<![CDATA[Page One: Crypto Recaps]]>https://pageone.gg/s/crypto-recapshttps://substackcdn.com/image/fetch/$s_!qn1B!,w_256,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3e08840f-e8eb-498d-848d-ecadfc52877f_500x500.pngPage One: Crypto Recapshttps://pageone.gg/s/crypto-recapsSubstackMon, 20 Apr 2026 01:26:35 GMT<![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-c2bhttps://pageone.gg/p/round-tripping-c2bMon, 26 Feb 2024 17:24:42 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: ETF demand overwhelms, ETH’s strength, crypto x AI test pump, UNI’s fee switch & the growing SEC pressure, BTC ordinals explosion & higher for longer

BTC dominance 52% | ETH dominance 19% | DeFi TVL $82B |

Total Crypto Market Cap $2.08T | Stablecoin Supply $139B |

Whew, it feels good to be so back. Both through writing and the price appreciation of our precious tokens. The obvious underlying reason for the continued momentum has been the speculation and demand for BTC, and to a continually growing extent ETH, ETFs.

The decade+ wait of spot BTC ETFs have now been trading for ~30 days and their debut has been a massive success. While initially throttled by GBTC’s liquidity unlock, net inflows to BTC ETFs have drastically surpassed even the most bullish projections. The “sell the news” crowd was initially correct as BTC traded from an approval high of ~50k to 38.5k in the following two weeks subsequent approval, but steady inflows have since enabled BTC to climb back above 50k.

As the calendar turned from January to February, observing the flows into the ETF products along with declining GBTC outflows provided a clear picture that BTC and the entire crypto market were headed higher.

Image
image from BitMEX Research

As BitMEX’s data shows, the net inflows began significantly increasing throughout the second week of February. Between February 8th through the 16th, inflows amounted to $3.22B and net outflows have occurred only once since January 25th. Since the products’ launch on January 11th, the cumulative net inflows now sits at a total of $5.51B despite the forced selling of GBTC and the closing/unwind of market participants that had been positioned long into the approval.

Simply put, every possible metric surrounding the launch of BTC’s long awaited spot ETFs signal that the market is headed higher. This doesn’t mean that the repricing higher occurs in the next hour, day, week or even months but what it does mean is that the market currently has a substantial underlying bid while previously massive amounts of GBTC selling are diminishing. Always remember, higher for longer.

Currently, BTC (50.6k-52.99k) & ETH (2.88k-3.03k) are breaking out of the relatively tight ~5% ranges they were previously consolidating in but the general market sentiment somehow appears almost fearful. I’m not sure how it’s possible but there’s a clear price to sentiment mismatch that I will continue to take advantage of by shoving every possible dollar into the market.

Where that money has been concentrated over recent weeks is AI tokens on both ETH & SOL, ETH & BTC ordinals. Since BTC’s spot approval, ETHBTC is up ~16%+ in a clear sign the market is positioning for what’s next. If you had prior doubts, it’s now absolutely clear market participants are onboard with running back the BTC ETF trade with ETH.

I have some slight hesitancy in the ETH ETF will undoubtedly be approved takes I’m not going to ever fight the trends and narratives the market creates. If you’re tradfi, one of these ETF issuers, or any market observer what is your core takeaway from the month+ of BTC ETFs? The obvious answer is that you start accumulating ETH and doing everything in your power to ensure that spot Ethereum ETFs are approved on May 23rd.

The insane volume traded and initial inflows translates to massive fees collected which creates an incredibly enticing carrot for Larry, Fidelity and financial institutions throughout the entire tradfi ecosystem to rally behind. We’re now 3 short months away from the white hot market having the additions of the BTC halving and an ETH ETF approval. Stop fighting the trends, embrace the new structure and realize that the long-term outlook for the space has never been better.

In a market-shocking move, a governance proposal from the Uniswap Foundation appeared Friday morning titled, “Activate Uniswap Protocol Governance”. More specifically, the proposal which will open for UNI holder votes on March 1st, proposes to “upgrade the protocol such that its fee mechanism rewards UNI token holders that have delegated and staked their tokens.”

While there has been endless speculation and governance initiatives along this same line the past, this proposal, to share fee revenue with UNI delegators and stakers, comes directly from the Uniswap Foundation. The UF’s weight was clearly felt through the market reaction as UNI quickly repriced from $7.16 to $12+ while UNI’s market cap expanded from $5.4B to $9.2B in a brief hour. As a result, UNI is now the 16th most valuable token by market cap and adding, but most importantly (so far) keeping, ~$3B worth of market cap appreciation signals a likely governance approval.

UNI’s repricing visualized (UNI has for now settled around $11)

As mentioned, UNI fee switch proposals are not a new thing (discussed & proposed since at least 2022) but the market’s reaction & the UF’s influence in creating the proposal are clearly being bought in a classic “this time’s different” scenario. Uniswap Labs, the entity behind Uniswap, has previously blacklisted tokens & addresses, created decentralized alternatives to their front end, said they may share wallet addresses and user information with third parties if litigated or subpoenaed and have shot down any comment, discussion or potential proposal on the “fee switch” for holders as it’s been considered a nonstarter mostly due to antiquated US regulations.

While UNI could’ve hypothetically adopted this model years ago, they simply haven’t entertained that option until now. Protocols sharing revenue with token holders, particularly US based entities, is a potentially massive step forward for the entire crypto ecosystem and UNI, as a market leader, sets the example for countless other protocols.

Admittedly, I’m potentially reading too far between the lines but the significance of UNI’s proposal is clearly being bought with billions of real dollars (sort top performing coins by 7d & 24h and you’ll see DeFi tokens, led by UNI, flooding the list). The UF’s proposal could also fail while meaning absolutely nothing but the market reaction and broader implications are worth considering (and no, it’s not a new paradigm for DeFi tokens pls don’t go buy them after they’ve all gained ~20%+ in the past 24h). This proposal, imo (not a lawyer & NFA), puts further burden on the SEC and slightly improves the likelihood of an ETH ETF approval in May as the regulatory body is increasingly pressured.

UNI’s, and subsequently all applicable tokens, potential fee switch adds subtle pressure to a SEC that is dealing with scrutiny from all angles. This week, Legit Exchange and the Crypto Freedom Alliance of Texas filed the first proactive lawsuit against the SEC by a crypto market participant as they are, “seeking a declaration that secondary market sales of digital assets are not the sales of securities.”

In addition to that lawsuit and UNI’s proposal, optimism continues to grow around Coinbase’s odds of the SEC’s allegations being dismissed and Kraken joined the fight alongside Coinbase and Binance filing a lawsuit of their own.

More importantly, it’s not just the crypto sector that is increasing pressure. Larry Fink is saying we should tokenize everything, the largest bank lobbying groups are joining forces to urge the SEC to repeal the erroneous SAB 121 rule that currently prevents US banks from engaging in the custody of digital assets (“As Bitcoin Rallies, Banks are Pushing US Regulators to Change Crypto Guidance”) & Morgan Stanley is highlighting stablecoins’ ability to strengthen the US dollar’s global dominance by saying,

“Dollar backed stablecoins are set to have a profound impact on the financial sector, potentially reshaping how money is moved across borders. Rather than challenge the dollar’s dominance, their continued evolution and growing acceptance by mainstream financial entities underscore their potential to significantly alter the landscape of global finance and in fact reinforce the dollar as the dominant global currency.”

We’re seeing growing signs of what we’ve been screaming about to what were perceived as deaf ears but it would appear as if they were always listening. This is going to shock you, but as soon as there’s a semblance of regulatory clarity (thankfully enforced by the rule of law of the US courts), financial service companies, banks, and the entire tradfi behemoth want their slice of the crypto pie (aka fees collected on custody & trading products).

Elsewhere, Ethena, the protocol behind the synthetic, decentralized dollar USDe, launched on mainnet this week to a flurry of conversation around its yield projections. Ethena takes stablecoin deposits and returns USDe at the target value of a dollar along with a juicy yield of 24% APY. That APY fluctuates weekly based on the protocols core function of generating yield through the previously large fund dominated trade of cash and carry arbitrage executed through using yield generating staked ETH as collateral to short ETH perpetual futures while collecting the funding rate + stETH yield.

The enticing APY combined with an impressive cohort of backers & the current markets infatuation with points (shards in Ethena’s case) has led to substantial demand. Ethena’s liquidity pools have reached their initial caps, the market cap of USDe has grown to ~$421M in 6 days and Ethena now makes up 5.61% of global ETH open interest. The shard (points) campaign launch is planned to run for 3 months or until USDe reaches $1B of supply (42.1% of the way there after 6 days).

Since Luna’s collapse, people are rightfully dismissing anything that promises high yield attached to a dollar deposit but comparisons between Luna and Ethena are incredibly misguided. While there remain risks to USDe, which are generally applicable to virtually everything in crypto, the team has, imo, properly highlighted them and provided backtested data that should quell the loudest skeptics. FWIW, I’ve personally deposited capital into the protocol and the trend of Ethena’s arbitrage strategy yielding “synthetic dollars” along with other yield bearing stablecoins will only grow moving forward. Ethena and its rapid growth should be the signal to gain a grasp of this sector now more than ever.

Looking ahead to this week, we have ETH Denver taking place and Blast’s highly anticipated L2 launch taking place. Some other things I’m constantly monitoring include:

  • BTC Ordinals — It was an impressive week for the BTC ordinal ecosystem as the volume transacted approaches $100M over the last 7d. I’ve previously written about ordinals eventual revival and feel more convicted than ever around that thesis. Fading ordinals in their still infant state will haunt people for years to come. NodeMonkes, the first original 10k pfp project inscribed on BTC, led the way as floor prices reached 0.4 BTC (~$20k) while the other top collections including Bitcoin Puppets, Quantum Cats & RSIC also repriced higher.

  • LINK, ONDO & RWAs — Larry’s leading the way with his “tokenize everything” comments. The takeaway from this should be identifying protocols that benefit from the growth of real world assets coming onchain. RWAs, DEPIN & AI are the categories that should see some of the largest growth over the next few years.

  • Solana Token Programs — Solana Labs announces new token extensions that “unlock rich native functionality designed for complex behaviors, without compromising on security or scalability”. Potential use cases include new base layer programmability for gaming, DAOs, DeFi, stablecoins, private transactions, optional KYC enforcement, payments & more.

  • Crypto x AI — OpenAI trying to raise $7 trillion dollars & Sora’s launch sent Worldcoin and the crypto x AI narrative into hyperdrive. The initial frenzy has since calmed but AI as a general trend & mindshare capture will continue to be up only. The entire AI crypto sector market cap sits at only $17.4B making up sub 1% of the total crypto market cap of $2.1T. There will be endless vaporware to avoid but if I could only long the marketshare of one specific crypto through 2025 the AI sector would be a close second to BTC ordinals.

  • Farcaster — I’ll save any ramblings as essentially every newsletter and/or podcast has covered it in recent weeks & simply say that if you have yet to join, change that. Frames sparked the frenzy and while hype endlessly front runs utility in crypto, Farcaster genuinely feels like the first, non-financialized crypto product that could go mainstream. My esteemed colleague terv has started a /replyguys channel that has grown to 8k+ people, read more on that here.

As a reminder, I’m always reachable @_tolks or at tolks@pageone.gg. If you want to sponsor the newsletter & reach an audience of 12.5k+ active market participants, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us at @PageOneGG.

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Round Tripping ]]>https://pageone.gg/p/round-tripping-ad8https://pageone.gg/p/round-tripping-ad8Wed, 03 Jan 2024 06:19:14 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: SOL’s dominant run, parallelization takes center stage, endless tailwinds remain, ETF approval imminent, inflows & core metrics remain healthy & *all* ETH is locked

BTC dominance 52% | ETH dominance 17% | DeFi TVL $104B | Total Crypto Market Cap $1.8T | Stablecoin Supply $131B | SOL dominance 2.75%

Happy New Year & cheers to everything in store for 2024 to all!! Apologies for the brief hiatus, but after an exhausting sprint throughout the entirety of Q4 I took the most time away from screens in the previous week then I have since before covid (damn that was almost 4 years ago).

Anyway, it’s hard to comprehend how back Page One is & we’re deeply focused on dominating 2024 through the same thing we’ve always done: provide an inside, no bullshit look at what we’re doing/seeing without the usual newsletter fluff and/or corporate wrapping. So with that out of the way, let’s dig in.

It’s been a month (apologies again) since my last writing as I’ve instead hyper focused on the opportunities the market has endlessly provided since October 1st. On October 1st, I released a Round Tripping post that detailed the case for becoming hyper bullish by saying:

“While the endless range and time-based capitulation continue, there are several reasons to believe that BTC, along with the entire market, *should* finally push up and through 30k+…From my understanding, the likeliest outcome of the years long saga that is a spot BTC ETF finally concludes with the approval of numerous ETFs on/around ARK’s final deadline date of January 10th, 2024…Combining all of the above, we’re now likely ~3 months away from the first ever spot BTC ETF approval, ~7 months away from the BTC halving and potentially ~12-14 months away from spot ETH ETF approval. Does anyone really want to be selling coins at these prices? The time to be structurally bearish has come and gone.“

This isn’t to pat myself on the back, rather it’s a reminder of what’s caused the endless rally of the past 3 months while highlighting the unique nature of it providing a clear potential “end date” that is now a week away. This is of course also prescient because the entire conversation on CT for the past ~two weeks has been centered around what happens on and shortly after the ETF approval date? How deep is the sell the news event everyone seems to be anticipating?

