I correctly called stablecoins a no-moat business, and the recent launch of OpenUSD confirms it. Circle keeps 40% of USDC yield and distributes only 60% to token owners. OUSD will distribute 100%.

In other words, you get a 66% higher yield on OUSD than USDC.

There goes Circle's entire business model.

But it was fun for the insiders while it lasted. By grabbing $424 million in SBC as part of the IPO, they tipped an otherwise profitable business into a loss-maker.

Given the huge spread between the IPO allocation price ($31) and IPO open ($69), insiders profited again at the expense of retail investors.

USDC holders also had the privilege of paying CEO Jeremy Allaire $4.1 million for personal security (Michael Saylor for all his flaws bills MicroStrategy (MSTR) shareholders a mere $272K for the same).

Worse, insiders keep hoovering up a larger slice of a shrinking pie. In Q1 2026, revenue rose 20%, but net income fell 50%. The culprit? Employee compensation rose 83% to $138.1 million.

The stock is down 80% from its peak, but still trades at a forward PE of 85x. It can go down another 80% and still not find fair value.

A value investor who enjoys catching falling knives will steer clear of Circle Internet Group.

July 06, 2026

Falling property prices is better for society

During the peak of Sri Lanka's economic crisis, the price of a used scooter doubled in a month. Basic transportation became a luxury.

Houses, like two-wheelers, are depreciating capital assets, but unlimited money printing inadvertently turned them into a store of value.

Home prices rise -> rents increase -> families feel the squeeze. China suffered the double whammy of the one child policy and families deferring kids due to rising inflation.

They have now solved the inflation problem, made homes affordable, and propelled excess savings into gold rather than empty apartments. And they did it without imposing rent control, without eminent domain laws or asset seizures.

Used homes rising in price is a historic anomaly, a bubble that either ends the Chinese way with controlled deflation, or a crash, like the 2008 sub-prime crisis.

The Chinese way is better for society.

July 08, 2026

AI political lobbying's payoff

In 2007, the banking sector spent $450 million on political lobbying, chiefly to keep capital requirements lax. In 2008, former Goldman Sachs CEO Henry Paulson orchestrated a $700 billion bank bail-out, a 1,555x payoff on the lobbying spend.

In 2025, the tech sector spent $314 million on political lobbying, with the AI sector alone accounting for $100 million. When the AI bubble bursts, will they receive the same payoff on their lobbying spend?

It wasn't too long ago that bitcoin investors were requesting a bail-out from the US treasury. They packaged it as a Strategic Bitcoin Reserve. Will Trump propose a Strategic AI Reserve?

Short-selling is hard, and it stings even harder when you're right but they change the rules and take your money.

In 2008, Paulson pressured the SEC to ban short-selling the stock of his former employer, among others.

The current SEC chair has documented conflicts of interest and required multiple ethics waivers simply to assume office. Will he enact a similar ban on short-selling Nvidia (NVDA) CoreWeave (CRWV) and other AI bubble stocks when the crash begins?

July 09, 2026

Debt fueled capex binges never end well. Just ask the shale oil companies.

Momentum chasing in cyclical stocks never ends well.

July 10, 2026

Side hustle: ghostwriting a bitcoin travel book

"You write well on X. You have a great newsletter. Can you write a book?"

Eight months ago, a prospective client approached me with a ghostwriting project. He had travelled to over 42 countries in a two-year period using bitcoin. He wasn't a writer, but with the help of AI tools he had written a 1,000-page manuscript documenting his travels and adding economic observations.

The raw material was there. I could envision the book (working title: Proof of Work) on my bookshelf, sitting next to Jim Rogers' Investment Biker and Adventure Capitalist. But it wasn't an editorial project, a fact that two editors had already conveyed to him. The book needed a ghostwriter to rebuild it from the ground up.

I had never written a book, but the project excited me. By Christmas, we had the first 50 pages, and the early feedback was overwhelmingly positive. The pilot was a success - it was time to produce the whole season.

The 1,000-page tome shrank into an ~180-page nightstand book. An editor at an Indian publishing house complimented the writing.

After 7 months of work, the handover is complete. Back to markets and regular programming.

August Update: unfortunately, the book project has been shelved until further notice. Expected royalties from book sales have gone to zero, much like the bitcoin balance of compromised Coldcard wallets.

Meta: What do you call this chart pattern?

July 11, 2026

Nigeria outperforms South Korea

It turns out oil is more important than memory, even during an AI bubble.

I called it, but didn't make money on it because it is impossible for a retail investor to get access to Nigerian equities.

I did look at the JSE and LSE listings but they had already run higher.

July 14, 2026

In bull markets, people want to talk about their 1 month gains.

In bear markets, you will be told to zoom out and see the bigger picture.

This chart will surface often over the next year. Ignore it.

