1/ There have really only been two things that have ever pulled crypto into new bull markets: ETF hype, and new pockets of speculative bubbles.

The reason things are moving faster this year, is that we have both at our backs.

🧵 2/ Aside from its impact as a meme, the 21 million bitcoin hard cap has been irrelevant since the first or second halving.

The real driver of the 2013 bubble was the intro of Grayscale's Bitcoin Trust.

It launched in Sept, and for the next 60 days bitcoin went vertical.

1/ When Gary Gensler says crypto “is just an accounting ledger” he tells on himself as being oblivious to history.

Here's a story that combines why Gensler is an idiot, how crypto is transformative, and the history of Messari all in one.

My three favorite things!

👇 2/ The history of accounting is arguably the history of human civilization. It's fascinating to read even the bare bones Wikipedia on the subject.

In short, no accounting, no civilization beyond tribes.

And no double entry accounting, no capitalism.

en.wikipedia.org/wiki/History_o…

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:

1/ HAPPY NEW YEAR

The Messari Theses for 2024 are now available for free.

Here's 105 thoughts for the new year. 👇 (You can read the full 190+ page report here, by signing up for a free Messari account.)

Otherwise, some highlights...

messari.io/crypto-theses-…

0/ 95 THESES for the second half of 2023.

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/ 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.

1/ BIG NEWS:

A new market structure bill just dropped in Congress. It’s a win this year for crypto to even get some attention in DC right now, after last year’s setbacks.

What this means 👇 2/ First, this is a v1, not a final product.

There is still a LOT of work to do to get to a viable piece of legislation, but this is a good starting point for a sensible market structure bill, and it delineates where authority might lie between the SEC and CFTC.

1/ If you look at adoption, there's really just three sources of (serious) demand for crypto right now:

1. Non-sovereign commodity money (BTC)
2. Stablecoins (digitized USD-denominated cash)
3. Blockspace (for builders/developers)

Plus some financialization around these three. 2/ Bitcoin is 50% of the non-stablecoin market. Protecting bitcoin mining, self-custody, development, and surrounding infrastructure is paramount.

The "outside money" thesis says you should own a little bitcoin bc the US has been too reckless to trust. Own gold and digital gold.

1/ It's been 24 hours to reflect on Chair Gensler's absolute train wreck of an oversight hearing yesterday.

Schadenfreude is satisfying, but here's the substance of how ineffective, and out-of-touch the Biden admin's financial regulators are right now. 2/ I've been saying (quite loudly) for two years that the Chair's "war on crypto" is about power, not policy. In particular, it's about placating his top (maybe only?) political booster: Sen Warren.

But when he is questioned by anyone other than spoon-feeding allies, he wilts.

1/ I just sent a letter to a dozen Congressional leaders outlining the economic & technical potential of digital assets; refuting misinformation spouted by some offices, regulators, and the executive branch; and calling for prudent, effective crypto legislation.

Part 1: 2/ The letter is thoroughly documented.

Tldr: a) Congress must act urgently, b) the status quo will harm the US economy & national security, c) Congress should exercise oversight authority over the out of control financial regulators, d) it shouldn't be that hard.

Part 2:

I’m sick of feeling like we have to apologize for our early stage and walk on egg shells around politicians and regulators.

We built a trillion dollar asset class with 100 million users in under 10 years with no institutional support and active encumbrances from government. Meanwhile, the Fed prints trillions and debases the dollar. Banks deplatform you on a whim, privatizing gains and socializing losses. And our politicians overspend, waste our tax dollars, cripple our currency and credit, and face no accountability for poor performance.

1/ For 2023 and 2024, we’ll need $100mm / year to hold the line on crypto in the US until the next administration.*

What does the campaign for crypto look like?

(*I am assuming Biden does not run for re-election.) 2/ $1mm each from 50 unicorns and top funds, $100k from 250 healthy US companies, $1000 from 25,000 individuals. We can make it work.

These are our hurricane insurance premiums, and they are critical.

1/ 95 Crypto Theses for 2023

(thread version) 1a/ Full report here:

messari.io/crypto-theses-…

IT'S HERE: The Crypto Theses for 2023

168 pages from yours truly on the top investment themes, people to watch, and trends in policy, CeFi, BTC, ETH, Stablecoins, DeFi, NFTs, DeSoc, DePIN, DAOs, and more.

(PLUS the tea on SBF's closed door crypto policy machinations.)

👇 This year's report was a mad dash.

I started writing on Dec 1, and leaned heavily on the Messari analyst team's prior research to ensure this was the most timely and comprehensive annual report yet.

It's free for all to read:

messari.io/crypto-theses-…

1/ If you're a GBTC shareholder, the biggest thing you should care about right now is that DCG's GBTC assets and Grayscale stay together for the foreseeable future.

The alternative would be not great.

Why? 2/ Grayscale throws off $200mm+ in annualized cash flow even at today's distressed prices.

The assets under management are permanent capital given the trusts' structure.

The question for an investor on what Grayscale is worth revolves around your forward outlook for bitcoin.

1/ On a recent episode of Unchained's The Chopping Block, @hosseeb makes a surprising comment about the $1.1 billion DCG-Genesis promissory note.

He says the 10 year note may have been structured as "callable" in the event of a Genesis liquidation.

Here's what that would mean: 2/ If true, Genesis could have treated the promissory note as a "current asset" (less than one year duration) even though it was structured as a ten year note.

That would have been a material part of any current assets that Genesis was showing creditors.

1/ No, DCG and Genesis can't "dump" GBTC. That's part of their liquidity crisis, but also net good news for GBTC shareholders and FUD fighting.

Why?

In public markets there are rules! 👇 2/ DCG bought nearly $800mm worth of GBTC shares since the premium flipped to a discount in early 2021.

DCG's board authorized up to $1.2bn of share purchases across Grayscale Trusts.

In light of the current liquidity issues, the remainder is likely on hold indefinitely.

1/ THE STATE OF CRYPTO 2/ Bad week, bad month, bad year...

Esp. for the over-levered, greedy, and unethical!

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.

1/ CRYPTO POLICY:

I’ve been quiet publicly, active privately on the DCCPA and US policy the past couple months.

tldr: DCCPA must be significantly amended or paused until next year. Measure twice, cut once. Let's get US crypto policy right.

👇🧵 2/ CONTEXT:

Messari has a vested interest in seeing the crypto industry grow & succeed. Our aim is to reduce information asymmetries & promote transparency to level up the market.

Our customers include exchanges & DAOs. Balanced policy is critical to long-term success for both.