Image
image from James Seyffart on Twitter

As of this morning, James Seyffart tweeted the above image of the current state of the core 11 spot BTC ETF filers saying that all signs point to “approval orders in that Jan 8 to Jan 10 window.” Over the past 30 days, BTC had been oscillating in a ~10% range until yesterday as it broke the range to the upside and closed convincingly above 45k. So, what’s next?

IMO, the two key determining factors to answer that question unfortunately remain in the relatively unknown state. The first, what is the timeframe between ETF approval and the actual launch of the products? While there’s currently no set timeline, our favorite Bloomberg ETF analyst James Seyffart, thinks “the gap [from approval to launch] will be measured in days NOT weeks.” Additionally, options on the launching BTC ETFs should “happen quickly”.

Secondly, and more important for continuation of price appreciation down the line, what do the inflows to the various products look like? Of course, the answer to this question is impossible to know, but I’d argue the constant bid (until today) on COIN, MSTR & BTC miner stocks combined with the CME BTC premium, futures open interest & options open interest signals that not only is TradFi front running prices ahead of an eventual approval, but that they’re significantly short, mid and long term underexposed to an asset that is going to be endlessly shilled by the world’s largest financial institutions.

images from velodata.app/tradfi

As for the endless shilling that’s going to occur, if the time to launch the ETF is days after approva, I’m not sure the broad market calling for a classic sell the news event is prepared for the onslaught of marketing and connections the issuers are waiting to deploy. Andrew Kang and others have said it better than I ever could, so I’d highly recommend viewing his tweet and the extended thoughts he’s quote tweeting.

On the other end of the equation, their are endless BTC holders that have bought throughout 2023 sitting on impressive unrealized gains and some of the most OG and respected traders/minds I’ve been lucky enough to talk to and read are convinced of a significant sell the news event. Additionally, an added wrinkle includes a Reuters report from last Friday noted that, “the SEC may notify issuers as soon as Tuesday or Wednesday that they have been cleared to launch the following week.” If confirmation is known sometime *this week* then the sell the news correction could be a bit more significant as there’s more time between eventual launch to offload. I realize presenting the two arguments without a definitive right answer might seem pointless, but both sides are worth considering.

In addition to considering, you could simply join me on the comfy side of realizing that no one is forcing you to sell to hypothetically buyback lower, no one is forcing you to trade the event, and essentially everyone realizes that this is one of the most impactful events in crypto’s history and you could simply hold spot, enjoy how far this still nascent space has come and look forward to the years of price appreciation ahead!

With that being said, if I had to make a prediction, I think that the approval will send BTC to ~50k, a retrace to ~40k for a ~20% down move will occur relatively shortly after but the time from approval to launch and onslaught of marketing/shilling from the world’s largest financial institutions will result in a relative V recovery back to 45kish leaving those who increasingly want to buy mid-to-low 30ks sidelined. Hold spot, relax, enjoy how far we’ve come, prepare capital to buy strong alt dips, realize that the asset class has never had a catalyst of this nature and internalize the statement of higher for longer.

While the market has been hyper-focused on the ETF launch and its resulting implications, there’s been endless lively developments throughout the core crypto ecosystems including:

  • SOL’s World — relative outperformance has slowed since Christmas, but the story of 2023, & December specifically, remains SOL as its ecosystem enters the DeFi Summer of ETH stage; SOL metrics exploded throughout December as SOL 24H DEX volume flipped ETH for the first time ever, SOL flipped ETH in 7d & 30d NFT volume for the first time ever, Solana-based USDC becomes top stablecoin by transaction volume

  • EVM Parallelization — as Keone, the founder of our friends over at Monad says, the list of parallel EVM chains as of 2 months was singular: Monad. As of today, that list includes: Monad, Avalanche, Polygon, Sei, Scroll & Neon — led by SOL’s resurgence, the focus on the need to optimize for parallelization has drastically benefitted NEON & SEI in recent weeks; expect this trend to continue throughout 2024 & put into hyperdrive from the eventual launch of our friends at Monad

  • Inflows & Volumes — the weekly crypto asset inflows into crypto ETPs continues to remain healthy, albeit slowing a bit & the growth of the TVL of stablecoins + total market cap has remained uponly; stablecoin TVL is up to 100B from ~63B in September while the stable market cap has climbed 8B from the 2023 lows of ~123B; in addition, monthly crypto exchange trading volume hit $1.1T in December, breaching $1T for the first time since September of 2022. Binance led the way with a 39.3% share of total volume, quelling any doubts about their staying power after CZ’s guilty plea.

  • BTC fees — as a result of the ongoing development of BRC-20s, inscriptions, and ordinals, the fees and long-term network sustainability of the network have gone parabolic in recent months with BTC miner revenue reaching ATHs in transaction fees and BTC convincingly passing ETH in transaction fees for a month+

    image from theblock.co/data

  • FTX Estate — Zaheer (@SplitCapital) & his team breakdown what the FTX Estate has sold through December 8th. Court documents show they’ve sold $1.8B worth of crypto & have somewhere around ~$1B left, likely denominated entirely in SOL (181M), BTC (661M) & ETH (187M); more importantly, FTX claims, once written to 0, are now trading as high as 73 cents on the dollar with every dollar returned to claim owners potentially further fueling the crypto asset class when reentered

  • ETH Locked & Onchain Drought — after raising their recent restaking caps, EigenLayer now has 608k ETH (~$1.4B) locked in their protocol, Blast’s TVL has breached $1B, Manta Network has locked $300M & there’s another ~$67B (some rehypothecated through Eigen) of ETH being staked; as a result, the onchain ETH ecosystem has been quiet for the past ~2 months, something that should change with the launch and unlock of the protocols listed

  • Points — there seems to be a growing fuss about the tireless nature of protocols launching points programs them, but they are clearly “this cycle’s top user acquisition tool like 2020’s yield farming without emitting highly inflationary tokens + leave some control to protocols for incentivizing user behavior as per their needs (revenues, ideally)” — imo after the shitshow that was the first 3 quarters of 2023, we should be generally thankful of the ever-growing number of points programs and future opportunities

  • Airdrops — one of the key tailwinds I’ve noted in recent months is the plethora of airdrops reigning free money in various ecosystem participants. Since then, JTO provided a massive stimulus to the SOL ecosystem, something that Jupiter, Wormhole & Mrgnfi (+ others) will also do soon; StarkNet & LayerZero have also confirmed airdrops in Q1 of 2024 largely benefitting the ETH ecosystem & Celestia + Dymension have rewarded cross chain participants of ETH, SOL & ATOM, a trend that will only increase as the modular blockchain vision ever-expands throughout 2024

  • Dencun — the next major ETH upgrade which includes EIP-4844 will be live on testnet January 17th, if testnet upgrades are successful it should be live on mainnet in mid-March; EIP-4844 introduces blobs & promises to eventually reduce L2 transaction cost in combination with protodanksharding — as a result of this news, and people positioning/rotating to ETH & ETH beta ahead of the narrative shift for the ETH ETF which we’ll explore more in depth on Sunday, Arbitrum’s ARB token has entered price discovery, Optimism’s OP has continually appreciated & MINA’s zk L2 is becoming a CT cult coin; expect this narrative to only grow in the coming weeks/months

As a reminder, the P1 team is always reachable at contact@pageone.gg. If you want to sponsor the newsletter & reach an audience of 12k+ active market participants, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-92ahttps://pageone.gg/p/round-tripping-92aTue, 28 Nov 2023 13:38:59 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: CZ steps down, inflows continue increasing, Blast engulfs $580M, SOL activity keeps climbing, ETFs are imminent, GBTC discount collapses, & clear skies ahead

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BTC dominance 53% | ETH dominance 18% | DeFi TVL $46.2B |

Total Crypto Market Cap $1.47T | Stablecoin Supply $128B |

If there was a singular word to describe crypto in 2023, cathartic is deserving of the crown. Three weeks after SBF was found guilty on all seven counts the DOJ charged him with, CZ pled guilty to violating the Bank Secrecy Act and has stepped down as CEO of Binance. One of the last remaining dark clouds from last cycle’s blunders is now cleared.

The tl;dr on the consequences for both CZ and Binance come from wolf and include: CZ personally fined $50M, no involvement in Binance operations for at least 3 years, Binance appoints an independent compliance monitor for 3 years, Binance fined $1.805B paid over 15 months + $2.51B for sanctions. As for where they go from here, CZ has paid his $175M bond and awaits sentencing (where he could face up to 18 months in prison) on February 23rd and Binance has appointed Richard Teng as its new CEO.

What began with the DOJ investigating Binance in 2018 has finally come to a rather (thankfully) anticlimactic ending as the agreements from both CZ and Binance settles ongoing investigations from the DOJ, Treasury, & CFTC. According to DeFiLlama, Binance has seen $1.94B of outflows over the last 7 days. Still, Binance has $66.5B worth of assets, has (so far) quelled any insolvent rumors, continues normal operations and has maintained a dominant/normal share of trading volume.

image from coingecko

As previously mentioned, the DOJ’s years long investigation into Binance provided some hesitancy for market participants across the entire spectrum, from crypto natives to institutions. Eventual outcomes were scattered, ranging from a slap on the wrist fine to the tail risk, worst case scenario of a full shutdown and seizure of Binance. While one can philosophically argue CZ’s punishment isn’t deserving, the terms of the settlement are about as good as possible for the future of crypto. As JPMorgan notes, the settlement eliminated “potential systemic risk emanating from a hypothetical Binance collapse”.

For years, there’s been not so subtle whispers of displeasure for CZ/Binance from some of the largest financial institutions and politicians in the U.S., a qualm that has now been resolved. With the settlement official and Binance back to essentially normal operations, there are clear skies and abundant catalysts ahead for crypto.

Of those catalysts, BTC’s eventual spot ETF approval is of course paramount as it continues to drive crypto prices upward. Everyday that passes, we’re almost certainly one day closer to approval with the last possible target date remaining the same as it has since October. That date, January 11th, is the deadline for a final decision on ARK’s application and is suddenly a short 44 days away. While I’ve written about likely approval before that date since ~October 1st, the recent verdicts against SBF, FTX, CZ, & Binance clear the arena for an even greater chance of approval as regulators have “cleaned” up crypto to insert their friends (Blackrock, Fidelity, VanEck, etc.) through ETF approvals.

Furthering that thought was a week of “bullish discussions” as the tradfi giants have had continued back and forth dialogue with the SEC, something that never previously happened. As our ETF friend James Seyffart says, “Grayscale had meetings with the SEC’s division of trading and markets (the division in charge of approving or denying 19b-4s). Have also heard rumblings of other potential spot BTC ETF issuers meeting with SEC in last ~week or so.” Later, James further comments on the reports of discussion between applicants and the SEC saying, “events of the last few days haven’t changed our odds. We can’t go higher than 90% by January 10th. That said, things are continuing to move forward in our view.”

image of GBTC’s discount from ycharts

If Bloomberg ETF analysts and settlements with Binance/CZ can’t convince you of imminent ETF approval, maybe the GBTC discount chart will. As recent as June, the GBTC discount was near its all-time lows sitting at -44%. Since then, the discount has continually shrunk signaling that spot BTC ETF approval & GBTC redemptions are fast approaching (only possible with GBTC’s conversion to a spot BTC ETF).

In addition to the GBTC discount shrinking, the future catalysts growing, & the potential Binance dark clouds eliminated, inflows continue to support the recent price appreciation. CoinShares notes that last week, digital asset investment products “saw inflows totaling $346M last week, the largest weekly inflow in this 9 consecutive week run…this run is the largest since the bull market in late-2021.”

image from CoinShares Digital Asset Fund Flows report

Combining the slow but steady growth in stablecoins, the CoinShares Digital Asset Fund Flows report, the ever-growing volume of the CME & COIN’s recent strength add support to the likeliest scenario of spot ETFs being approved anywhere from now until January 11th. Specifically, the continued fund asset inflows, GBTC’s decreasing discount & CME volume signal that almost all of the recent price appreciation has come from a barbell of institutions positioning as best they can ahead of the ETF approval combined with the surviving crypto natives deploying capital. The era of CZ running Binance has come to a close, but the future of tokenization & crypto growth has never looked better.

Outside of CZ & Binance, the other major topic of the week was Blast. Blast is currently, “the only Ethereum L2 with native yield for ETH and stablecoins.” Opinions on the latest “L2” have resulted in chaos on CT as responses to the yield farm they launched have people incredibly divisive. The L2/bridge quotations are worthy imo as it currently stands, and will be for the foreseeable future, the Blast “bridge” & “L2” operate as a one-way transfer of funds to a multisig generic contract on ETH.

That multisig generic contract has CT in a frenzy largely because of the GTM ponzification and capital sink it has grown to. As of writing Monday night, Blast’s TVL has reached a staggering $580M+ in a ~week. Assets bridged consist of $361M of ETH, $139M stETH, $35M USDC, $26M USDT, & $15M DAI.

image from @alec’s Dune Dashboard

As essentially everyone is aware of, we’re firmly in the era of magic internet points accumulation in the hopes of a future translation of points to magic internet money. While often times the farming/yield/reward of eventual magic internet money is obfuscated, Pacman and the Blur team have consistently done an incredible job of leaning into, not hiding, this taboo through clever mechanism & token sink design.

Blast’s outlined design, an L2 where bridged ETH & stablecoins earn native onchain yield through the ETH staking rate + RWA assets (stablecoins deposited into protocols like MakerDAO generating real yield from T-Bills) is genuine innovation that benefits both bridged capital and the attraction of TVL to Blast. Expect established L2s to eventually incorporate similar mechanics and Blast to be the first of countless future L2s/L3s experimenting with yield + mechanism design to attract idle capital.

