The Everything Code: Why Debasement, Liquidity, and Adoption Are Driving Crypto’s Next Leg

The Everything Code: Why Debasement, Liquidity, and Adoption Are Driving Crypto’s Next Leg

Disclaimer: This is educational content, not financial advice. Crypto is volatile—do your own research and manage risk.

The Quiet Engine: Debasement > Headlines

In today’s markets the strongest force isn’t the news cycle—it’s currency debasement. When purchasing power erodes faster than wages or savings grow, the only defense is owning assets that outpace that erosion. That’s the core of the “Everything Code” thesis popularized by Raoul Pal: when liquidity rises to refinance an over-levered system, assets with network effects—crypto and technology—tend to lead.

Trad finance was trained to watch inflation prints and earnings; crypto native investors internalized debasement and liquidity. As the policy conversation shifts toward rate cuts and balance-sheet engineering (i.e., “refi the debt”), the game becomes explicit: liquidity will need to flow, and markets will discount that before it shows up in backward-looking data.

“I Can GUARANTEE This Will Happen In September” | Raoul Pal Crypto (WATCH SEE)

Why Liquidity Favors Crypto and Tech

Across cycles since 2008, broad liquidity (think money supply and policy easing) explains a large share of returns for:

• Crypto (highest beta to liquidity + network growth)

• Tech equities (power laws, platform effects)

• Gold and broad indices (helpful, but typically lag the leaders)

The simple playbook: hold assets that beat debasement on a multi-year basis—or risk falling behind the only trend that matters.

The Risk Curve, Again—But Faster

Each cycle rhymes. Liquidity and adoption first lift the “safest” crypto assets, then spill out the risk curve:

1. Bitcoin dominance phase (macro & institutional bid)

2. Rotation to Ethereum (utility, settlements, L2 rails)

3. High-adoption L1s (Solana, Sui, a few others)

4. Large liquid altcoins retail recognizes (unit-bias appeal: XRP, DOGE, ADA, etc.)

5. Mid-tier narratives (select DeFi, infrastructure)

6. Illiquid flyers (where most get wrecked late cycle)

Two realities many forget:

• Unit bias is real. Newcomers anchor on the sticker price, not fully diluted value. That’s why big-cap “cheap-per-coin” names often catch retail flows late.

• Adoption > elegance. A clean whitepaper isn’t a catalyst; users and velocity are.

What to Own vs. What to Wish

If you strip the noise and just ask “What’s outperforming on the weekly?”, you often get the right answer. For many investors, a barbell of:

• A core in BTC/ETH, and

• A measured sleeve in high-adoption L1s

beats dabbling across a dozen middling tokens. Complexity kills returns; concentration in proven networks + patience wins more often.

NFTs as Apex Scarcity

At the very top of the risk curve sit ultra-scarce digital collectibles (think historic, culturally entrenched sets). The thesis: when crypto wealth compounds, a slice migrates into the rarest digital assets, much like fine art in traditional markets—status, provenance, and narrative create a bid even through drawdowns. They are volatile and illiquid—not for everyone—but structurally aligned with the Everything Code (liquidity + network culture).

How the “Refi the Debt” Era Intersects Crypto

Refinancing a heavily indebted system typically implies lower real rates, policy creativity (e.g., stablecoin rails, bank-friendly custody), and larger liquidity cycles. That cocktail tends to:

• Compress risk premia,

• Pull flows out the curve (from BTC → ETH → L1s → “cheap” large caps),

• And reward assets with clear on-chain demand.

If stablecoins scale as neutral settlement plumbing, they can also bridge fresh capital into crypto markets faster and with less friction—another tailwind for beta.

A Practical Playbook (Not Advice)

• Define your core. Size BTC/ETH to sleep at night.

• Add adoption beta. One or two high-velocity L1s you actually track.

• Respect unit bias flows. In late phases, liquid big names with low per-coin prices can sprint.

• Timebox risk. Use invalidation levels; cut losers, let winners trend.

• Mind liquidity. Thin books exaggerate both upside and downside—size accordingly.

• Keep dry powder. Pullbacks are features, not bugs, in liquidity-driven bull runs.

What Could Invalidate

• A policy shock that tightens liquidity for longer than expected.

• Regulatory hits to fiat on-ramps or stablecoin plumbing.

• A tech fracture (critical exploits) that crimps user adoption.

Bottom Line

The Everything Code reframes markets around liquidity + adoption + debasement. In that lens, crypto isn’t an outlier—it’s the front-runner. The rotation playbook is in motion (BTC → ETH → selected L1s → retail-favored large caps), and unit bias plus network effects will likely do the rest.

Ignore the noise. Track liquidity, track adoption, and align with the code—not against it.