Exhaustion - not failure - is the enemy in markets. When the market gives traders a move they have anticipated for years, they don't want it anymore. BTC above $12k, ETHBTC above 0.04. It's almost like OG disbelief is a prerequisite for secular & lasting uptrends.
It feels like this is as common amongst VCs as traders. For whatever reason, a longstanding thesis will often only work after the "strongest hands" who bagheld for years finally give up and move on. Then it works exactly as they imagined.
Very weird & almost demonic. The market (perhaps this market in particular) is like one giant exorcism, transferring from weak to strong. It does everything it can to convince those who thought they were "strong hands" for years to destroy themselves at the final moment.
PART I: THE END OF THE SAVER & UNSTOPPABLE RISE OF CENTRAL BANKING
PART II: SALVATION OF THE SAVER, IS CRYPTO READY FOR FIXED INCOME?
PART III: ANCHOR, DEFI’S RISK-FREE RATE & THE STRIPE FOR SAVINGS
PART I covers:
a) The end of the saver, Nixon’s capitulation and Gold’s final deathblow. The new orthodoxy that lionized the debt-craving consumer. Purchasing power dwindling to oblivion; the decline of savings as a % of GNI and real yields wheezing their way to zero.
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.
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.
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.