With that being said, Blast is not without its faults. First, the L2 and bridge they boast are, until proven otherwise, entirely theoretical. Currently, the ~$580M of “bridged” assets sit in a generic contract on the ETH L1 as the Blast team continues to build the promised functionality of their future L2. Secondly, the mainnet launch of their future L2 isn’t until February of 2024 when the “bridged” assets will be available for withdrawal and native dapps are live. Those assets ($580M worth mostly in ETH) are locked until ~3 months from now with the eventual redemption of the accumulated magic internet points not converting to Blast tokens until May of 2024.

While the decision of market participants to bridge and lock assets for ~3 months can’t be judged until the yield generated through future Blast tokens is clear, we have some core learnings in the present. Those to me are:

  • Embracing (relatively) Sustainable (“riskless”) Yield — Blast is the first, but it’s inevitable that we see already established + future L2s embracing/building upon the concept of dollars onchain earning yield being a net goood

  • L2 Experimentation — with Blast launching, and the ability to fork existing L2s and/or launching your own rollup growing easier by the day, we’re destined to see the increasing ponzification of L2s similar to what we saw with last cycle’s L1s

  • Mechanism Design — despite the pleas for “professionalism” from some crypto investors, the entire space is ~10 years old; DeFi is ~3 years old and anyone telling you outcomes are certain is drastically mistaken; experimentation and net new designs like Blast should be criticized for their flaws but broadly welcomed

  • Idle Capital — as mentioned, over the course of the last ~week, $580M worth of assets have been bridged to Blast; as we exit the down only stages of the last ~2 years, it’s clear that there’s a massive pool of idle onchain capital ready to generate yield + potential future rewards

The resulting effect of Blast, positive or negative, will unquestionably be criticized but the growing experimentation of mechanism design is certainly a welcoming site. The eventual hindsight analysis is of course flawless, but crypto was quite literally built for permissionless development and the Blur team deserves credit for consistently being at the forefront of experimentation.

As usual, there’s too many core developments to cover in depth so the following items fell below the fold but remain incredibly important moving forward. These include:

  • BTC fees & Ordinals — as brc-20s & Ordinals continue their renaissance leading to BTC fees on November 16th exceeding the total fees paid on ETH for the first time since December 2020; as I’ve written previously, anyone expecting the previous spike in attention, fees, & maturation of Ordinals to pass by as a quick fad is mistaken; they’ll continue their growth throughout 2024 & beyond (s/o Udi & the Taproot Wizards forever and always)

  • Steady Inflows — stablecoin inflows, while mostly benefitting USDT & FUSD, have gradually climbed higher throughout November as the stablecoin total market cap has climbed from $124B to $128B+; additional inflows can be seen from the CoinShares data linked earlier as digital asset fund flows have increased for 9 straight weeks bringing 2023’s fund inflows to a total of $1.66B

    image from DeFiLlama stablecoins overview

  • Oracles — SOL-based PYTH has successfully completed its long-awaited token airdrop while LINK (ETH-based) staking v0.2 will go live Tuesday at noon EST. LINK remains far and away the dominant oracle by TVL while PYTH has rallied ~50% since its airdrop claim lows. PYTH’s circulating supply remains low for the next ~5 months so we’ll likely see PYTH’s market cap ($623M) gain ground on LINK’s ($14B) over the course of the next few months. Oracles have been and will continue to be a critical part of all things crypto/DeFi and LINK/PYTH should display good beta to ETH & SOL

  • ATOM — Cosmos Hub governance approved a proposal to reduce ATOM’s max inflation rate from 14% to 10%; Additionally, Circle’s CCTP for USDC will be live on Noble, the asset-issuance chain in Cosmos, this week. “CCTP will allow anyone on ETH, AVAX, ARB, Base, OP, ATOM & soon SOL to directly move USDC natively into DyDx without bridged or wrapped USDC.”

  • GBTC — the discount to NAV of Grayscale’s flagship GBTC product is currently below 10% for the first time since 2021, adds further confidence to the SEC’s approval of spot BTC ETFs before ARK’s deadline on January 11th. ETF approvals are unquestionably bullish mid-to-long term but JPMorgan (as well as plenty on CT) say GBTC could eventually see outflows of $2.7B upon Grayscale’s conversion of GBTC to an ETF, would stem from speculators who bought GBTC’s discount redeeming their purchases for the underlying value upon conversion

  • Phantom — SOL-based wallet debuts Cross-Chain Swapper & Refuel. The CCS enables the bridging of tokens across ETH & SOL natively in Phantom. Refuel enables users to convert a portion of their bridged tokens to SOL so users can instantly pay for transactions as soon as they bridge. Phantom’s CCS & Refuel are another example of UI/UX/onboarding issues of previous cycles slowly being solved natively in dapps & wallets.

  • SOL tokens — while I’ve been writing about this scenario for months, SOL ecosystem tokens have exploded over the past few weeks; most have given back some recent gains, but the looming Jupiter, Jito & MarginFi airdrops provide support; the number of biddable SOL tokens/ability to profit from them has long been a gripe of CT but that has and will continue to change as it becomes a massive plus where every future bridged + airdropped dollar has a small concentration of tokens (10-20 max) to rotate funds to; SOL/ETH weekly DEX volumes + SOL DEXs reaching new volume highs further illustrates the point

image from The Block Data

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]]><![CDATA[Round Tripping ]]>https://pageone.gg/p/round-tripping-614https://pageone.gg/p/round-tripping-614Sat, 18 Nov 2023 18:15:27 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: Celestia & dYdX launch, SBF’s guilty, SOL continues upwards, inflows continue to increase, wealth effects are coming, funding grows & the eventual ETF bid remains

BTC dominance 51% | ETH dominance 17% | DeFi TVL $45.4B |

Total Crypto Market Cap $1.44T | Stablecoin Supply $126.7B |

We’re just over a year removed from Caroline’s famed $22 FTT tweet at CZ and the ensuing collapse of FTX. It’s been an incredibly long year, but the light at the end of the tunnel has continually brightened as the one year anniversary sees the coin prices marching higher and SBF officially heading to prison. Good riddance to the goblin and cheers to the well deserved future we have ahead.

Poetically, SOL continues to be one of the top performing assets in 2023 as it successfully overcomes any remaining claims that the chain is/was dependent on FTX. Undoubtedly, FTX played a large role in SOL’s original ascent but thinking SOL couldn’t succeed without FTX was always a foolish take. ~4 hours of due diligence in early 2023 would have resulted in the simple conclusion that the price of SOL was severely disconnected from its potential both in USD terms and to its peers.

As a result, SOL is up another 51% since the start of November and ~6x higher than the FTX-induced lows. I’ve been writing about the Solana ecosystem’s resurgence and mispricing since weeks after FTX’s collapse, and will continue to do so until SOLETH is 0.1+ & SOL reclaims its previous ATHs+. Regarding the rest of the market, it’s been an interesting few days as BTC, ETH, & SOL are slightly off their recent highs thanks to a Tuesday wipe of building OI and ~$300M worth of longs.

image from coinglass liquidation data

Regardless, ETF enthusiasm remains heightened and 10-20% corrections are to be expected even in upward trending markets given the amount of leverage natively in crypto. While ETH currently sits at ~$1950, it briefly rallied to $2100+ in response to BlackRock filing an application for the “iShares Ethereum Trust”, a spot ETH ETF. Fidelity followed BR’s lead and filed for their own ETH spot ETF after hours Friday, bringing the total spot ETH ETF filers to 7. BlackRock’s weight is of course massive and ETF analysts have highlighted specific language in their filing that boils down to Grayscale’s court win + the SEC’s recent approval of ETH futures ETFs = eventual spot ETH ETF approval, something I clearly outlined in the October 1st edition of Round Tripping.

Speaking of ETF analysts, plenty of offside longs were liquidated in the anticipation of the long awaited spot BTC ETF approval that could’ve theoretically come this week. Last Wednesday, James Seyffart noted, “we still believe there’s a 90% chance of approval by Jan. 10…if it comes earlier we are entering a window where a wave of approval orders for all the current applicants *COULD* occur…if the agency wants to allow all 12 filers to launch — as we believe — this is the first available window since Grayscale’s court victory was affirmed.”

While there were a significant amount of the aforementioned longs & OI wiped, the market remains structurally bullish until proven otherwise for the reasons I outlined two weeks ago. In addition, while leverage gets wiped as leverage normally does, the spot bid volume increase and structural demand on BTC, ETH, & SOL is evident in essentially every metric available. Currently, The Block’s data has total spot volume across exchanges in November at $479.5B. That total in all of October was $516.4B which is significantly up from the ~$334B total throughout September. In addition, one of the most notable metrics of capital positioning for the eventual spot ETF approval is CoinShares’ tracking of weekly crypto ETP flows.

CoinShares weekly tracking of “Digital Asset Fund Flows”

James Butterfill writes, “digital asset investment products saw inflows totaling $293M last week, bringing this 7-week run of inflows past the $1B mark…ETH saw its largest inflows since August 2022.” Per CoinShares tracking, the $767M of inflows that occurred *prior to the additional ~$300M this week* represent a total that is larger than *all of 2022’s inflows combined*.

As we stand, we currently have BTC sitting at 36.6k and waiting for its next direction. While there’s certainly a case to be made for a general retrace as essentially everything is up 2-4x+ in the past month+, the spot + institutional demand through ETPs and the CME is evidently clear. Even in bullish trending crypto markets, pullbacks of 10-20%+ are to be expected but for me those will remain an easy buy. Those buys will come on incredibly strong alts (TIA, SOL, INJ, LINK, DYDX, PRIME, AVAX, TAO, RUNE, etc.) as well as leaning into BTC’s strength.

There’s been endless discussion about ETH’s recent underperformance & people wanting knife catch ETHBTC. To me, this is a fool’s errand. ETH will have it’s time but the weak reaction to BlackRock & Fidelity filing spot ETFs + its lack of strength *throughout 2023* are clear signs to wait. The most obvious time to bid ETH is right before/on the eventual approval of BTC ETFs, and I’ll be waiting for that clear signal from the market before prematurely rotating any increased exposure to ETH.

As for the rest of the ecosystem and developments, the most important to me are:

  • Wealth Effect — TIA’s airdrop is complete, PYTH & JUP are coming, projects such as zkSync, LayerZero, HyperLiquid, Berachain, Friend Tech, Scroll, StarkNet, Blur & more are coming + the entire SOL DeFi ecosystem (marginfi, jito, drift, zeta, pyth, jup, etc.) is soon to have “free” capital released; determining which tokens, protocols, & assets will benefit the most from this + the potential of alt season accelerating across both ETH & SOL is key over the next few months

  • ETH Burn — the burn & positive catalysts of BlackRock & Fidelity filing for spot ETH ETFs have yet to impact price, ETH’s reflexive monetary policy + staking yield will compound soon as ~$17.5M worth of ETH was burned this week alone

  • Arbitrum (ARB) — Arbitrum’s DAO approves initial vote on proposal to activate token staking. Upon final vote passing, ARB stakers will earn “yield” funded by the Arbitrum treasury distributing 100M tokens as rewards over the course of 12 months; Arbitrum Foundation says Orbit, a program for developers to spin up L3s on top of Arbitrum’s L2, is now live & ready to settle to Arbitrum’s mainnet

  • Current Barbell of Outperformance — there’s been a few recent ETH onchain winners, namely TAO, MUBI, TURT, & OLAS, but the current onchain capital seems to be dispersed between SOL tokens & BTC ordinals + brc-20s; will continue to monitor this trend in the coming week(s)

  • Celestia (TIA) — highly anticipated modular blockchain officially launches mainnet & token, TIA has been one of the best performing tokens over the past two weeks with the token appreciating ~200%

  • dYdX — dYdX’s Cosmos-based, standalone appchain is officially live; dYdX foundation officially confirms that the chain’s accumulated trading fees will be allocated to network validators & token stakers, distributed in USDC

  • Mad Lads — the SOL-based NFT is up ~5x since it’s October lows as the Backpack team has announced and launched their in-wallet exchange beta, holders have access PYTH’s airdrop, & speculation builds on future airdrop benefits from the broad SOL ecosystem + the *likely* future exchange token

  • Polygon — there’s a slowly building consensus that Polygon is at the forefront of ZK tech; MATIC has been underperforming for years, but we could see that change over the course of the next 3-6+ months. Also, Polygon has begun the migration of their MATIC token to POL as they align their future vision of ZK + other chains tapping into the underlying POL chain tech

  • FTX claims continue increasing in value in OTC markets, reach as high as 65 cents; theoretically, the higher FTX claims go, the more “found” capital is returned to creditors which they can then potentially inject back into the market

  • USDY — Mantle (MNT) partners with Ondo Finance to launch RWA-backed yield generating token. USDY is backed by short-term treasuries & bank demand deposits, yield is generated via underlying assets increasing token value

  • Stablecoin Inflows — while it’s mostly FDUSD & USDT benefitting, stablecoin inflows are very slowly increasing; the total stablecoin market cap looks like it bottomed in late October at ~$124B, since then it’s climbed to ~$126.5B

  • BTC Ordinals — per usual, once almost the entire space writes off a new fundamental development after it’s initial peak, said thing has returned with a vengeance. In this case, it’s the burgeoning ecosystem of ordinals (BTC NFTs) & brc-20s. The growing fees, ordinal transactions, brc-20s & security budget for BTC are things I’m betting will only continue up & to the right.

image from @sh_ooey Dune Dashboard

As a reminder, the P1 team is always reachable at contact@pageone.gg. If you want to sponsor the newsletter & reach an audience of 12k active market participants, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-f54https://pageone.gg/p/round-tripping-f54Wed, 25 Oct 2023 20:16:21 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: we’re so back, UNI’s 0.15% fee switch, CME volume continues to rise, BTC dominance to alts rotation soon, FTX claims worth ~$0.50+ & crypto’s still contrarian

BTC dominance 54% | ETH dominance 16% | DeFi TVL $41B |

Total Crypto Market Cap $1.31T | Stablecoin Supply $124B |

In the October 1st edition of Round Tripping, I started to detail the case for what, if anything, could fuel the market upwards by saying, “while the endless range and time-based capitulation continue, there are several reasons to believe that BTC, along with the entire market, *should* finally push up and through 30k+.”

