Investors watched MicroStrategy (MSTR) transform into a Digital Asset Trust (DAT), proving that capital markets can be harnessed to accumulate digital assets while compounding per-share value. Under Michael Saylor, MSTR became the definitive Bitcoin treasury company, growing its BTC holdings to over 638,000 coins and delivering extraordinary shareholder returns.

Now, Sharplink Gaming (NASDAQ: SBET) is setting up to run the same playbook — but with Ethereum.

Digital Asset Trusts: A New Investment Frontier

Digital Asset Trusts (DATs) bridge traditional equity markets with crypto adoption, allowing investors to gain exposure to blockchain assets without handling wallets, private keys, or self-custody risks. The DAT model has proven successful through MicroStrategy’s transformation into a Bitcoin treasury company. As the digital economy expands, DATs are becoming a scalable and regulated pathway for institutions and individuals to integrate crypto into traditional portfolios.

Three players matter today:

• BitMiner (BMNR): Diversified DAT holding BTC, ETH, and SOL.

• Ether Machine (ETHM): Smaller, ETH-first competitor.

• Sharplink (SBET): Ethereum-focused DAT with an aggressive per-share growth model.

Precedent: MicroStrategy and the Bitcoin DAT Strategy

MicroStrategy, now doing business as Strategy (Ticker: MSTR), lead by Michael Saylor has become the poster child for how a public company can build a digital asset trust via a Bitcoin treasury strategy. Over the past 12–24 months, MicroStrategy has delivered extraordinary returns, both from Bitcoin’s own price appreciation and from increasing the number of Bitcoins held per share (often called “BTC per share” or “Bitcoin yield”). For example, in Q2 2025 the company reported a year-to-date BTC yield of 25 %, ahead of its original targets. Their operating income in that same quarter rose to $14 billion, largely driven by unrealized gains on their Bitcoin holdings, and diluted earnings per share (EPS) of $32.60 were also cited.

https://x.com/Strategy/status/1966117018567954705

Over a broader timeframe, shareholders have benefited from both Bitcoin’s rally and from MicroStrategy’s active deployment of capital markets tools—issuing equity, preferred stock, debt, or convertible securities—to finance further Bitcoin purchases. This has allowed the firm not just to ride Bitcoin’s price move, but to amplify exposure via growing the Bitcoin base itself. As reported, MicroStrategy owns over 638,000 BTC as of September 2025, at an average cost basis in the mid-$60,000s per coin. Because of this scale, even holding periods when Bitcoin is flat can produce returns for MSTR if BTC per share increases. And when Bitcoin rallies, those returns magnify.

Why is Microstrategy such a big deal?

First, it shows that public companies can internalize crypto risk in a regulated setting, while still using predictable financial engineering to grow per-share exposure.

Second, it opens the possibility for investors (including in retirement accounts) to access Bitcoin-like upside without needing to directly hold or manage crypto themselves.

Finally, it establishes a playbook: accumulate the digital asset, manage it transparently, and use equity / debt / capital markets tools to grow the holdings — all while keeping an eye on not over-diluting existing shareholders in terms of the underlying asset per share. This is the foundation that SBET is now applying to Ethereum.

Ethereum’s TAM: Bigger Than Bitcoin’s

Bitcoin is digital gold, with a ~$13T TAM tied to global gold markets. Ethereum, by contrast, is the internet of value — powering decentralized finance (DeFi), tokenized assets, NFTs, gaming, and enterprise applications.

ARK Investments projects Ethereum could reach a $20 trillion market cap by 2032, implying $166,000 per ETH, thanks to its role in financial infrastructure, tokenization, and Web3 adoption. Compared to Bitcoin’s narrower TAM, Ethereum offers broader and more diversified growth potential.

Bitcoin TAM

• Primarily a store of value and digital gold.

• Addresses monetary debasement and global hedging needs.

• TAM largely tied to global gold market (~$13 trillion).

Ethereum TAM

Ethereum extends far beyond Bitcoin’s store-of-value thesis with a ~$20T TAM. Its TAM includes:

• Traditional Finance (TradFi): Settlement infrastructure for tokenized assets, bonds, and securities.

• Decentralized Finance (DeFi): Lending, borrowing, stablecoins, and decentralized exchanges.

• Web3 Applications: NFTs, gaming, and digital identity.

• Enterprise and Verification: On-chain proofs for supply chain, real estate, and intellectual property.

• According to ARK Investments’ Research: Ethereum’s valuation potential could exceed Bitcoin’s by acting as both digital money and a settlement layer for the internet of value.

ARK Investments projects Ethereum could reach a $20 trillion market cap by 2032, implying $166,000 per ETH, thanks to its role in financial infrastructure, tokenization, and Web3 adoption. Compared to Bitcoin’s narrower TAM, Ethereum offers broader and more diversified growth potential.

Ethereum’s multi-vertical TAM positions it as the higher-growth digital asset compared to Bitcoin. For equity investors, SBET provides direct exposure to this larger market opportunity.

Institutional Validation: BMNR’s Strength, SBET’s Edge

BitMiner (BMNR), under Thomas Lee, already controls over 2 million ETH and has argued ETH could hit $60,000 within five years. ARK Investments validated the DAT model by purchasing $476M of BMNR shares, underscoring institutional demand for ETH-first equity exposure.

Recent public disclosures show BMNR has exceeded 2 million ETH in its treasury holdings — as of early September 2025 it held 2,069,443 ETH plus additional crypto and cash, making its crypto + cash holdings exceed $9.2 billion. Thomas Lee has stated that BMNR is actively pursuing a goal of acquiring and staking 5 % of Ethereum’s total supply, reinforcing the ambition and scale of its strategy.

On the valuation side, Lee has made several bold predictions about Ethereum’s future price. In multiple forums, he has said that ETH could reach $60,000 in the next five years, driven by institutional adoption, stablecoin growth, tokenization of traditional financial assets (“real-world assets”), deployment of financial rails onto blockchain, and innovations in AI as they intersect with ETH’s smart contract capabilities. He has also argued that Ethereum has at least a 50 % chance to “flip” Bitcoin in total network value over time—based on its multiple verticals of utility, staking yield, and regulatory tailwinds.

Institutionally, ARK Investments (Cathie Wood) has now put $476 million into BMNR common shares (9.6 million shares) across its funds. ARK has increased its exposure to BMNR. This institutional backing both validates the thesis and provides capital for BMNR to continue executing its accumulation + staking + ETH per share growth strategy.

Why SBET is Ethereum’s MicroStrategy

MicroStrategy showed that digital asset treasuries can thrive even in flat markets by growing BTC per share through disciplined treasury management. When BTC rallies, returns multiply. SBET is applying this proven formula to Ethereum — which may have an even larger TAM and higher upside potential.

While BMNR offers broad-based exposure to Ethereum through its DAT, SBET has greater potential upside because it is directly focused on maximizing ETH per share via staking, buybacks, and treasury optimization. This active strategy allows SBET to compound Ethereum holdings more efficiently than BMNR’s passive structure, positioning it to outperform as ETH adoption accelerates.

Sharplink is “The world’s largest publicly traded company to adopt Ethereum as its primary treasury reserve asset. The asset is $ETH. The ticker is $SBET.”

SBET’s leadership is its secret weapon.

• Joseph Chalom brings Wall Street credibility and financial structuring expertise.

• Joe Lubin, Ethereum co-founder and ConsenSys founder (MetaMask, Infura, Linea), offers unparalleled influence within the Ethereum ecosystem.

This combination ensures SBET isn’t just a passive treasury — it’s an Ethereum-native institution aligned with the protocol’s growth.

• Joseph Chalom’s logic on how to value Ethereum:

https://x.com/joechalom/status/1963621073540583666.

• Joe Lubin - has been instrumental in scaling investment and products within the Ethereum ecosystem like MetaMask and Infura, two unicorn companies that today underpin billions of dollars in decentralized finance and NFT activity. His track record of turning Ethereum from an experimental blockchain into the foundation for a new internet of value lends SBET both legitimacy and strategic advantage.

SBET’s Strategy

SBET’s focus is maximizing ETH per share through:

1. ETH Treasury Growth – Direct ETH accumulation on balance sheet.

2. ETH Staking – Generates recurring yield and compounds NAV.

3. Stock Buybacks – Opportunistically repurchasing shares when the market undervalues SBET relative to its NAV.

These three strategies combined will be a powerful combination of revenue streams for Sharplink to increase it’s ETH holdings in risk optimized strategies that benefit the owners and save a lot of time from backend requirements to participate in all of these different strategies individually. See Sharplink Gaming’s Asset Dashboard for summary NAV reporting.

Recent Example SBET Increasing it’s ETH Holdings

• Earlier this week, SBET’s NAV of ETH exceeded the stock’s trading price.

• SBET announced a share buyback to increase ETH per share, directly benefiting long-term shareholders (press release).

• Add on Top SBET’s current ETH holdings were acquired before recent ETH price appreciation so they’re sitting on ~$892M in unrealized profit already.

This disciplined treasury strategy mirrors MicroStrategy’s conviction but is applied to Ethereum’s broader value thesis.

Investment Rationale

Here’s why I believe SBET merits consideration for long-term investors, aka 401k retirement accounts and investors looking to take advantage of the trend into crypto adoption with traditional finance moving to on-chain transparent finance on the blockchain:

• Regulated Exposure: Equity-based ETH access through NASDAQ listing.

• Ethereum-First Focus: Unique versus Bitcoin-centric peers.

• NAV Arbitrage Opportunities: Buybacks accrete value when stock trades below ETH NAV.

• Yield Optimization: Staking ETH compounds returns over time. Ethereum is an internet bond with a baseline dividend if staked. Now average investors can take advantage of this opportunity.

TLDR Summary

SBET is to Ethereum what MicroStrategy is to Bitcoin — but with a bigger TAM, staking yield, and an Ethereum co-founder at the helm.

Sharplink (SBET) offers investors a next-generation DAT strategy, focused on Ethereum’s asymmetric upside. By leveraging ETH’s role as the internet bond — producing yield, powering decentralized finance, and underpinning digital value transfer — SBET is positioned to replicate MicroStrategy’s success for the Ethereum ecosystem. BMNR is also a good bet, but it’s already priced over it’s NAV so you’re paying a premium compared to what’s available with SBET.

For long-term investors, Sharplink offers the clearest way to participate in Ethereum’s multi-trillion-dollar future through a NASDAQ-listed equity. Do your own research and buckle up for the great things ahead!

Thanks for reading!

In the New Market Wizards, Jack D. Schwager introduces us to Linda Bradford Raschke (LBR), a female trader whose career is a masterclass in adaptability, discipline, and the art of thriving under pressure.

While many traders dream of big wins, triple baggers, etc., Raschke's story reminds us that consistent success often stems from quick cuts, like Floy Mayweather, catching a trend or moving in 2-5 days, executing with precision. With a ~70% success hit rate on her positions, she’s been so successful that she’s created many books and training now for others to learn the short-term trading strategies she’s mastered over the last few decades. Here's a deep dive into her trading philosophy and lessons we can all learn from her journey.

Early Lessons: The Power of Resilience

Linda's journey into the world of trading started with challenges that would break many others. She began her career on the trading floor, an environment dominated by chaos and testosterone. Her ability to thrive in this high-pressure setting came down to her resilience and razor-sharp focus. It wasn't long before she transitioned to trading for her own account, a move that would test her discipline and emotional fortitude.

One of her most valuable lessons? The importance of bouncing back. Raschke once stated, "Every trader has losing streaks. The difference is how quickly you can recover." This mindset allowed her to endure bear markets, black swan events, and challenging periods and emerge stronger, turning setbacks into opportunities for growth.

“My niche is short-term trading, which is how I make my bread and butter. The occasional long-term trades are frosting on the cake.

I believe that only short-term price swings can be predicted with any precision. The accuracy of a prediction drops off dramatically the more distant the forecast time. I’m a strong believer in chaos theory.”

There are too many unpredictable things that can happen within two months. To me, the ideal trade lasts ten days, but I approach every trade as if I’m only going to hold it two or three days.” - LBR

macro-ops.com/lessons-from-a-trading-great-linda-bradford-raschke/

Technical Analysis and Market Psychology

In her conversations with Schwager, Raschke emphasized the importance of understanding market psychology through technical analysis. She explained that markets often move in recognizable patterns because human behavior tends to repeat. This insight formed the foundation of her trading approach.

When discussing her methodology, Raschke emphasized the importance of finding an edge through pattern recognition:

"The market is going to do whatever it wants to do. The trick is to get yourself positioned in a way that when it moves, you're in sync with it." - LBR

This philosophy guided her development of various technical trading strategies for which she would later become known. She also acknowledges that even when she’s right, she may be too early and losing or not making as much as she could “should” be making.

My own particular weakness has always been being a bit premature on entering positions. As the saying goes, “The pioneers are the ones with the arrows in their backs.”

*“ I’ve learned to think to myself, “Patience, patience, patience.” I try to wait until things set up just right before I take a trade. Then, when I’m ready to take the trade, I slowly count to ten before I pick up the phone. *

It’s better to have the wrong idea and good timing than the right idea and bad timing.” - LBR

The Art of Short-Term Trading

One fascinating aspect of Raschke's approach is her mastery of short-term trading. She developed specific criteria for identifying high-probability trades, emphasizing that success in short-term trading requires both technical skill and psychological preparation.

"Trading is not about being right or wrong," she explained. "It's about developing a process that gives you a statistical edge over many trades." This perspective helped her maintain emotional equilibrium during both winning and losing streaks.

“ I’m also a firm believer in predicting price direction, but not magnitude. I don’t set price targets. I get out when the market action tells me it’s time to get out, rather than based on any consideration of how far the price has gone.

youtu.be/KuoK0GUfQow?si=VeWV81NJA0342Jyy&t=468

You have to be willing to take what the market gives you. If it doesn’t give you very much, you can’t hesitate to get out with a small profit.” - LBR

Discipline: The Invisible Edge

Raschke's discipline is legendary. For her, trading isn't about adrenaline or gut instincts—it's about following a plan. She meticulously logs her trades, studies her mistakes, and continually refines her approach. This systematic process keeps her grounded, even in volatile markets.

In discussing risk management, she shared a crucial insight:

"Position sizing is everything.* You can have the best system in the world, but if you're not managing your position sizes correctly, you'll eventually blow up. I put a great deal of effort into getting the best entry price possible. *

I feel this is probably one of my strongest skills. In day trading, a good entry price is critical because it buys you time to see how the market will react. If you buy because you think the market should bounce, but it only goes sideways, you’d better get out.

Part of the trading process is a matter of testing the water. If your entry timing is good enough, you won’t lose much even when you’re wrong.” - LBR

This emphasis on risk management became a cornerstone of her trading philosophy.

Market Preparation and Daily Routine

One of the most valuable additions to Raschke's trading wisdom is her detailed approach to market preparation. She developed a structured routine that includes:

1. Pre-market analysis

2. Setting up key price levels

3. Reviewing multiple timeframes

4. Identifying potential catalysts

5. Planning entry and exit points

"Preparation is where the real work happens," she noted. "By the time the market opens, you should already know exactly what you're looking for and how you'll react to different scenarios."

