The Wolf Den #910 - Full Circle
Which path did you take back to Bitcoin?
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In This Issue:
Full Circle
Ethereum is the Line
Big News For Uniswap
The Bitcoin ETF is Still Gaining Traction
The Truth Behind 27% On Ethena, The Hottest Project In Crypto | Guy Young, Founder & CEO
Full Circle
In a perfect world, this would be the ideal journey in crypto…
The Introduction to Bitcoin → The Desire to Invest → Hesitation to Invest → Encountering Experienced Traders/Investors → Entering the Crypto Market → Facing Market Volatility → Identifying Risks → Approaching DeFi → Moving Further Down the Risk Curve → Learning From Mistakes → Transitioning to Safer Assets → Returning to Bitcoin.
But since perfect doesn’t exist, here’s what the journey often look like…
The Introduction to Bitcoin → The Desire to Invest → Hesitation to Invest → Entrusting a ‘Guru’ → Skipping Bitcoin for Altcoins → Believing You Are a Genius → Moving Beyond Your Circle of Competence → Reinforcing Bad Habits → Giving it All Back → Leaving the Space with Resentment.
However, in some cases, a hero emerges...
The Introduction to Bitcoin → The Desire to Invest → Hesitation to Invest → Finding a List of Trusted Sources → Buying Bitcoin → Exploring DeFi → Taking Bad Trades → Altcoin Maximalism → Underperforming The Market → Questioning Everything → Minimizing Losses → Doing the Homework → Transitioning to Safer Assets → Returning to Basics
I’d like to believe that my journey, along with most of you reading this newsletter, somewhat resembles outcome #3. Most of you all have been here for quite a long time and, if you are still reading, it probably means your portfolio survived and your sanity too. From what I have gathered, most participants truly don’t make it this far.
For those of you that are new here, technically you could fall into any outcome, but if you stick around, and take this space seriously, chances are you will be a mix between #1 and #3. No promises.
What’s intriguing about the many paths you can take (as an investor/trader), excluding outcome #2 (which is really only half of a hero’s journey), is that I genuinely believe most roads lead back to the basics, i.e. Bitcoin, and perhaps some really simple DeFi.
It's nearly impossible to find a crypto OG who doesn't believe in Bitcoin, which says a lot about what it means to last. Believing in Bitcoin has proven to be pretty much the only reliable strategy cycle over cycle. It would be hard to find an OG who has held onto their portfolio throughout their entire journey while abandoning Bitcoin.
Until this cycle, with Ethereum solidifying itself as a 'here to stay' asset and Solana attempting to be the Ethereum of the last cycle, surviving in the cryptocurrency space without holding Bitcoin or a significant stroke of luck was nearly impossible. While some traders and investors have managed to navigate the market's volatility, they would likely admit that they are the exception rather than the rule and are bound to crash and burn at some point.
My key takeaway from this segment is that we often circle back to the fundamental basics we all start with. These include recognizing Bitcoin as the hardest asset on the planet, acknowledging its status as digital gold, and a store of value. Additionally, understanding the significance of decentralization, recognizing that yield implies risk, and acknowledging that there is more to the cryptocurrency space than just Bitcoin.
Making it up until this point doesn’t guarantee victory, but we can be sure the ugly parts are over. I wish you all the best on this journey; we are in this together.
Also, I'd like to share some details about a brief but telling conversation I had this weekend with an old friend, which helped me gauge where the market is. The context of the conversation is as follows: my friend is smart, works in finance, knows about my involvement in crypto, and has been curious about crypto in the past. After catching up for a while, he asked about crypto, giving me a chance to see a glimpse of the perception from the outside.
When I flipped the mic back to him, all he could say was that he had heard nothing about it.
I asked if he meant he just hadn’t heard any good news or truly meant nothing at all. He responded that he had truly heard nothing about the market and asked me if it is doing well or not. He genuinely did not know. I will never gauge sentiment off one conversation, but I think this was strongly telling that we are still fairly early this cycle. This may sound crazy, but the ETF news still isn’t news to anyone outside of those who actively keep up with crypto.
I suspect this will continue to be the case until Bitcoin reclaims all-time highs and then proves it can keep going. Until then, people just aren’t going to bat an eye - and that’s a good thing. Also, Bitcoin is nowhere close to being where it was on the mainstream’s radar like it was back in 2017 and 2021. This time, however, I suspect the mainstream will be more open to Bitcoin as they have had ample time to realize its staying power. Last point before wrapping up, Ethereum is looking pretty stellar right now, props to everyone who didn’t get shaken out. You deserve this.