What fueled that thought were the crypto specific catalysts, led by Grayscale’s court win, that were quickly compounding leading me to conclude, “we’re now likely ~3 months away from the first ever spot BTC ETF approval, ~7 months away from the BTC halving and potentially ~12-14 months away from spot ETH ETF approval. Does anyone really want to be selling coins at these prices? The time to be structurally bearish has come and gone.”

Those upcoming catalysts were then ignited with rocket fuel as an *insane* tweet from cointelegraph mistakenly “reported” that the SEC had approved iShares BTC spot ETF. The market quickly realized this was categorically false but of course the damage was already done as fomo is one of the most powerful forces in life and markets. At this point, the market increasingly began to front-run what would happen on the eventual BTC spot ETF approval which has almost entirely shifted from “if” to “when”.

With BTC sitting right at 30k, the ETF fomo was pushed into hyperdrive as the iShares Bitcoin Trust ETF and its ticker $IBTC had been listed on the Nasdaq clearinghouse website. Bloomberg’s Eric Balchunas then noted that, “def notable BlackRock is leading charge on these logistics (seeding, ticker, dtcc) that tend to happen prior to launch, hard not to view this as them getting signal that approval is certain/imminent.”

image from coinglass liquidation data

As you can see, what quickly followed were a cascade of ~$325M worth of short liquidations that rapidly elevated BTC’s price from 30k to 35k in a few brief hours. Of course, the $IBTC ticker was removed from the site the next day causing a quick panic, then once again relisted before eventually resulting in a DTCC spokesperson having to clear the air by publicly saying that the Blackrock ETF has actually been on their site since August. Never change crypto twitter.

In the same manner as the cointelegraph tweet, the damage was already done as the market’s almost instant leap upwards once again reinforced the current ETF frenzy and the bid that is ready to push BTC higher. As of this writing, BTC has twice more touched 35k and is clinging to the impulse move to 34k+ despite equities continuing to puke in the face of macro and geopolitical uncertainty.

BTC is now 22% higher over the past ~week and the questions on everyone’s mind are undoubtedly how much higher can we go from here and at what BTC price is the ETF approval effectively priced in? These questions are unanswerable and their answers vary depending on the continuation the market shows and how much relative strength compared to equities crypto continues to show.

What’s clear to me though is that we’ve finally, convincingly escaped the brutal downtrend of 2022 and the endless range of 2023. The higher BTC goes above ~32k, the stronger the uptrend, momentum and hopes of a traditional bull market in 2024 & 2025 become. While it’s easy to be stuck inside the thoughts of our collective crypto circle, looking to the outside provides me with the view that will continue pushing higher ironically led by the lack of attention crypto garners and the following catalysts:

Obviously led by the ETF narrative, BTC dominance has slowly climbed since the summer before exploding in recent weeks. As of now, it sits at its highest level in over 2 years after ranging for 763 (!!) days.

BTC dominance leading us into 2019/20 & 2024

Historically, BTC dominance rapidly increasing is an incredibly healthy sign for the signal of the end to a bear market. With the ETF approval likely coming sometime before year’s end, now is the time to evaluate ETH and strong alts to deploy into. The ideal scenario regarding the ETF approval looks something like BTC wicking to 40k+, consolidates around that level, BTC dominance retreats, ETHBTC gains ground, and the wealth/risk spills over to the broad ecosystem leading to a proper altcoin season.

The healthiest sign of a final confirmation of an actual bull market would be something like this scenario playing out and the entire ecosystem rallying throughout Q1 in a similar but continued to fashion to Q1 2023. As I’ve been writing for a month+ now, I’m personally full bull ahead.

Regarding specific alts to monitor, those that have been outperforming of note recently include tokens such as: SOL, LINK, LDO, RLB, INJ, STX, AAVE. In addition to that, there’s been some increasing signs of onchain life and I’m personally anticipating an onchain memecoin season reminiscent (likely stronger) to that which PEPE started in April this year. Generally speaking I’m watching DEX trades, volume traded, and ETH gas fees for further confirmation but some recently emerging strong onchain coins to watch include: PEPE, BITCOIN, JOE, SMURFCAT, & SPX.

Finally, as for the rest of the ecosystem, the key events and developments that’ve occurred over the past ~week include:

This edition of Round Tripping is sponsored by Uranium3o8. Uranium3o8’s mission is to drive innovation, transparency, and security as the premier global platform for uranium pricing and access. They are committed to simplifying and democratizing ownership of what they believe to be the world’s most critical resource for a clean energy future - uranium.

Uranium3o8 will officially start their public sale for their tokenized uranium $U token on October 31st. Follow Uranium3o8 on Twitter and join their Telegram for the latest updates.

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Round Tripping ]]>https://pageone.gg/p/round-tripping-505https://pageone.gg/p/round-tripping-505Tue, 17 Oct 2023 03:43:34 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: SEC dealt blows in Ripple & Grayscale cases, SOL’s strength, fake spot approval shows R/R clearly favors upside & a price floor exists, & whose willingly selling here?

BTC dominance 51% | ETH dominance 16% | DeFi TVL $37B |

Total Crypto Market Cap $1.12T | Stablecoin Supply $124B |

After another quiet weekend in crypto, the market, along with social media and every group chat, exploded Monday morning when Cointelegraph tweeted the below erroneous “headline”.

Before correcting their mistake and eventually deleting the tweet, Cointelegraph decided the appropriate course of action was to edit *their own market moving headline* to include “reportedly” at the end. Of course, seconds after their tweet was sent, the damage was already done as BTC teleported 2k higher resulting in over $100M worth of liquidations.

As you can see, before official confirmation, the market began to sniff out that the “report” was absolute bullshit because no reputable publication had also reported the news and the original “report” came from cointelegraph of all “media companies”. So, BTC quickly retraced the entire move back to 27.7k before slowly and methodically climbing 4% higher to 28.8k and eventually settling around 28.4k.

Two weeks ago, I wrote, “while there are of course still hurdles (FTX/Celsius sales, Binance x DOJ case, potential US government sales), the path for upwards expansion in the short, mid and long term clearly outweighs the one-time hurdles listed above…we’re now likely ~3 months away from the first ever spot BTC ETF approval, ~7 months away from the BTC halving and potentially ~12-14 months away from spot a spot ETH ETF approval. Does anyone really want to be selling coins at these prices? The time to be structurally bearish has come and gone.”

Well, if there was any doubt about that statement it would appear as if the blunder from cointelegraph today made the demand for BTC, and subsequently the rest of crypto, abundantly clear. As mentioned, on that tweet BTC instantly repriced gaining ~10% in a brief 7 minutes. Witnessing today’s outcome, the question of who is selling at these prices becomes even more important.

We’re now ~6 months away from the BTC halving and less than 3 months away from what various Bloomberg ETF analysts are calling a 90% chance of spot BTC ETF approval *and* have a test run of it’s effects showing an instant 10% gain. Today’s move showed exactly how out of position the broad market is for the actual ETF approval and places immense short-term pressure on anyone who was wanting to allocate to BTC and the broad crypto markets ahead of the upcoming catalysts. What’s the market’s reaction and actual follow through going to be on the day of approval? If you know something has a catalyst to send it 10-20% higher in the next ~3 months, what forces you to sell? How much can you buy before the event? What percent gain between now and then is necessary to think the false confirmation of an instant 10% gain has been effectively priced in? 10-20% higher from the current levels? More?

While I wish I had the exact answers to all of the above questions, unfortunately I don’t but I can guarantee every fund and market participant is currently evaluating a similar thought process themselves. The potential one-time sell pressures I previously outlined of course remain, but today proved that a catalyst ~3 months away has massive price appreciation awaiting it and a broad swath of the market is currently sidelined and/or not positioned as heavily as they’d like to be. To be clear, I don’t think we just magically grind upwards everyday until approval but I think it’s once again clear that current risk reward severely benefits buying at the current prices and a pseudo floor price was established today. Oh, it also helps when the CEO of the world’s largest asset manager who is waiting for his spot BTC ETF to be approved is on TV talking about crypto as a “flight to quality” asset class.

If all of that wasn’t enough to convince you of crypto’s current R/R favoring buyers, we also received two pieces of incredibly good regulatory news. First, the SEC was dealt another blow last week as Judge Analisa Torres rejected the SEC’s bid to appeal the agency’s loss in the Ripple case. There’s now an April 2024 trial date for “other issues that still need resolution” and the SEC could appeal the overall case after it concludes. Regardless of a down the line appeal, Ripple’s win remains great for the crypto industry in the current environment and weakens the SEC’s arguments.

In addition to Ripple’s win, the SEC also tucked their tails on the Grayscale case as they confirmed that would not be appealing the court’s ruling. As a quick, dulled down refresher, Grayscale was suing the SEC regarding their stance that the approval of futures ETFs for BTC should allow spot BTC ETF approval and that the SEC’s previous spot denials were not logically justified. Since that announcement on Friday evening, the discount of Grayscale’s GBTC to NAV has continued to climb and now sits at ~14% as an eventual ETF conversion is seen as “inevitable”.

current GBTC discount, image from ycharts

The GBTC discount is rapidly closing signaling imminent spot ETF approval (~3 months), the SEC was dealt two recent blows from the courts reinforcing their overreach, a ludicrous unconfirmed BTC spot approval tweet signaled how offsides and/or sidelined most market participants are for upward expansion, recent ETH futures ETF approval indicates spot approval is within reach and the halving is ~6 months away. If there was any doubt left, it’s time to pay attention again and make sure you’re properly allocated ahead of the turn to 2024, anon.

Other notable developments of the past two weeks include:

  • Solana v1.16 — chain successfully completes v1.16 upgrade enabling “Confidential Transfers” & improved ZK capabilities with encrypted SPL token transactions, v1.16 also increases EVM compatibility & reduces validator hardware requirements

  • Instadapp introduces Fluid — planned for a phased launch starting in January, Fluid’s key innovation is the Liquidity Layer which “blends the best of UNI, AAVE, COMP, MKR, & CRV”. Fluid’s first 3 launches will include lending, vault & DEX protocols that are capital efficient through unified liquidity, read more here.

  • RWA tokenizer Backed issues the first tokenized security on Base, “blB01” tokens track a short-term iShares US treasury bond ETF

  • THORSwap (RUNE) — RUNE announced that due to “potential movement of illicit funds through THORChain and, specifically, THORSwap, they’ve temporarily transitioned the THORSwap interface into “maintenance mode”. The move comes as the FTX hacker has accelerated swapping ETH for BTC & WuBlockchain reports that “over the past four months, more than 50% of funds converted from ETH to BTC via THORSwap routers were stolen funds.” On Monday, THORSwap relaunched their swapping function adding “some extra guardrails in place to help prevent the flow of illicit funds” behind the scenes.

  • LDO — usual debates about it’s share of ETH staking have raged in recent weeks with Vitalik briefly touching on Lido in his recent Enshrinement article and everyone in the ETH ecosystem continuing to argue and wax poetic about the potential harms and potential need for self-limiting. While the conversation is massively important, tbh I can’t currently be bothered to write extended thoughts on it as it’s incredibly tiresome to me.

  • SOL Overhang — while much has been made of the sell pressure coming to SOL, the FTX Estate stakes 5.5M SOL worth ~$125M bringing the total active stake on Solana to a new ATH; as I wrote last week, SOL continues to show impressive strength in the broad market and more importantly against both BTC and ETH

  • SBF’s Trial Begins — while I’m sure everyone has been following along, somehow ole Sammy boy has been portrayed as even more clinically insane than what was previously though possible highlighted by: reaching out to Thai prostitutes to access and bribe the Chinese government, thinking he could be President of the U.S. & his desire to raise funds from Saudi Crown Prince MBS

This edition of Round Tripping is sponsored by Uranium3o8. Uranium3o8’s mission is to drive innovation, transparency, and security as the premier global platform for uranium pricing and access. They are committed to simplifying and democratizing ownership of what they believe to be the world’s most critical resource for a clean energy future - uranium.

Follow Uranium3o8 on Twitter to be notified about their upcoming public sale and official launch!

funding:

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Round Tripping ]]>https://pageone.gg/p/round-tripping-bechttps://pageone.gg/p/round-tripping-becMon, 02 Oct 2023 02:26:38 GMT

as always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: (friend, friend), SOL’s recovery continues, ETH mainnet activity dwindles, funding heats up, ETH futures ETFs ahead, & a potential end to the endless range

BTC dominance 47% | ETH dominance 18% | DeFi TVL $39B |

Total Crypto Market Cap $1.15T | Stablecoin Supply $124B |

gm gm & welcome to a loooong overdue Round Tripping! My friend tech induced apologies for the lack of content over the past month, but some travel + incredibly quiet markets + being lucky enough to be one of the first 50 users of FT and realizing its opportunity/potential has lead to minimal recent writing (if you can write for free or make 15-25e on FT in a month, the short-term choice is clear). Of course, I deeply miss expressing my thoughts on a weekly basis so if you work for, have funded, or know a protocol/team looking to advertise to 12k active readers you can guarantee at minimum a weekly post by having them reach out to me (@_tolks) or @PageOneGG on Twitter).