Adaptability: Thriving in Changing Markets

Another defining trait of Linda Raschke is her adaptability. Markets evolve, and Raschke's willingness to adjust her strategies has been critical to her longevity. She's not afraid to abandon setups that no longer work or venture into new markets if the opportunities align with her strengths.

Linda’s Top 5 Takeaways for Profitable Trading

1. Preparation is Everything: Raschke's success is built on meticulous preparation. She studies her setups, plans her trades, and enters the market with a clear game plan.

2. Discipline is Non-Negotiable: Consistency and discipline are Raschke's invisible edge. By sticking to her rules and managing risk, she's been able to weather countless market storms.

3. Adapt to Survive: Markets are dynamic, and Raschke's willingness to adapt her strategies has been a critical factor in her longevity.

4. Focus on Execution: Having a plan is important, but executing that plan with confidence and speed is what separates great traders from the rest.

5. Learn from Mistakes: Raschke's commitment to logging her trades and analyzing her performance underscores the importance of continual learning.

Resources to Learn More from Linda Raschke

For traders interested in learning more from Linda Raschke's experience and methodology, here are some valuable resources:

1. Lindarachke.net - Linda's official website where she shares market analysis and trading insights

2. “Charting the Stock Market” The Wyckoff Method - Linda’s top suggestions for TA on her website.

3. "Street Smarts: High Probability Short-Term Trading Strategies" - Her book co-authored with Laurence Connors

Stay tuned for the next Blueberry Wizards - GBC x Market Wizards chapter to come out soon. Happy Holidays, and best of luck, traders and leverage investors.

Blue Chip Venture Investment in the Future of Finance

In the rapidly evolving world of decentralized finance (DeFi), it's easy to get lost in the noise and chase speculative trends. I believe the real opportunity lies in identifying and investing in the foundational infrastructure of this new financial system. This is why my partners and I have placed a high conviction bet on Aave, not as a short-term trading vehicle, but as a core venture investment for the next 3-5 years.

Our investment thesis for Aave is built on three pillars - Aave’s undisputed market leadership, its innovative and profitable stablecoin strategy, and its visionary expansion into bringing real-world assets on-chain.

The Foundation: A Testament to Market Dominance

When you look at Aave, you are looking at a blue-chip DeFi protocol that has proven its resilience and market fit. Data from platforms like DeFiLlama consistently show Aave at the top of the lending and borrowing sector, with a Total Value Locked (TVL) that has, at times, rivaled some of the largest commercial banks in the United States.

This is not a coincidence; it is the result of a battle-tested protocol that has earned the trust of both retail users and, increasingly, institutions. Aave's scale and liquidity have created a powerful flywheel effect, solidifying its position as the go-to platform for on-chain lending and borrowing. Owning the AAVE token is a direct claim on the value generated by this financial leviathan.

https://x.com/Jonasoeth/status/1962392371326603340

Aave's Journey: From ETHLend to a DeFi Powerhouse

Aave’s history is a case study in a crypto project’s evolution, from a peer-to-peer lending protocol to a leading decentralized financial institution. The project was founded by Stani Kulechov in 2017 as ETHLend, raising $16.2 million. Due to liquidity issues with the peer-to-peer model, the project rebranded to Aave in 2018, adopting a pooled liquidity model.

In 2020, Aave launched its V1, pioneering the concept of flash loans and fueling its growth during the "DeFi Summer." Since then, the protocol has continued to innovate with Aave V2 and V3, expanding to multiple blockchains. Today, Aave is a giant in the DeFi space, with a visionary roadmap that includes its native stablecoin, GHO, and a strategic push into real-world assets.

Aave Key Milestones

• 2017: Founded as ETHLend, a peer-to-peer lending platform.

• 2018: Rebrands to Aave, switching to a pooled liquidity model.

• 2020: Launches V1, introducing the groundbreaking concept of "Flash Loans."

• 2021: Expands to multiple blockchains including Polygon and Avalanche.

• 2022: Launches Aave V3 with new features and improved capital efficiency.

• 2023: Launches its native stablecoin, GHO.

• 2024: Launches Horizon, a platform to bridge real-world assets and DeFi.

The Innovation: GHO's Role in a New Financial Era

Aave is not a protocol content to rest on its laurels. Its recent launch of GHO, a native, over-collateralized stablecoin, is a pivotal strategic move. Unlike centralized stablecoins, GHO is minted by users who deposit collateral into the Aave protocol. This creates a deeply integrated asset that empowers its users while simultaneously generating a new, consistent revenue stream for the Aave DAO.

This is a profound shift. By issuing its own stablecoin, Aave is moving beyond a simple lending marketplace to become a foundational financial layer. The value GHO accrues through its use deepens the protocol's moat and ensures that Aave's growth is tied directly to the core infrastructure it is building. Aave now makes money from borrowing and lending activities as well as the issuance of it’s own stablecoin that’s 100% collateralized.

The Future: Onboarding Trillions with Real-World Assets

Perhaps the most compelling part of the Aave investment story is its visionary project, Horizon. This initiative aims to bridge the gap between traditional finance and DeFi by creating a permissioned market where accredited institutional investors can use tokenized real-world assets (RWAs), such as U.S. Treasuries, as collateral to borrow stablecoins.

Here’s a walk through on how Horizon works and below is a visual summary

Since Horizon launched it’s RWA markets on Ethereum less than a week ago, the project has attracted over $50M and I expect this to increase to $1B in the next year.

https://x.com/josefabregab/status/1963353810363191770

Why is this a big deal?

This is the holy grail for institutional adoption. For the first time, regulated entities can access the efficiency and transparency of DeFi while staying within their compliance frameworks. For all investors globally with internet access, this opens up a new class of yield opportunities backed by low-risk, high-quality assets. This move positions Aave at the very center of what I believe will be the single largest capital migration in history: the onboarding of institutional capital onto decentralized blockchains.

TLDR: Our Bet on AAVE

Our conviction is clear: for investors with a long-term, venture-style outlook, the AAVE token represents a unique opportunity. It is a direct ownership stake in a protocol that dominates its sector, innovates on a fundamental level with its own stablecoin, and is strategically positioned to capture the coming wave of institutional capital.

https://x.com/Token_Logic/status/1962530932059254897

10x Potential or More

As we look to the future, we believe Aave’s potential is far from priced in. Consider the valuation of BlackRock, a traditional asset management giant with a market capitalization exceeding $170 billion. BlackRock's business model is fundamentally based on generating revenue by managing assets and earning fees. Aave's protocol is doing the same thing, generating substantial revenue from its on-chain lending activities, its GHO stablecoin, and its new push into real-world assets.

The divergence between Aave's current market cap of less than $5 billion and its potential to capture trillions in on-chain financial activity highlights a significant venture investment asymmetry. It is our view that as DeFi matures and institutions onboard, Aave’s valuation will begin to reflect its revenue-generating capacity, potentially pushing its market capitalization to $50 billion or higher by the end of 2026. This would make it a true blue-chip financial asset of the future.

That’s the pitch. DYOR and good luck!

Additional References

• Header image

• Recent interviews with Aave’s founder Stani - here and here

• Aave financials on TokenTerminal

First off, a reminder on what Inflation is and how it hurts the average investor’s purchasing power and ability to thrive.

https://x.com/MilkRoadDaily/status/1910373503913927049

The Macro Story Has Moved Far Beyond Tariffs

When Donald Trump first fired the opening salvo of tariff hikes back in 2018, most investors treated it as a skirmish in an otherwise healthy global order. Seven years later, Bridgewater founder Ray Dalio argues the tariffs are merely “symptoms of a far bigger, once‑in‑a‑lifetime breakdown of the monetary, political and geopolitical orders.” businessinsider

Dalio’s new book, “How Countries Go Broke: The Big Cycle,” maps that breakdown onto a long‑term debt arc:

“The Big Debt Cycle moves from sound, hard money to increasingly loose money and credit, and finally to a debt bust that resets the system.” x

The two visuals below capture that arc. In the early stage (left side of the curve) productivity gains outrun debt growth. In the late stage — where Dalio places the U.S. today — debt service crowds out growth, social cohesion frays, and policymakers resort to financial repression: negative real rates, currency debasement and capital controls.

Why Hard‑Money Assets Win

Before diving into history, here are two quotes from two of the most powerful men in the investment world today educating the public on Bitcoin’s value.

1. “Bitcoin is becoming a store of value, gold’s has historically been a store of value,” - Treasury Secretary Scott Bessent

2. “By 2030, mandatory government spending and debt service will consume all federal revenue, creating a permanent deficit. If the U.S. doesn’t get its debt under control, if deficits keep ballooning, America risks losing that position to digital assets like bitcoin.” - Larry Fink, Blackrock CEO

Now, let’s dive into history to understand how the future could rhyme but not repeat itself. History’s late‑cycle episodes (Dalio cites Weimar Germany, 1970s U.S., post‑war U.K.) share two features:

1. Persistent negative real yields. Savers flee instruments that promise fixed nominal returns.

2. Capital seeks portable stores of value. Gold in the 1970s; offshore dollars in the 1980s; now, potentially, Bitcoin.

As real rates grind below zero and fiscal deficits keep rising, the relative scarcity of hard assets — those with supply schedules independent of politics — becomes a structural tail‑wind. Gold is the 5,000‑year incumbent; Bitcoin is the up‑start with a programmatic 21 million‑coin cap.

The “BBC” & the Coming Flood of Fiat

CryptoHayes, a billionaire 🐐 in financial markets - Arthur Hayes - takes Dalio’s framework and runs the math. In his recent essay “The BBC” (Big Bessent Cuck), Hayes argues that Treasury Secretary Scott Bessent and Fed Chair Jerome Powell are now captive to fiscal dominance: the need to finance $36 trillion of federal debt at tolerable yields.

“Once QE starts, it doesn’t stop for a long time; it increases as the economy needs more printed money just to stand still.” - Cryptohayes

Hayes calculates that the Fed’s shift from $25 billion/month QT to a net‑neutral balance sheet — and soon, outright QE focused on Treasuries — injects an annualised $240‑$420 billion of fresh dollar liquidity.

Japan’s YCC cap and China’s on‑again, off‑again stimulus mean the other two major currency blocks are likely to follow suit.

Outside of the crypto echochamber, others are calling out the issues and expecting the money printers to turn on before the markets implode.

https://x.com/LukeGromen/status/1910713503586869464

Bitcoin’s Historical Beta to Liquidity

During the 2020‑21 QE wave, Bitcoin’s market cap rose 8× while global M2 expanded ~30 %. Hayes expects a similar, if less explosive, ratio this cycle. His year‑end target of $250,000 per BTC rests on two premises:

• Fiat supply grows faster than real GDP, forcing real yields deeper into negative territory.

• Bitcoin’s fixed supply makes it the cleanest hedge against that dilution.

Ethereum’s Tough Year: Valuation Gravity Meets Narrative Drift

Hard money tail‑winds have not lifted all crypto boats. Ethereum’s exchange rate has collapsed to multi‑year lows against both Bitcoin and it’s top competitor Solana.

Stablecoin Founder, Sam Kazemian (Frax) summed up the structural problem in an April 10 post:

Ethereum may become “the world’s issuance ledger, but very little of that value is captured by the ETH token,” which is sliding toward a discounted‑cash‑flow, tech‑stock‑style valuation. - Sam.Frax

Three Headwinds for ETH

1. Fee Compression & L2 Cannibalisation Roll‑ups have diverted activity (and therefore burn‑driven scarcity) away from main‑net ETH.

2. Narrative Vacuum Bitcoin owns the “digital gold” meme; Solana now dominates the “fast & fun” consumer‑app meme. Ethereum’s “world computer” pitch feels dated to younger devs.

3. Relative Monetary Policy Bitcoin’s terminal supply is hard‑coded; Ethereum’s burn is variable and increasingly offset by validator rewards. In a hard‑money bull market, that nuance matters.

Key Takeaways - Themes, Implications, and Suggestions

What Could Change the Story for ETH?

• A policy volte‑face (e.g., coordinated global austerity) would undermine the Bitcoin thesis — but would also tank risk assets across the board.

• Ethereum 2.0 fee markets that materially raise base‑layer burn could restore ETH’s scarcity narrative.

• Solana and other competitors lack regulatory approval as a commodity and thus limit access to global investors in their retirement accounts and current brokerage accounts. This isn’t likely, but possible that Bitcoin and Ethereum remain the most liquidity and easy to access crypto tokens for the masses.

The Bottom Line - Pivot to Defensive Mode

Following legendary investment advisor Ray Dalio’s advice from the Big Cycle tells us where we are: late‑stage debt, fraying geopolitics, and a scramble for real assets. From the crypto legendary trader perspective, Arthur Hayes’ “BBC” tells us what comes next: another wave of money‑printing because the math says policymakers have no alternative.

In this upcoming environment, scarcity beats cash‑flow — which is why digital Bitcoin look like the assets of the cycle, while Ethereum must reinvent its value capture or continue to lag.

Thanks for reading. Best of luck and as always do your own research.

Daljit is no longer an Unknown Wizard because of his interview in the "Unknown Market Wizards” book. Daljit Dhaliwal's journey from modest beginnings playing tennis to becoming a rich trading wizard is documented in the book and now highlighted here for your pleasure.

Now, again, why should we care what Daljit may think about trading and making cash money?

“Dhaliwal’s track record is extraordinary. In his nine-plus years of trading, he has achieved a remarkable average annual compounded return of 298%.

He trades aggressively, taking large positions when he has a high degree of confidence in a trade. His average annualized volatility is extremely high at 84%.

He has been profitable in all years, 95% of quarters, and 70% of months...

His approach combines patience, precision, and an unwavering commitment to risk management, offering valuable lessons for traders at all levels.

Dhaliwal’s initial passion was tennis, not trading. As a teen, he was a promising junior player in the UK and hoped to become a professional. When Dhaliwal is committed to a goal, he goes all out to achieve it. - Jack Schwager

The Foundation: Building a Trading Philosophy

Dhaliwal's trading philosophy is built on several core principles that set him apart from the typical trader:

1. Extreme Patience: Unlike many traders who feel compelled to be in the market constantly, Dhaliwal is known for his ability to wait extended periods for the perfect setup. He views himself as a predator waiting for prey, rather than a trader who needs to be active every day.

2. Risk Management Above All: His approach to risk management is extraordinarily disciplined. Rather than focusing on potential gains, he obsesses over protecting his capital and ensuring that no single trade can significantly impact his overall portfolio.

3. Simplicity in Execution: Despite his sophisticated understanding of markets, Dhaliwal's trading approach emphasizes simplicity. He believes that complexity often leads to confusion and poor decision-making.

The Art of Waiting

One of Dhaliwal's most distinctive traits is his ability to stay patient during periods of market uncertainty. His approach involves:

• Maintaining extensive watchlists

• Setting specific criteria for entry points

• Being willing to wait weeks or even months for the right opportunity

• Keeping cash readily available for when perfect setups emerge

Risk Management: The Cornerstone of Success

Dhaliwal's risk management framework includes:

1. Position Sizing: Never risking more than a small percentage of capital on any single trade

2. Stop Loss Discipline: Using predetermined stop losses and honoring them without exception

3. Portfolio Balance: Maintaining diversity across different setups and market conditions

4. Cash Management: Keeping substantial cash reserves to capitalize on rare but exceptional opportunities

Market Analysis Methodology

His approach to market analysis focuses on:

1. Technical Analysis: Dhaliwal relies heavily on price action using Bollinger Bands to identify potential market extremes and mean reversion opportunities. As he notes, "The market always gives you signals - the key is having the patience to wait for the clearest ones."

