(1/11) Where are we in the current crypto cycle and where do we go from here?

In this thread I'll cover:
-Cycle timing
-Predictions for the next 18m
-Investor implications

TLDR: You aren't bullish enough.

Lets dive in🧵 (2/11) Current State
-This cycle effectively started in Q4 2023 with anticipation of the approval of BTC ETF in the US
- $15b of net new flows in the asset over the first six months of the year
-Thew ETH ETF announcement on May 23rd gave a strong price bump initially jumping over 30% in a handful of days, but recent weeks have seen the asset give back all of these gains.
- We had a large deleveraging event to end Q2 with almost $1B in assets liquidated over the course of the last weekend.

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24 crypto predictions for 2024

Unlike other threads put in as many hard numbers for these predictions to make them quantifiable.

Also tried to call out as many start-ups/hidden gems as possible. Most launching in Q1.

15 for 25 last year.

Can we do better this year? NFA 1. Privacy protocols are front and center. At leats one wallet integrates direct privacy features for sending transactions. I like @elusivprivacy

The debate then rages on for ZK, FHE and MPC and which cases are best for each.

If you aren't confused right not, you arent paying attention.

I pulled all the available data to look at the end game for the rest of 2023

Quick ~15 tweets, each with a chart to understand where we are at and the eventual endgame 🧵 Earnings season came in above expectations.

Where is the recession we were promised?!

Q1 was supported by RECORD profit margins.

Aka greedflation by corps.

This is unsustainable.

.@Rocket_Pool is the best investment idea on the board atm imho (NFA, etc) . Why?
-Atlas upgrade (next wk) lowers threshold to run a node
-Accompanying expansion in rETH w/ more nodes
-Mechanical buy pressure on RPL (thin supply) by stakers who need to hold it

Let's dive in🧵 For Ethereum staking today there are a handful of major players with varying market shares: Lido (~31%) Coinbase (~12%), Rocketpool (~2%), Stakewise(<1%), and Frax (<1%).

How do you best manage a crypto portfolio? Using the data available + academic research:
-Whats the op. port mix?
-Whats the op. bench?
-Whats the best rebal sched?
-Best time to trade?
-Does tech analysis work?

Lets explore🧵 Starting with BTC/ETH.

BTC/ETH have provided empirical risk-adjusted benefits to a traditional portfolio (60% stocks / 40% bonds), despite the volatility and downside risks.

~10% outperformance for basically no vol jump.

This period captures 2018/2020/2022. Didnt matter.

1/5 The Rumors of Solanas Death Have Been Greatly Exaggerated

Sol has 2xed off recent lows. The bounce started w/ Vitalik's tweet + BONK

YET despite the lack of fundamental drivers for the recent appreciation, SOL was vastly oversold for the fund. underpinnings of the ecosystem 2/5 Network activity on blockchains has been known for quite some time to strongly correlate to prices

While many believe Sol activity fell after FTX, daily active wallets interacting on major Sol protocols stayed constant

In the past few weeks, activity 3xed Pre-FTX levels

My personal top 25 predictions for 2023

1-2 tweets per #taek, 1 chart/pic to make it EZ on the eyes/brain

Some overlap with @twobitidiot and our firmwide theses but some notable deviations

Thanks to my awesome colleagues @MessariCrypto research for shaping many of these 1. Macro still matters. Q1 is likely to be rough

Rapid incr. in IRs + removal of liq have hist. been followed by crises as the receding tide of ez mon. policy exposes systemic weaknesses

Something will break in tradfi. Watch credit spreads

ETH 1k BTC 15k arent unreasonable Q1

Heard about MEV but still don't get it?

@chasedevens hold your hand and walk you slowly through the dark forest to discuss

-What is MEV?
-What does it look like today on Ethereum?
-What does it look like on other chains?
-What's the future of MEV? MEV is the ability for security providers to selectively insert, reorder, or censor user transaction requests during the block production process

There are many players in the MEV supply chain. From you the user down to the validator. Each have a role to play

(1/6) If your currency was rapidly depreciating what would you buy to protect your purchasing power?

The answer for Euro and Pound holders has overwhelmingly been #Bitcoin

This is notable because we did not see the same trend in previous crises in 2020 or 2021

A brief 🧵 (2/6) What about other major crypto assets? Interestingly we haven't seen the same trend with Ether. Recent volumes are fairly unremarkable compared to the last 2 years. Hard money vs the world computer?