Sponsors or not, Page One has never been more back then in this moment and I’m back ready to grind harder than ever. So, at an absolute minimum, you can expect Round Tripping (weekly recap) in your inboxes by Sunday morning, a monthly recap, and a biweekly (until the market calls for more often) Trend Chasing article.

In addition to that, by subscribing to Page One, you can expect periodic deep dives on various sectors & protocols. Also, we’ve been toying with some daily formats (only applicable when the market/news actually enables it) that you may soon see in your inbox as well. If P1 has been anything, it’s respectful of your inbox/time while always writing with a purpose, something we’ll continue no matter our frequency moving forward. With that housekeeping out of the way, I can’t thank you all enough for the incredible support over the past ~year & a half. Let’s mfin get to it.

Since Friend Tech initiated my writing delay, let’s start there before moving on to the broader market. On August 15th, when FT was live for five days, I wrote about FT’s benefits despite the (at the time) broken app saying it included a, “fast, easy signup/install steps, a mobile dapp, & a seamless one-click, no gas fee transaction that should be copied by every hybrid crypto application moving forward.” Since writing that, FT’s TVL has increased 50x from $1.2M to $50M+ and the mindshare it occupies has skyrocketed.

While the long-term sustainability is still in question, FT has now successfully captured the scarcest resource in markets, attention, for almost two months. While a significant portion of that attention capture is aided by the carrot of a likely future airdrop, the data on FT is incredibly impressive and speaks for itself.

Throughout the history of my 4+ years in crypto, FT remains the only native crypto app I open multiple times a day. There are clearly sticky habits the app induces which should be celebrated as a relative first in crypto. Whether FT continues to capture attention months to years from now remains in question, the go to market strategies FT deployed should be repeated by crypto apps ad nauseam moving forward. Launching as a mobile first, progressive web app (PWA) to work around Apple’s approval, the app’s minimalistic, easy to onboard wallet experience and the reignition of what token incentives can accomplish should be table stakes for every future consumer facing crypto app. As far as I’m concerned, FT was a resounding success for those realizations alone and everything else it accomplishes will be an added bonus.

Outside of Friend Tech, it’s been another incredibly slow month+ of general crypto news. Until the strong rally over the past few days, the state of the market was clearly enduring time-based capitulation. As I’m writing, BTC and the broad market are rallying as BTC sits at 28k, squarely within the same ~15% range it’s been oscillating in since the middle of March (!!!).

While the endless range and time-based capitulation continue, there are several reasons to believe that BTC, along with the entire market, *should* finally push up and through 30k+. First, the importance of Grayscale’s court win against the SEC on August 29th can’t be overstated as until proven otherwise, it all but guarantees eventual spot BTC ETF approval.

Following the logic of Grayscale’s case (futures ETFs for BTC should allow spot ETF approval), ETH spot ETFs seem likely to gain approval by the end of 2024 as we’re now hours away from the first deadline where the SEC could delay a decision or grant approval for ETH futures ETFs (Valkyrie’s first, October 2nd). From what we know, it seems incredibly likely that for the first time, the SEC will approve essentially all applications for ETH futures ETFs throughout October. As Bloomberg’s Senior ETF analyst Eric Balchunas says, ETH futures ETFs are “highly likely (90% odds) to start rolling out in early October”.

Image
image from @EricBalchunas on Twitter

So far, we have Grayscale’s court win all but guaranteeing spot BTC ETF approval and the almost guaranteed ETH futures ETFs (which the Grayscale case seemingly indicates eventual spot ETH ETFs) officially being approved tomorrow. In addition to those catalysts, we’re quickly approaching the BTC halving in April of 2024, something that historically starts bullish trends ~6 months before it occurs.

While the exact timing and official approval of the BTC and potentially ETH spot ETFs are unknown, markets routinely front-run upcoming narratives, events, and catalysts. Throw in the historical returns for BTC in October, historical equity markets returns during an election year and the forecast of the first rate cut in 2024 and suddenly you can easily see why sophisticated market participants would be buying crypto at current prices.

While there are of course still hurdles (FTX/Celsius sales, Binance x DOJ case, potential US government BTC sells) and unknown timelines for ETF approvals, the path for upwards expansion in the short, mid and long term clearly outweighs the one time hurdles listed above. In other spot BTC ETF news, the SEC delays Ark 21 Shares BTC spot ETF application was once again delayed, with the final deadline now set for January 10th, 2024.

As you can see from the below image, the ARK 21Shares BTC ETF is the first in line for a final ruling in January. From my understanding, the likeliest outcome of the years long saga that is a spot BTC ETF finally concludes with the approval of numerous ETFs on/around ARK’s final deadline date of January 10th, 2024. Combining all of the above, we’re now likely ~3 months away from the first ever spot BTC ETF approval, ~7 months away from the BTC halving and potentially ~12-14 months away from spot ETH ETF approval. Does anyone really want to be selling coins at these prices? The time to be structurally bearish has come and gone.

Image
image from @EricBalchunas on Twitter

As mentioned, the coins are enjoying a strong weekend rally with BTC (+5.5%) and ETH (+9%) closing higher. Despite everything we outlined above clearly benefitting BTC and ETH, SOL was clearly the top performing large cap token this week gaining 24%. It’s of course just a one week sample, but the market’s clear upcoming narratives and events drastically favor BTC and ETH compared to anything else. There’s been plenty of discussion about a BTC-led rally occurring but we’ve yet to see it materialize despite the bullish catalysts. Over the course of the next few months, I’ll be monitoring coins that continually outperform their ratios to both BTC and ETH as a signal to their prospectus in the next bull run.

Speaking of those coins, SOL has continued to display impressive strength against both BTC and ETH. While almost everyone left Solana for dead, and many still confusingly choose to, SOL has continued it’s impressive rebuild throughout 2023. As regular readers of P1 know, SOL’s future was never in question to me and I’ve publicly supported them since the December of ‘22 lows. Over the past four weeks, the SOL to ETH and BTC ratios have increased and the fundamental developments teams and protocols have been working towards continued to be displayed. In addition the price appreciation, over the last month+ the Solana ecosystem has seen:

While essentially everything I’ve written this week presents clear bullishness, there are unquestionably going to be continued choppy weeks, hurdles, and setbacks ahead. To me though, it’s evidently clear that if anyone was on the fence about the future, we’re going up. That timeframe is ~3 months+ to years though and I’ll continue to employ the DCA strategy I’ve had since December (SOL twice weekly, ETH once) until ETH is 4k+ and SOL is 150+.

Outside of SOL, Friend Tech, and the ETF news for BTC & ETH, the top notable stories of the past few weeks include:

Moving forward, we have the historical trend of positive returns for crypto in October, conferences from ATOM & LINK kicking off next week, SBF’s trial starting on Tuesday, and the aforementioned likely approval of the first ever Ethereum Futures ETFs on Monday. As a programming note, my final travel of the year takes place next week as I’m going to Sedona & Phoenix for some reason to spend money watching my awful Bengals. As a result, you can expect the next Round Tripping to be next Tuesday evening with a new Trend Chasing article coming on Thursday. Cheers, frens.

As a reminder, the P1 team is always reachable at contact@pageone.gg. If you want to sponsor the newsletter & reach an audience of 12k active market participants, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.

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]]><![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-f7bhttps://pageone.gg/p/round-tripping-f7bTue, 15 Aug 2023 20:39:15 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: the endless range & onchain summer continue, Grayscale outcome provides vol, BASE launches, PayPal’s PYUSD, Visa’s AA push, & Friend.Tech captures mindshare

BTC dominance 47% | ETH dominance 18% | DeFi TVL $42B |

Total Crypto Market Cap $1.2T | Stablecoin Supply $124B |

It’s been an incredibly eventful few weeks since I last wrote (apologies for that, I’ve touched copious amounts of grass this summer but am back grinding more than ever), but you’d never know that from looking at BTC and ETH. BTC has been between 29k and 31k since June 15th while ETH is essentially a $1850 stablecoin. The Ripple news has come and gone, every major US financial institution has applied for a spot BTC ETF, almost as many have applied for a ETH futures ETF, stocks have generally continued up and to the right, and yet crypto majors are pushing towards all-time lows in volatility.

coinglass historical volatility index showing it at all-time low levels

The reason for this lack of vol has been discussed at length on CT and in my opinion it’s a combination of capital and energy being directed elsewhere (AI, stocks uponly), general boring seasonality effects, and mostly a massive stalemate of activity from the largest market participants. Of course, markets are always forward looking but it appears that the front running of an ETF approval or Grayscale win are limited compared to most market events.

This is just a streamline of my thoughts, but the severity of impact a Grayscale win or spot BTC ETF approval would have on the market may be allowing the largest participants and flows to take a wait and see approach. If the impact is as large as most think, the repricing and positive catalysts for BTC, ETH, and the entire crypto ecosystem will provide more than enough upward volatility allowing large fund and trading flows to capture the continuation move upwards. What makes this situation relatively unique is the uncertain timeline and date with which decisions are made.

So, where that leaves us is a standoff with incredibly stagnant crypto major prices as we’re potentially enduring the rare case where large capital and smart money are positioning to be reactive instead of proactive due to the likely severity of an outcome in either direction. As far as the Grayscale outcome goes, we can look to GBTC and public commentary on the case to get an idea of the outcome.

GBTC discount continuing to push upwards, image from ycharts

As the above chart shows, the discount of GBTC to BTC has steadily climbed higher since Blackrock applied for their spot BTC ETF and it currently sits at 25%, the lowest the discount has been in a ~year and a half. In addition to that optimism of a Grayscale win displayed through GBTC’s discount, Bloomberg’s senior legal analyst previously wrote, “Grayscale has a 70% chance of winning its lawsuit against the SEC over the company’s bid to convert the Grayscale Bitcoin Trust (GBTC) to a Bitcoin ETF.”

Regarding the timing of the decision, the first deadline for response was today (Tuesday August 15th) and Scott Johnsson notes that a decision by the end of August is almost guaranteed. It’s also been noted that rulings come on Tuesday or Friday, so I’m preparing for a decision to become public Friday at 11 AM (and then rolling that over to the following Tuesday and Friday if no decision is made).

Regarding the spot BTC ETF race, ARK’s deadline came and went last Friday with the SEC electing to delay their decision. That decision had been expected for weeks as the SEC wouldn’t approve any spot ETF until they know the result of the Grayscale case. If Grayscale wins, it would appear as if a slew of spot BTC ETFs would be essentially guaranteed for approval but the expectation is that even if a favorable outcome occurs for Grayscale the SEC will use all of their allotted time and wait to approve BTC ETFs until January of 2024.

In addition to the Grayscale case result and the eventual approval or denial of spot BTC ETFs, recent weeks have seen increased pressure applied to the SEC in the form of numerous ETH futures ETF applications. What all of this highlights to me is a perfectly rational time for BTC and ETH to be void of volatility as the soon to be regulatory decisions will provide ample continuation and volatility in either direction.

Now, to the fun stuff. While volatility has evaporated from the BTC, ETH and most CEX tokens as we await the court and SEC rulings, the onchain trenches have flourished. Hamster racing, telegram bots (UNIBOT), Rollbit and the gamblefi narrative, HarryPotterObamaSonicInu10 (ticker: BITCOIN) are some of the select onchain tokens that have captured mindshare and/or benefitted from the lack of CEX activity.

CEX volumes continuing to hit new YTD lows, image from The Block Data

This shouldn’t come as a surprise as in the June 18th edition of Trend Chasing I wrote, “new capital is not entering the crypto ecosystem and the inflow of capital chasing memecoins is largely a result of previously siloed NFT capital fleeing BLUR and majors traders escaping the tight range, choppy markets in order to find somewhere volatility and volume are abundant.” NFT volume & prices continuing to decline + CEX traders losing their minds and capitulating to the onchain games = price expansion for the onchain leading tokens RLB, UNIBOT, BITCOIN, & OX.

Recently, this trend has been referred to as onchain summer, but the reality is that it’s an extension of what started back in April with the initial run of PEPE. While a majority of the newly indoctrinated onchain traders will never fully leave, I suspect that when CEX volatility returns (soon) and NFT volumes/activity recover (who knows when) most will migrate back to their comfort zones.

Still, the onchain revolution has occurred and there’s no going back as the tooling, analytics, security, AI help, etc. will only continue to improve overtime. Moving forward, I expect there to be four main buckets of crypto activity: onchain tokens, NFTs, CEX traders, and institutional flows to the overarching/L1/L2 tokens that represent the increased onchain activity. This topic is an entire article itself, so we’ll come back to that at a later date.

Switching gears, one of the most impactful developments last week came from PayPal as they officially introduced their stablecoin PYUSD describing it as, “PYUSD is fully backed by U.S. dollar deposits, short-term U.S. treasuries and similar cash equivalents, and can be redeemed 1:1 for U.S. dollars.” I’ve written numerous times about how stablecoin issuers are some of the best businesses ever created (at least while yield can’t be passed through to holders) and it seems like PayPal, along with what will be ever-growing competition, wants their shot at capturing marketshare.

PayPal’s entrance to the stablecoin market is a welcoming development as they already have a massive, mobile friendly, generally younger skewed user base through Venmo. As far as impact and adoption goes, it’s TBD and their initial fee structure could be a hinderance to adoption. More importantly, PayPal’s approval to launch their stablecoin along with what it signals to the politicians and the broader fintech/tech industry is most notable.