2. Volume Analysis: He pays particular attention to the On-Balance Volume (OBV) indicator, which provides insights into whether volume is flowing into or out of an asset.

3. Market Context: "You can't just look at a setup in isolation," Dhaliwal emphasizes. "You need to understand what's happening in the broader market, in related sectors, and how they might impact your trade."

4. Pattern Recognition: "The patterns repeat because human nature doesn't change. Fear and greed drive the same behaviors over and over."

Trading Psychology Mastery

1. Emotional Control: "The biggest battles in trading are fought in your own mind,". Stick to your plan and remember that you’re first battling with yourself and sticking to your plan that doesn’t let your emotions lead the decision-making.

2. Confidence Through Preparation: "When you've done your homework, you don't second-guess your decisions."

3. Discipline in Execution: "A good plan executed with discipline will always beat a perfect plan executed poorly."

4. Learning from Mistakes: "Every loss teaches you something if you're willing to learn."

Key Lessons for Aspiring Traders

1. Patience is a Competitive Advantage: "Most traders lose money because they can't sit on their hands."

2. Risk Management is Non-Negotiable: "The size of your position should make you feel almost uncomfortable with how small it is."

3. Simplicity Beats Complexity: "If you can't explain your trading strategy to a ten-year-old, it's probably too complicated."

4. Mental Game Matters: "Your biggest enemy in trading is yourself."

5. Process Over Outcomes: "Focus on executing your strategy correctly rather than obsessing over individual trade results."

Final Thoughts

Daljit Dhaliwal's trading journey offers a masterclass in patience, discipline, and risk management. His success proves that trading doesn't require constant activity or complex strategies – instead, it demands unwavering discipline, careful preparation, and the ability to act decisively when genuine opportunities arise.

As he succinctly puts it, "Trading is not about being right or wrong - it's about being profitable over time."

Daljit is truly a Blueberry Wizard with lots of great tidbits for any trader to learn from or be reminded about with the ever-changing global markets.

The convergence of macroeconomic forces, political shifts, and technological advancements is setting the stage for the crypto industry to flourish in 2025. Check out what happened just in the last week in crypto alone:

https://x.com/CroissantEth/status/1856915734800027892

Among the many investment opportunities, staked Ethereum (ETH) stands out as a transformative asset. Viewed by many as the foundation of the internet’s financial infrastructure, staked ETH blends the appeal of a high-growth venture with the reliability of a fixed-income investment.

As traditional finance prepares to embrace Ethereum through ETFs, the potential for staked ETH to become a mainstream asset class is greater than ever. With its superior market position, robust ecosystem, and the advent of restaking innovations, staked ETH remains our top venture bet in the crypto space. However most will miss this and chase the latest meme coin or speculative AI trend.

Here are three key trends that will shape the crypto landscape in 2025, with a closer look at why staked Ethereum is poised to dominate. My research below comes from the A16z 2024 Crypto Report and the links below.

1. Crypto Goes Mainstream: Adoption at an All-Time High

Like a favorite neighborhood diner suddenly becoming a hotspot, crypto is hitting the mainstream. Alongside the broader adoption trends, Ethereum continues to lead, bolstered by its staking opportunities.

Staked ETH as the Internet Bond

Locking up ETH, aka staked ETH, is evolving into what financial analysts call the "internet bond", blending predictable yields with ownership in Ethereum's ecosystem. Staked Ethereum earns fees from users and even with the expansion of L2s and L3 blockchains on top of Ethereum, it continues to drive healthy revenue that doesn’t look to stop any time soon.

https://x.com/LeonWaidmann/status/1856597208059261179

With staking becoming easier for retail investors and potentially accessible through ETFs, Ethereum is poised to dominate the conversation about blockchain adoption.

• Accessibility: The upcoming Ethereum ETF in 2024 is expected to drive adoption by allowing traditional investors to include ETH and staked ETH in their portfolios.

• Growth Potential: Unlike fixed-income investments like Treasury bonds, staked ETH rewards grow with the Ethereum network, combining income and capital appreciation.

• Traditional Finance trusts Ethereum: With BlockRock, the Chinese government, and other industry leaders of TradFi moving assets to the Ethereum blockchain, it’s clear that “TradFi trusts ETH” and isn’t yet interested to invest in other blockchains as much as they are focused on building on top of Ethereum like Coinbase with Base L2.

https://x.com/matthew_sigel/status/1857063312682279091

2. Policy and Politics: Crypto at the Crossroads of Regulation and Innovation

Crypto has officially entered the global political arena, with staked Ethereum emerging as a critical player in this dynamic landscape.

Donald Trump’s Support of Crypto’

• Donald Trump has emerged as a surprising advocate for cryptocurrency, blending personal involvement with strategic policy proposals. His support began on December 15, 2022, when he launched his own NFT collection, Trump's Digital Trading Cards, which sold out rapidly and raised $4.5 million. This marked Trump’s direct entry into the crypto world and signaled his openness to digital assets.

  By June 11, 2024, Trump held a pivotal meeting with Bitcoin mining executives, including representatives from Marathon, Riot, and Core Scientific. He emphasized the importance of ensuring that "all the remaining Bitcoin" is mined in the U.S., tying Bitcoin mining to energy independence and economic growth.

  On July 27, 2024, at the Bitcoin Conference in Nashville, Trump made waves by proposing a Strategic National Bitcoin Reserve, positioning Bitcoin as a key component of U.S. financial and technological dominance. He also pledged to fire SEC Chair Gary Gensler, denounced Central Bank Digital Currencies (CBDCs), and committed to pro-Bitcoin policies.

  Finally, on September 18, 2024, Trump made history as the first U.S. president to complete a Bitcoin transaction. His administration supports the BITCOIN Act, targeting the acquisition of 1 million BTC within five years, underscoring his vision for Bitcoin’s role in America’s future.

We are truly entering a new era with direct support from the upcoming US President and his VP who’s deeply connected and integrated into venture capital.

3. Infrastructure Evolution: The Backbone of New Applications

Ethereum's infrastructure upgrades and staking capabilities are paving the way for a new era of decentralized innovation.

Why Staked Ethereum Stands Out

1. Superior Ecosystem Leadership: Ethereum leads the pack with the most developers, locked value, and active users. As competing blockchains like Solana and Cardano gain traction, Ethereum’s first-mover advantage and established profitability make it a safer bet.

2. Multi-Layered Rewards: Beyond base staking rewards, innovations like Eigenlayer restaking and airdrops from platforms like Ether.fi multiply returns for ETH stakers. For example, early adopters of Ether.fi received governance token airdrops valued at $500 or more, significantly enhancing their annual yield.

3. Future-Proof Investment: As a hybrid between a bond and a venture investment, staked ETH offers exposure to Ethereum’s price appreciation, passive income, and ecosystem growth. Analysts predict Ethereum could see massive price increases by 2030, further amplifying staking returns.

The Road Ahead: Why Staked Ethereum is Our Favorite Venture Bet

Ethereum staking encapsulates the essence of what makes crypto exciting: it’s a blend of cutting-edge technology, financial innovation, and community-driven growth. The hearts of global developers and entrepreneurs is still strong with Ethereum leadership, check out this 15 minute talk from a core developer on why - ETH is the Ticker

https://www.youtube.com/live/-HAh09a5Qec?t=17932s

With the approval of Ethereum ETFs on the horizon, a growing global regulatory framework, and continuous advancements in staking infrastructure, ETH is poised to dominate both crypto markets and traditional finance conversations.

For those looking to invest in the future of the internet, there’s no better time to consider staking Ethereum. It’s more than just a crypto investment; it’s a stake in the infrastructure of tomorrow’s digital economy. Buckle up—2025 is shaping up to be Ethereum’s biggest year yet.

Do your own research along with me and best of luck ahead in 2025!

Why Timing the Market is So Tempting (And So Dangerous)

Balaji Srinivasan, in a recent article, America’s $175 Trillion Problem, about the unfolding debt crisis, notes several concerning economic trends that all lead to more momentum for Bitcoin as a store of value in the future of finance and financial trade. The US’s debt problems don’t directly lead to crypto and high investments' increased market demand, but the US Dollar’s decreased demand and value directly related to Bitcoin and eventually Ethereum as store-of-value assets that can generate passive income—bonds on steroids.

It will take time for the global markets to adopt my views, and that’s OK as a venture investor with a 5 to 10-year horizon. As a small fish in a big pond venture investor, I love to learn as much as I can from experts and those who can predict into 2029 - 2034 from where we are today. This is where the USA’s debt problems and an all-in agreement from experts that there’s only one way the USA will resolve it’s debt problems - printing more dollars and stealing from the poor to keep the US economy going.

Now let’s jump into some key topics on the USA’s debt challenges and the US dollar’s stance in global markets from Balaji’s article reference above. First confirmation from three billionaires on their view of a US debt crisis ahead.

*“As Elon, Dalio, and Jamie Dimon all recognize, the Western world is headed for a sovereign debt crisis. Just like the establishment was hiding the president’s senility, they’re also hiding the true state of the economy” - *Balaji

As governments rack up unprecedented levels of debt, the U.S. Federal Reserve has been forced to intervene with surprise interest rate hikes and emergency loans. This turbulence has many investors nervously eyeing the stock market, wondering when the next big drop will occur.

The U.S. dollar is devaluing rapidly, with its purchasing power down 25% in just four years. Add to that China’s treasury dumping and BRICS countries stacking gold, we’re faced with a perfect storm of global financial instability.

More de-dollarization than ever…China — which is the #1 trade partner of most countries in the world now — has just flipped to majority CNY for cross-border foreign exchange deals:

It’s clear that the US dollar is not the best asset to hold for maintaining purchasing power. To keep it simple, within crypto, I favor Ethereum, but there is also a great use case for Bitcoin based on this inflationary environment and government debt that will ruin fiat’s purchasing power. Regardless of what high-risk crypto assets you’d like to invest in, dollar-cost averaging is the industry standard to build a position unless you’re uber-rich and can pay a firm to do this for you.

Dollar-Cost Averaging: A Smarter Way Forward

Dollar-cost averaging is a simple concept to comprehend. The hard part is fighting our emotions about changing the plan and not using a DCA strategy. This approach offers several key advantages, particularly in the face of economic uncertainty.

1. Takes the Emotion Out of Investing

   Human psychology often gets in the way of making rational investment decisions. When the market drops, fear takes over, and many investors panic-sell. Conversely, when the market is booming, the fear of missing out (FOMO) kicks in, causing investors to buy at inflated prices. DCA eliminates these emotional extremes by sticking to a set schedule, regardless of the market's ups and downs. You’re buying in good times and bad, ensuring that you don’t miss out on long-term growth.

2. Reduces the Risk of Mistimed Investments

   Waiting for the perfect moment to invest often backfires. As Balaji points out, we’re in an era of “more borrowing than COVID, more interest than defense.” By spreading your investments over time, you can lower the average cost of your investments, especially during market downturns when prices are low.

3. Harnesses the Power of Compound Growth

   One of the often overlooked benefits of DCA is that it allows you to take advantage of compound growth. The earlier you start investing, the more time your money has to grow. Instead of waiting for a dip to invest, DCA encourages you to consistently put money into the market, ensuring that you’re benefiting from both regular contributions and the compounding interest on those investments.

Real-World Example: Bitcoin and Ethereum

Take Bitcoin and Ethereum as an example. Since 2017, crypto markets have seen wild swings, with massive highs followed by equally sharp corrections. Investors who tried to time their entry points were often left frustrated. But those who stuck to a dollar-cost averaging strategy saw their portfolios grow consistently over time.

By regularly purchasing BTC or ETH regardless of price, DCA investors took advantage of these assets' long-term upward trajectory while avoiding the stress of trying to pick the perfect moment to enter.

In today’s environment, where the U.S. dollar’s global influence is waning, and debt levels are at all-time highs, DCA into assets like Bitcoin and Ethereum makes even more sense. Balaji’s analysis of the debt crisis shows that traditional financial systems are facing unprecedented challenges. By adopting a DCA strategy in these uncertain times, you’re setting yourself up for long-term success while avoiding the pitfalls of market timing.

The Bottom Line: Consistency Wins

The U.S. appears to be headed toward a sovereign debt crisis worse than 2008. The true debt of the U.S. government is estimated at $175 trillion, a figure that dwarfs any previous crisis in history. You may miss the boat if you’re waiting for the perfect dip to buy into assets like stocks, Bitcoin (BTC), or Ethereum (ETH). The world is shifting rapidly — whether through de-dollarization or the rise of AI-driven markets — and waiting too long means you may never get a better entry point. DCA ensures that you’re always in the market, consistently building wealth over time rather than chasing elusive moments of perfection.

Venture investing is a marathon, not a sprint or even a 10K run. While the allure of catching a market dip may seem tempting, dollar-cost averaging offers a safer, more reliable path to building wealth.

Thanks for reading. Best of luck, and do your own research. This is educational content and not financial advice.

Risk Reward, Early Venture Investing in NFTs

Here are some reasons why investing in select NFT communities as a high-risk art investment might make sense, at least here’s why I’m long algorithmic art and strong brands lead by fearless artists and their communities.

First, investing in NFTs is a high-risk strategy that has higher losses and return rates on average compared to other crypt investing strategies like buy-and-hold, staking, or even some DeFi LP strategies. NFT investing fell out of favor with 99% of those who got into the hype in the last cycle.

However, not all NFT collections will go to zero and in fact some will reach new heights ahead as the founding art collections of the new age of art investing - on the blockchain. My goal with investing in NFTs is to increase my ETH holdings and then move my ETH into USD in 5-10 years ahead. Now, let’s jump into my three favorite collections and why I’m still bullish on NFTs.

To start, here’s my favorite introduction to art and NFT investing by Arthur Hayes. It’s a bit lengthy but highlights why humans put incredible sums of money into “worthless” items like this picture of a rock that sold for $248,184 in 2023.

Art is an expression of human civilisation’s energy abundance.

When viewed in net energy terms, it is completely worthless. But when viewed as the purest expression of humanity beyond our basic functions of consuming calories, reproducing, and perishing, it is priceless.

We “work” to enjoy leisure, and leisure is a personal pursuit that usually involves some art form. That encompasses music, film, paintings, sculptures, sports etc. All of these activities are energy sinks, but bring endless pleasure to the participant and the spectator.

The advent of super-intelligent networked thinking machines will herald an era where the vast majority of humans’ labour is economically worthless.

Freed from the physical constraints of work, humans will turn to their new digital worlds and the complete expression of civilisation’s creativity and vitality. The metaverse is the future.

What, then, of the concept of “art” in a purely digital construct? How will money, which is just an energy abstraction, be “wasted” on the pursuit of digital art? Are NFT-based art forms both worthless and priceless at the same time, similar to all other “traditional” forms of art?

NFT-permissioned art is completely worthless from an energy standpoint, but it will represent the ultimate way to Flex social standing in a purely digital world.

While it seems silly to those who think Art Basel and The Venice Biennale are the epitome of gatherings of like-minded cultured individuals, infinitely replicable JPEGs traded on the blockchain are no sillier than squiggles on a piece of canvas.

