Lorenzo Letter #05: CZ's Supercycle Doubt Precedes Market Crash

Welcome to the Lorenzo Letter, your weekly update on stablecoins, DeFi, tokenization, crypto legislation, and more.

In This Issue:

• CZ Expresses Supercycle Doubts Before Market Selloff
• Stablecoin Rewards Debate Intensifies As Tether Backs Anchorage Digital
• Vitalik Rethinks Ethereum’s L2 Roadmap

CZ Expresses Supercycle Doubts Before Market Selloff

CZ” took to X this week to share that he was “less confident” that Bitcoin is entering a long-hyped supercycle. Speaking on Binance Square earlier this month, CZ attributed his shift in tone to recent FUD and heightened emotions in the market.

CZ also addressed renewed allegations about Binance’s role in past market dysfunctions, calling some accusations “pretty imaginative FUD” and denying reported Binance BTC sales. He defended Binance’s plan to convert its $1 billion Secure Asset Fund for Users into Bitcoin over 30 days, dismissing claims that the pace of execution was manipulative in the current environment.

Bitcoin has fallen sharply since CZ's post, contributing to a sizable drop in total crypto market capitalization from roughly $2.62 trillion at the time of his post to around $2 trillion today.

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CZ Expresses Supercycle Doubts Amid Binance FUD

Binance founder CZ said he is less confident in Bitcoin’s supercycle thesis as prices slide and accusations of Binance-driven FUD resurface.

Lorenzo ProtocolBart Hillerich

Stablecoin Rewards Debate Intensifies As Tether Backs Anchorage Digital

This week, Tether announced a $100 million strategic investment in Anchorage Digital, valuing the federally chartered crypto bank at $4.2 billion and deepening their existing partnership around U.S. stablecoin issuance.

Anchorage said the investment reflects years of regulatory engagement and infrastructure development, positioning the firm to meet institutional demand for compliant custody, trading, staking, and stablecoin services.

The deal comes as stablecoin legislation remains stalled in Washington. A recent White House meeting between banking groups and crypto industry representatives failed to resolve disagreements over stablecoin rewards or interest-like features. Banking groups argue yield-bearing stablecoins could accelerate deposit outflows from traditional banks, while crypto advocates say prohibiting rewards risks pushing innovation offshore.

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Stablecoin Rewards Debate Intensifies As Tether Backs Anchorage Digital

U.S. stablecoin legislation remains stalled over yield and rewards, even as Tether invests $100 million in Anchorage Digital, highlighting the gap between regulatory debate and market activity.

Lorenzo ProtocolBart Hillerich

Vitalik Rethinks Ethereum’s L2 Roadmap

Ethereum co-founder Vitalik Buterin is calling for a fundamental rethink of the network’s layer 2 roadmap, arguing that Ethereum’s original rollup-centric scaling vision no longer reflects how the ecosystem is evolving. In a post on X, Buterin said progress toward fully trustless stage-2 rollups has been slower than expected, while Ethereum’s layer 1 has begun scaling directly, with low transaction fees today and significant gas limit increases projected for 2026.

Buterin said L2s should no longer be treated as uniform extensions of Ethereum, but instead viewed as a spectrum ranging from rollups that fully inherit Ethereum’s security to chains with looser guarantees. He argued that L2s should focus on differentiated value, such as privacy, application-specific efficiency, or ultra-low-latency execution, and said any L2 handling ETH or Ethereum-issued assets should reach at least stage-1 decentralization.

Full Story:

Vitalik Buterin Rethinks Ethereum’s L2 Roadmap

Vitalik Buterin says Ethereum’s original L2 vision no longer fits as Layer 1 scales, calling for rollups to differentiate as usage and onchain activity surge.

Triana: Crypto News, Insights, StoriesBart Hillerich