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Rob
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AI Fatigue, Robinhood & Every Market Becoming Crypto | Weekly Roundup
AI fatigue is reaching institutional LPs as router savings and cheaper open-source models threaten frontier-model pricing within 12 to 18 months. Robinhood’s $1.3B quarter and $12B of Chain DEX volume make it a key real-time gauge for capital rotation, while declining active accounts and uncertain chain winners keep tokenized-asset adoption unresolved.
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- CLARITY’s odds just hit an all-time low near 27-30% on Polymarket, and Rob — the resident “clarity guy” — wouldn’t buy the dip: “I wouldn’t buy the 30% on poly,” it’s “appropriately priced.” Public optimism from figures like Brian Armstrong masks private bearishness over two blockers: ethics language on Trump-family crypto ownership (who litigates — FBI or state AGs?) and BRCA developer protections, where Sen. Cortez Masto floated “agreed” language Republicans and industry “would not have agreed with.” The consolation: SEC and CFTC rulemaking proceeds regardless, so “we’ll be in a better spot regardless” in 6-9 months.
- Every asset class now trades like crypto, and the mechanism is leverage plus quant flow. Santiago cites Goldman reporting prime leverage in the final half of 2026 at its highest since before the GFC, with ~20% bunched in a few AI memory names; Leopold supposedly sold his entire $14B notional in a single block trade at 4x leverage into memory stocks down 50% in a month, and Rob thinks Korea has had more circuit breakers this year than in the market’s entire history. Santiago’s takeaway: of “ladies, liquor, and leverage — definitely avoid leverage.”
- The best-performing crypto liquid funds over the last five years are all delta neutral — “market neutral funds and lawyers are the best performing people in crypto.” Rob argues the long-term fundamental investor “is struggling more than ever” because LPs can’t stomach the vol (“just don’t send me quarterly statements, please”), while Ken Griffin’s newfound interest in long-term fundamental investing reads as a contrarian tell.
- Rob is hearing AI fatigue from big institutional LPs for the first time, with one comparing it to crypto’s 2021 cycle. The rumored $10B OpenRouter deal on a $140-150M revenue business “is insane to me”; his stealth router portfolio company cut one client’s token spend by 80%, and he thinks the premium for frontier models “is probably going away in the vast majority of industries within the next 12 to 18 months.” Yet Santiago calls Anthropic’s ARR the “fastest growing in the history of mankind,” and says, “I don’t know anybody who thinks that goes public for less than 1.2 trillion.”
- Santiago calls Robinhood “the most important company” to track for crypto flows — if AI fatigue rotates money back, “you’re likely going to see it first” on Robinhood Chain, not in earnings. Q results: $1.3B in earnings, up 32% YoY, with prediction markets ($156M revenue) out-earning crypto ($100M); the Arbitrum-built chain did $12B in DEX volume and 100M transactions in four weeks and, per Frank’s tweet, leads all chains in tokenized stockholders — though Rob notes active accounts have trended down post-launch, “same thing happened to Base.”
- Away from Robinhood, on-chain is bleak: all other Ethereum L2 TVL is back to ~$5B (2023 levels), and H1 saw a record 212 exploits with $1B+ lost, half-plus from Lazarus. Rob’s three-factor explanation is low yields (basis trade from 10%+ to 3-4%), hacks, and AI stealing the momentum trade. Santiago’s preferred metric is active on-chain users (a16z: under 100M, range 40-60M), not TVL, half of whose decline is just ETH/BTC price denomination. Rob says apps like Uniswap and Ethena benefit more than the infrastructure layers.
- Santiago links Ondo’s private institutional L1 to Hyperledger déjà vu — “just a database that looks like a blockchain” — while steelmanning it: settlement stays public, execution private, because “you can’t have order flow being public.” Rob’s bottom line is that “the direction of travel is tokenized assets. Everything’s going to be tokenized” — but which chain wins, “nobody knows.” Visa’s forward-deployed stablecoin platform could accelerate institutional adoption. Meanwhile crypto VC hit a record-low deal count, fund sizes shrank across Paradigm, a16z, Haun, Framework and Variant, and the re-up math is brutal: under 80-85% of existing LPs returning means “it’s a conversation. Every time.” Santiago says a $50M fund can still work if crypto includes stablecoin fintech, while a $1-2B crypto-only fund is difficult.