     - Crypto ‘Arthur’ Hayes, Rock Paper Scissors Says Go.

Returning to the 1/1 Rock NFT that sold for $248K, this basic JPG NFT is one of 100 Etherrocks that “serve NO PURPOSE beyond being able to be brought and sold, and giving you a strong sense of pride in being an owner of 1 of the only 100 collectible rocks :)”. Status shows if you can spend $200,000 on a JPG that anyone could copy or try to clone but verifiably is yours through confirmation on the Ethereum blockchain as to which wallets own the one hundred original EtherRocks.

Generative Art NFTs Reach Product Market Fit

In the high-end art investor world, NFTs have gained a lot of attention within the algorithmic art space. Check out Art Blocks, the first and most respected algorithmic and generative NFT art platform.

https://www.artblocks.io/

Art Blocks is an NFT platform focused on generative or algorithmic art. Artists create unique digital works using code, and each piece is algorithmically generated on-chain at the moment of minting. This results in a distinct output for each collector, ensuring no two pieces are identical.

Algorithmic art is unique because it blends creativity with technology, producing unpredictable and highly varied results. The code becomes the artist's medium, pushing the boundaries of digital art and offering collectors a one-of-a-kind experience.

With Art across the ages, at max there are 5 to 10 artists to stand out and “make it” every generation and this is a lot like venture investing. Ryan Zurrer talks about his view and why he’s invested a lot in the top NFT collections. He highlights how the New York MOMA has seen great success showing Refik Anadol’s digital art.

Personally, I was drawn to Jeff Davis’s work, and I have chosen a Construction Token for my ArtBlocks investment thus far.

https://www.instagram.com/p/C30OQ2DxwL2/?img_index=1

Check out the early ArtBlocks NFT collections for good opportunities to join a well-respected art community that continues to produce new projects with leading artists.

Art + Music = NFT Entertainment Communities

Beyond just status and cutting-edge art investors, NFTs have also ushered in community entertainment companies where one or a few artists sell their work and grow a niche community around their NFTs and the benefits of owning their NFTs.

https://www.doodles.app/

Doodles is a vibrant NFT project known for its colorful and playful artwork. Created by Burnt Toast (Scott Martin) alongside founders Evan Keast and Jordan Castro, Doodles features 10,000 unique hand-drawn NFTs. The project prioritizes community input, allowing Doodle holders to participate in decisions about future developments via Doodlebank, a treasury for community proposals. Doodles also explores experiences beyond traditional NFTs, such as music, animation, and gaming, to expand its universe.

Doodles NFTs have attracted high-profile investors and collaborators like Alexis Ohanian, Reddit co-founder and renowned musician Pharrell Williams, who joined as the brand’s Chief Brand Officer in 2022. Additionally, rapper Lil Wayne has shown interest in Doodles NFTs, expanding the project’s reach into popular culture. These influential figures have helped elevate Doodles' profile within the NFT space, combining celebrity influence with a strong community-driven ethos. I own Doodles #8046 and that’s my new pfp moving forward.

Metaverse NFT Investing - Virtual Worlds & Currencies

Another exciting category within NFT investing is the metaverse. The metaverse isn’t just a VR playground but a whole new economy. Companies building digital spaces, virtual real estate, and blockchain-based assets (like NFTs) are seen as tomorrow's major players. VanEck points out the potential for gaming, social interaction, and even decentralized finance (DeFi) to converge in these spaces, which makes it ripe for investment. They’re not betting on sci-fi dreams but on actual tech infrastructure already taking shape.

Sonmium Space is a metaverse ecosystem building on the latest technology and has a fearless leader Arthur Sychov who continues to push the future of a mixed reality forward with digital ownership of land, resources, and fun inside each ecosystem.

There are many other metaverse ecosystems, and it’s not clear who’s going to win. However, it’s still the early days, and some metaverse communities like Sonmium Space continue to grow. The assumption is that the current leaders can see a resurgence in the price of their land and in-world assets. I own a few parcels and have experimented in other ecosystems but won’t mention them here as they don’t appear to be building and growing as well as Sonmium Space. Please DYOR on any and all of these suggestions.

Wrap It up - Kent’s NFT Investing Strategy

Whether it’s generative art, entertainment-driven communities, or virtual worlds, NFTs offer various ways to invest in the future of digital culture. Keep your eyes open and do your research—early adoption could pay off in this new art and tech frontier. Here’s to the next evolution in owning culture, being a part of the transition to digital-first art, and investing in an age of inflation in the 2020s. Thanks for reading!

If you've ever found yourself marveling at the audacity of Silicon Valley or the sheer size of a venture capital fund, Tom Nicholas’s VC: An American History is your ticket to the origins and evolution of this high-stakes world. Nicholas peels back the history in layers of venture capital (VC) to reveal a world where risk meets reward, and where fortunes are made (and often lost) in the blink of an eye.

The big ideas from the book that I took away are that 1) venture capital investing is riskier than index investing on average, 2) success comes from riding the winners all the way, and 3) venture capital helps the people and general population via the innovations brought to society (ex. Google or Uber).

Now, to jump into the history of venture capital investment and how I see a great opportunity to focus my venture capital efforts now on the Ethereum staking ecosystem.

From Whaling Ships to Rocket Ships: The Surprisingly Old Roots of Venture Capital

Before you start picturing hoodie-clad tech bros in a sleek Silicon Valley office, the author Tom Nicholas takes us back to a time when venture capital was more about harpoons than hardware. Yes, that’s right—whaling! The early roots of VC can be traced back to the 19th century whaling industry. Shipowners, much like today’s venture capitalists, would fund risky whaling expeditions with the hope of a big payoff in the form of whale oil. These voyages were fraught with danger, but when successful, they yielded massive returns.

Nicholas brilliantly connects these maritime adventures with the modern-day tech startup scene, showing how the appetite for risk and the pursuit of outsized rewards have always been part of the American entrepreneurial spirit. This historical parallel isn’t just a fun fact—it’s a reminder that the DNA of VC has always been about navigating uncharted waters.

The Rise of the Venture Capital Firm: From Clubs to Powerhouses

Fast forward to the 20th century, and we see the transformation of venture capital from informal networks of wealthy individuals into structured firms with immense power. Nicholas paints a vivid picture of how post-World War II America became a breeding ground for innovation, particularly in technology. With government backing and a burgeoning tech industry, the 1950s and 60s were ripe for the rise of firms like Kleiner Perkins and Sequoia Capital.

Nicholas doesn’t shy away from the eccentricities of these early venture capitalists—people who were just as likely to invest based on a gut feeling as on any solid business plan. These were the cowboys of finance, willing to take enormous risks on unproven ideas. The result? Companies like Intel and Apple, which would go on to define entire industries.

The New Frontier: Ethereum as the Value Layer of the Internet

As we look to the future, the evolution of venture capital is increasingly tied to the digital world, particularly the rise of blockchain technology and cryptocurrencies. Nicholas’s insights into the past provide a valuable lens for understanding the present—just as early venture capitalists bet on risky, unproven ideas, today’s investors are exploring the potential of Ethereum (ETH) as the new value layer of the internet.

Ethereum isn’t just another cryptocurrency; it’s a decentralized platform that enables smart contracts and decentralized applications (dApps). This functionality has led many to view Ethereum as the backbone of Web3, the next generation of the internet, where value and ownership are embedded in the very fabric of the digital world.

Ownership of the Internet’s Value Layer

For modern-day venture capitalists and individual investors alike, Ethereum represents a unique opportunity. Investing in ETH is akin to buying a stake in the infrastructure of the future internet. But the opportunities don’t stop there—within the Ethereum ecosystem, there’s a burgeoning market for staking, where investors can lock up their ETH to support the network’s operations and earn rewards. Platforms like Ether.fi that enable staking and re-staking are leading the charge in this space, offering investors new ways to passively engage with the Ethereum network and reap significant returns.

This new frontier of venture investing, much like the early days of Silicon Valley, is not without its risks. The crypto market is notoriously volatile, and the regulatory landscape remains uncertain. Yet, for those with an appetite for risk, the potential rewards are immense. Just as the venture capitalists of old backed the companies that would define the 20th century, today’s investors in Ethereum and its staking ecosystem may be laying the groundwork for the digital economy of the 21st century.

Final Thoughts

VC: An American History is more than just a history lesson; it’s a tale of ambition, risk, and the relentless pursuit of success. Nicholas masterfully weaves together past and present, offering readers a nuanced understanding of the venture capital industry. Whether you’re a seasoned investor or just curious about how Silicon Valley became the powerhouse it is today, this book is a must-read.

And if you’re looking to be part of the next chapter in venture capital, consider the possibilities of Ethereum. Just as early venture capitalists navigated uncharted waters, today’s investors in Ethereum are exploring the new value layer of the internet. The future of innovation may very well be decentralized, but the spirit of venture capital remains the same—bold, risky, and with the potential for extraordinary rewards.

https://x.com/balajis/status/1816695480014741752

So, next time you see a tech giant’s stock like Nivida price soar, or Ethereum’s value climb, remember—it all started with a dream, collaboration, and determination to ride out the waves to find great success.

Cheers to doing your own research to get the results.

As the Ethereum ecosystem continues to evolve, innovative solutions are emerging to address the complexities and challenges of staking. One such solution that has gained significant traction is Ether.fi. In this post, we'll explore what Ether.fi is, how it operates, and why it stands out as a leading liquid staking strategy for Ethereum today.

What is Ether.fi?

Ether.fi is a decentralized platform designed to simplify the staking process on the Ethereum network. It allows users to stake their Ether (ETH) and participate in securing the network while earning rewards. The platform is built to provide a seamless and user-friendly experience, enabling both novice and experienced users to engage in staking without needing to manage the technical aspects.

Key Features of Ether.fi

1. Liquid Staking: One of the primary features of Ether.fi is liquid staking. Unlike traditional staking, where funds are locked up for a specified period, liquid staking allows users to maintain liquidity. Users can stake their ETH and receive a tokenized representation of their staked assets. This token can be used within the DeFi ecosystem, providing flexibility and additional earning opportunities.

2. Restaking and Self-Custody: According to Ethereum Staking Guide, Ether.fi introduces the concept of restaking with Eigenlayer along with self-custody. This allows users to retain control over their private keys while still participating in staking. Restaking enables users to enhance their returns by staking their derivative tokens in other protocols.

3. Decentralization: Ether.fi is committed to maintaining a high level of decentralization. The platform leverages smart contracts to manage staking operations, ensuring transparency and minimizing reliance on centralized entities. This approach enhances security and trust within the community.

4. User-Friendly Interface: Understanding that staking can be complex, Ether.fi offers an intuitive and straightforward interface. Users can easily stake their ETH, track their rewards, and manage their staked assets without needing in-depth technical knowledge.

5. Security: Security is paramount in the crypto space, and Ether.fi prioritizes it by implementing robust security measures. The platform employs industry-standard practices to safeguard users' funds and data, providing peace of mind to its users.

6. Competitive Rewards: Ether.fi offers competitive staking rewards, air drop rewards of their own token and also Eigenlayer restaking points making it an attractive 3 way earning option for those looking to maximize yield. Their Liquid Staking yield products continuously optimizes its staking strategies to maximize returns for its users. With their 3rd airdrop campaign live now, it’s a great time to stack rewards by staking with Ether.fi

Why Ether.fi Stands Out

Ether.fi distinguishes itself in the liquid staking space for several reasons:

• Flexibility and Liquidity: By providing liquid staking, Ether.fi allows users to keep their assets liquid, giving them the freedom to participate in other DeFi activities or withdraw their funds without long lock-up periods.

• Decentralized Approach: The emphasis on decentralization reduces risks associated with central points of failure, enhancing the overall security and resilience of the platform.

• Community-Centric Development: Ether.fi actively engages with its community, incorporating feedback and continuously improving its platform based on user needs and industry trends.

Data-Driven Insights from Dune Analytics

To further understand the impact and performance of Ether.fi within the Ethereum staking landscape, we can refer to insights from the Dune Analytics ETH2 Staking Dashboard. This dashboard provides comprehensive data on Ethereum staking, including the total amount of ETH staked, the number of validators, and the distribution of staking services. A key point to highlight here is Ether’s growth into a market leader shows trust across the global market to adopt Ether.fi’s ETH staking products.

• Ether.fi is now the #3 largest staking provider. - The dashboard highlights the growing amount of ETH being staked, with over 1,00,000 validators now online; reflecting increased participation and confidence in Ethereum's proof-of-stake mechanism.

Innovation with Ethereum Staking Products

Ether.fi is releasing new products for Ethereum staking investors such as a cash debit card, liquid staking vault products, and different partnerships across DeFi to embed eETH across the leading EVM blockchains (Ethereum, Arbitrum, +).

Ether.fi's cash debit card allows users to convert staked Ether rewards into spendable cash, blending crypto with traditional finance for everyday use. This card enhances financial flexibility and practical utility, promoting mainstream adoption by integrating the benefits of decentralized finance with conventional banking convenience. Learn more from this blog post.

Conclusion - Wake up to Ether.fi’s Opportunity

Ether.fi is at the forefront of the liquid staking revolution in the Ethereum ecosystem. By offering a decentralized, secure, and user-friendly platform, it provides an attractive solution for those looking to stake their ETH while maintaining liquidity. As the Ethereum network grows and evolves, platforms like Ether.fi will play a crucial role in driving adoption and enabling users to participate in the network's success.

Whether you're a seasoned staker or new to the world of Ethereum, Ether.fi offers a compelling and accessible way to earn rewards and contribute to the security of the Ethereum network.

For more detailed insights and data on Ethereum staking, you can explore the Dune Analytics ETH2 Staking Dashboard or read this further deep dive into Ether.fi’s products

https://medium.com/@ethereumstakingguide/ether-fi-eth-staking-restaking-together-with-self-custody-introduction-9d5e895cfb9d

The question of how Ethereum will be regulated in the United States is a major one. Clear regulations are expected to unlock billions of dollars in investment for ETH and staked Ethereum products in the coming years. Here are three key developments that will shape Ethereum's regulatory landscape:

The SEC Lawsuit: Classifying Ethereum as a Commodity

The Rise of Asian Ethereum ETFs: A Glimpse into the Future?

Staking Regulation: The UK Leads the Way

Taking these Ethereum industry updates into consideration, I believe that once we have regulatory clarity we will see billions of dollars poured into Ethereum over the next two years as most global investors first get access to owning some ETH and betting on Ethereum as the Internet’s native bond with Ethereum staking. Now let’s dive into each development to add more context.

SEC Lawsuit - ETH is a Commodity

Recently the SEC has been sued by Ethereum’s development company Consenys to to classify Ethereum as a commodity asset. Here is the summary argument:

1. Ethereum is a global computing platform, not an investment scheme.  Ether is not a security.* It is a commodity, as repeatedly confirmed by the Commodity Futures & Trading Commission (CFTC)*

2. ***The SEC has no authority—***nor should it—to regulate global, peer-to-peer computer networks. The SEC’s aggressive overreach into commodities, software, and these novel technology platforms is unlawful.