*THE NEWSLETTER WILL BE SHORTER THIS WEEK!!! BACK TO REGULARLY SCHEDULED PROGRAMMING SOON.
Ethereum Is The Line
Cory Klippsten, a prominent Bitcoin maximalist, sparked a dialogue with me from this tweet above. Our exchange developed into a full discussion. We both presented our perspectives. What do you think?
Me: CME has ETH futures, like BTC. Surveillance sharing. Only other tokens besides BTC that could remotely have an ETF.
Cory: Why not XRP, ADA, TRX, DOT etc? Where is the line?
Me: They don’t have market of significant size for surveillance sharing. So it’s a non starter. That’s a pretty clear “why not.” The line is after ETH.
Cory: So the SEC would choose to set the precedent that if another centralized premined altcoin reaches "significant size" then it would be cleared for ETFs?
Me: If they allow the CME to offer futures and approve a futures ETF of that specific asset? Then yes, I assume. But they’re too small and nobody is proposing them. SEC doesn’t care about premines last I checked. Securities can have ETFs.
Me: Also, I literally said on my show there will likely be minimal interest in an ETH spot etf. Futures ETF had zero. But the path to approval is logical.
What's different about the ETH ETF from the BTC ETF is that not everyone is a fan of it happening. This, in turn, creates a sentiment that it can't happen. However, not wanting it to happen doesn't change the likelihood of it occurring. BlackRock doesn’t lose.
Big News For Uniswap
Very early Friday morning, Uniswap’s UNI token jumped +50% on the news of the foundation announcing some major changes that benefit participating UNI holders, which was previously believed to be illegal. Here are the three major changes to be implemented:
Upgrade Uniswap Protocol Governance to enable the permissionless and programmatic collection of protocol fees
Distribute any protocol fees pro-rata to UNI token holders who have staked and delegated their votes
Allow for governance to continue to control core parameters: which pools which are charged a fee, and the magnitude of the fee
Here’s the Uniswap Foundation explaining the decision:
“This proposal seeks to invigorate and strengthen Uniswap’s governance system by incentivizing active, engaged, and thoughtful delegation. Specifically, we propose to upgrade the protocol so that its fee mechanism rewards UNI token holders that have delegated and staked their tokens.
The UF team is often asked what success looks like for Uniswap governance. Quite simply, success for governance equates to the long-term sustainability and continued growth of the Protocol. Governance controls the Uniswap Treasury, and core parameters related to the Protocol’s long-term sustainability (for instance, fees). In 5, 10, 20 years, Uniswap’s continued success – and whether it actually becomes the liquidity layer of the Internet – will have been the result of its delegates and the decisions they make.”
As far as implementation goes, Uniswap is currently moving through its standard governance process with the community, but the change should be a done deal.
“Assuming no major blockers arise, a Snapshot vote for this proposal will be posted on March 1, 2024 and an on-chain vote will be posted on March 8, 2024.”
What's intriguing about this development is the speculation that Uniswap either knows something about the Coinbase decision or suspects a favorable outcome, which shields them from getting in trouble for distributing these rewards (purely speculation). Not only could this development be a massive win for Uniswap, but also for governance tokens and DeFi in general. Giving governance protocols the chance to reward their holders legitimately would be a huge boost to DeFi, which the market is not yet ready for.
The Bitcoin ETF is Still Gaining Traction
Two significant ETF stories broke this past week that are worth catching up on. Firstly, Bitwise was selected and approved for full access at an undisclosed $100 billion nation-wide RIA (registered investment advisor) firm. We will likely learn the name of the firm in the near future when the official announcement is made or when clients are recommended Bitcoin. The other news is regarding $30 billion Carson Group approving Bitcoin ETFs from BlackRock, Franklin Templeton, Bitwise, and Fidelity to issue to their clients. Carson Group’s VP highlighted that these four were selected based on strict criteria, including cost-efficiency, competitive fees, size, and in-house research. Get ready for more stories like this because we will likely see different variations of it many times over. We are still very much witnessing history in the making.
The Truth Behind 27% On Ethena, The Hottest Project In Crypto | Guy Young, Founder & CEO
Ethena has become one of the hottest projects in crypto lately. Inspired by Arthur Hayes' synthetic dollar idea, Guy Young decided to build Ethena to disrupt the crypto industry. While the project may be challenging for crypto novices to grasp, I endeavored to simplify it by interviewing Guy. Tune in to learn about Ethena and the future of crypto and stablecoins in this episode of The Wolf Of All Streets podcast.
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.