It’s easy for crypto opposed politicians and critics to point fingers and ridicule, justified or not, “shady” offshore stablecoin issuers (USDT) and onshore ones that depegged over fears of insufficient backing and “shady” banking partnerships (USDC) but PayPal, one of the most successful fintech companies of the 21st century and a publicly listed company, gives further validation of crypto to politicians and the tech industry.

In other traditional payment giant news, Visa released their latest experimentation with account abstraction in “Paying Blockchain Gas Fees with Card: bring the ease and convenience of traditional payments to the world of crypto”. The core idea leverages recent advancements in account abstraction and the ERC-4337 standard and showcases the ability/future of eliminating the necessity for ETH users to pay ETH for transactions and/or gas fees while potentially enabling gas fee payment with any token.

Simplifying and distilling the UI and UX of crypto to one-click transactions while simultaneously eliminating the friction of onramping fiat to ETH or worrying about gas fee fluctuations are step function improvements. While obviously still in the earliest days, the developments are rapidly progressing with Visa product manager highlighting the benefits saying, “…we are accepting fiat and covering onchain fees on behalf of users using our offchain solution. It will simply appear to users in the same way that regular card-based payments are made for their onchain fee cost.” Props to Visa and PayPal for their continued embrace of the future.

Simplified and distilled UI/UX (once downloaded and actually working) not only benefits the future but also captures the present attention as Friend.Tech burst onto the scene late last week through an application built on Coinbase’s BASE L2. Similar to PayPal’s PYUSD, whether Friend.Tech is a fad or demonstrates staying power is TBD, but there are clear takeaways regardless.

Friend.Tech perfectly outlined the playbook that future crypto hybrid dapps should employ. What Visa, and others, are attempting to do with account abstraction, Friend.Tech executed incredibly well enabling users to install their dapp on a mobile phone home screen while simultaneously abstracting away the friction of transactions through BASE’s L2 built on OP’s tech stack. Fast, easy signup/install steps, a mobile dapp, and a seamless one-click, no gas fee transactions should be copied by every hybrid crypto application moving forward.

image from app.artemis.xyz

As the above image shows, the result of Friend.Tech’s seamless UI/UX along with numerous other applications and tokens launched on BASE contributed to a successful launch of Coinbase’s L2. Since BASE’s launch, a total of $235M worth of assets have been bridged to the new L2 and Coinbase has collected roughly $2M in revenue from fees.

BASE and Friend.Tech weren’t the only beneficiaries as Optimism, the tech stack they’re both built on, has enjoyed some impressive metrics. Since Worldcoin related activity began to accelerate in early July, OP's price is up ~20% while BASE and Worldcoin’s launch have resulted in Optimism flipping Arbitrum in daily transactions a few times in recent weeks. Arbitrum has since reclaimed the lead, and still dominates in TVL, DEX volumes, etc. but the launch of BASE and Worldcoin provide potential daily active users of OP’s stack multiples greater than any other crypto protocol, something to watch as we move forward.

image from app.artemis.xyz

In addition to all the above, some other noteworthy developments that occurred recently include:

This edition of Round Tripping is sponsored by Jito. JitoSOL is Solana’s first liquid staking token to include rewards from revenue associated with MEV extraction. Users can swap their SOL for JitoSOL to maintain liquidity and participate in DeFi, while earning MEV-boosted yield from staking.

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]]><![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-a07https://pageone.gg/p/round-tripping-a07Fri, 14 Jul 2023 20:38:20 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: bottomish signs were gift wrapped, the endless 30-31k range continues, COIN’s PA signaling *something*, healthy BTC dominance, everyone gets an L2 & UNI v4

BTC dominance 50% | ETH dominance 20% | DeFi TVL $46B |

Total Crypto Market Cap $1.25T | Stablecoin Supply $127B |

While the innagrual edition of Trend Chasing (covering: ETH staking, East vs. West, Stablecoins, Optimism’s Outlook, CCTP & Bridge Wars, Improving Fluidity, Onchain Activity, BTC Ordinals & Inscriptions, ETH Burn) was most recently, the last Round Tripping covered a drastically different crypto market sentiment.

image from the June 13th edition of Round Tripping

At that time, even the most consensus following market participants should’ve noted that the “crypto is over” signs were beyond the point of satire and actually signaling the perfect opportunity to bid. I mean, come on, *Vox* stated, “now might be a good time to consider quitting crypto”. During that week, BTC and ETH were down ~20% from their mid-April highs as we were a week removed from the SEC filing suit against both Binance & Coinbase. Unquestionably, the outlook was bleak.

Two days after that post, and a ~week after statements of crypto’s death were once again becoming consensus, we convincingly found out who was “stepping in to be the marginal buyer and liquidity addition” as the world’s largest asset manager, BlackRock, announced that they filed for a spot BTC ETF. CT is known/built on the ability to display massive sentiment changes, but the shift over the course of the past ~month from “crypto in the US is on life support” to “we’re so fucking back” has rarely been this profound. Over the past ~three weeks we’ve received essentially nothing other than good news including:

As a result of that slew of bullish news, BTC has led the recent rally which has been flatlined between 30 and 31k since June 22nd. Still, since BlackRock’s announcement, BTC is up 25% with ETH lagging behind gaining 17% over the same time span. Of course, ETH trailing makes sense as BTC has an iron-clad grip over the current narrative as the market awaits the SEC’s ETF decision.

While it’s impossible to know the result of that decision, imo reading the tea leaves suggests that eventual approval is far likelier than not. There’s a combination of factors leading to that conclusion with the first being COIN’s recent price action. Since the SEC announced their suit against Coinbase on June 6th, COIN is up ~120%. In addition, COIN is up ~110% since BlackRock announced their ETF filing (that names Coinbase as their exchange partner for the SAA & the usage of Coinbase Custody) on June 15th. To me, it would appear as if COIN (while currently being sued by the SEC) is trading like it’s going to be the partner exchange and custody solution of the first ever approved spot BTC ETFs.

COIN also isn’t the only crypto specific and/or adjacent public company that has vastly outperformed the broad crypto market in recent months as Saylor’s MSTR, MARA, WGMI, HUT, BITQ, SATO, & BITS have all outperformed their crypto counterparts. Of course, the above public companies have market caps that are significantly less than BTC, ETH & other crypto majors but their rally in recent weeks is still notable as it likely shows a consistent bid coming from equity market participants as they tangentially allocate to crypto through publicly accessible vehicles as allocating directly to crypto would require significant time and due diligence cooperation.

If COIN and the crypto specific public companies aren’t enough evidence for you, let’s take a look at an asset that was incredibly toxic as little as ~2 months ago. Grayscale’s GBTC product is approaching the lowest levels it has been in a ~year+, another added signal in addition to COIN’s outperformance that people are buying and positioning for an ETF approval. As a result, GBTC’s discount has gone from December lows of almost 50% (!!), to 44% on the day of BlackRock’s announcement, to ~28% today.

GBTC’s discount on a year & 3 month time period visualized on The Block

The GBTC discount to NAV has skyrocketed since BlackRock (& the flurry of others) have applied for spot BTC ETFs as market participants are consistently repricing Grayscale’s eventual ETF conversion allowing GBTC to redeemed for BTC 1:1. In addition to the ETF excitement, there’s continued positive developments surrounding Grayscale’s ongoing legal battle with the SEC as Eric Balchunas of Bloomberg notes, “another reason why we give spot BTC ETF approval 50% chance is our senior legal analyst gives Grayscale a 70% chance of winning case against SEC”

While the confluence of green candles, BlackRock’s ETF filing, COIN/publicly traded crypto companies, the GBTC discount & the slew of good news we’ve received in recent weeks has bolstered broad crypto sentiment, SOL specific sentiment is off the charts since it bottomed ~a month ago on June 10th. Since then, SOL is up over 100% and there’s (finally) a growing consensus that the token and ecosystem are only just beginning their recovery while cementing their place in the future of crypto. Solana will be one of the main topics for Wednesday’s second edition of Trend Chasing, so for now all I’ll say is that envisioning Solana’s eventual resurgence was clear if you were looking in the correct places and Page One has been writing about SOL’s eventual recovery since the week after FTX’s collapse.

Finally, since the initial run up after the flurry of ETF news, BTC has essentially remained in a tight range coiling between 31 and 30k for the past ~25 days. While we hopefully don’t trade within this tight ~1k BTC range for the next month, the next major crypto-specific date is the SEC’s deadline to respond to ARK’s BTC ETF filing suit on August 13th.

Image
current players in the spot BTC ETF race & key deadline dates

Outside of SOL’s recovery & ETF news, other noteworthy developments of the past few weeks include:

Lastly, I know I didn’t touch on the price movement of yesterday (that has since been retraced) and what the Ripple case news means for crypto moving forward, but everything above this paragraph was all already written and I wanted to let the dust settle a bit before making rash judgements. So, expect thoughts on that + everything from Tuesday on of this week to hit your inboxes Sunday evening.

As a reminder, the P1 team is always reachable at contact@pageone.gg. If you want to sponsor the newsletter, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Trend Chasing ]]>https://pageone.gg/p/trend-chasinghttps://pageone.gg/p/trend-chasingSun, 18 Jun 2023 17:57:13 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

gm and welcome to the first edition of a new biweekly (until things pick up again) Friday afternoon post, Trend Chasing. The aim of this is to cover interesting metrics, data, trends, developments, onchain activity and fundamental improvements that are often overlooked in the frenzy that is the day-to-day in crypto markets. This post will be longer than what I have in mind for the biweekly posts moving forward as it’s a comprehensive overview with important takeaways covering the last ~month & a half.

Before we dive in, I didn’t realize that last week’s Round Tripping was Page One’s 150th (!!) published article to date. If you’ve ever received anything of value from Page One, we’d greatly appreciate sharing this post, a tweet, pageone.gg, or our Twitter account with a friend, co-worker, acquitance, etc. It’s been an incredible ride over the past 18 months as I’ve gone from tweeting word doc screenshots in 2020 to sub 100 followers to the reach Page One has now. It’s hard to express my gratitude for the support we’ve received but it’s deeply appreciated. Cheers to the next 150 posts.

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While memecoins and US regulatory action have dominated the crypto headlines since the start of May, as always, there’s been continued development and growing trends that slowly work in the background to push the global asset class forward. This week, we’ll cover those that occurred over the past ~month+ which include sections on: ETH staking, East vs. West, Stablecoins, Optimism’s Outlook, CCTP & Bridge Wars, Onchain Activity, BTC Ordinals & Inscriptions, ETH burn and Improving Fluidity.

ETH Burn

As an obvious result of memecoins skyrocketing onchain activity throughout May, gas fees and the corresponding amount of ETH burnt reached continuous levels we haven’t seen since ETH’s transition to proof of stake. To highlight the pace at which ETH was burning, there was a 24 hour period spanning across May 4th/5th (the height of PEPE and endless meme derivative activity) where the average base fee was above 200 gwei and 12,00 ETH was burnt.

Over the past few weeks, gas has returned to normal levels but the impact on ETH’s fundamentals (total supply, deflationary status, ETH staking yield) were drastic throughout meme szn as ETH supply is now convincingly deflationary since the merge at a pace of -0.31% per year. Throughout May, the base gwei transaction fee remained convincingly above the 17.4 threshold necessary to make ETH the asset deflationary for a month+ straight.

image from ultrasound.money

I’ve talked about this numerous times previously, but for better or worse, ETH the asset massively benefits from heightened onchain transactions and outrageous fee prices to transact on the chain. In addition to memecoin trading pushing gas fees upwards, the total share of publishing fees L2s pay to mainnet to settle transactions reached a new ATH in May. The fees paid to batch and settle transactions to mainnet reached ~$17M this month as the memecoin and onchain trading volume spiked gas fees and market participants continue to explore and farm for future airdrops of L2s and their developing protocols.

At some point in the next 6-12 months, the thesis of ETH’s increasing onchain activity creating a flywheel that benefits the token stakers through decreased supply and increased yields will become mainstream. I continue to think that accumulating and staking ETH will be one of the safest 3-5x’s heading into the next eventual cycle. Simply deploying this strategy until there are daily CNBC segments (2025?) discussing ETH’s current deflation rate & staking yield seems optimal and “safe”.

With that being said, as with many things in life, the effect of these eventual flows are drastically over stated in the short term but are under-appreciated and make for incredible tailwinds in the mid to long term. Since before ETH’s transition to PoS speculation about this flywheel creating structural flows changes has persisted, but we’ll likely have to wait until 2024 for it to start playing out on a meaningful level.

One of the downstream effects of ETH’s burn rate increasing through amplified onchain transactions is the boosted MEV extraction and priority fees (hello, jaredfromsubway.eth) that are eventually passed down to higher staking APRs. With that in mind, let’s take a look at the liquid staking market since Shapella went live.

Liquid Staking

Despite the irrational fears of a “death spiral” and broad ETH selloff due to staked ETH withdrawals finally being enabled, the polar opposite has occurred. The entry queue for new staking validators sits at 40+ days long while the withdrawal queue, outside of Celsius, has been largely inactive allowing anyone wanting to remove their ETH free to do so at anytime. As you can see, the cumulative total of locked ETH has steadily and continuously moved up and to the right with the net flow since Shanghai resulting in 3.58M additional ETH staked.

image from hildobby’s dune dashboard

The reason for this is multifaceted and includes the large majority of previous ETH stakers being committed to/believing in the protocol’s future, steady yield generation at a time when DeFi yields have been pillaged by US treasury bills, stakers witnessing others successfully remove their ETH eliminates the tail risk of their potential inability to withdraw, and a combination of enhanced yield through the aforementioned increased onchain activity along with the growing LSDfi sector. Since the Shanghai fork, the cumulative number of ETH staked has risen from ~19M to ~22.9M.

