Crypto Weekly Roundup: Fake News, Real Action

Disclaimer: This post contains the thoughts of a medium stupid person (me) on crypto, a volatile and risky asset class. It is not investment advice, and you should do your own research. All information is for educational purposes only. Please don’t take risks with money you’re not willing to lose.

Welp, we got our volatility event. Sort of.

For anyone who hasn’t been online, on Monday Coin Telegraph (which has apparently been around for 10 years???) tweeted that the Blackrock ETF had been approved. They retracted their tweet about 15 minutes later, but not before we got to see the reaction of the crypto markets.

There’s plenty of chatter about how this makes crypto look stupid or corrupt or that Gensler will never approve the ETF now or whatever. I don’t think any of that is really true.

While the news could have been manipulated by some intern to pump his Rollbit longs, the pump itself was not a scam. It was the obvious result had the news been true.

What’s much more interesting is to measure the response. Which coins led? Which coins didn’t show much life? Bitcoin itself pumped about 7% before the news reversed. ETH pumped about 3.5% and Solana about 8%.

That doesn’t necessarily mean anything on its own, but it is becoming clear that calls for Solana’s death have been greatly exaggerated.

View of the Market:

I’m not generally great at charts, but that’s a bottom if I’ve ever seen one. ETH has looked like trash on almost every major pair for the past six months, but SOL also looks quite strong against BTC, even as BTC dominance (Bitcoin’s percentage of total crypto market cap) rips higher.

There was a parody account recently that wrote a very funny tweet claiming Caroline (of Alameda fame) testified in SBF’s trial that there was a Solana off-switch that they used to liquidate traders on-chain.

What was surprising though was how many supposedly smart crypto accounts quoted it without considering for a second that it was an obvious parody.

I’m not convinced people who hate Solana have ever actually tried it. Put simply, Solana is delightful to use, and Ethereum is miserable to use. Long term I think that matters a lot more than rent-seeking tokenomics.

It also seems like the market (or at least Crypto Twitter anyway) is broadly uninformed of how much is going to be shipped over the next six months.

I personally am about 50% allocated to SOL (then about 20% each ETH and AVAX, and then the remainder to various nonsense). Everything related to SOL is showing strength, and the Alameda overhang, while still significant, doesn’t seem to be affecting price very much since the liquidators staked their unlocked SOL last week.

I’m not a big fractal guy spiritually speaking, but unfortunately, absolutely nothing has been different this time compared to ‘18/’19. “Solana is this cycle’s ETH” is a very clean narrative that’s easy to understand. Year to date, the market seems to agree.

Blackrock is Shilling:

This is a stunning clip. Larry Fink is one of the most powerful financiers in the world, and he’s putting the full weight of Blackrock behind Bitcoin. Nobody knows for sure, but I don’t think Gary Gensler is going to win if he tries to take on Fink, and given that assumption, anybody holding cash should feel extremely underexposed to crypto.

Some Light Reading:

Moar Solana Shilling: Good article in Blockworks chatting with Mert about the more technical reasons for Solana’s superiority. All of this stuff is interesting to me in a kind of cosmic way, but again my source of conviction personally is simply that I’ve used Ethereum and I’ve used Solana, and only causes me mild to moderate heart palpitations.

Ethereum’s Counter: To briefly shill my other (smaller) bag. Ethereum certainly could pull off their own scaling model. While reading about various tradeoffs in L2 and bridging models is interesting, I just don’t fundamentally believe any end user is going to learn any of that. At best they’ll get a wallet, and use a couple of apps, and I think you’re insane if your long-term vision requires my mom to learn how to use Synapse.

Meme of the Week: