The Twighlight Zone: On the Cryptoeconomy in 2026 & Beyond
Ryan Watkins • 361K views
Meltem Demirors
Mar 30, 2026
There’s a version of the American reindustrialization story that goes like this: China ate our manufacturing base. Supply chains proved fragile. Now we need to build again: factories, foundries, grid infrastructure, defense hardware. The solution is onshoring. The solution is making things.
That story is true. But it’s incomplete.
The onshoring thesis captures something real about what America lost. But it misses what made America great in the first place.
America didn’t dominate the 20th century because we had the best workers or the most natural resources. We had both, but so did other nations. What we had that no one else could match was a financial system capable of accumulating and deploying capital at a scale and speed that turned ideas into industries that changed how the world worked.
The oil industry (my first true love) didn’t just require engineers and drill bits. It required titans like John D. Rockefeller to understand that controlling the financing of oil infrastructure was as powerful as controlling the wells, refineries, and railways.
Rockefeller was the first, amassing one of the greatest fortunes in modern history, but he wasn't the last. As the industry matured, a new problem emerged: managing price volatility was existential to survival. A producer who couldn’t predict what their oil would sell for in six months couldn’t plan a drilling program, couldn’t service debt, couldn’t survive a downturn. The answer wasn’t better geology. It was financial engineering.
The modern oil futures market, formalized on the NYMEX in 1983, gave producers and consumers a mechanism to lock in prices and transfer risk to parties willing to bear it. From there, the architecture grew more sophisticated: swaps, options, and synthetic derivatives that let companies hedge specific exposures, structure project finance, and attract capital from investors who had never set foot near a wellhead. Oil markets evolved in response to the extreme price volatility
Ex: The Evolution of Financial Engineering in Oil Markets
The derivatives market didn’t just serve the oil industry, it enabled unprecedented growth and exponential scale. In modern oil markets, derivatives volumes dwarf physical barrels, with our Crucible research putting ‘paper barrel’ trading volume at up to 30x times underlying physical flows in major benchmarks. That’s not speculation run amok. That’s the price of building a global industry and the backbone of the global economy.
It also gave rise to the petrodollar - fifty years of dollar hegemony supported by the depth of American capital markets and its most aggressive financiers.
Ex: Physical x Paper Oil Trading Volumes
Source: Crucible Research
To extend the analogy further, the railroad boom wasn’t just a feat of civil engineering, it was financed by bond markets and the stock market fueled by speculators. Jay Gould created the railroad bond and Union Pacific issued shares. The internet didn’t scale because of DARPA alone. It scaled because venture capital and public markets created capital conditions that allowed for a massive buildout of ISPs and telcos.
In every case, technical engineering and financial engineering advanced together. One without the other would have stalled.
Derivatives continue to benefit issuers even in later stages of a company’s trajectory in today’s markets. When listed options are introduced on a stock, three things tend to happen to the underlying equity simultaneously:
Ex: Listed Equity Volume Before and After Options Listing
The current reindustrialization push leans heavy on mechanical and industrial engineering with little focus on financial engineering. We’re seeing all types of financing announcements for automated factories, faster and better ways to cut metal, and onshore drone and solar panel fabs. Today, these companies are more or less funding their development with equity and government funding. Tomorrow, all the money in the world won’t be enough.
We cannot rely on persistent equity and government funding to fuel the incredible size and scale of the growing intelligence economy and industrial economy.
We’re building fabs and battery plants and LNG terminals. We’re passing legislation to subsidize domestic production. These are the right instincts. But if the financial infrastructure to trade, price, and hedge the outputs of these industries doesn’t develop in parallel, we’re building an engine without considering the fuel to power it.
America’s greatest competitive advantage isn’t its manufacturing capacity. There is no moat there; other nations can replicate that over time. It’s the US dollar’s reserve status, the depth and liquidity of American capital markets, and the sophistication of our financial risk infrastructure. These aren’t just downstream benefits of a strong economy. They are the fuel that powers American exceptionalism and dollar hegemony. A manufacturing renaissance that doesn’t leverage the depth of American capital markets is incomplete.
We need to embrace capital markets maximalism. The age of the Financial Engineer is upon us.
Financial engineering gets a bad reputation. But conflating the excesses of mortgage-backed securities with the entire category is spurious at best and malicious at worst.
At its best, financial engineering does three things:
It prices risk — turning uncertainty into a number that can be acted on. Without pricing mechanisms, capital can’t flow to where it’s most needed.
It distributes risk — spreading exposure across parties who can bear it, which allows a wider range of market participants to access and participate in markets.
It unlocks capital — by creating instruments that match the time horizons and risk tolerances of different investors, drawing capital off the sidelines and into productive use.
When these tools are applied to physical infrastructure, such as energy, logistics, manufacturing, they amplify and compound the dollars deployed into these industries to support more economic activity and higher productive output.
The rise and fall of global power over the last millennium has closely followed this arc. The Italian city-states of the 1400s and 1500s — Venice, Florence, Genoa — weren’t dominant because they had the best armies or the most land. They had double-entry bookkeeping, letters of credit, and the bill of exchange: instruments that let merchants finance trade across continents without moving physical gold. Florence didn’t rule Renaissance Europe through conquest. It ruled through its banking houses.
The Dutch did the same thing a century later, but bigger. The Amsterdam Stock Exchange, founded in 1602, was the first in the world. The Dutch East India Company was the first publicly traded company and became a vehicle for spreading the risk of long duration trading voyages across thousands of investors who never left home.
