A weekly newsletter on actionable digital asset market insights and practical observations with a smidgen of greentea 🍵 insights
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📖 Book of the Month 📖
This month, I am re-reading The Fourth Turning by William Strauss and Neil Howe. If you have not read or listened to the audiobook (free link below). I cannot recommend it enough. In my opinion, this is one of the most important books of the last 20 years. I know it sounds hyperbolic, but give it a read or listen and judge for yourself!
Listen to The Fourth Turning For Free with Audible. Link
💭✍🏼 Food For Thought 💭 ✍🏼
In my opinion it is a 100% probability that whatever US CBDC or Stablecoin that is eventually launched in the US will have direct MIT connection. Read it all here. Link
I love VC investing, I started my career in VC investing in 2007 and that is what set my on the path to where I am today. Let's just take a sober look at reality--financial conditions are very very frothy ⬇️ Link
As you can see below, Past is Prologue--regardless of whether or not you were around to live the history--it has happend before and it's happening again. Pay special attention to the fact that the story below is from 2007, comparing against the forthy nature of 2001. Let me know if you see any familiar "buzz words"? ⬇️ Link
And next we have the first mega private equity firms coming public--- Summer of 2008. Today we have Coinbase. Same movie, new actors. ⬇️ Link
I could go on, but I won't. Question: What is my point? Answer: My point is that the parallels to other periods of frothy times are crystal clear, in my opinion. In each prior time there was a late cycle echo of "this time is different"--it was not different. Yes, I think Crypto will change the world.
Yes, there is a ton of development happening all over the ecosystem globally. It is also true that Monetary and Fiscal Stimulus has injected the "patient" with so much "good stuff" that the patient cannot feel any pain at the moment. As the effects of the stimulus roll off and wear off--we will see a sober economic backdrop kick in and I suspect we shall see this every month starting now as more and more stimulus wears off and sobriety comes. Expect a major headache and probably worse. The writing is on the wall.
In my opinion, leadership does not know what they are doing. This is also called "winging it!". I see it all the time in C-Suites and other forums. You do not have to agree with a word herein; however, it is public and time stamped so let's revisit this in Q2 or Q3 and see how things play out before the Mid-terms. Remember--the Fed and other central banks never change policy right before elections to avoid being political---unless they are forced to by circumstance. This means they are more likely to have to act sooner rather than later and this increases the probability they make a mistake. See 2008 and 2020. Note that everyone has changed their tune at the same time. Coincidence? Not likely. ⬇️ Link
💸 Companies and Deals I am Watching Closely 💸
1. Can't Stop, Won't Stop -- FTX Has Raised More Money ($400 Million) in Series C at a $32 Billion Dollar Valuation - Link
2. Gemini Exchange Affiliate, Gemini Galactic, approved for FINRA membership -Link
3. JP Morgan Chase has apparently as closed all bank accounts of Uniswap founder Hayden Adams from their "platform" (remember the money have in the bank is not actually yours) - Link
📖 Quote of the Week 📖:
“The Youth of a Nation are the trustees of posterity." - Benjamin Disraeli
📰 This Weeks Most Interesting Digital Asset News 📰:
- tZERO’s BSTX Joint Venture Receives SEC Approval as National Securities Exchange - Link
- A computer engineer cracked a Trezor hardware wallet - Link
- Binance Restricts Over 281 Nigerian Accounts - Link
- Ethereum 2.0 Has Been Rebranded to the "Consensus Layer" - Link
- Ripple Buys Out Their Series C Investors (after being sued by their lead investor) - Link
- YouTube May Exploring NFTs for Creators - Link
📈 Top 10 Market Movements by Market Cap over the last 7 days 📉:
Bitcoin: Price OHLC
Earlier today I was having one of the many conversations in the last few days that keeps bringing me back to OHLC.
OHLC chart for Bitcoin shows the Open, High, Low and Closing price and above I have updated this chart again to show the year to date chart for context.
To return to the conversation I was having--you guessed it--it was a "should I buy"? As always, I do not give investment advice and you should do your own research.
My response was, "as I have been saying in my newsletter writings since the week of December 5, 2022---you want to be more cautious that the period pre- December 5, 2022. I continue to echo this opinion. The reason is simple, I personally see more volatility that less across all sorts of markets. In fact, I am beginning to think about echos of the 2007-2008 time frame. During that time private markets boomed generally while the housing market cracks were not yet in mainstream consciousness. I would know because I was actively working in private markets then -hedge funds, VC funds, PE, Buyout you name it and go check the tape. During 2007 up until Q4 2008 private private markets were having their best fund raising and capital deployment years since the dot com era, until they didn't.
I am not saying we are there right now. However, what I am saying is that I am observing some of the same disconnections I remember from that time because private markets do not mark their assets to "market". In this case the rush of private market capital is flooding into Crypto back in the 2007-08 era is was flooding into Blackstone and Carlyle and other buyout funds without abandon. See my Food For Thought section above for reflections of that era compared to today.
Bitcoin: Exchange Net Transfer Volume from/to Exchanges - All Exchanges
Updated for this week, this chart shows the difference of in volume flowing into exchanges and out of exchanges, i.e. the net flow of coins into/out of exchanges. Note that exchange metrics are based on our labeled data of exchange addresses that we constantly keep updating, as well as data science techniques and statistical information that changes over time. Therefore these metrics are mutable – the data is stable, but especially most recent data points are subject to slight fluctuations as time progresses.
Ethereum: Net Transfer Volume from/to Exchanges - All Exchanges
I have provided this chart for Ethereum updated as well. One thing I have noticed this year is that BTC and ETH are basically fully institutionalized meaning all the TradFi risk management and rules based system from the old world have been applied to them. This means that for people looking for asymmetric upside BTC and ETH are not the place to be (at this time) because they just trade with the direction of broader global macro, e.g. risk on BTC and ETH rally and risk off BTC and ETH are flat or down. This means that news tokens and protocols like structured products are where all the "juice" is today. More on this coming soon.
Total Value Locked (USD) in DeFI
As I noted immediately above, the "action" has started to migrate into new areas of crypto such as structured products. You can see here that broader DeFI is stead but not moving spectacularly. I expect we see this choppy period for a while more until central banks break something, cause a crash and hyper print in response. During that phase it will be time to jump back onto the train fully. For now, I remain of the conviction to have more cash than normal (and even short things) and watch and wait.
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Green Tea Tidbits:
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This Newsletter does not provide, and no portion of this content purports to be, individualized or specific investment advice and I do not provide investment advice. All information provided herein is general in nature and is made without regard to individual levels of sophistication or investment experience, investment preferences, objectives or risk parameters and without regard to the suitability of the content for individuals or entities who may access it.
No information provided herein, should be construed as an offer to sell, or a solicitation of an offer to buy any security or investment vehicle, nor should it be construed as tailored or specific to you, or any reader or consumer thereof. You understand and agree that the content does not constitute specific recommendations of any particular investment, security, portfolio, transaction or strategy, nor does it recommend any specific course of action is suitable for any specific person or entity or group of persons or entities.
The content herein is based upon information from sources believed to be reliable and I am not responsible for errors, inaccuracies or omissions of information; nor is it responsible for the accuracy or authenticity of the information upon which I rely. For informational purposes only. Do your own research.
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