3. The SEC is currently reframing its authority,* by redefining legal standards and even everyday language, in order to claim oversight of the Ethereum computer programming ecosystem.*

This lawsuit comes as the SEC is aggressively pushing to pursue enforcement in the crypto sector and continues to hold the belief that Ethereum is a security investment product under it’s regulatory control. A successful lawsuit could pave the way for wider acceptance of Ethereum as a legitimate investment, just like Bitcoin.

Asian Ethereum ETF Launches While USA Ethereum ETF in Limbo

While the US investors are held away from being able to invest in Ethereum via an exchange traded funds (ETF), Asia investors are now able to buy Ethereum ETFs via the Hong Kong markets. Launched on Tuesday April 30th, there are now three Ethereum ETFs available to investors. This is possible because Hong Kong has already provided regulatory clarity on Ethereum as a commodity already.

“Hong Kong has already had a clear definition of Ethereum… It is not a security, but the first non-securities virtual asset to be included in Hong Kong supervision together with Bitcoin, and it is one of the two targets that can be provided to retail investors.”

- Wayne Huang, Head of ETF at OSL.

In the United States there are nine current Ethereum ETF applications awaiting approval by the SEC. The SEC must decide on VanEck's and ARK's filings, which are first in line, by May 23 and May 24 respectively. The current assumption is that the SEC will not approve any of the Ethereum ETFs until there is regulatory clarity on Ethereum the asset or at least until the SEC has to approve the applications based on court order.

It took more than ten years to get a Bitcoin ETF approved as the SEC stonewalled and delayed every application until they were forced to approve one. The SEC lost a federal court case to Grayscale Investments to grant approval of their Bitcion ETF product. History has shown us that the SEC prefers to delay crypto product approvals and thus it is expected for the SEC to delay the Ethereum ETF as long as possible as well.

Ethereum Staking Regulation - The UK Plans to Define Staking Regulation in 2024

The United States has followed the UK and European Union with it’s crypto regulation strategy thus far, albeit implementing regulation at a much slower pace. The European Union was the world’s first major jurisdiction with comprehensive crypto laws through their Markets in Crypto Assets regulation, MiCA. MiCA was passed in 2023 and came into effect in 2024 enabling businesses and investors to have certainty on how crypto will be regulated.

Now the UK is working on introducing staking regulation to further enables enable economic growth with a clear regulatory framework for crypto assets. The U.K.’s economic secretary to the Treasury, Bim Afolami, revealed the government’s ongoing drive to lay the groundwork for revamping the country’s payments landscape while speaking at the Innovate Finance Global Summit (IFGS) 2024.

“Speaking of true change, I know that the cornerstone of our position as a world leader in fintech is the delivery of our regulatory regime for crypto assets and stablecoins.”

Bim Afolami - U.K.’s Economic Secretary to the Treasury

Clarity on how Ethereum staking rewards will be treated for tax purposes is very important for United States investors. The staking rewards from Ethereum, akin to a dividend, are a key component to Ethereum’s investment appeal and the total picture of the Ethereum ownership opportunity.

Staking is a critical part to the Ethereum investment analysis and thus far the current Ethereum ETF products awaiting to be approved do not include staking rewards. The thinking is that the USA will continue to follow the UK’s crypto regulation when their laws work effectively, just as the US has started to create regulation on stablecoins comparable to the MiCA laws. Regulatory clarity in Europe on crypto staking rewards will be a positive indicator that the USA can follow to provide clarity on staking rewards and Ethereum investment products for USA investors.

More Demand Than Bitcoin?

Over $10 billion dollars within two months was put into Bitcoin once the Bitcoin ETF was approved in 2024. That’s a lot of money that quickly moved into Bitcoin and there may be even more interest for Ethereum from global investors than Bitcoin.

“The world of investors who are looking for cash producing assets is massive and ETH obviously generates fees that goes to the token holders… "Even if you don't have an ETF that can offer staking as a part of it, it's still a cash producing asset, so I think ETH could make more sense as an asset to more people than Bitcoin does.”

Pranav Kanade, VanEck Portfolio Manager

The thinking is that due to Ethereum’s native yield (aka staking rewards) combined with it’s business model and expected growth ahead, Ethereum is a more attractive investment for investors than Bitcoin. Bitcoin doesn’t produce positive cash flows or staking rewards for holders of the asset. Would you rather own a cash producing asset with a real business model or digital gold that just protects your purchasing power and hedges against inflation? My bet is that most investors will prefer staked ETH over Bitcoin for the mentioned reasons above.

Are We There Yet?

We are not yet to regulatory clarity on Ethereum in the United States but we are making progress on multiple fronts with active lawsuits to define ETH as a commodity and approval of Ethereum ETF products for USA investors. As the rest of the world leads the way with crypto regulation and adoption, the USA again has the chance to copy what is working in other regions to enable financial innovation and investment opportunities locally for USA investors and businesses.

My bet is that we see the USA classify Ethereum as a commodity in 2025 and the Ethereum ETFs are approved in the same year. Staking regulation will likely come afterwards in 2026 and this will usher in access to staked Ethereum products for USA investors. We’ve got a lot of time until we get to Q2 2026. Taking into consideration the macro investment landscape, we have an uphill battle with global financial market uncertainty, higher borrowing costs, and fears of a global financial meltdown of 20-30% before we see a reversal in investor market sentiment to be risk-on investors again.

On the macro environment, my bet is that the money printing by the USA and other governments will lead to real assets appreciating and Ethereum being included in this category as a high beta tech stock for risk-on investors. Therefore I see this time when Ethereum is under $3,000 as a great opportunity to dollar cost average into a starting position of Ethereum and awaiting the global adoption of Ethereum with investors ahead in the next 2-3 years. We don’t know when Ethereum’s regulatory status will be confirmed but it is clear that the next generation of financial markets will be lead by tokens with Ethereum as a core infrastructure layer for the future of finance ahead.

Bitcoin’s Next Halving

Bitcoin has a total supply of 21 million. The 21 million bitcoins in existence are scheduled to be mined through the year 2140. The underlying code ensures that only 21 million bitcoins will ever exist. Almost 90% of bitcoin’s total supply has been mined.

About 900 new BTC bitcoins are mined per day, currently. To sustain the emission and increase scarcity, the number of bitcoin emitted per block is regularly reduced. This process of reducing the bitcoin emission per block is known as Bitcoin Halving.

After a predetermined block height (840,000 for this halving event), the amount of bitcoin emitted per block is reduced to half of the previous number. For bitcoin new halving occurs after an interval of 210,000 blocks or 4 years.

The most recent (2020) halving reduced bitcoin emission from 12.5 bitcoin per block to 6.25 bitcoin per block. This means that instead of 12.5 bitcoins, miners will now be rewarded with 6.25 bitcoins per block mined.

The Halving: Sell the News or Bye the Hype - Looking Back

While the Bitcoin halving is often interpreted as a bullish signal for Bitcoin, in the past Bitcoin has sold off sharply with a sell-the-news event. For instance, in 2016, the market experienced a sharp sell-off from around $760 down to $540 - a correction of approximately 30% - right around the time of the halving.

This halving event may be different than the last four halving events now due to the Bitcoin ETF enabling institutions to own Bitcoin for the first time. I like using the on-chain insights from Glassnode to best evaluate what might happen this halving event.

Using Glassnode’s recent research piece, Adjusting Trading Strategies to the Upcoming Bitcoin Halving: Is This Cycle Different?, we can compare the last four cycles to this cycle. Looking at the chart below, when the cycles are laid on top of each other, it appears that in this cycle the Bitcoin price may keep going up without a significant pullback.

We’ll have to wait and see what happens to Bitcoin’s price as the 5th halving event occurs later this month. This time is different but still there are often good lessons to be learned from reviewing the past cycles to understand what’s most likely to occur this cycle.

Bitcoin L2s - Scaling Bitcoin for Mass Adoption

A big trend this year and ahead will be how to make Bitcoin more usable for global investors and financial markets. Bitcoin Layer 2s are projects that scale the Bitcoin blockchain with an additional execution layer that offers increased throughput by processing transactions off the main chain. Bitcoin Layer 2s use bitcoin as the gas token, and use the Bitcoin blockchain for settlement.

Bitcoin Layer 2 networks rely on the Bitcoin mainnet for the final settlement of their transactions on their own execution layer, and in this way, they maintain the level of security and decentralization of the Bitcoin mainnet blockchain. The leading Bitcoin Layer 2 projects include the Lightning Network, Stacks, Liquid, Merlin, and Rootstock.

I’m excited about the Bitcoin L2 innovation happening within each of these projects and others that are just starting like Citrea which use the latest privacy technology zero-knowledge proofs to make Bitcoin more usable for developers to build on top of Bitcoin. However with this excitement, I’m not forgetting that Bitcoin is the most valuable asset that I want to own. I don’t believe these other projects’ native tokens like, STX, will out perform BTC over the next year.

Bitcoin DeFi

As Bitcoin becomes more mainstream and it’s ecosystem of networks and companies expanding it’s reach, the potential for Bitcoin to pay it’s owners a dividend or reward for use within decentralized finance is getting easier and easier. Bitcoin DeFi is simply putting Bitcoin to work within global finance markets that enable borrowing and lending through decentralized finance. Here are the leading Bitcoin DeFi projects that I am watching on top of the L2s discussed above.

• Badger enables Bitcoin to be minted on the Ethereum blockchain to be used in the Ethereum DeFi ecosystem. Anyone can lock up their ETH or staked ETH and then mint Bitcoin on the Ethereum blockchain to be used within Aave, Curve, or any borrowing and lending protocol in the Ethereum ecosystem that has an eBTC offering.

• BRC-20 has brought fungible tokens to Bitcoin. Modeled on Ethereum's ERC-20 standard, BRC-20s enable fungible token creation on the Bitcoin network. BRC-20 tokens allow for the creation, deployment, and transfer of fungible tokens on Bitcoin.

• Ordinals have brought NFTs to Bitcoin. Ordinals improves Bitcoin's capabilities by integrating digital content (such as images and text) into the blockchain. This is made possible through the use of SegWit and Taproot upgrades that occurred in 2023. The Ordinals token ORDI has over a $1B market cap and Galaxy Research estimates that the market size of Bitcoin NFTs built on Inscriptions and Ordinals will reach $4.5 billion by 2025.

Now with all the excitement shared around Bitcoin’s global adoption ahead, I want to end with a big idea that could influence how you decide to participate in investing in the Bitcoin ecosystem ahead.

The Fat Protocols Thesis - Why Owning BTC & ETH Is Better Than The Applications Built on Top

Back in 2016 a new idea and framework for investing in cryptocurrency networks was created by Union Square Ventures titled ‘Fat Protocols’. The idea is that within cryptocurrency and Web3, the base layer of technology - called the protocol layer - will capture more value than the application built on top.

This is the opposite of the social media internet era, aka Web2, when the applications like Facebook and Google, captured the most value compared the base layer protocols that they are built on like HTTPS.

This is a big shift. The combination of shared open data with an incentive system that prevents “winner-take-all” markets changes the game at the application layer and creates an entire new category of companies with fundamentally different business models at the protocol layer. - Joel Monegro

Staying Focused on BTC, Not The New Altcoins

With this viewpoint of value capture within cryptocurrency networks, I believe that Bitcoin and Ethereum will soak up most of the real investment into cryptocurrencies due to their unique positions in the market and strength of their network effects. For now, I’m watching all of the innovation and waiting for the last few 15-30% BTC price retracement to nibble on a bit more Bitcoin, not altcoins, before Bitcoin takes off to new heights with all of the central bank money printing combined with the global interest in digital currencies pushes Bitcoin to new ATHs above six figures ($100,000 per BTC) and beyond.

The concept of investing in the internet's infrastructure might sound futuristic, but staked Ethereum (ETH) presents a compelling proposition. By locking up your ETH to help secure the Ethereum network, you earn rewards – a potential alternative to traditional fixed-income investments like US Treasury bonds.

Traditional Investor, Company/Government, and Investment Overview

Internet Bonds offer a conceptual framework for understanding and valuing these new types of digital work agreements between the lenders of capital and resources and the companies aka protocols operating on the base layer of the new internet economy.

Akin to traditional bond investment structures, Internet Bonds represent an agreement between the bond issuer (the protocol, aka Ethereum code base) and the bondholder (the validator, aka ETH stakers).

Ethereum Investor, the Ethereum blockchain, and Investment Overview

However, unlike traditional bond structures, according to Ethereum staking provider Bison Trails, internet bondholders in Web3.0 are lenders of capital, labor, resources, and owners of the network at the same time. This enables Ethereum to have additional rewards via airdrops of new tokens and an expected price appreciation due to Ethereum’s growing demand and limited supply.

Staking vs. Bonds: A Numbers Game

Let's break down the financial comparison:

• US Treasury Bonds: As of March 19, 2024, the 10-year Treasury bond yields around 4.8%, according to [financial news source like Bloomberg or Wall Street Journal]. This interest rate is considered the risk-free rate in traditional finance, a benchmark for other investments.

• Staked Ethereum: Current estimates from resources like TokenTerminal and Messari suggest an Annual Percentage Yield (APY) of around 4-5% for staking ETH on Ethereum 2.0.

It’s clear that Ethereum’s staking rewards are lower than some US Treasury Bonds now, but when considering inflation and the purchasing power of US dollars over time compared to Ethereum, the Internet Bond, staked ETH far exceeds the rewards of traditional bonds. Let’s dive into an example on why staked Ethereum has more potential than a government bond below.

The Appeal of Staking

While staked ETH's APY currently falls short of the 10-year Treasury yield in USD terms monthly, over a 3-5 year timeline the ETH staking APY is higher due to the appreciation of ETH, it offers several potential advantages:

• Growth Potential: Unlike bonds, the value of your ETH holding can appreciate alongside the price of Ethereum itself. This presents a chance for higher overall returns if the Ethereum ecosystem continues to grow.

• Restaking: Additional yield on the Ethereum that has been already staked and then is staked again with a “corporate” bond market provider, such as **Eigenlayer. **Restaking can be thought of as the second bond market layer for crypto bond markets. At the first layer, the ETH is staked in the enshrined bond market with a liquid staking provider and then there is a second layer, like the corporate bond market in traditional finance, that offers services based on staked Ethereum, like Eigenlayer.

     Restaking Ethereum is the crypto financial market’s leading corporate bond market      with over $13B of ETH already locked up in Eigenlayer.

• Airdrops: Earning free tokens for helping new Ethereum staking protocol companies to start is a profitable venture with a third tier of rewards.

  • 1. ETH native staking rewards

  • 2. Restaking rewards - An example is Eigenlayer points

  • 3. Airdrop rewards - An example is Ether.fi’s recent airdop. Ether.Fi is an Ethereum staking and restaking protocol with Eigenlayer that just started rewarding early users with their own governance token ETHFI, giving out $210M to users and a promise to give out more ahead.

Example - Staking & Restaking ETH with Ether.fi

What if $1,000 was invested into staked Ethereum with Ether.fi, aka buying and holding weETH over 1 year and Ethereum goes up to $5,000 by March 20, 2025?

The result is not an APY of 2.9% or ~$29 in ETH total return on your capital, but rather a 55% APY increasing your capital to $1,554.19 without considering the airdrops.

