Unchained Podcast: Bits + Bips — Will Crypto Rise on Liquidity or Will 2026 See Another Washout?

Episode 988 | December 23, 2025
Host: Chris Perkins (guest hosting for Laura Shin)
Guests: Rahm Alawalia (Lumina), John Wu (President, Ava Labs/Avalanche)

Episode Overview

In this end-of-year episode of the “Bits + Bips” series, Chris Perkins is joined by Rahm Alawalia and John Wu for an in-depth discussion on the state of the crypto market after a volatile 2025. The trio explores the interplay between macroeconomic conditions, regulatory progress, liquidity cycles, and the future of crypto assets. Key topics include the potential for 2026 to bring market recovery or further decline, changes in token supply and demand, institutional and retail adoption, and the evolving dynamics between tokens and equities. The conversation is candid, analytic, and occasionally combative, with each guest bringing deep industry insight and colorful metaphors.

Key Discussion Points & Insights

1. 2025 Market Recap: Gold Outshines “Digital Gold” (Bitcoin)

• Status: Precious metals (gold, silver) at all-time highs, while Bitcoin lags — possibly facing its fourth down year in history.
• Drivers:
  • Hype outpaced reality in digital assets.
  • Stablecoin regulation milestones (Genius Act), but “sell the news” effects blunted momentum.
  • Competing narratives: AI, space, robotics, and traditional momentum assets now draw the same attention (04:23, Rahm).
  • “Momentum creates demand for itself… and we’re not seeing that in the asset.” — Rahm Alawalia (04:22).

Memorable quote:

“The momentum crowd will go wherever the hottest hand is… and right now, that’s not Bitcoin.”
— Rahm Alawalia (03:47)

2. Why Isn’t Crypto Rallying? – Technical and Fundamental Factors

• Technical: Increased retail access and millions of new on-chain tokens dilute demand; supply vastly overwhelms new investor inflow (06:13, John).
• Fundamental:
  • Lack of clear methods to value tokens and fundamental utility remains confusing.
  • Institutional pipelines (e.g., JP Morgan, Circle IPO) are opening, but it’s not translating into price.

Memorable quote:

“We’re not just talking about the three to four or five thousand tokens… talking about on-chain tokens left and right in the millions. And that’s kind of confusing for a lot of people.”
— John Wu (05:07)

3. Market Cycles & The “Trough of Disillusionment”

• Gartner Hype Cycle Applied to Crypto:
  • “Peak of inflated expectations,” post-regulatory euphoria, now giving way to despair (“trough of disillusionment”).
  • Fast information velocity compresses traditional cycles; big rallies and crashes now happen in shorter windows (09:49, Rahm).

Key insight:
Buy when conditions are psychologically painful:

“It’s gotta be an uncomfortable buy. People have to hate the asset class. That’s when I would be really interested.”
— Rahm Alawalia (12:13)

4. 2026 Outlook: Differentiation, Consolidation, and the End of the Four-Year Cycle?

• Move from “index” investing in crypto to focus on tokens/projects with real utility.
• Supply Side:
  • Meme coin washouts seen, but further shakeouts needed (08:41–09:49).
  • M&A expected to rise as weaker projects fold and stronger ones acquire (20:08).
• Demand Side:
  • Opening of RIA ($40T+ channel), institutional access.
  • Old “whale” holders are cashing out; new investors have different psychology (14:45, Chris).

Differing predictions:

• John Wu is broadly bullish on 2026, arguing the “four-year cycle” is outdated due to expanded investor base and changing market structure (14:11).
• Rahm argues the cycle is still expressing itself, driven by group psychology, but believes a deeper washout (i.e., more pain) may precede real opportunity (15:03).

5. Institutional Adoption & The Battle for Settlement Layers

• Avalanche vs. Canton vs. Ethereum:
  • Canton over-indexed on large, centralized institutions; Avalanche started more decentralized, onboarding mid-sized financials (21:30–24:37).
  • A new battleground: which blockchain will serve as the “institutional settlement layer”?

Memorable metaphor:

“It’s not a company, it’s a city-state of people contributing and using a community…” (24:53, John Wu on token utility)

6. Tokens, Equities, Value Capture, and Regulation

• Key friction: Who captures value: token holders or equity holders?
  • Current landscape is “loosey goosey”; projects experimenting with models from free cash flow, buybacks, dual structures (31:35–35:41).
• Need for taxonomy and clarity:
  • The Clarity Act and related legislation will help the market differentiate between commodity- and security-like tokens, improving investor decisions and reducing friction (35:41, 35:23).

