Post-Musk crypto markets are going to be eclectic and confusing. Retail is now here to stay, so capital rotation becomes more idiosyncratic. $DOGE type moves that leave us totally bewildered. More chaos and randomness. Correlations fly around and confuse conditioned participants.
The entrance of Musk's retail is the return of a 2017-type market. It'll be way more fragmented vs 18/19/20. It's not a market where you can over-generalise through clear structural themes.
Alts blown off one second, pullback is over the next, lead by some random coin on WSB.
It's now a war between old retail and Musk retail. The psychology of Musk retail is very different. Musk's crowd is futuristic and open-minded. Anything is possible. Any valuation, any idea. Pure crypto retail is skeptical, wounded by bear market PTSD.
Not only is Musk now the general of a new crypto army, he has opened the floodgates for other influencers to do the exact same thing.
Just like Saylor removed career risk for corporate treasurers, Musk removes reputation risk for online influencers and their digital armies.
Be prepared for more sudden entrances into crypto, lead not just by tech billionaires, but online superstars and their meme armies. The biggest YouTuber, the largest Gamer, a top five artist, actor or athlete.
Like 2017, 2021 crypto will reward a blank slate mentality. Nothing is too crazy. If you catch yourself saying "this is insane" too early, you're probably on the wrong side of the poker table. Just think of the $TSLA run and how it torched the skeptics for years on end.
Manage your risk and don't feel bad if you take profit into BTC and miss an X or two.
But just do yourself this one favour: fight the temptation to be the first guy declaring war on the herd, especially when this Herd's Leonidas is $TSLA's Elon Musk.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
The market is yet to understand Ethereum’s four-prong supply sink
Unlike the Halving, $ETH's supply-side argument is not straightforward to grasp
But once understood, just like the Halving, these dynamics will drive a quick institutional repricing 👇
1) Firstly, ETHE has re-opened for subscriptions as of early February. This is a check valve: coin that enters does not leave.
With a CME contract paving the way for institutions to arb the ETHE premium, this ultimately creates a black hole for spot $ETH.
2) While ETHE is an institutional supply sink, ETH 2.0 is a gravity well for diehard, ETH-denominated HODLERs.
Staking metrics are growing: According to @cryptoquant_com, the staking rate has grown by 250% since December and roughly 2.8m ETH ($4.3b) now sits in contract.