To include the airdrops, this estimate above doesn’t include the APY from the Ether.fi airdrop or future Eigenlayer rewards. For reference, the Ether.fi initial airdrop which was worth ~$500 for most early users thus could make this a 100% APY opportunity in one year for some who were early. The Ether.fi airdrop will continue ahead and more rewards will come with airdrops from restaking platforms like Eigenlayer.

What if Ethereum goes to $10,000 in the next three years?

Ethereum is predicted to hit $170,000 per ETH token by 20230 via Ark Investments and many are talking of Ethereum reaching $20,000 in this cycle. To be bullish and a little bit conservative, let’s estimate ETH going to $10,000 in three years.

Using the StakingRewards ETH staking calculator, below is this prediction for staked ETH’s returns by March 2027.

The APY on the $1,000 investment in three years would be 227% return or 76% annualized return. This is way beyond anything possible in traditional finance, which also comes with additional risks because of the newness and volatility crypto has compared to the US dollar.

The Future of Ethereum Staking

Financial publications like Barron's and The Economist have explored the potential of staked ETH as a new asset class. As the Ethereum network matures and staking becomes more accessible, it will become a more attractive option for investors seeking a balance between risk and return. Ethereum’s ETF is expected to be passed in 2024, thus allowing traditional investors to put ETH and dividend paying ETH (aka staked ETH) into their retirement accounts.

“From a market perspective, part of me believes that the market size for a spot ETH ETF is potentially as big if not bigger than the spot bitcoin ETFs,” said VanEck Portfolio Manager Pranav Kanade.

With this understanding that there is likely high demand for Ethereum with traditional investors and the market preparing for Ethereum’s first ETF, the potential for rewards for staked Ethereum investors and holders is greater than than it has ever been before.

Beyond the Numbers

The concept of staked ETH extends beyond just the APY comparison. Resources like Bankless delve deeper into the idea of "internet bonds," highlighting how staking could become the foundation for a decentralized financial system. This emerging ecosystem offers a glimpse into a future where investing in the internet's core infrastructure is a mainstream possibility.

Ethereum is a digital bond and digital oil that now has a yield instrument that Bitcoin, gold, and commodities like oil don’t offer.

There are other competitors for the Internet Bond proclamation, primarily from other smart-contract blockchains like Solana, Cardano, and Polkadot which also pay a staking reward akin to a dividend for locking up their tokens. The difference with Ethereum is that Ethereum is the #1 market leader in the most important categories (total developers, total amount of money locked up, and total ecosystem size of users & companies) and has just started to turn a profit as a business.

Risks to Consider

There are risks with all investments, and with staked Ethereum there are a few new risks and different risks than with traditional bond investments.

• Volatility: The Ethereum market is known for its volatility. Unlike a bond with a guaranteed payout, the value of your ETH holding can fluctuate significantly, increasing or decreasing the payout based on multiple factors, with the price of ETH as the main driver.

• Technical Complexity: Staking can involve technical hurdles, especially for those unfamiliar with crypto wallets and decentralized applications (dApps).

• Restaking is new: Staking Ethereum is now close to 2 years old, but restaking is brand new and adds an extra layer of risk with unproven and not yet battle tested code that could lead to hacks or loss of staking rewards for some ETH stakers.

Conclusion

Staked Ethereum presents a unique investment opportunity with the potential for competitive returns and exposure to a growing technological ecosystem. Staked Ethereum, aka The Internet bond, is an entirely new asset for financial markets. It allows anyone in the world to invest, participate, and profit off an open-sourced, decentralized digital economy."

More technical: Staked Ethereum (ETH) emerges as a novel asset class, democratizing participation and potential returns within the open-source, decentralized digital economy.

More concise: Staked Ethereum offers a revolutionary way to invest in the open-source infrastructure of the internet.

More focused on accessibility: Staking ETH opens the door for global participation in the decentralized digital economy, allowing anyone to invest and potentially profit.

However, it's crucial to understand the inherent risks associated with cryptocurrency investments. As the market evolves, staked ETH could become a compelling alternative to traditional fixed-income options, challenging the status quo of the "risk-free rate" in a decentralized future. Remember, conducting your own research and understanding your risk tolerance remains paramount before entering any crypto investment.

Additional References

• The Internet Bond, White Paper

https://drive.google.com/file/d/13-s15SvCIUBukhSZiNkpd0sTff3izQ5G/view

• The Internet Bond & High-Yield Stablecoin - Ethena Labs

https://mirror.xyz/0xF99d0E4E3435cc9C9868D1C6274DfaB3e2721341/v_ksCJPHOLFOtXB47ng7cdYnFiVOq2pw22clQJq8weU

• The Birth of the Internet Bond, Bankless

https://bankless.ghost.io/ether-the-birth-of-the-digital-bond/

DePIN: Building the Future of Infrastructure

This article explores DePINs (Decentralized Physical Infrastructure Networks), a new and exciting way to build and manage physical infrastructure in the real world and how to bet on AI’s growth through investing in decentralized file storage via Filecoin.

First let’s introduce what DePIN is and then jump into the Filecoin investment opportunity.

What is a DePIN?

Decentralized physical infrastructure (DePIN) is offering arguably the most real-world implementation for blockchain technology to date.

Imagine building awesome stuff in the real world, like super-fast wifi hotspots or solar-powered charging stations, but instead of one big boss (Amazon, Google, or Meta) calling the shots, anyone can join in and help! That's the magic of DePINs. Decentralized physical infrastructure projects use blockchain tech, like the kind behind cryptocurrencies, to create a trustless and open way to build these networks.

Now anyone can operate real-world physical infrastructure and hardware networks in a permissionless, trustless and programmatic way.

Run this by me again in a bullet points please and thank you. Sure thing :).

• A DePIN is a network built on blockchain technology that uses crypto tokens to incentivize individuals and companies to contribute resources and participate in building and maintaining physical infrastructure.

• Examples of physical infrastructure include WiFi hotspots, solar-powered home batteries, wireless networks, and decentralized cloud file storage.

• DePINs are permissionless and open, meaning anyone can contribute and benefit from the network.

What are the Categories within DePIN and it’s Potential Addressable Market?

DePIN comprises protocols that aim to disrupt traditional billion-dollar infrastructure industries, which can be broadly categorized into four categories: decentralized server, wireless, sensor, and energy networks. According to Messari, The total addressable market for DePIN is estimated to be over $2.2 trillion and is projected to reach $3.5 trillion by 2028. This may be a low estimate according to some market pundits, but to stick with Messari’s analysis from 2022, the market size for each sector by 2028 is:

• Decentralized Servers $1tn

• Decentralized Wireless Services $2.3tn

• Decentralized Sensors $30.5bn

• Decentralized Energy $146bn

Here’s an infographic overview of the DePIN market leaders within each of the four market segments.

Now that you understand what DePIN is at a high level, let’s jump into why it is set to grow ahead along with AI.

Benefits of DePINs - An Extension of the Sharing Economy

Decentralized physical infrastructure enables collective ownership where everyone who contributes to a DePIN network has ownership through token rewards. On top of this DePINs are more resilient and secure than centralized networks, making them less susceptible to hacks and outages.

DePINs have cost advantages as well. By leveraging a network of contributors, DePINs reduce costs compared to traditional, centralized infrastructure. Right now, decentralized file storage can be a lot cheaper than centralized storage due to the large amount of unused decentralized storage available.

Lastly, DePINs are open to competition and Innovation. DePINs encourage new players to enter the market, fostering innovation across various sectors.

What are Real-world use cases of DePINs?

Here are four examples of real-world use cases for DePins today.

• DIMO: Collects car data to provide value-added services to car owners.

• Hivemapper: Builds a decentralized version of Google Maps using data collected from mapping devices on dashboards.

• Daylight Energy: Allows homeowners to participate in the energy grid by installing solar panels and batteries.

• FileCoin: File storage for social media, research articles, and any files that want to live forever on a blockchain.

My personal favorite DePIN project is Filecoin (FIL) which aims to address the need for decentralized storage solutions.

Here are some of its top use cases for FileCoin that AI will use as well ahead.

• Web3 Storage: Filecoin provides a secure and reliable way to store data associated with Web3 applications, such as NFTs, metaverse assets, and game data.

• Decentralized Archiving: Organizations and individuals can use Filecoin for permanent or long-term data archiving in a cost-effective way compared to traditional cloud storage solutions.

• DApp (Decentralized Application) Storage: Filecoin offers a decentralized storage option for data used by Decentralized Applications (DApps) built on various blockchains.

The Future of DePINs will Power AI

DePINs are a rapidly growing sector with the potential to revolutionize the way we build and manage infrastructure. As DePINs develop, we can expect to see even more innovative use cases emerge, transforming industries like telecom, energy, mobility, storage, and most importantly AI.

There is an idea that AI will need to use a blockchain-based digital payments system. Why would AI use a government created currency that continues to debase and doesn’t use code as law?

Bitcoin Will be the Currency of AIs

Some believe that Bitcoin will be chosen by AIs as the currency in which their economic actions are denominated. The current traditional finance system is unsustainable for AI-powered economies. Why?

Imagine AI trying to use a regular payment system, but the rules keep changing and they can get kicked out anytime! No good, right?

AIs need a payment system with clear, unchanging rules, like a recipe everyone can follow. This system also can't favor anyone and has to be open to everyone, no matter who the AI is or what it's buying.

Since AIs can't exactly argue their way in (they don't have fists!), this payment system needs to be super resistant to shutdowns. That's where blockchains come in! Blockchains are like special code everyone can see, so the rules are always clear. That's why only blockchains can be used as a fair and reliable payment system for our AI friends.

If you can’t convince yourself to own Bitcoin, AI’s currency of choice, you may want to own what AI will rely on to function.

How to Bet on AI Through Filecoin

Arthur Hayes, the legendary investor and author, outlines here why he’s investing in FIL as his bet on AI in the future. Here is a summary of his argument for investing in FIL for a bet on DePIN and decentralized file storage through Filecoin’s network as a great opportunity.

“Because I have no clue as to which AI business models will succeed, I want to invest in the things I know AI will rely on to function – i.e., its food groups.

Either I need to invest in compute power in some way, or I need to invest in cloud data storage. For both food groups, an AI craves decentralisation. An AI faces existential risks if human-controlled, centralised companies decide to restrict access to their services (due to coercion by governments, for example).

So, as far as I can tell, there’s no decentralised way for me to invest in compute power. That leaves me with investing in data storage.

The largest decentralised data storage project by storage capacity and total bytes of data stored is Filecoin (FIL). Filecoin is particularly appealing because it has been around for a few years and is already storing a large amount of data.

To read more in depth about my logical arguments on why an AI needs decentralised money, services, and networks in general please read “Massa” and “Moai”.” - Arthur Hayes

What’s the Logic Behind Investing in Filecoin Now?

Now here’s his math for investing in FIL. Don’t worry if this all doesn’t make sense, this is the perspective from a billionaire cryptocurrency exchange founder and expert in traditional finance. I learn at least 3-5 new words or things every time I read one of his articles.

Let’s go through my (Arthur Hayes’) checklist to see if FIL is suitable (investment into AI).

Is it tradable on an exchange?

Yes. FIL began trading in 2020, and is tradable on all major global exchanges.

Does it trade much lower than it’s ATH?

Yes. FIL is down close to 99% from its April 2021 ATH. But even more importantly the Price / Storage Capacity and Price / Storage Utilisation multiplies both contracted by 99%.

Historical figures

FIL ATH: $237.24

Filecoin storage capacity (2021): ~4 EiB

Storage utilisation (2021): ~0.2%

Current figures as of Q2 2023 (Messari report)

FIL price: $9.23

Filecoin storage capacity: 12.2 EiB (exbibyte)

Storage utilisation : 7.6%

Investing after multiples take a beating is always best practice. Imagine if the Price / Capacity ratio rebounds only 25% of where it was in April 2021…, the price would rise to $59.29 up almost 640% from current levels.

Is it a cryptocurrency whose network helps feed an AI?

Yes. FIL is a blockchain based on proof-of-spacetime. FIL is the native cryptocurrency of the Filecoin network…

The AI boom hasn’t even started yet. Just wait until the major central banks do an about-face and start printing money to save their domestic governments from bankruptcy. The sheer amount of capital and attention focused on this “new” technological development will be something unseen before in human history.

The gobs of fiat money printed and the lightspeed adoption of AI will combine forces and produce the biggest financial bubble EVER!” - Arthur Hayes, Double Happiness

Let’s Wrap it Up

We covered a lot in this blog post and so it’s important to summarize what we learned. First off, we dove into the new decentralized physical infrastructure (DePIN) industry that is growing tremendously along with AI. Next we covered why Bitcoin and crypto networks that supply will compute power or cloud data storage will be in high demand for AI’s global adoption ahead. Lastly, we dove into the Filecoin investment thesis with guidance from an legendary investor, Arthur Hayes.

I hope you enjoyed this post and feel free to reach out if you have any questions.

Do your own research and get ready for the largest financial bubble every ahead!

Investors Pay for Leverage, Not Much Else

In today's digital world, many users exchange their data and attention for free access to products and services. Leveraged investing stands out as a service that investors are willing to pay for. Most cryptocurrency projects search for ways to monetize their users while leverage trading exchanges have already found product market fit with investors that want to pay to take leverage on their trading.

Within crypto markets, leverage investing is most popular through perpetual futures, not futures contracts with end dates. Perpetual futures dominate trading volume, surpassing even spot trading on centralized exchanges. Why do perpetual futures dominate leverage trading today?

Compared to traditional futures, perpetual contracts offer greater price parity with spot markets, enable capital efficiency through leverage, and 100% control. This is where GMX comes into the picture as the leading perpetual futures exchange that offers leverage to global traders and investors.

GMX: A Simplified Approach to Leveraged Trading

GMX stands out as an innovative decentralized exchange (DEX) for both spot and leveraged trading, offering perpetual contracts with a simplified design. With a current market capitalization of $481 million, GMX is a unique and undervalued investment opportunity with market leadership and massive growth potential ahead as more investors convert  to 24/7/365 access in decentralized finance (DeFi) over centralized finance (CeFi).

Competitive Advantages and Market Leadership

The derivatives ecosystem, including perpetual futures exchanges, caters to various traders and entities seeking leverage and hedging opportunities. Specific to GMX, it caters to a diverse user base, ranging from small day traders to institutional large investors, and leading DeFi protocols seeking risk hedging solutions. Thus far GMX has has over $176B in total trading on it’s permissionless exchange.

Compared to its main competitor, dYdX (market cap: $3.16 billion) GMX's on-chain design, tokenomics, and financial performance highlight its competitive edge with a market cap of $456M.

Financials and Investment Potential

GMX boasts a strong financial position. Currently, $618 million is locked up by liquidity providers (LPs) who earn 70% of exchange profits by renting their spot exposure to traders. The remaining 30% goes to staked GMX holders, who can further increase their returns by compounding ETH or AVAX rewards on the exchange. Notably, GMX's Price to Sales ratio (P/S) of 13.4 (as of February 12th) is significantly lower compared to dYdX's Price to Sales ratio (P/S) of 86.4*.

Additionally, GMX offers unique advantages like hourly payouts like a dividend in Ethereum. Add on top the ability to increase this dividend dividends 200% through compounding their rewards, taking the dividend up to 14% ETH APY at the time of writing.

