you got a BTC and ETH ETF approved in the US after a decade plus of advocacy
you got the likes of Stripe and PayPal supporting stablecoins appreciating they'll make e-commerce faster, better, cheaper (less fraud, faster checkout, more worldwide access)
you're seeing signs of a path towards regulatory clarity; courts have ruled in favor in most crypto cases (Coinbase, Ripple, Greyscale)
you're seeing more applications being launched and used across social, DePIN, gaming and DeFi. None are perfect by any stretch of the imagination (nothing ever is) but getting better and showing strong uptake and retention (more than 100 true fans)
you have crypto becoming a presidential topic in the upcoming US elections; one candidate openly supporting crypto and another which is realizing it's importance and shifting to a more neutral/balanced tune
you have DePIN networks that are case studies of how to bootstrap and scale infra networks in a more capital efficient manner. It's impact to networks will be similar to how software-as-a-service (SaaS) transformed internet business models. DePIN's benefits will be realized by DIY enthusiasts who participate and earn in networks (no different than Bitcoin miners) and consumers who get more access, coverage and lower fees to core services like internet, mobile, and GPS/location
is crypto going away? no
will it be a volatile and non-linear trajectory? yes, a reflection of it's nascent, exploratory stage
will it transform industries? absolutely
carry on
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A) Swap to USD & withdraw to bank (are they solvent next week?)
B) Swap to major (ETH/BTC) & take market risk
C) Hold USDC
Everyone in crypto is doing this calculation rn
Exhibit A: Circle held $33.6B in US Treasuries and $8.7B in US Banks*
* Cash held at U.S. regulated financial institutions BNY Mellon, Citizens Trust Bank, Customers Bank,
NY Community Bank, Signature Bank, Silicon Valley Bank and Silvergate Bank
1/ In this dark hour for the industry it’s crucial to remind ourselves why we’re here & why this matters. We’ve lost a lot of ground this year but let’s not lose sight of the good things happening. Among others, Ethereum migrating to PoS & scalability thru L2s
2/ I don’t think crypto goes away or remains niche. Digital scarcity/property rights are becoming an integral fabric of society & reshaping industries - similar to how the Internet did. We’re closer to releasing killer products that are too hard to ignore. Faster, better, cheaper
3/ Long gone are the days of recursive leverage. DeFi yields are lower than tradFi anyways. Many users have been hurt & lost confidence. Candidly, this raises the bar for us to deliver on the promise of creating wonderful apps/services powered by this tech. We have work to do
1/ Envision a state of the world where tokens need to register as securities (see @SBF_FTX 🧵). Is that the end of the world? Historically, it's been portrayed as such but I'm optimistic clarity will unlock much trapped energy
2/ A lot of regulatory uncertainty is already priced in and has help up many participants on the sidelines waiting for clarity to operate in DeFi & crypto
The spirit of the law is consumer protection & fairness, which I think are essential properties for any market to thrive...
3/ So if we abide by these core principles, there is a state where exchanges (FTX/Coinbase/Binance) become the gatekeepers where teams register to issue tokens. By the way, this already happens. The level of DD that some exchanges like Binance do on token issuers is rigorous...
1/ When you think you've missed a trend there's usually a 3-9 month window after the broader market discovers it where you can scale into a trade in size & still make outsized returns. You didn't have to catch DeFi at very bottom of last cycle & you won't this cycle. Here's why
2/ When Compound launched liquidity mining, the market woke up to DeFi. Until then only a few of us were investing across DeFi. Many thought they had missed the DeFi train. Data below supports my framework: usually have a 3-9 month window to catch up & still make outsized returns
3/ Interesting that you can buy core DeFi 1.0 protocols today at similar levels as the beginning of DeFi Summer in 2020. Arguably, many protocols are more de-risked having more traction to show for & Lindy effect. Rising rates changes the picture but still DeFi is not going away
1/ Crypto isn’t perfect. To expect it to be this early on is unreasonable. But the fundamental premise of having robust systems governed by predictable & transparent set of rules no one can control is here to stay. The possibility of having digital property rights is here to stay
2/ Crypto has a long way to go to realize its full potential. It’s important to remember this is still very experimental - on both the technical and socioeconomic side. The encouraging part is that the rate of experimentation is faster in open source systems (vs closed ones)
3/ As I reflect on the past 10 years since I discovered crypto, it’s been remarkable to see the growth of this industry. We’ve created trust-less systems that work. It’s become a trillion industry. It’s captivated the imagination of our generation from people of all walks of life