Crypto Weekly Roundup: Taking a Breath

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.

We are so back.

After our Lord and Savior the Coin Telegraph intern decided to run a little ETF approval simulation, it appears the market was forced to finally address the fact that unlocking new buyers through an ETF is bullish for the present value of future cryptocurrency cash flows.

The market repriced extremely quickly.

The same broad patterns played themselves out but were more muted. SOL continued to rally against ETH but declined vs Bitcoin. ETH continued to look like utter garbage on most pairs. Lagging alts kept lagging.

The main interesting change was the basket of new meme coins, led by Pepe, that moved higher very quickly.

HarryPotterObamaSonicInu10 (ticker $BITCOIN) rallied 64% this week back up to $140 million market cap. $SPX and $JOE continued to build out their meme resumes as well.

There are interesting Layer 1 trades, and SocialFi, and genuine businesses like Uniswap, but the new class of memes have captured a lot of attention as on-chain enthusiasts look to recreate the incredible run $SHIB and $DOGE had in 2021.

It speaks to an interesting concept, which is that once you make something a real business, it will be valued as a real business. It will have comps. It will be subject to some degree of a discount rate.

Layer 1s are able to escape this cap because all of them include “our gas token is money” as part of the core pitch. Money doesn’t necessarily have comps, so they can go much higher.

But something like the Uniswap token will trade much differently as the market matures. So while I still think Bitcoin + Layer One is the move most of the way up, I’ve carved out a small amount for meme coins to try and get more Solana. Hey, if it worked for Zhu Su (citation needed), then who am I to question the playbook?

I started a challenge in late September where I’m trying to see if I can turn $1k into $100k by end of year flipping nonsense. I bought 3 rugs and put $500 into $SPX and now the wallet is worth about $3,700. I’ll keep riding SPX while it’s in price discovery and then swap for ETH and try to keep hunting good memes.

BTW the thesis on this coin is that the ticker is the same as the S&P 500 ETF except the name has 6900 in it and it has a funny logo. To date that’s been worth about a 7x multiple on my investment.

Wallet address if you want to follow along: 0x7c0E5c061f859c9D84D8EF6c7d04AC361C170Ce5

View of the Market:

Stablecoin balances appear to have stabilized and actually started growing again. While it’s not perfect, stablecoin market cap is probably the best indicator of new money entering the space (at least that we can see). It got brutalized after 3AC collapsed, but substantial amounts of Tether were printed this week, and if the bull run is back on, I’d expect this number to grow quickly.

10-year yields briefly tapped 5% before pulling back slightly. I don’t know if this is the top obviously, but overall I think we’re close to this not mattering, assuming things don’t get substantially worse.

Stocks don’t look great, but have held up better than it looked like they might a month ago. What’s really interesting is that crypto has now legitimately decoupled to the upside in October. If stocks bounce and we get easing in 2024, things can get back to 2021 levels of insanity.

Some Light Reading:

Celestia is live! That’s one (1) for the Cosmos maxies.

The Wall Street Journal is lying about terrorist’s use of crypto: Thanks to Nic Carter for surfacing an excellent Chainalysis review of a WSJ story showing they vastly overstated Hamas’ use of crypto fund terror operations. Then they fight you, then you win or something.

Uniswap added a fee to use their front end: Hayden announced a small fee to use the Uniswap front end, going directly to the treasury. Presumably someday it’s implied this will be returned to token holders, but it is not this day.

One Good Meme: