I would be absolutely terrified to hold any form of ETH short right now. Here's a thought experiment for how reflexive and fragile market psychology is right now.

Imagine Saylor divested 10% of his treasury into ETH. I'm not saying he will - but what would happen if he did?
It's probably not going to be Saylor, but somebody is going to do it. If not the leading BTC Stonk, a blue chip tech company. If not a blue chip tech company, a brave insurance or pension fund. If not 10%, 5%.
Who is first or how large their position is ultimately won't matter. The moment a *credible* treasury allocates into ETH, the market suddenly flicks a switch and gaps like it hasn't done in years.

Shorts clobbered and reflexive narratives crystallised - overnight.
Like the Halving story after PTJ, ETH's supply sink narrative will very quickly catapult into mainstream credibility & consciousness.

After this first treasury short squeeze, the EIP1559 narrative graduates from CT obscurity to the next Morgan Stanley / Goldman report.
Just think about how contrarian it was to think the Halving was a thing before PTJ. It was all about EMH, n=2, risk asset, etc.

Same thing here. It's still highly contrarian to be bullish on ETH based on these new monetary narratives. But after its PTJ moment, that will change.
This is why crypto is the best place to be as an investor & trader. Narratives are constantly being overlooked and it only ever takes a single fuse for market dynamics to change completely - to go from totally ignored to plastered everywhere in less than a week.

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More from @ninos_mansor

1 Mar
DeFi’s narratives in 2021👇
Slowly chipping at TradFi credibility from synthetics to savings, injecting itself into legacy systems during moments of havoc (GME). Oasis for 24/7 price discovery in an era of dysfunctional markets. A refuge for savers in the yield-deprived sahara, without bankers & their fees.
Institutional products racing to capture inflows (Bitwise the early-mover, Grayscale the 800 pound behemoth). Wall Street rebels warm but unallocated, Wall Street dinosaurs in denial. As with BTC, they ultimately allocate by force, not by will -- client demand dictates all.
Read 8 tweets
9 Feb
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.
Read 8 tweets
3 Feb
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.
Read 7 tweets

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