Thread by @wassielawyer

1/ Some thoughts from a Wassie in a suit regarding the state of the market founded purely on anecdotal evidence gleaned from being a founder, advisor and investor that isn't completely out of touch with reality.

The altcoin / venture market feels incredibly uncomfortable.

2/ Obviously none of these is legal or financial advice, especially because this take is probably mid-curve af.

But these views are formed from having a front-row seat to dozens of fundraisings as an advisor and service provider, as well as being a founder and angel.

3/ The headline point is this - who the fuck will buy my venture bags at 10-11 figure valuations when (a) the institutional bid is only on majors, (b) 'dumb money' is purely aping memecoins and (c) the only 'smart retail' that would buy those bags are already in private rounds?

4/ To elaborate further, I think the first point is easy enough to digest. The BTC ETF (and maybe ETH ETF) has unlocked liquidity from a new class of investors. The flows will likely accelerate over time as larger and less nimble funds get internal sign-off to allocate towards...

5/ the ETFs. Unlike our terminally online asses that rebalance our portfolios every 5 minutes, your large institutional funds move a lot more slowly. And I do think it is likely that they will allocate more towards BTC whenever they next get approval to rebalance their exposure.

6/ But BTC (and maybe ETH) flows do not translate to bids on your favorite ZK DA AI/Gaming Intent-centric L1/L2/L3/L4 that you privately aped at 9 fig 'seed' valuation because its definitely going out the gates at 10 fig FDV when it TGEs sometime in 2024 - 2026.

7/ Or the countless cheques for dApps you wrote at 10 - 20m valuation because your brain assured you that this is going out the gate for 80-100m minimum.

If you are reading this and thinking 'Oh wait that's me!' - you are probably a 2022 survivor that was likely 'dumb money'...

8/ in the last cycle buying the VC fund's bags that has spent the bear market working hard, networking and building your own circle of friends with which you share 'alpha'.

This cycle - you are the 'smart money' and you are going to make your 10x on 'dumb retail'.

9/ Wait but where the fuck is the dumb retail?

Now obviously Larry will buy your BTC bags but you have none because you don't want a 3x, you want to a 30x at least. You have altcoins.

And the dumb retail who don't have connections / alpha are...

aping memecoins.

Riiiiight.

10/ Which brings us to point number 2.

If the paragraph above didn't apply to you (i.e. you haven't been writing a boatload of seed / private cheques via your friends / NFT community / local KOL), are you sitting around ready to ape a coin with 3 rounds of VC funding at 9 figs?

11/ Probably not. You may be 'dumb retail' but you aren't that retarded.

We all know that the main utility of any token is to sell it to someone else at a higher price. It doesn't matter if the tech is based on dogs, cats, frogs or the flavor of the month buzzword.

12/ Because lets get real here. who the fuck actually reads the white paper to find out if the tech is truly more decentralised? Or that it really will provide more TPS than Solana? Or is more censorship resistant / efficient / scalable?

The only question is - will there be EL?

13/ "Hey wassielawyer ser - you are being too cynical. Surely there are people who are still investing for the tech!"

Yes of course there are. The problem is - they are already in the seed rounds.

Which brings us back to the question - who is buying your venture bags?

14/ Ok but how about the 'new' retail that isn't on CT, that isn't networked into the space and isn't buying majors or memecoins?

Firstly, said individuals likely only exist in an asylum.

Secondly, in case all your friends are cartoon characters, normies are poor.

15/ Unlike in 2020 when everyone was receiving stimmies and had literally nothing better to do but participate in a casino, the average normie is struggling with inflation and higher rental / mortgage while wages stagnate.

No they don't have time to buy your shiny new altcoin.

16/ But surely with the wealth creation brought on by BTC / memecoins, some of that crypto-native money will flow into alts?

Yes I am sure some will. But most won't.

BTC holders are the most risk-averse in this retarded industry.

Memecoin millionaires will buy a lambo.

17/ Inflows certainly aren't enough to absorb the hundreds and thousands of projects that will TGE in Q3 2024 all the way through to end 2025.

The good projects will likely have market makers in to try and anchor a price before the unlock dumps. Bad ones - straight to zero?

18/ Because if you can't figure out who the hell is your exit liquidity (because said exit liquidity is already sitting in the seed / Series A round next to you)...

You probably are the exit liquidity.

You just don't know it yet.

Not until the tokens unlock.

19/ That said - I am sure some altcoins will still outperform.

Those that have already had significant supply distribution and limited overhang (and real tech / use case + marketing) will certainly continue to draw whatever 'smart money' interest there is left.

But not all.

20/ Again - a very hypocritical thread because I have written angel cheques to L1s/L2s/dApps that I genuinely do believe in.

And my business (@gvrn_ai) is literally built on helping founders structure their legal entities / fundraise and manage legal (DM me if you need help!).

21/ And I hold an uncomfortable amount of liquid altcoin bags (albeit with seemingly limited supply overhang) in projects and founders that I believe in.

So I do hope I am wrong and someone buys my bags.

Not legal or financial advice.

I'm a Wassie in a suit.