The long-term builders have been hurt by association, but they aren't the ones who've been perpetuating fraud or fleecing investors.
The innovators will be here when the trash is removed.
3/ Who's hurt and who's left?
Opaque lenders: dead
CeFi bucket shops: dead
Low float tokens: dead
No diligence VCs: dead
Paid personalities: dead
And good riddance!
Who's left, what has been built in the past several years that is new, novel, and interesting?
4/ This is my favorite slide of all time (h/t us @MessariCrypto we created it).
Crypto is inevitable because we've made - despite setbacks - significant progress with bitcoin, stablecoins, distributed computing, scalability, onchain financial primitives, and governance.
5/ On Bitcoin:
There were some narrative violations this year. (Rainbow chart dead. Bitcoin mining struggling. Saylor, El Salvador entering max pain.)
But BTC as "outside money" will have renewed interest in 2023, and we're entering historic buy range:
They represent 4/10 top crypto assets. Volumes are BIG, and stablecoin issuers *actually generate yield at the true risk-free rate of return* aka US treasuries.
Stablecoin legislation seems likely. Sky is the limit here, and that's good for DeFi applications.
7/ On Layer 1s:
The Merge happened, the software equivalent of the moon landing. Major derisking event for Ethereum (and economic catalyst).
Cosmos, Solana, Aptos/Sui, Polygon, Optimistic/zk Rollups, Avalanche...all made major progress!
Fees are also way down! Good UX!
8/ On DeFi:
We're two years into a secular bear market. DeFi has been in a deep winter, and faces technical headwinds (hacks) and reg challenges (DCCPA). BUT the primitives are here to stay.
AMMs, Flash Loans, Perps, NFTs, etc. are 0 to 1 innovations, and progress compounds.
9/ On NFTs:
NFTs are data wrappers. You can now transact any IP, synthetic asset, consumer digital good, identity token, etc. on chain. They look like toys to start, but they are almost unfathomably important as a technical primitive.
Short apes, long NFTs.
10/ On DAOs:
We have on-chain voting, delegation, liquid democracy, subDAOs, community treasury management, and rapid formation and wind downs of community organizations. BTC and ETH are in their 3rd innings, maybe.
But like NFTs & DeFi, we're in the first inning for DAOs.
11/ The frauds will rot in jail. The thieves will get their comeuppance. The trash will be taken to the dump.
But there are TENS OF BILLIONS in cash getting deployed into crypto's development, and all time highs in talent, potential, and opportunity.
Don't get discouraged.
LFG
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3/ For the sake of brevity, I'll skip what you may already know about the origins of money thanks to crypto ("there's this island called Yap"), and anything that you could read about early accounting in that wiki.
I'll skip to the "merchants of Venice" who birthed capitalism.
A close friend of mine (who is liberal) asked me today: “I understand the support for Vivek, but how can you swing over to Trump overnight?”
I compared Trump to an entrepreneur and comedian, but not in the way that you are thinking.
👇🏼
For starters, Trump was right about a LOT of issues. Immigration, NATO, tax reform, China. Just ask…Jamie Dimon:
But the big issue that always comes up is “but Trump is a jerk / dictator / insurrectionist. Democracy is at stake.”
If you think J6 was a literal insurrection, the conversation usually stops there. The guy with the horn helmet and face paint did not almost halt democracy.
I'm writing a comprehensive, mid-year check-in in a single day, 280 characters at a time. All day.
A lot happened in the first half of the year, and I have never been more bullish on crypto than I am now.
It's gonna be a big H2’23.
0.1/ Note, I don’t have much time, as I’m heading out on pat leave, like, tonight. We'll see if I make it through.
But I wanted to take a day to sprint through a stream of conscious mid-year update to Messari’s annual end-of-year report. It’s a throwback to my original thread.
1/ It’s all about macro (Bitcoin, ETH), not “crypto” (DeFi, L2s, NFTs). This is not a surprise unless it’s your first cycle. The soul-crushing apathy of crypto winter is second nature to me, tho. Good news: BTC dominance tends to lead recoveries, and we’re at multi-year highs.
1/ 90% of crypto’s market carnage last year ties back to the SEC’s utter incompetence and prioritization of impossible technical compliance over investor protection. twitter.com/i/web/status/1…
2/ I’m talking of course about the spot ETF refusals and the Grayscale products, which are “SEC Reporting” Trusts attempting to convert to ETFs, but blocked on specious technical grounds. Famously: spot markets are “not regulated” but SEC is ok with those markets’ derivatives.
3/ This paved the way for the GBTC trade: investors created GBTC shares with Bitcoin due to imbalances in demand for GBTC shares vs spot BTC.
For a while, GBTC had a premium that savvy investors could harvest in return for creating new shares. 3AC and BlockFi did this in size.