Innovation and Future Outlook

GMX is not talked about much and continues to invest in innovation and market partnerships to grow it’s moat. Despite its strong performance, GMX remains relatively undiscovered due to its anonymous founders and investor focus on news-driven narratives rather than fundamental analysis. However, GMX has established itself as a leader in the profitable perpetual exchange market and continues to innovate with features like 1-click trading, Binance Smart Chain (BSN) ecosystem integration, and new assets available for leverage trading. This commitment to innovation positions GMX to maintain its market leadership within the perpetuals futures contract leverage trading global ecosystem.

Conclusion

GMX presents a compelling investment opportunity in the growing DeFi leverage trading space. Its innovative design, strong financials, and focus on user experience position it for continued success. Decentralized derivative volume has grown 400% since July 2023. Despite this, the sector is still in its infancy, capturing only 2% of the total cryptocurrency futures volume. As the market matures and investors seek value beyond hype, GMX has the lead today as the dominant player in the crypto derivatives landscape, compelling financials, and continued growth of its user base solidifying GMX as the best liquid token opportunity under $500M FDV today.

References:

https://dune.com/gmx-io/gmx-analytics

https://defillama.com/protocol/gmx?

https://tokenterminal.com/terminal/projects/gmx

https://mirror.xyz/shaunda.eth/aLALRZOg8_w8l1LwmZIK39CfzQz-qU0KFsSJiMpj7SA

https://medium.com/@vikram.arun/gmx-the-trading-platform-of-the-people-by-the-people-for-the-people-c4856897478

What is Rocket Pool?

#Rocket_Pool is an #ethereum staking protocol that makes it easier to run an #ETH node from home (aka #StakeFromHome) or anywhere. I run 5 nodes myself in 5 different countries.

Why is Decentralization Important?

Ensuring that Ethereum stays decentralized is essential to censorship resistant and truly permissionless commerce over the internet. A16z, one of the best venture investment firms in the world has an article on why decentralization matters ( ‘Why Decentralization Matters’) and here is a quick summary with a review of the history of the internet.

During the first era of the internet — from the 1980s through the early 2000s — internet services were built on open protocols that were controlled by the internet community…

During the second era of the internet, from the mid 2000s to the present, for-profit tech companies — most notably Google, Apple, Facebook, and Amazon (GAFA) — built software and services that rapidly outpaced the capabilities of open protocols…

The good news is that billions of people got access to amazing technologies, many of which were free to use. The bad news is that it became much harder for startups, creators, and other groups to grow their internet presence…This in turn stifled innovation, making the internet less interesting and dynamic.

Centralization has also created broader societal tensions*, which we see in the debates over subjects like fake news, state sponsored bots, “no platforming” of users, EU privacy laws, and algorithmic biases. These debates will only intensify in the coming years.*

“Web 3”: the third era of the internet

The internet is the ultimate software-based network, consisting of a relatively simple core layer connecting billions of fully programmable computers at the edge. Software is simply the encoding of human thought, and as such has an almost unbounded design space…

Chris Dixon

Decentralization is essential for innovation to flourish and for the future of the internet - arguably the most valuable and important global network ever created by humans. Without a decentralized base layer that one government or group can't manipulate we ensure that trustless business and commerce can occur, aka #defi, #web3 (the user owned internet), #desci, and freedom for anyone with an internet connection.

Ethereum was founded on this concept - anyone with ~$200 of hardware and an internet connection could run a node to support the network and earn #stakingrewards for their service to validate the network. 

#Solana and most other crypto networks require a data center and professional grade hardware to run their blockchains. This is outsourcing the validation of the network to #AWS, #Googlecloud, or a large provider - NOT the users of the network.This is a big deal and hence why the Bank of China, JP Morgan, and other leading organizations choose #Ethereum first as their blockchain to sell bonds or build their future finance solutions with transparency and the most trust by the global technology community. Rocket Pool has lowered the barrier for running an Ethereum node and created a liquid staking token rETH that can earn extra rewards in DeFi.

How is Coinbase Doubling Down on Rocket Pool?

First off, Coinbase is a strategic investor in Rocket Pool via Coinbase Ventures and has been deeply involved in the community by running a node for the oDAO.Now, a few years in, Coinbase has integrated #rETH (Rocket Pool's Ethereum Liquid Staking Token) into their wallet with a few clicks. Anyone can convert their #ETH into #rETH which automatically accrues staking rewards over time & can be used in multiple DeFi applications.

On top of this, Coinbase introduced #rETH as one of the first liquid staking tokens available on #BuildOnBase, Coinbase's Ethereum scaling blockchain (aka #L2).Rocket Pool is open to everyone with an open code base as well. Anyone can be a #ETH_Node operator with Rocket Pool & help to secure Ethereum. This includes #cbventures who are running minipool validators with #Unit_410. Read the whole announcement here.

What to do with this information?

Consider staking your Ethereum with Rocket Pool in a self-custody wallet to start earning passive income while supporting the future of Ethereum's global success. Self-custody staking - NOT directly on Coinbase, Kraken, Binance or with any other custodian is essential. Don't trust anyone else with your private keys, or you could be rugged or fooled by someone new like Sam Bankman-Fraudster.

Where Can You Learn More About Staking Ethereum?

Check out my educational project along with SunshineStaking.eth - EthereumStakingGuide.com to get started.

Of course there are other resources that could be helpful too. I highlight my favorite Ethereum staking resources in this video below.

Do your own research and don’t sleep on earning passive income with your Ethereum by staking it in self-custody with a trusted provider like Rocket Pool. At Ethereum Staking Guide, we are fans and users of a couple different Ethereum staking protocols, but by far Rocket Pool is the decentralized market leader with a huge community ready to help you find your way.

Thanks for reading!

I don't need to lie no more

Nowadays all I do is shine

Take a breath and ease my mind

-Mac Miller ‘2009’

[P.S. Mac Miller overdosed shortly after this TinyDesk concert. This was the first time he performed ‘Small Worlds’ and ‘2009’ live as well. RIP Mac, thank you for inspiring me and so many others 🤍]

Bad News First

Ooh, I Been a Fool But That's Cool, That's What Human Beings Do

This week, a storm cloud arrived in the form of an indictment against one of my past business partners. The US Federal government accuses him of a large fraud scheme. My initial reaction? "What the f*ck?"

I vetted him, we ran a company together, and even hung out at conferences. My gut said he was good, his morals aligned with mine. I was wrong.

Owning Up and Taking Responsibility

In 2022, I brought Matt into my investment club, vouching for his credibility and value. Transparency is key, so I need to share: I learned about the indictment not directly, but from a New York Times reporter and a club member who received the same news.

No doubt, bringing him in comes with responsibility for brand reputation risks. The "why" still haunts me – why would a seemingly bright young man do this?

Important Clarifications

Let's be clear: Matt is presumed innocent until proven guilty. However, the US Homeland Security doesn't bring indictments lightly. With a veteran prosecutor like Assistant US Attorney Carlton Gammons on the case, it's evident they're taking this seriously. At 21, Matt faces a potential 45-year sentence, $3.5 million in damages, and a shattered reputation. It saddens me and the other partners deeply.

The Good News

Here's the silver lining: before the indictment became public, the DYOR Collective partners and I bought Matt out of the company in mid-2023. I follow law and play by the rules, the funds are safe, and my partners seem willing to give me a second chance. This is a testament to doing what's right, even if it's uncomfortable.

Eyes on the Horizon

Keep your Eyes to the Sky, Never Glued to Your Shoes

I'm grateful my other project, Ethereum Staking Guide, is thriving and only getting better. My partner, Sunshine Barhorst, is a gem – a PhD in medicine and a rising star in Ethereum node validation and DIY education for non-techies. Together, we're building a community and library of high-quality, free education on staking ETH from home.

What is our mission? Empowering anyone to #StakeFromHome with free guidance or to be able to receive personalized support on their Ethereum staking journey via our mentorship programs.

• Videos Guides

• Blog Post Guides

• 1:1 & 1:Many Mentoring

Alignment and Shared Passions

Sunshine and I met when she was creating videos on hardware wallets for the University of Cincinnati's CryptoEconomics Lab. We bonded over our passion for mentoring, research, and helping others. As I guided her into Ethereum staking, she launched SheNodes, a women's mentoring group to bring more women into running the ecosystem. Check out a teaser of her educational content on how to get started staking Ethereum from home below.

Exciting Horizons

We're just getting started. Sunshine's launching her first SheNodes mentoring program this month, and we're alpha testing the Ethereum Staking Guide mentoring program while partnering with Aya Hq to help launch an Ethereum node in the first Hacker House in Africa!

https://youtube.com/shorts/l0-q0JcWHaw?feature=shared

Facing the Future

My dream to empower others and pay it forward remains clear. I'll keep "falling forward" on my path to success. Dwelling on the past or comparing myself to others is futile. My focus is doing my best, following the law, and trusting that karma will prevail. I embrace imperfection and find gratitude in life's lessons and the chance to try my best each day.

A Final Note

As Mac Miller said, "Lookin' At My Dreams, Who I Wanna Be / Guess You Gotta See It To Believe." So, keep pushing through, and may your dreams manifest too.

“Yeah, nine times out of ten, I get it wrong

That's why I wrote this song, told myself to hold on

I can feel my fingers slippin'.. In a motherf*ckin' instant, I'll be gone

Do you want it all if it's all mediocre?… Starin' at the wall and the wall's full of posters

Lookin' at my dreams, who I wanna be… I guess you gotta see it to believe

Ooh, I been a fool but that's cool… That's what human beings do…

Keep your eyes to the sky, never glued to your shoes

-Mac Miller ‘Small Worlds’

Thanks for your time.

“Bad B- play with my hair…She said "Relax, Tune, baby don't stress out"

But I got a lot of shit on my mind, though

She said, "Let that shit work itself out"…Let that shit work itself out"

Lil Wayne, Let It All Work Out

Welcome to a new year with new opportunities and ideas to ponder on. Here are the top predictions for 2024 within the crypto markets along with a few recommendations on areas to avoid.

As always, I’m here to share ideas from the best investors and thought leaders in the space, with a bit of my creativity and thoughts added on top. My hope is that you take away some new ideas of contemplation and then decide to take the right actions for you. My advice is not to follow the TikTok serviced “ I’m going to be a millionaire over night” strategies, but rather the unsexy and diligent actions that go against the media’s narratives. Dive deep enough and you’ll find the best answers to help you and your family build financial sovereignty with time and compounding returns.

Top 6 Predictions for 2024

2024 will be the year of a recession, Bitcoin going mainstream via ETFs, and much more “hurry up and wait” activity before regulation is passed in the USA. These 6 predictions I believe are the leading indicators for the crypto market all come from VanEck, an esteemed Institutional Investment firm’s Top 15 predictions for the year.

1. The USA will enter a recession in H1 Causing Prices to Dip

The U.S. economy will finally enter a recession in the first half of the year. The economic momentum has been slowing for months, and inflation has cooled along, creating an economy more vulnerable to shocks. What data is showing us this will happen based on past recession?

A) U.S. leading indicators are now in recessionary territory after 19 months of consecutive declines, close to a record.

B) Shares of retailers are struggling, commodities are weak, employment is softening, corporate bankruptcy filings are back to early COVID levels, and

C) The yield curve on US Treasury bonds is inverted but steepening in recent weeks.

According to VanEck, “Bitcoin has only experienced one official US recession, from January to April 2020, during which it fell 60% peak-to-trough before rallying sharply once the Fed provided sufficient liquidity. Gold also tends to decline in the early periods of a recession - it fell 12% in two weeks in March 2020.

Still, its recent breakout confirms strong demand for hard money that is not cancellable by U.S. authorities, a characteristic shared with Bitcoin.”

What this means is that we should be prepared for 20% hair cut on assets prices at least, maybe 50% declines, before the markets turnaround and new fiat (aka dollars, Yen, Pounds) are added into the market.

2. Bitcoin will be made available to retirement accounts and traditional investors via a spot Bitcoin ETF.

Bitcoin in everyone’s retirement accounts and grey haired investors brokerage accounts is expected to come in Q1 2024 with the SEC’s approval of the first ever spot Bitcoin ETF.

According to VanEck, “We expect more than $2.4B will flow into newly approved US spot Bitcoin ETFs in Q1 2024 to keep the Bitcoin price elevated. Notwithstanding the possibility of significant volatility, the Bitcoin price is unlikely to fall below $30k in Q1 2024.

As we assume that Bitcoin is taking significant market share from Gold among the hard money crowd and expect 2024 to be a peak year of voter understanding of debt-driven money printing, (we) estimate of $40.4B inflows over the first two years of trading.”

This is long-awaited good news for current crypto investor community with some believing this will be the catalyst to have Bitcoin go to the moon. I don’t believe a spot Bitcoin ETF will start the bull market, as we’ll need additional market elements to line up for global investors to become risk-on and to start acquiring Bitcoin in masses.

However with the estimates of $40B coming into the Bitcoin market by the end of 2026 and increased money printing ahead for global governments this is a great sign that the lows for this cycle are in and Bitcoin’s best times are still ahead.

3. Bitcoin will achieve a new all-time high price in Q4 2024

Once a recession has taken full grasp of the markets and the US Fed decides to step-in and help provide liquidity to the markets before the election in November, the Bitcoin price is expected to keep climbing to new heights beyond $61K At the same time as the US economy begins to fight its way back to a positive economic outlook, more investors will decide to de-dollarize and buy some Bitcoin or keep nibbling on Bitcoin as they see the price continuing to go up. VanEck has two predictions here that sound good but likely won’t be actually true.

We think the Bitcoin price will reach an all-time high on November 9th, exactly 3 years to the day from its last all-time high. (Recall that Bitcoin’s breakout in November 2020 also came exactly three years to the day from its November 2017 top).

If Bitcoin reaches $100k by December, we make a long-shot call that Satoshi Nakamoto will be named Time Magazine's "Man of the Year." - Matthew Sigel, Top 15 Predictions for 2024

4. Ethereum will continue to thrive as the #1 smart contract platform, but lose market share to Solana and not flip Bitcoin.

Ethereum continues to be the top blockchain built for commerce and innovation, as it continues to lead with the # of developers, total dollars locked on it’s blockchain, and businesses running on top of or around the Ethereum blockchain. Still with this knowledge, the leading competitor Solana is predicted to gather more market share from those who don’t understand financial fundamentals and those who want to earn higher returns with more risk, aka chasing the next best thing.

According to Brandon Potts of crypto VC firm Framework Ventures, he explained the difference between Ethereum and Solana as:

“Ethereum is going for this bulletproof security model. They are going for more of a settlement layer, more of the high value transactions,

Solana, they are going with high speed, low latency, performance, low cost.”

With this viewpoint in mind, Ethereum’s #1 security model is expected to attract high-value global transactions, on-chain US treasuries, bonds, and other high-value real-world assets (RWA). On the other hand, Solana’s low cost and fast transactions will make it the easy and cheap blockchain for payments, gaming, and other use cases that Ethereum L2s are currently fighting for.

From a financial accounting viewpoint, let’s look at how much revenue Solana and Ethereum are earning as a business and compare this to the price of their assets. I believe the Price to Fees Ratio is a good way to compare crypto assets to any traditional business or Tech company like Apple or Tesla.

Solana is valued at 509x more than the amount of fees it currently earns.

