The Best Time to Build in Crypto
Y Combinator is increasingly bullish on crypto despite current market downturns, expecting more startups to integrate crypto infrastructure for capital raising and payments. The firm argues that bear markets attract serious builders focused on real innovation rather than speculative gains, and highlights emerging opportunities in stablecoins, trading infrastructure, and financial rails.
Summary
Y Combinator's leadership expresses optimism about cryptocurrency's future despite current market pessimism, noting that prices are down and many builders are leaving the space. The firm has already invested in over 100 crypto startups and expects this number to grow significantly. They predict that eventually most YC startups will use crypto rails for capital raising and payments, though many may do so invisibly without explicit awareness of the technology.
The optimism is grounded in several concrete developments: major fintech companies outside the crypto space (Deel, Gusto) are adopting crypto infrastructure; regulatory clarity is finally emerging; stablecoins are being adopted by major financial institutions; and tokenized stocks are transforming trading. Projects like Hyperliquid are demonstrating that crypto networks can compete with traditional financial infrastructure. The speaker argues that AI agents will likely use crypto networks as financial rails in the future.
Crucially, Y Combinator sees bear markets as superior conditions for building compared to bull markets. In bear markets, founders are attracted by genuine opportunity rather than easy money, and teams can focus on real innovation without competing against scams offering infinite yields. This leads to a different founder quality and earlier liquidity events based on merit rather than speculation.
The firm has funded major teams across the crypto spectrum, including infrastructure projects like Beliani Pay and Infinia (building developer tools and ramps for Latin America) and Sporeum (enabling remittances to India via stablecoins). Y Combinator identifies several key opportunity areas: capital raising infrastructure, new stablecoins and their applications, agentic commerce, trading platforms, institutional products, and scalable private blockchains.
Key Insights
- Y Combinator expects that eventually most YC startups will use crypto rails for capital raising and payments, but most will probably never explicitly know they are using crypto infrastructure
- Bear markets attract a different type of founder more focused on building and getting early liquidity events, whereas bull markets are the worst time to build because prices are decoupled from reality and teams must compete with criminals offering infinite yield
- Major fintech companies outside the crypto industry, like Deel and Gusto, are already building with crypto rails despite not being primarily crypto companies
- Tokenized stocks are transforming trading and projects like Hyperliquid with tiny teams are making traditional stock exchanges concerned about their competitive edge
- Y Combinator has identified specific emerging opportunities in capital raising, stablecoins, agentic commerce, trading, institutional products, and scalable private blockchains as near-term focus areas
Topics
Transcript
[0:00] 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, [0:30] 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…
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