As for the LSD sector at large, Frax’s staked frxETH routinely generated upwards of 8% in it’s early days while Rocket Pool’s recent Atlas upgrade, reducing the number ETH necessary to pool, have contributed to the the liquid staking category surpassing DEXs in TVL for the first time, making it the leading category in DeFi by TVL.

image from DeFiLlama’s liquid staking overview

Throughout much of May, the corresponding LSD APR’s for each of the above protocols were continuously between 5-8% as elevated onchain activity leads to increased APRs (through MEV & priority fees). While those APR’s have since come down to the 3.5-5% range, the ability of staking APRs to randomly spike for weeks or months due to heightened onchain activity which in turn burns ETH contributing to supply deflation creates an enticing flywheel. So while APRs between 3.75-5% may not seem incredible, those levels as a relative baseline with spikes to 6, 7, or 8%+ for days to weeks at a time reinforces the desire to stake.

As I previously wrote, I would expect the trend of ETH staked to continue up and to the right as the total percentage of ETH staked currently sits just above 19%. For other PoS chains, this number ranges between 35-60% & I’d expect the LSD sector to benefit from the total amount of ETH staked approaching ~30% by year end.

CCTP & Bridge Wars

As with most of the fundamental developments over the course of the last few weeks, Circle’s CCTP announcement flew relatively under the radar. What Circle announced was their release of their Cross-Chain Transfer Protocol (CCTP) for ETH and AVAX allowing users to seamlessly move their USDC between chains.

In their announcement tweet, Circle highlights the benefits of CCTP saying, “with the Cambrian explosion of third-generation blockchains and ETH scaling solutions, moving USDC across blockchains became a desirable primitive for many developers and applications…CCTP removes the need to bridge USDC via traditional lock-and-mint approaches, improves liquidity across the blockchain ecosystem, and enables developers to provide their users a seamless and secure experience moving USDC natively across chains.”

While this may seem like another run of the mill “we’re the best” announcement from a protocol highlighting their “unique advantages”, Circle’s announcement carries weight because of its effect on the broad, highly competitive and valuable bridging market. As the chart below shows, bridge TVL has been dominated by USDC, something that Circle can and will likely monopolize moving forward.

Image

Circle’s USDC is transparently and natively backed with treasuries and other short-term cash assets, so Circle can easily move native USDC across chains by avoiding the trust heavy lock-and-mint mechanism. This enables Circle to instead institute native burn & mint of USDC on any chain USDC is supported on. CCTP will improve the security/trust of bridged USDC, improve capital efficiency (as liquidity for USDC on various chains is no longer needed), and expand the reach/scale of USDC.

As the graphic above shows, USDC is the most bridged asset out of Ethereum, accounting for nearly a third of the bridged asset distribution. In my view, this is bearish for other popular bridging protocols that include CT’s favorite SYN and VC’s favorite STG as their total bridged volume is likely to take a large hit.

In other bridging news, Axelar (AXL) announced the launch of their General Message Passing (GMP) that enables connections between Cosmos and all EVM chains, providing composability for dapps that span both ecosystems. In similar fashion to Layer Zero’s general messaging protocol, AXL now enables a developer building on any Cosmos to chain to call any function on an EVM chain and vise versa.

While Axelar’s development is another player entering the “bridge wars”, Circle’s CCTP is the infinity gauntlet for the most bridged asset, USDC. To defend against Circle, Synapse has continued forever teasing the launch of SYNchain and Layer Zero/Stargate have their own moat through what is seemingly infinite funding and the ultimate crypto carrot of incentivized usage in hope of a future airdrop. CCTP puts pressure on other bridging protocols, and the future benefits SYN and Layer Zero have teased are now under the most scrutiny and competition they’ve ever faced.

Speaking of Circle and USDC, let’s take a look at recent/current developments in the stablecoin space and how the launch of CCTP and native USDC finally entering the Cosmos/Arbitrum ecosystem may provide Circle tailwinds they could use.

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Stablecoins

The unquestionable top takeaway of recent stablecoin developments, something I’ve routinely covered, is the continued growth and success of Tether’s USDT. The total market cap of USDT recently surpassed the previous all-time highs of ~$83B. That previous peak was elevated by the collapse and subsequent flee of capital from LUNA/UST to USDT and Tether is once again benefitting from another stablecoin’s struggles. As for total stablecoin dominance, USDT is currently 65%, a market share level that hasn’t been seen since the heights of the 2021 bull market before the eventual growth of Circle’s USDC.

Tether continuing to dominate headlines (announcing that they’ll be purchasing BTC with 15% of net profits & mining BTC in Uruguay) is not necessarily bad, but consolidation of any one of crypto’s largest sectors into the hands of one entity surely is. As the below image shows, Tether’s dominance was relatively flat before March 10th as USDC’s trust took a hit from the SVB induced depeg and BUSD has been trending downwards in the face of mounting regulatory pressure since ~February. Since that image on March 10th, the market cap of Tether has risen to $83.3B while USDC and BUSD have fallen to $28.2B and $4.81B. Of note, TUSD’s market cap has increased to $3.1B since the below image after ~$1B+ was minted on Thursday June 15th. Binance appears to be shifting capital from BUSD to TUSD, something I’ll dig deeper into in tomorrow night’s Round Tripping.

image from DefiLlama

As for the overall stablecoin market, one of the best indicators of new capital entering the crypto ecosystem, the total market cap continues to slowly trend downwards from $137B at the start of 2023 to $128B now. This stagnation of stablecoin market cap comes as a relative surprise to me as my assumption would be that the recent flurry of onchain growth/activity combined with the “risk-free” yields available to ETH stakers would’ve corresponded to at least minor stablecoin growth.

What this then signals is that new capital is not entering the crypto ecosystem and the inflow of capital chasing memecoins was largely a result of previously siloed NFT capital fleeing BLUR and majors traders escaping the tight range, choppy markets in order to find somewhere volatility and volume are abundant.

Speaking specifically to USDC’s decreasing market cap since March 10th, it would appear that a combination of demographics (USDC dominant in US, USDT offshores), growing US regulatory pressure, and yield multiples greater than DeFi available in US Treasuries (mostly inaccessible to USDT holders) are responsible for the decline.

Despite USDC’s stagnant growth in the face of increased onchain activity *everywhere* throughout May, USDC has potential catalysts in the aforementioned CCTP launch along with finally deploying native USDC to the Cosmos and Arbitrum ecosystems. Native Cosmos USDC is a particularly strong catalyst as the ecosystem has been searching for a native stablecoin since UST’s collapse more than a year ago.

In other stablecoin news, Curve, one of the largest DeFi protocols, has officially launched their crvUSD stablecoin. While once again the short term implications are often overstated, Curve’s protocol native stablecoin will likely have drastic long term effects on the stablecoin market as well as liquidity, TVL, and flows throughout the DeFi sector. Curve is not alone in their pursuit of vertically expanding as AAVE is following closely behind with their own native stablecoin GHO. At a minimum, I’d expect Uniswap to follow AAVE and Curve’s expansion to the stablecoin market with others soon to join the never ending competition to capture users, capital, and TVL.

Ordinals & Inscriptions

Outside of the memecoin insanity that was taking place on ETH, the biggest story of the last several months is undoubtedly BTC Ordinals, Inscriptions, and BRC-20s. The ability to create, trade, and purchase what we colloquially know as fungible tokens and NFTs on BTC has rapidly escalated throughout Q2. There were multiple days in late April and May where an Ordinals collection was the highest volume collection across *all* blockchains according to cryptoslam.io.

Ordinals marketplace overview from Domo

The increased activity on BTC has lead to predictable infighting where braindead maxis demand a censoring (of the most robustly decentralized blockchain to ever exist!) of transactions and/or blocks that contain Inscriptions or Ordinals. Their pleas of “the chain is congested!!!” are reminiscent of the 2017 block wars but are thankfully falling on deaf ears (s/o to Nic Carter, Udi, Eric Wall & the Taproot Wizard gang for spearheading the charge & education). As with any blockchain, heightened activity leads to fee spikes and BTC transaction fees recently surpassed the peak they reached in the 2021 bull market.

In another first since 2021, BTC block 788,695 had more fees than the miner reward. Once taboo conversations around BTC’s long-term security and fee generation have slowly drifted to the surface over the past year+, but the development of Ordinals and Inscriptions have provided a likely solution to BTC’s future security. Fees captured by miners have been up only and public BTC miners along with the burgeoning BTC scaling solutions seem poised to benefit from BTC’s newfound features.

While activity has since slowed, there have now been upwards of 10M (!!) Inscriptions forever etched into the BTC blockchain since their launch in ~March. BTC daily transactions have doubled from their baseline levels of the past 3 years while DEX volume on BTC has increased by multiples as people continue experimenting.

BTC’s 3 year transaction data from app.artemis.xyz

While the peak insanity has certainly calmed down, the excitement and future of Ordinal Inscriptions and BRC-20s is clearly here to stay. Unquestionably, the heightened activity of BTC transactions is gaining attention and developer mindshare towards what’s possible on BTC. Looking back a year+ from now, the development and excitement about what BTC can enable will forever be linked to the explosion of Ordinals and Inscriptions in early 2023. The world’s biggest shoutout is in order for Domo, a fellow TheOne discord member and the original creator of BRC-20s. Salute.

dgtl_assets Dune dashboard covering Ordinals

Onchain Activity

As you can see from the chart below, unique Uniswap users hit 74k+ on May 7th, a level that hadn’t been reached since around the peak of the bull market in May of 2021 (also aligning with almost prefect local tops of ETH and BTC). DEX volumes have skyrocketed as capital has rotated from the stagnant NFT market and choppy majors price action to chase the volatility and volume spikes in memecoin land. Once again, while the peak insanity has calmed down in the same vein as BTC Ordinals, the ability to generate headlines and FOMO severely aids crypto’s growth.

On May 5th, total ERC20 daily token transfers hit one of their highest levels ever. Much has been made of the increased transaction fees, volume, and activity on ETH, but DeFiLlama shows that ETH is not the sole beneficiary. The future of ETH is scaling through various L2s and the general consensus since ~2020 has been that L2s will make alternative L1s obsolete. That theory, while likely true in the long term, was proven wrong over the past few weeks as general token swaps on Arbitrum reached upwards of $5 during peak memecoin frenzy. In a likely response to that, BSC DEX volume reached heights not seen since 2021 and Solana DAUs topped 400k.

DEX volume on BSC & Solana DAUs both spiking during memecoin szn

We can argue back and forth ad infinitum about the importance of cheap fees and users’ demand for them, wether they flee ETH due to fees, how much that matters, and how it’ll play out heading into next cycle but what I think is the clear takeaway outside that debate is that crypto activity moves in unison. The parabolic rally of PEPE and other memecoins on ETH rejuvenated energy and attention to crypto which benefitted *all* chains when looking at metrics (volume, DAUs, etc.) throughout May.

Another metric that stands out looking back at May, is the DEX to CEX spot trade volume ratio. The ratio reached a new all-time high of 22% in May as onchain trading dominated the crypto landscape as majors continued to chop and volume left the NFT market to chase “the next PEPE”. While the memecoin carousel has since come to a stop, I’d expect this ratio to continue pushing upwards as the recent regulatory actions against Coinbase and Binance along with a general lack of demand for majors force users to embrace trading onchain. To further highlight the exodus of volume from CEXs, crypto exchange volumes recently plummeted to their lowest monthly levels since 2020.

The last thing I’ll say about onchain activity surrounds the prospects of the strongest memes created throughout the memecoin frenzy potentially providing signal moving forward. Of course, this is the furthest thing from financial advice, but PEPE and something like HarryPotterObamaSonic10Inu (ticker BITCOIN) could provide some of the first onchain signs that risk is back in the same way DOGE did for so long. As access to exchanges and regulatory pressure in the US mounts, onchain memes that crypto native participants appreciate and respect will likely be some of the first movers when the environment is conducive to risk-on.

West v. East

While putting the outline and pieces together for this article, “West vs. East” was unfortunately a section before the developments last week. In even more unfortunate news, the US regulatory actions have escalated as the SEC sued Binance & Coinbase.

The hostile regulatory climate has contributed to Coinbase and Gemini, originally US companies, both announcing their plans to launch offshore derivatives platforms in recent weeks. a16z announced that they’re opening a UK-based office and are relocating their crypto startup school there. In addition to that, Jane Street and Jump are pulling back their crypto trading and market making amid the US crackdown. Fwiw, both entities have offshore operations that will continue, but the regulatory crackdown that began in February is continuing to push US companies along with their innovation, economic benefits, and employees offshore.

In stark contrast to the US’s hostility, the East and Latin America continue to embrace crypto providing relatively clear regulation, accommodating banking relations, and an environment in which crypto companies can comfortably operate. While the US pushes activity, volume and tax revenue offshore, the rest of the world seems eager to capitalize on the promising industry as it licks its wounds from the chaos of 2022.

In addition, Hong Kong has enabled retail access to crypto trading as of June 1st, continues to court US-based companies to relocate, and is pressuring banks to take on crypto exchanges as clients. Europe’s comprehensive framework Markets in Crypto Assets (MiCA) regulation, while nowhere near perfect, seems poised to pass and provide companies with clearly established rules and guidelines to operate within.

