Crypto is getting ready for the bull run. Are you?
What is Web3? Current highlights: China, Liquidity, Halving. EigenLayer, Solana, Magic Eden, and other news.
Hello, Investors,
These newsletters have become too long, so I’ve decided to change the structure.
From now on, you’ll get:
1 Guide, Strategy, or a deep dive
Highlight of the week with my take
Cookie-sized news of the week
Occasional portfolio updates
We start from the beginning but don’t worry, soon we’ll cover the basics and explore advanced concepts like:
How to evaluate land in the metaverse?
How to use launchpads to get the best results?
Why are projects doing airdrops and how to get involved?
What is Web3?
I consider Web3, or Web 3.0, as the next phase in the evolution of the internet.
It’s not just “crypto”, it’s how we interact with the technology, how it changes our behavior, and where we put our attention.
In my definition, it involves blockchain, but also AI to power up the creation, AR/VR to unlock new experiences, and a major shift in monetization and economy.
Just imagine telling your parents 15 years ago that people would make 6 figures by recording videos of their cats.
That’s how much the internet changed our behavior.
Crypto is getting ready for the bull run. Are you?
BTC, and the whole crypto market, is getting ready for the upcoming cycle.
BlackRock’s IBIT is now in the Top 5 in YTD flows, which means it's taken in more cash than 99.98% of ETFs. Only three S&P funds and one Global stocks fund are above. (1, 2)
Investors and asset managers are talking about 60/38/2 instead of 60/40 portfolios (1, 2, 3).
Airdrops are making headlines with projects dropping hundreds of millions to the ecosystem, and having valuations almost as if we are already in the middle of the bull market.
And we have the BTC halving in 64 days, which will reduce the supply side of BTC.
For those new to crypto, BTC halving is when mining rewards (supply) get reduced by 50%, an event often associated with the bull cycle.
My take
All seems lined up and ready for takeoff, right?
There are 2 sides of that coin.
Check this 2-minute CNBC interview with Kyle Bass - one of the few people who predicted the housing market crash in 2008.
He points out that the two largest property developers in China, Evergrande and Country Garden, have more than $500 billion in debt combined.
On top of that, they have 3.5x more leverage than the US had when they entered the last real estate crisis.
And they are in big trouble. Evergrande was already ordered to be liquidated (1, 2, 3).
What does this mean?
China is trying hard to stay “ahead”.
Meaning they are doing whatever they can to stimulate the economy - what FED started doing during the last crisis, and what was one of the impulses to create Bitcoin, an alternative to devaluing currency that gets printed every day by boxes.
Btw, I started investing in China 2 weeks ago (1).
This means many things, but one of the important is - when central banks stimulate the economy, the currency gets weaker, but stocks (assets) go up.
Devaluing currency motivates investors to reduce cash and buy assets.
So, even with things looking ugly, markets eventually pick up and rise.
—> both sides of that coin look pretty similar.
This is a long thought train, so coming back to BTC and bull market readiness.
I still expect some correction in the next few months due to all the problems around - China, US banking, warzones, …
But if things go ‘just’ bad and not catastrophic like World War III, then China is already pumping money into the economy, the US will start later this year as well, and long-term investors are looking to enjoy:
Good buying opportunities in the short term (~6 months)
Nice returns in the long term
I remain focused on Web3, sticking to long-term strategy and DCA - boring is actually good when it comes to investing.
Then diversified Web2 portfolio to support it - mainly dividend and defensive stocks, index funds, and bonds.
And having a little fun with part of my portfolio on airdrops, metaverse & games, pre-sales, and other stuff.
Wormhole announces airdrop (1, 2)
From the announcement: “Wormhole is the leading interoperability platform powering multichain applications and bridges at scale — the Web of Web3”
What I didn’t know, is that In 2023, the Uniswap Foundation’s Bridge Assessment Committee conducted a report that named Wormhole the only unconditionally approved cross-chain protocol for use by the Uniswap DAO.
My take: I was farming this airdrop, and I hope to get a decent drop. I’ll see at what valuation Wormhole opens. They raised the last round on a $2.5b valuation, considering DYM sits on $7.2b right now, I expect W to reach $10b until the first bigger token unlock which happens 4 months after the TGE.
Solana was down for 5 hours (1, 2, 3)
Solana experienced a network outage early Tuesday morning.
Price briefly dropped from $96 to below $94, now sits above $104
My take: Honestly, I’m surprised they went almost a year without issues. Still, the market doesn’t care, Solana just like Celestia is still popular for airdrop hunters, and I keep $SOL in my portfolio because of their strong Web2 partnerships (Shopify, MasterCard, Visa, …)
EigenLayer has almost 2% of the total ETH supply (1)
EigenLayer re-opened its gates and saw an inflow of $3b in just 3 days. Currently over $5b (2).
People line up to get the airdrop - if you are farming, here’s a point system tracker.
My take: $5b sounds like a crazy high number, but Blast has $1.5b Portal sits at $1b and what’s more, Lido has $23b TVL, so considering people just used their staked ETH it’s not that crazy.
I’m a big fan of EigenLayer and EigenDA, and I’m excited to see how this will change the ecosystem past re-staking mania.
I’m also worried about all the extra vulnerability points that we keep bringing into the ecosystem, especially with those “restake here, get Eigen points, and my airdrop” projects.
MagicEden has launched its reward program (1)
My take: I’m very bullish on this one, they are well-funded and in close co-op with YUGA Labs. I’m even considering to start flipping NFTs again to farm my points.
Side note, flipping NFTs for points can be easier for people with less time and more money, but ofc can be very costly if done wrong.
The SEC is going after DeFi LPs (1)
MetaMask adds Robinhood integration (1)
Apple Vision Pro Launches Web3 Metaverse game - Victoria VR (1)
BlueSky opens to the public (1)
ENS partners with GoDaddy (1)
This one unlocks a circa $9b market of domain speculation and flipping to ENS holders.
Really nice summary, thanks a lot for that!