New York says no to new 50 MW and above data centers

Anyone who followed the Marcellus shale saga knows this playbook well:

2008: no new drill permits

2010: "temporary" moratorium on fracking

2014: Gov Cuomo announced a permanent ban

2020: fracking ban codified as state law

Will history repeat?

July 16, 2026

Data Centers

Reuters: A small Utah town could run out of water in months. And in Colorado, a rancher has sold a fifth of her herd as stock ponds stand empty.

Data center operators are happy. Global AI snapped up enough land for a 1 GW site. Expect more such shopping for distressed deals, with private equity players locking up land and water rights while the river runs dry.

When water levels rebound, cattle and cotton will be replaced by solar farms and server racks.

The Great Unwind

Since the GFC, the national debt quadrupled but the Fed's balance sheet 10xed.

But even with all that money printing to buy bonds, yields are still near 2008 levels.

We are seeing the unwind of America's exorbitant privilege.

July 20, 2026

Cross-asset returns in the 1970s

In inflationary environments, gold outperforms nearly everything else.

During the 1970s bull market, the annual dividends on gold stocks exceeded the buy price of a few years ago.

This is why I keep stacking gold, silver and mining stocks.

Mass layoffs at Exodus

Crypto wallet provider Exodus Movement Exodus (EXOD) fired ~54 employees (25% of workforce) on Friday.

Usually, stocks of companies that perform mass layoffs rise on the news. Exodus tanked 5.5%.

Clearly, the market isn't happy with the company firing technical staff in order to pivot to payments. Benchmark cut their share price target from $21 to $12.

Surprisingly, neither the CEO @jprichardson nor the official @exodus account have announced this massive layoff on X.

Which is understandable - cutting the technical team isn't going to inspire confidence in users of their wallet software (the Cake wallet fiasco comes to mind). Personally, I moved a good chunk of my coins out of Exodus. Not worth the risk.

Destroying your core competency to fund moonshots is a terrible idea. The stock is down 68% YTD.

July 23, 2026

Quantifying the AI Economy -Kashyap Sriram

July 27, 2026

Ethereum is moving

Ethereum sentiment is terrible, but the price action isn't. No position since I don't trade on price alone, but my interest is piqued.

Is Nvidia the next GE Capital?

Anyone remember the time GE's next product was GE Capital?

That worked out well.

Bull markets end when the leaders turn into laggard

July 28, 2026

Credit growth barely slowed during the Fed's last rate hike campaign.

Hike or cut is irrelevant when public debt, bank deposits and loans are steadily marching higher.

The system is flush with liquidity. The economy is flush with inflationary drivers.

July 29, 2026

$1 trillion in annual AI spend

The AI economy needs $1 trillion a year, the equivalent of the entire global software industry, in order to justify the capex spend.

Every year revenue falls short, the players need to raise debt and equity just to meet the cost of capital.

Current ARR of the labs - $70B. Open source models and edge inference are eating market share faster than expected.

Yet, neoclouds and hyperscalers keep building.

There is a cliff coming. It is inevitable. And judging by the KOSPI and Nasdaq 100 price action, it looks like investors are finally beginning to see it.

"The Committee is continuing its policy of maintaining ample reserves in the banking system." - FOMC July statement

Ample reserves/ reserve management program is the new QE.

Meet RMP, the New Name for Endless QE -Kashyap Sriram

"We're in the performance business." - Kevin Warsh

Truer words have never been spoken.

Warsh meant to say the FOMC did more than just talk, that the Fed will deliver performance. But the outcome belies those words.

The entire press conference reads as inflation theater.

Things AI bulls say

Dan Ives argues that the Keynesian multiplier effect of AI spending boosts NVDA and its customers.

Whether that spending has any benefit is an irrelevant question. The credit card bill isn't due until later, and as Keynes famously said, in the long run we are all dead.

July 31, 2026

Lack of Situational Awareness

Two decades ago, a Calgary wunderkind blew past all risk limits at a hedge fund and lost $6.6 billion in three weeks.

The story of Situational Awareness reminds me of Amaranth Advisors. Two of three actors are the same - Citadel and JP Morgan (JPM).

Only difference is the fund that got liquidated, and the market they operated in.

Amaranth blew up trading natural gas spreads at 5x leverage. Situational Awareness blew up being 4x levered AI names.

In both cases, Citadel bought the book at a discount in a block trade.

The Amaranth trade netted $1 billion for Citadel and $750 million for JPM.

Leopold's AI book must have gained more than that in today's market recovery.

It's a nice job if you can get it.

Fundamentals vs Flow

Today's move in the Nasdaq, as measured by the 1-day rate of change, is a clear outlier.

Moves like these have nothing to do with fundamentals. It is all flow dynamics.

Fundamentals trend, flows mean revert.

Something to keep in mind while parsing Amazon (AMZN) and Apple (AAPL) earnings.

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Good Trading!

Kashyap

hello@kashyapsriram.com

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