By the time England took the baton in the 1800s, the formula for winning was clear: the nation that builds the deepest capital markets attracts the most investment, funds the largest projects, sets the terms for everyone else. America picked this up in the 20th century and ran further with it than anyone. The question now is whether we remember what got us here.
The Crucible team has a front-row seat to what happens when a new industry gets both the technical and financial engineering right. I spent eleven years building Digital Currency Group from a niche Bitcoin investor into a financial powerhouse, CoinShares from a fringe alternative asset manager to a publicly listed financial services firm. Before that, I worked on project financing in the Oil and Gas industry. Kelly built Galaxy Digital’s trading business from the early days of a crypto dominated PVP market to include the largest institutions in the world. Honour worked on the divestment of oil commodities businesses at one of the largest banks in the world in the wake of Dodd Frank, and had a front row seat to the emergence of tech-enabled esoteric lending.
Bitcoin is the most instructive recent example. The underlying protocol was a real technical innovation. But Bitcoin didn’t reach institutional scale on technology alone. It got there when futures markets, ETFs, options, and custody infrastructure gave traditional capital a trusted onramp. When investors could price it, hedge it, and hold it within existing risk frameworks, the floodgates opened and Bitcoin became a trillion dollar asset.
The technical innovation created the asset. The financial innovation created the market. Both were needed to make Bitcoin a trillion dollar asset.
This is exactly what we’re watching play out now in energy markets, compute infrastructure, and industrial technology, sectors that have immense technological tailwinds and long term structural demand but are still waiting for the financial architecture to catch up.
SIDEBAR - So where is the crypto? Over the last few months, real world assets have become the most explosive growth story in crypto and they mostly trade on offshore exchanges. Today, the biggest growth market for onchain trading is global commodities. On an average day, 20% of Binance volume is RWAs, primarily gold and oil. Hyperliquid’s RWA volume is closer to 30-40%, again its mostly gold and oil. These trade primarily in USD stablecoin pairs but on offshore venues that accrue no value to American markets or the American economy.
We invested in Ostium in 2024 around the view that commodities and macro sentiment would dominate crypto long term. Unlike most perpetual trading venues that rebuild and further fragment liquidity for RWAS with new order books, Ostium chose a different infrastructure design. Ostium has no native order books. Instead, onchain traders expressing views on commodities, forex, and stocks are accessing the order books of the most liquid underlying markets, many of which are in the United States of America. This means better execution, depth, and liquidity. By using a proprietary pricing infrastructure that is verticalized with deep existing TradFi data partnerships, traders globally can now access American markets permissionlessly. Ostium’s RWA volume has increased to 89% in Q1 2026, with only 11% of trading volume being crypto pairs. The top geos using Ostium are based in APAC and EU but volume is settling in underlying American markets.
Metals shouldn’t trade in London. Plastics derivatives shouldn’t be priced in CNY. The number one priority of the US techno industrialist complex should be bringing commodities and materials trading back onshore. Crypto is the best means we have for extending US dollar hegemony and US capital markets into the rest of the world’s industrial base.
We must get to work if we want to win.
At Crucible, we’re capital markets maximalists.
We believe the next generation of transformative American companies won’t be built by technical founders alone. They’ll be built by founders who understand that how you finance and trade an industry’s value chain shapes what that industry becomes.
The energy transition is a perfect example. Grid-scale power, whether from renewables, nuclear, or gas. doesn’t just need engineers to build it. It just needs risk management infrastructure to price it, ISO market expertise to route it, and financial instruments to fund the capital expenditure at the scale required.
The companies that build that infrastructure will matter as much as the companies building the hardware itself.
This is why we invest in both technology and financial innovation together. Not as separate bets, but as a single thesis: that in every great American industrial buildout, the financial architecture and the physical architecture rise in tandem. When investing in technical teams, we help with financial planning - from optimizing the cost of capital to derisking their own supply chains.
We are rolling up our sleeves and putting our GP capital to work to do accelerate financial engineering capacity with our founders. Recent examples include:
Building a factory financing model
Deploying asset backed credit
Structuring non-deliverable forward swap and option contracts on compute
Pricing and executing OTC options trades on commodities rates
Providing short duration working capital to manage liquidity during volatile periods
Optimizing trade financing facilities
Financial engineering a tax optimized GPU deployment
Over the coming quarters, Crucible will continue evolving from an early stage venture capital fund to a more comprehensive investment firm that can support our companies across their full lifecycle while compounding capital in a tax optimized manner for our capital partners. Early stage venture will continue to drive the trajectory and evolution of Crucible. As we go through this evolution, our own team is levered long Crucible via some innovative debt structuring.
Believe in something. Then lever to the tits.
Every great industrial buildout in American history — oil production, railroads, the internet — was unlocked by breakthroughs in technical engineering coupled with novel financial engineering. The builders who understood both didn’t just participate in the transformation. They shaped it and profited most from it.
We’re looking for founders and capital partners who are capital markets maximalists. The ones who see a new industry and ask not just how do we build this, but how do we build the markets around this.
We’re building Crucible to find, finance, and financially engineer alongside ambitious companies creating an abundance of energy, atoms, and intelligence. Whether its humans or agents who do the optimization, the future belongs to those who master the market.
Manufacturing didn’t make America great. Financial markets did. Let’s run it back turbo.
Thanks to Kelly Greer, Honour Masters, Neel Baronia, and Dean Eigenmann for their feedback.
https://link.springer.com/article/10.1007/BF02920225
https://www.sciencedirect.com/science/article/abs/pii/0378426691900909
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