Ethereum is valued at 75x more than the amount of fees it currently earns.

It is clear to me that I want to own profitable businesses with competitive moats that can survive market changes and market cycles. Even if Solana and other L1 blockchains like Ripple or Cardano gain momentum in 2024, they will struggle to reach true market adoption and become profitable businesses without attracting developers, investment capital (TVL), and users all of which the Ethereum ecosystem has the lead in today.

To wrap this section up, going back to VanEck’s insights in their 2024 Predictions:

“Ethereum will fail to flip Bitcoin in 2024, but it will outperform every mega-cap tech stock. Despite a strong performance in 2024, ETH will lose market share to other smart contract platforms”

5. Regulation in the USA will be delayed until 2025 or 2026

Hurry up and wait is the short answer. The delay tactics by the traditional investment industry are working as there is no clear path to regulating crypto assets in the USA on the calendar for the USA’s regulatory bodies.

According to the WSJ in their latest update on Crypto regulation titled ‘Big Battles Loom in SEC’s War on Crypto’:

“The SEC in 2024 will mark the seventh year of its campaign to regulate cryptocurrencies through enforcement, with no end in sight.

The regulator is waging several major court battles that could determine whether rules written for Wall Street apply to digital assets.

But a winner isn’t likely to emerge in 2024 and neither is certainty about who regulates crypto.” - Dave Michaels, WSJ

With Coinbase, Kraken, and Binance all in legal battles with the SEC, we will need to wait until these cases are completed and/or Congress clarifies which regulatory body - the SEC or CFTC or a new one - is responsible for regulating crypto. My prediction is that a new USA President will usher in regulation to help financial markets get out of the recession and push crypto regulation has a way to keep America’s financial economy strong in their first year in office. We’ll have to wait and see what happens.

6. NFTs and Web3 gaming begin to see true market adoption

NFT activity is expected to reach new all-time highs as speculators return to crypto and gravitate toward top NFT collections on Ethereum, improved crypto games, and new Bitcoin-based offerings according to VanEck.

With close to $14B invested in crypto gaming startups since 2021, the companies building these games are now coming to life with high-quality AAA games that can rival and/or improve upon non-token enabled games. Still this market will be slow to evolve with the prediction that daily active users will increase but there still will be fake users and challenges to reach the global gaming population.

Blockchain gaming will see at least one title surpass 1 million+ daily active users, demonstrating the long-awaited potential. According to a recent report from DappRadar, the WAX blockchain currently leads the gaming sector with 406k daily unique active wallets. However, many of these players are likely bots farming the tokens due to the simplicity of the games. - Matthew Sigel, Top 15 Predictions for 2024

Personally, I’m excited about the opportunities that NFTs have to merge culture with investing to help a new class of creators thrive and for current creatives and brands to maximize their monetization of their current communities. If you want to dive deeper into NFTs and the future ahead, I suggest listening or watching this interview (below) with Yat Siu, the founder of Animoca Brands.

Pitfalls and Traps of Crypto Investing

“See the road to hell, is paved with good intentions”

- Ms. Lauryn Hill, Mr. Unintentional (Unplugged)

This is my 7th year in web3 and crypto investing and I have learned the hard way by failing in almost every strategy of the market. From ICOs to day trading to private sales and NFT flipping, I’ve learned that most of these strategies are a winner take all market and most lose more than they wanted to chasing the next best thing.

I’ve learned to avoid most new opportunities and that the best are often hard to execute unless I expand my time horizon and use time as my friend (aka dollar cost averaging BTC & ETH).

Top 3 Traps of Crypto Investing in 2024

These three traps are highlighted in the latest Crypto Trader Digest, the best free crypto newsletter, written by CryptoHayes aka the Crypto King, Arthur Hayes himself. In the article titled ‘Expression’ he highlights what to avoid to ensure you can win long term with crypto.

1. Avoid Permissioned DeFi

1. Investing in permissioned DeFi is a trap to let large traditional investors or VCs take advantage of uneducated retail investors.

   “If we just think about the meaning of the words, (Permissioned + Decentralized Finance) it should be clear to any thinking person these projects are destined to fail….

   Given the meaning of these words, how the f*ck does one create a centralised decentralised financial network? Or a permissioned permissionless financial network?

   It makes no sense at all … unless you are a TradFi shark who wants to find another way to screw retail investors…

   The whole reason DeFi is attractive to global retail crypto traders is because it has a different market structure than TradFi stock and derivatives markets.

   After the hype fades, these permissioned DeFi markets will just be a circle jerk of high-frequency trading shops sitting on the bid and ask waiting for the other to cross the spread and get f*cked. - Arthur Hayes, Expression

   Avoid buying into governance tokens for new perimissioned DeFi projects that bring together TradFi and retail. The real DeFi infrastructure projects already exist (ex. Aave, Curve, DyDx, GMX) and have significant moats that won’t be toppled by the next best thing.

   2. Avoid Real World Assets (RWAs)

The idea sounds good, to bring real world assets on-chain and to bridge the gap between traditional markets and 24/7/365 open markets on the internet. However if you dive deeper, you’ll find that the traditional markets for real world assets are advanced, very liquid, and aren’t easily able to be to taken down by just bringing them on to the internet.

The question for investors is - Why pay a premium for decentralisation when a centralised option exists and is already extremely cheap and liquid?

The allure of fractional real estate on the blockchain is one that got me in 2021 when I supported Bacon Coin now called Home Coin. To date this has not been a great investment and the project is growing but highly illiquid and not growing as a expected originally.

The other tantalizing RWA trend in 2024 is bringing US Treasuries and Bonds (aka debt) to the blockchain. The most popular projects today offer holders of their token the yield on US Treasury bills (T-bills). This sounds good again, but lacks teeth and merit when you compare this to traditional markets with Exchange Traded Fund (ETF) that holds T-bills. I’ll save the nuanced details for those who want to read the full article themselves, and just end with this beautiful summary:

In short, leave the “real” world that is governed by the laws of the state to TradFi intermediaries. They are able to offer a more coherent and cheaper investment product to express the same theme.

A true DeFi project should depend only on well-written code, not laws that must be adjudicated and interpreted by fallible humans. - Arthur Hayes, Expression

3. Avoid Bitcoin in your Brokerage Account aka the Bitcoin ETF

Buy Bitcoin and crypto and then move it to a self-custody wallet. Bitcoin held as a contract within an ETF is not the same as Bitcoin held in your full control.

The traditional finance system wants you to keep your assets in their custody so they can charge you fees and do “magic” on the backend without transparency. It’s great to know that Bitcoin will become easier to acquire and add into investment accounts, but the true test is if you can hold the asset yourself with 100% control, 24/7/365.

In summary to CryptoHayes’ advice, we are currently in a war of inflation and government currency debasement in 2024. To survive this war, you will need to pick a side.

To that end, when thinking about surviving the ongoing fiat debasement, you must choose a side.

Either you are trading a financial asset to earn more fiat, or you are trying to preserve wealth in energy terms alongside using a financial system outside of the state’s control.

In the former case, trade ETFs to your heart’s content. That is why they exist. In the latter case, you must buy Bitcoin and withdraw it from the centralised exchange to your own self-custodial wallet. - Arthur Hayes, Expression

Self-custody is harder to accomplish and involves more responsibility than letting another entity control and custody your assets. The trades off is simple and the compounding effects are not to be ignored for those who become self-sovereign financially. The option is yours to choose just like what you choose to eat or where you choose to vacation. Some like to go to Las Vegas and eat free steak dinners and others like to eat vegan and travel the world.

Thanks for reading and the best of luck to you in the new year ahead!

“Men lie, women lie, numbers don't Ain't nothin' changed for, me 'cept the year it isI think I have to send you a reminder, here it is”

Jay-Z, ‘Reminder’

Global investors are aware of the financial manipulation occurring with the leading economies and this can be clearly seen within the price of Bitcoin, Ethereum, and Gold.

Here are some expert insights into how the manipulation is occurring and how the price of scare assets are responding.

First off, let’s look at the price of Bitcoin, gold, and my favorite Ethereum’s appreciation this year.

Bitcoin is Digital Gold

Bitcoin continues to lead as one of the best performing assets globally in 2023. Not only has BTC appreciated over 140% YTD, it has more than doubled relative to gold, and still dominates against the rest of the digital asset industry.

UkuriaOC, GlassNode Insights

Bitcoin has dominated gold this year and Ethereum, along with other crypto assets are behind but still have 60%+ return for the year. How’s your overall portfolio doing compared these these assets?

Bitcoin has consistently posted the strongest performance amongst the digital asset ecosystem this year as well, with Ethereum and wider Altcoin sectors only experiencing an uptick in relative strength over recent months. The total YTD growth in the market cap for these sectors is impressive:

🟠 Bitcoin: +141.6%

🔵 Ethereum: +79.4%

🔴 Altcoins (excl ETH and Stablecoins): +62.3%

Why is this happening?

Manipulation of the global financial markets is the short answer. To dive into the nitty gritty, lets review the latest alpha shared by the King of Crypto, Arthur Hayes, in his blog post Panda Power.

2024 is an election year in the United States and politicians are preparing for this by helping to weaken the dollar and pump up financial markets. Why are politicians doing this? To get re-elected of course, their #1 job once in office.

Like all voters, American voters decide at the margin who they will pick based on recent economic performance.

According to statistics from the US’s National Bureau of Economic Research (NBER), since the end of World War I in 2018, the sitting US President has won re-election 11 times out of 11 if the US economy was not in recession within two years of an upcoming election.

However, sitting US presidents who went into a re-election campaign with the economy in recession won only one time out of seven.

– Pg. 62, The New Global Oil Market Order And How To Trade It

On the other side of the world, for Chinese voters and investors to feel good about their leader Chairman Xi, they need to see net positive investment in their country and economy.

So what’s Expected Ahead?

Here’s the summary of what’s expected ahead in the next 3-7 years:

In the short run, let’s say that in two to three years, the Democrats need to win an election. If the threat of four wars on the periphery is removed, which causes energy inflation and bond yields to fall, that helps Newsom win a 2024 election.

On the Chinese side, Xi just took over his third term as Party Chairman in 2022. He needs to show his constituents that by giving him the most power since Chairman Mao, he can bring home the bacon and rejuvenate the economy immediately.

Both sides need short-term wins to appease their domestic power bases. Near the end of the decade, all the real issues will resurface, and at that point, a rewrite of the global trade, security, and economic architecture will be unavoidable.

Arthur Hayes, Panda Power

The weakening of the US dollar compared to other global government (fiat) currencies is important to stimulate growth in the USA and help Joe Biden and other democrats get re-elected.

(Janet) Yellen is already hard at work weakening the dollar by issuing more Treasury bills, which causes the Fed’s Reverse Repo Program (RRP) balances to fall.

I spoke about this in my previous essay, “Bad Gurl”. Since early November, the dollar index DXY has fallen. The weak dollar strategy is already bearing fruit.

Arthur Hayes, Panda Power

There are No Sure Things in Financial Markets

This header is true and this is why it’s best to follow the money and see which assets are appreciating and to find ways to hedge out the risk of the US Dollar and other foreign currencies continuing to lose purchasing power compared to scarce assets.

As the USA continues to print more USD to fund the wars in Israel and Ukraine, to pay for the lopsided budget that requires ~$1 trillion dollars of new currency a year to sustain, other global powerhouses like China have taken note and decided to also print more currency to support their objectives.

The United States’ 12 Month Plans

The US Treasury Secretary Janet Yellen tasks as the leader of the US’s Financial Markets is to buy the economy time to save politicians, fool investors, and not rock the global markets too much with more USD in the markets.

• Inject liquidity into the system so that stocks rise. When stocks pump, capital gains taxes rise, which helps pay some bills.

• Fool the market into thinking the Fed is going to cut rates, and thus remove selling pressure on the stocks of non-Too Big To Fail (TBTF) banks who are all insolvent.

• Fool the market into thinking the Fed is going to cut rates, which creates demand for long-term debt.

• Ensure the liquidity injection is not so large that the price of oil pops because of a weaker dollar.

  Arthur Hayes, Bad Gurl

Thus far this strategy is working and here is what is expected to occur due to this strategy into 2025 for the US and global financial markets.

1. A net liquidity injection of $1 trillion, the current size of the RRP, into the global financial markets.

   1. (A) This liquidity injection will power a rising US stock market, crypto, gold, and other fixed-supply financial assets.

   2. (B) All other major central banks like the People’s Bank of China (PBOC), Bank of Japan (BOJ), and European Central Banks (ECB) will also print money because now that US monetary conditions are loosening they can print money without weakening their currencies.

2. The market believes the US Treasury yield curve will bull steepen in the future.

   1. (A) It will prevent a market fire sale of all non-TBTF bank stocks.

3. Once the Fed’s Reverse Repo Program (RRP) runs dry going into the end of 2024, the US Treasury market Armageddon will reassert itself.

   Arthur Hayes, Bad Gurl

China’s 3 Month Plans

The short term prediction for the next three months is for China to roll into their New Years with financial gains and more trust in their economy.

“Chinese New Year occurs in mid-February next year. I expect that Xi will provide his comrades a phat 红包 (Hong2Bao1) so they return to their families feeling rich and ready to spend once the New Year holidays finish”

Arthur Hayes, Panda Power

If you want to dive deeper into the Chinese economy and markets, you should read the full article “Panda Power”. To dive deeper into the USA’s above plans to fool markets and help get politicians re-elected read the full article Bad Gurl.

Numbers Don’t Lie Check the Scoreboard

Follow the money and you’ll see that real assets will continue to go up as investors find ways to protect their wealth and avoid losing their lifestyle and family money by investing not in cash, but in real assets.

There is no argument that Bitcoin is digital gold with global investors now and this can be seen with the appreciation of Bitcoin to gold. Now digital gold is cool, but I personally like investing in businesses that make money and power economic growth. This is why I continue to hold steady on my Ethereum investments and I’ve slightly increased my fund’s Bitcoin exposure to make sure my ol’ heads don’t get left with 0 sats when all of their friends start getting off of zero in 2024 with the Bitcoin ETF growing in demand.

Do your own research and find ways to avoid following politicians blindly. There is enough high quality information available for the hungry investors.

Are you Ready To Get Off Zero Yet?

Take your time to test out and execute your own self-custody Bitcoin and Ethereum investment strategy to make sure you don’t get left on Atlantis as it sinks to the bottom of the ocean of purchasing power.

Per the ‘oldest man in crypto’, founder of ShapeShift, and a global expert in finance:

“This is a peaceful revolution pushing for rules based on math 🧮 and not men👨.... "We should be optimistic, for what a time to be alive, at the dawn of such a peaceful ☮️ revolution, where any two people on Earth 🌎 can trade value without permission"

Erik Voorhees Inspiring talk and guidance on the purpose of crypto, ethereum, bitcoin, and more +, to empower everyone with freedom of commerce and the ability to have clear rules based on code, not politics.

See the full 24 minute talk and introduction to Permissionlessii here:

https://x.com/Permissionless/status/1702054516458156126?s=20

We all deserve freedom. We all deserve the ability to own crypto and own our financial sovereignty.

Stand tall my friends, dive deep into the truth, and take advantage of the opportunities today to improve the lives of your family ahead.

Best of luck ahead!