The Best Time to Build in Crypto
Categories: VC, Startup, Design
Summary
Y Combinator is doubling down on crypto investment despite market downturns, arguing bear markets attract better founders and enable real projects to build without competing against yield schemes. They expect eventually every YC startup to use crypto rails invisibly, from Deel to Gusto.
Key Takeaways
- Bear markets are optimal for building in crypto because they eliminate competition from yield-farming schemes and attract founders focused on genuine product development rather than quick liquidity events.
- Regulatory clarity has arrived, enabling institutional adoption of stablecoins and tokenized assets across major financial institutions, shifting crypto from speculation to infrastructure.
- Crypto rails are becoming invisible infrastructure in mainstream fintech—founders won't know they're using blockchain for payments, capital raising, and transfers, similar to how TCP/IP works beneath applications.
- High-impact crypto opportunities exist in underserved markets: remittance infrastructure (Sporeum for India transfers), developer ramps (Beliani Pay, Infinia for Latin America), and institutional trading products.
- Small teams are disrupting established financial institutions—Hyperliquid's tiny team is making stock exchanges competitive, signaling that crypto networks will become default financial rails for autonomous agents.
Related topics
Transcript Excerpt
It's a dispiriting moment in crypto. Prices are down, hot narratives have fallen flat, and many builders are leaving. It sounds crazy, but at Y Combinator, we're more optimistic than ever. We've invested in more than 100 crypto startups, but we expect that number to go up a lot. Eventually, we expect every YC startup to use crypto rails, from capital raising to payments, but most will probably never even know about it. Here's why we're bullish. Many YC-funded fintechs, way outside crypto, are building with it, like Deel and Gusto. Regulatory clarity is finally here. Stablecoins are being adopted by every major financial institution. Tokenized stocks are transforming trading. Projects like Hyperliquid, with a tiny team, are making stock exchanges squeamish about their edge, and it feels ine…