Memorable quote:

“The double dipping’s got to stop. Investors have to be taken care of. The vesting schedules weren’t aligned. People are going for the quick pops and the quick wins.”
— Rahm Alawalia (37:15)

7. The Super App Race: Coinbase vs. Robinhood (vs. X/Twitter?)

• Emerging “everything apps”:
  • Robinhood and Coinbase both racing to become a U.S. “super app” (trading, payments, lending, stablecoins, tokenization, etc.).
  • X/Twitter, Metamask, Phantom, and big tech all potential players in the battle for the end-user relationship (45:18–49:06).
• Big issue: As competition heats up, profit margins shrink, and value investors may struggle (47:29, 49:06).

“When competitors meet at an intersection, no one wins.”
— Rahm Alawalia (49:06)

8. TGE (Token Generation Event) Disappointment & Capital Formation

• 2025 TGE Stats: Of 118 token launches, 85% are below their TGE valuation (53:44).
• Consensus: TGEs (in current form) are dying; curation, standards, and sell-side style diligence needed to restore confidence (54:04, 54:34).

“Curation helps a lot, actually. I do think curation plays an important role. You have that in other markets.”
— Rahm Alawalia (54:04)

Notable Quotes & Memorable Moments

| Timestamp | Speaker | Quote | |-----------|-----------------------|--------------------------------------------------------------------------------------------| | 03:47 | Rahm Alawalia | “The momentum crowd will go wherever the hottest hand is… and right now, that’s not Bitcoin.” | | 05:07 | John Wu | “We’re not just talking about… thousands of tokens… on-chain tokens left and right in the millions. And that’s confusing for a lot of people.” | | 09:49 | Rahm Alawalia | “I think a good framework for this is the trough of disillusionment... This is the perfect way to understand where we are.” | | 12:13 | Rahm Alawalia | “It’s gotta be an uncomfortable buy. People have to hate the asset class. That’s when I would be really interested.” | | 14:11 | John Wu | “I am a believer that the four-year cycle is no longer. The demand side has changed so much.” | | 20:08 | Chris Perkins | “I think it’s also going to be the season of M and A before us. Consolidation will manifest itself in M and A.” | | 24:53 | John Wu | “It’s not a company, it’s a city-state of people contributing and using a community… [the token] was going to help utility and create value...” | | 37:15 | Rahm Alawalia | “The double dipping’s got to stop. Investors have to be taken care of. The vesting schedules weren’t aligned. People are going for the quick pops…” | | 47:29 | Rahm Alawalia | “Competition is what makes capitalism great. But we welcome the competition. Let’s bring on the competition.” | | 49:06 | Rahm Alawalia | “When competitors meet at an intersection, no one wins. …I would wager that X… will have a super app. The super app thesis is one of these obvious opportunities…” | | 54:04 | Rahm Alawalia | “Curation helps a lot, actually. I do think curation plays an important role. You have that in other markets.” |

Section Timestamps

• 2025 Market Recap & Drivers: 00:00–04:23
• Crypto’s Technical & Fundamental Weaknesses: 04:23–07:25
• Liquidity, Regulatory Progress & Macro Setup: 06:13–07:25
• What Will Bring Momentum Back?: 07:25–11:52
• “Trough of Disillusionment” & Timing Value Investments: 09:49–12:13
• Bitcoin, Cycles & Timing the Turn: 13:41–17:12
• Rotation of Builders & Investors; Need for Shakeout: 17:12–20:08
• Institutional Settlement Layers: Avalanche vs. Canton: 21:30–24:37
• Tokens vs. Equities, Value Capture, & the Regulatory Final Bosses: 24:37–37:15
• Super App Battle: Coinbase, Robinhood, and More: 45:00–52:29
• TGEs, Capital Formation & Curation: 52:57–54:42

Conclusion & Takeaways

• 2025 was a year of disappointment for “digital gold”; alternative narratives (AI, precious metals) drew away attention and momentum from crypto.

• 2026 looks set for consolidation, with winners and losers decided by true use-case, better regulatory clarity, and ultimately, by who captures real value (not just attention).

• Major themes for 2026:

  • M&A among protocols, exchanges, and app layers
  • Race for institutional blockchain adoption; settlement wars
  • Super app proliferation, compressing profits and putting pressure on margins
  • Demand for better standards, curation, and investor protections after a washout of unsuccessful token launches

• Tone: Blunt, pragmatic, but with hope that clearer standards and a true shakeout will set the table for healthier, more resilient crypto markets ahead.

“We just got a bit ahead of ourselves… Now the vibe is free cash flow and buybacks and earnings yield. That’s the sentiment.”
— Rahm Alawalia (49:06)

For the full episode and deeper context, listen at Unchained