Is the merge rally stronger than poor macro conditions?

Big week for earnings (FANGs report).
Big week for macro (Fed IR decision).

Where we are at and the week ahead in macro / crypto in 7 charts We have Apple, Amazon, Meta, Exxon, Microsoft, Boeing, Pfizer all reporting. Or basically half of the stock market.

Heard about the three zkEVM announcements (@zksync, @Scroll_ZKP, and @0xPolygon) this week and unsure about wtf a zkEVM even is or what it means for Ethereum?

🧵 @eshita and I got you Lets start with the zk part. Each zkEVM plans to operate as an L2. L2s batch trans for cheaper costs + faster local processing while preserving sec of L1. L2s can by zk or op.

ZKs are the gold standard for speed/cost/sec but until now it hasnt been pos to have support on the EVM

Dogecoin is the world's most expensive running joke at $9b in mkt cap

But its also surprisingly a:
-top ten cryptocurrency
-the second biggest PoW coin
-one of the oldest coins in the industry

Is there any dev path, roadmap, or underlying value? Or is it all just a gag? After sitting undeveloped for yrs, in 2021 Dogecoin found a recommitted group of developers.

They have put together a roadmap to try and bring the tech stack up to date and rebuild the back end in an effort to help merchants add Doge payment capabilities for customers.

.@dYdX recently announced it is leaving the @ethereum Layer-2 (L2) ecosystem to launch its own @Cosmos chain.

This decision prompted many investors and builders to reconsider the tradeoffs between these two ecosystems. Today Cosmos allows builders more flexibility (language, inflation sch, trans fees, security, design, account model etc), interoperability between ecosystems, and also allows them the potential for value accrual (MEV, transaction costs, etc) for their own native token

Bear market got you down? Need something to look forward to? The merge is on the horizon my friends.

Yes, you've heard about it but how do you quantify and play the opportunity? A brief🧵 You know the merge is the change in Ethereum's consensus mechanism from PoW to PoS but what does it do for the investment case for Ether the asset?

Estimating #ETH yield + valuation post-merge has been a challenge. There are great models built but many are now out of date

W/ the merge in focus, I built a fresh set of models (h/t @drakefjustin, @Data_Always, @Saypien_) for you to mess with

TLDR ~10% yields and est $6k ETH Staker Yield Model Prediction: Real yields of 7% to 13% at the time of the merge. These will scale down over time.

Q1 2022 was the first quarter since the 1980s you literally couldn't win in any asset class....and your cash got crushed by inflation best case scenario for stock and bond investors was a -4.5% return from high yield bonds...again before inflation

Stocks up, crypto up more. Stocks down, crypto down more.

That’s the world we live in today.

But not for long.

How, when and why crypto de-couples from stocks 👇 🧵 Let’s start with the basics. What is not corr with equities? Mainly Gov bonds and Gold. Why? They have claims to some asset enough people think is RF. They give stability that investors desire during turbulent times. They retain their purchasing power during better than peers.

Want to know what's going on in macro but hate reading long drawn-out articles?

Where we are at and where we are headed in ~30 charts and as few words as possible.

Let's start with inflation (Yes it's transitory). That informs interest rates which informs risk assets. 👇🧵 Inflation sucks. But what do people mean when they say inflation? Here is the mainstream def. The FED strips out food/energy, and allows for a changing basket of goods Ie if beef goes up, it assumes you buy chx. If you think the Fed is moving the goalposts you would not be alone

2017 had ICOs, 2020 had DeFi, but 2022 will be the year of Sports NFTs.

But wait didn't we do that @nbatopshot thing already? Nope we are just getting started.

Give me 8 tweets and I will show you why Sports NFTS are ready to pop the 2nd half of 2022 and onboard the normies 🧵 Sports NFTs are the intersection of trading cards ($14B industry) and fantasy sports ($22B industry). There are 60m fantasy players in the US and Canada alone. Daily Fantasy (@DraftKings +@FanDuel ) have 2m+ monthly users spending $2b+ a year.

The addressable market is enormous

A lot has been made of the death of the #petrodollar system.

This has massive implications from #equities to #crypto. From the #US to #China.

I agree its time will come. But not anytime soon.

Stick with me for 8 tweets👇🧵 USD is EXTREMELY entrenched

USDs are 50%+ of int. loans and 60% of reserves (below).

That bottom green bar 2%? Thats the Yuan