It’s not all gloom and doom for the US regulatory climate though as BlackRock filed application for a spot BTC ETF and Patrick McHenry, Chairman of the House Financial Services Committee (SEC), & Glenn Thompson, Chairman of the House Committee on Agriculture (CFTC), introduced a comprehensive framework for crypto regulation that includes an impressive amount of nuance and understanding.

While the current US regulatory environment casts a bleak shadow, crypto remains a far-reaching, global asset class. In addition, there’s plenty of pro-crypto supporters throughout regulatory positions and elected officials while BlackRock’s ETF filing (using Coinbase Custody & price data) and the McHenry/Thompson proposed bill provides some pressure on the SEC. Hopefully this regulatory environment will soften after the 2024 election but regardless, it’s clear that other governments and regulatory bodies are ecstatic to pick up any scraps that the US mistakenly pushes their way.

Improving Fluidity

Despite the current US regulatory environment, the accessibility, usability, fluidity and uniquely crypto-native products have continued to slowly improve. Wallet management, UI/UX improvements, mobile apps, benchmark rates, onramping, and real world assets onchain are expanding through recent developments that include:

  • Apple’s Crypto Policy Slowly Softening — iOS mobile crypto applications have recently experienced good news as Apple has approved Uniswap’s mobile wallet, a limited version of Axie Infinity, and StepN’s mobile app launch that allows users to buy, sell and trade NFTs natively in-app (30% tax to Apple of course)

  • BlackRock’s (Potential) Spot BTC ETF — whether BlackRock ultimately receives approval or not is TBD over the next 6-12 months+, but the premier US asset manager signaling their desire to possess a BTC ETF, even if only for fee capture reasons, once again shows that the ability to gain crypto exposure will only become easier

  • ETH Benchmark Staking Rates — CoinDesk Indices & Coinfund partnered to launch an ETH benchmark staking rate and Chainlink launched ETH staking APR feeds. TradFi pillars such as the discount rate and forward rate curve can now be emulated onchain in ETH staking yield opening the potential for massive innovation in DeFi and the ability to gauge risk/reward of exogenous staking yield

  • RWAs Onchain — Incredibly nascent compared to the ultimate potential of the sector, RWAs onchain are consistently growing. This week, Arcade.xyz facilitated a loan of two tokenized NFTs representing Rolexes onchain allowing the owner to tap into global, onchain liquidity to borrow in an instant; expect this trend to drastically increase (Rolexes stored @4KProtocol, s/o Cashtro @ Arcade.xyz)

  • Sending Crypto w/ Ease: TipLink — TipLink, a protocol built on SOL, recently debuted their ability to “send crypto to anyone, even if they don’t have a wallet…TipLink is a lightweight wallet designed to make transferring digital assets as easy as sending a link…send that link to anyone over any platform”

  • Swapper— On June 8th, the team behind Swapper officially introduced it’s capabilities saying that Swapper “swaps all tokens (ETH or ERC20s) it receives to a predefined output token of your choice…someone can send ETH and you’ll receive USDC…by swapping a portion of income into stablecoins, Diversifier acts as a tax-withholding wallet for NFT creators, DAO contributors, and anyone else earning onchain income.”

  • Stripe Embeddable Onramps — Stripe introduced their Stripe-hosted-fiat-to-crypto onramp (includes built-in fraud tools and identity verification to support companies in meeting KYC and compliance requirements). Stripe, “today announced [their onramp]…making it easier for Web3 companies to help US-based customers purchase crypto…Stripe’s onramp allows customers to purchase crypto at the precise moment they need it.”

image from Stripe’s fiat to crypto onramp announcement

While none of these features are a panacea to instant adoption, what they highlight is the constant adoption, building and improvements teams continue to push towards. The above, combined with improving wallet experiences led by Rainbow’s mobile focus and Castle’s integration with Safe, paint a future where crypto’s ease of use is no longer a hinderance to adoption. Increased building and adoption of native account abstraction will further improve the current crypto UI/UX by orders of magnitude and the steady refinement of crypto rails continues to march onwards.

Optimism’s Outlook

While Arbitrum continues to dominate in daily active users, capital chasing new token launches, and DeFi protocols for L2s, Optimism has continued building and has an interesting strategy that should come into clearer resolution throughout the rest of the year. OP’s successful completion of their Bedrock upgrade last week was a massive step towards achieving the protocol’s eventual endgame. Bedrock opens the door to Optimism’s future as the upgrade drastically widens the design space available to applications and developers building on top of OP.

To me, the most interesting of the above improvements Bedrock enables is the “modular superchain future”. As the L2 competition wages on, Optimism has a potential influx of users vastly greater than any crypto app (outside of peak Axie incentives) has seen to date. These potential users of OP come from Coinbase’s Base L2 and Worldcoin committing to building on top of OP’s Superchain.

Users are undoubtedly an important metric, but value accrual to the underlying token along with fee revenue generated for the protocol remain paramount in achieving. As of now, that value accrual remains difficult to parse and it’s unclear how a potential influx of tens of millions of users on OP’s Superchain tech stack (through Worldcoin & Base) translate to sustainable protocol revenue and demand for OP. The next few quarters for the Optimism stack are an exciting time, but protocol revenue and value accrual to OP should be an increased focus so the token and Superchain thesis doesn’t result in a similar fate to that of ATOM and the IBC ecosystem despite the total number of users and applications building on it.

An interesting sidenote on OP’s upgrade surrounds the reduction of fees by up to 47%. As everyone is mostly aware, fee cost reduction has so far not been a significant driver of user adoption as applications users want to use control the flow of capital and daily active addresses. Despite OP’s reduction in fees, along with numerous other blockchains having cheaper fees than ETH, users of ETH have remained sticky. There’s been a ton of hype around the reduction in fee cost EIP-4844 will enable for ETH L2s, but I’m skeptical of its translation to L2 adoption in the short to mid term despite the growing narrative.

OP’s fee reduction has yet to translate to an increase of users or capital shifting from other L2s because, once again, fee cost (so far) doesn’t drive user intent. EIP-4844 has been lobbied as a massive driver of L2 adoption but the point remains that users want *apps* to use almost irregardless of fees. The design space for what can be built on L2s will certainly expand and the fees will be cheaper because of EIP-4844, but it’s ultimate effects appear much further out on the timeline than most are willing to admit.

Putting the Pieces Together

Well, this post ended up being far longer than I anticipated but it feels good to recap and conclude takeaways from what has been an absolutely batshit insane crypto sector since the end of April. If I had to summarize the entire post to seven bullet points, they would be as laid out below. Once again, thanks for reading and for the continued support of Page One!

  • The bridge landscape and omnichain developments are worth monitoring over the next few quarters with Circle’s CCTP rollout, SYN’s Synchain launch, and LayerZero’s (eventual?) airdrop

  • Asia, Latin America, Europe, Hong Kong, BlackRock & the McHenry/Thompson bill are putting increasing pressure on the SEC and US regulators as crypto remains a global asset class other countries are eager to embrace and support

  • Optimism’s Bedrock enables the Superchain thesis to take shape; a potential influx of tens of millions of users could be onboarded to OP’s stack within the next 12-24 months through Base & Worldcoin but OP value accrual is paramount

  • Percentage of ETH staked will continue to climb as onchain activity scales, creating a flywheel of benefits for staked ETH through ETH burning & yield generation; the LSDfi sector remains in its early days

  • The usability of crypto continues to improve through wallet management, UI/UX improvements, mobile apps, benchmark rates, onramping, and RWAs onchain

  • BTC Ordinals have caused a rejuvenation of life to the BTC ecosystem generating a path towards long-term BTC security & heightened developer interest

  • Users remain largely agnostic to fee costs, instead are driven by applications they can use, and increased onchain activity on ETH correlates to the entire space benefitting as overall crypto activity moves in unison across chains

Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-80ahttps://pageone.gg/p/round-tripping-80aTue, 13 Jun 2023 04:00:30 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: BTC dominance breaks out, ETH as a growing safe haven asset, altcoins experience a deathly weekend, OP & MATIC’s recent updates & week size: big

BTC dominance 50% | ETH dominance 20% | DeFi TVL $43B |

Total Crypto Market Cap $1.1T | Stablecoin Supply $128B |

Apparently just shy of $300M worth of liquidations on the news of the SEC suing Binance wasn’t enough, with that total being quickly topped as ~$350M worth of long liquidations occurred Friday night. That $350M of liquidations is the new “high bar” since FTX’s collapse, and was largely the result of cascading altcoin prices.

image from coinglass.com/LiquidationData

In the usual crypto low liquidity weekend dumping fashion, most alts throughout the entire crypto ecosystem lost somewhere between 20-30%+ in the span of a brief ~15 minutes late Friday night. While we’ve never confirmed an exact answer as to what happened, the best guess is some combination of somewhat often scam weekend dump, someone severely hedging ahead of the massive week ahead, and a relatively sizable entity decided to cut *all* their altcoin positions that could have the slightest remote potential to be affected by US regulatory enforcement and liquidations exacerbated the move.

To further support that last point, BTC and ETH have remained unscathed throughout the SEC’s lengthy lawsuits and the two crypto majors only shed ~4% in the same 15 minute candles that saw essentially every other token retrace 20%+. What this signals to me is an unfortunate trend that may continue throughout at least the summer of 2023 where the market shakes off headlines potentially impacting BTC and ETH, instead passes fears down to continued selloffs and underperformance of any tokens that could remotely be considered a security.

As a result of the broad alt selloff Friday night, BTC dominance is approaching 50% after (for the time being) breaking through a 768 day range that began in May of 2021. In addition to BTC dominance’s strength, ETH’s dominance remains at a healthy level of ~20.5% while the total market of crypto excluding BTC and ETH took a beating last week, closing the week down ~15%.

BTC dominance breaking a 768 day range started in May of 2021

The continued relative strength in the dominance of ETH and more specifically BTC further highlight the flight to safety that is ongoing as US-based and offshore entities alike sell altcoins to presumably avoid holding any tokens that could under potential regulatory scrutiny.

As for ETH, the ETH/BTC ratio has remained strong at ~0.07 in the face of the largest regulatory pressure the industry has seen. To me, if there was any doubt, this signals what most rational people have concluded since ETH’s transition to PoS: that it is now officially a crypto major and treated by a growing number of market participants as a safe haven asset, something that was previously only bestowed upon BTC.

Speaking of ETH, as I’ve written numerous times previously, it’s difficult to find a metric around total staked ETH that doesn’t point towards it being a premier asset for the next few decades of crypto. Well, Coinbase’s Wrapped Staked ETH, cbETH, is one of the lone indicators of the entire staked ETH ecosystem that isn’t displaying immense growth. In fact, cbETH’s growth has declined on both the 30d and 7d time frame which is largely a result of 24,750 cbETH redemptions on June 6th in response to the SEC’s suit against Coinbase.

image from DeFiLlama’s ETH Liquid Staking dashboard

Coinbase has continuously said they’ll operate “business as usual” but market participants are clearly displaying caution when it comes to Coinbase’s staked ETH product with alternative options abundant. On the bright side, most other metrics involving both Coinbase and Binance since the SEC filed suit last week remain relatively unchanged.

As I wrote last week, there have been some outflows from both exchanges, but Coinbase’s public quarterly financial reports and Binance’s publicly visible wallet holdings are reassuring to customers. Ironically, the public withdrawals Coinbase and Binance have endured would’ve almost certainly sent every US regional bank into FDIC receivership in a similar crisis-inducing fashion as to what happened with SVB.

Scaling Efforts Continue

While overall market sentiment remains at FTXish levels, protocols and teams throughout the ecosystem continue building towards a better, more scalable future. This week, Optimism and Polygon highlighted that fact as Optimism completed their long-awaited Bedrock upgrade and Polygon detailed their vision to build “the Value Layer of the Internet”.

Optimism’s completed Bedrock upgrade is the more near-term relevant accomplishment as it significantly reduces fees by upwards of ~47%, establishes the path for OP’s modular Superchain vision (which Coinbase’s Base and Worldcoin have committed to building on), drastically reduces deposit times, enabled multi-client systems, and opens the door for multi-proof systems on OP including ZK and hybrid proofs in addition to the optimistic native fraud proofs (h/t binji_x).

As mentioned, Optimism wasn’t the only ETH scaling protocol that announced fundamental changes this week as Polygon released their vision for the future of MATIC. Ryan Wyatt, president of Polygon Labs, stated that Polygon 2.0 aims to achieve, “unifying the protocols: seamless usage across zkEVM, PoS, & Supernets to feel like using a single chain, token evolution, & establish the long-term decentralized governance.”

Most interesting to most of us crypto market participants, is the lack of plurality when referencing “token evolution”. As Polygon has slowly rolled out their zkEVM L2, the founder of Polygon, Sandeep, previously hinted at a possible additional token airdrop specifically for Polygon’s zkEVM. While nothing has been officially confirmed or denied, Polygon outlined their 2.0 roadmap with important dates that span the next month+. Personally, I’m much more excited about OP’s Bedrock upgrade as Polygon continues to face consistent chain reorgs (often ignored by the broad ETH community) and their zkEVM launch has come with plenty of hiccups and a TVL that has only managed to reach ~$23M.

Image
Polygon’s dates to monitor from their 2.0 announcement

A few other recent developments of note include:

  • AVAX DAAs — according to Artemis’ dashboard, daily active addresses on AVAX have climbed 162% over the past 3 months which is 2x more than the next leading blockchain (TRON) when you exclude addresses farming zkSync, Starknet & Base’s testnet. Interestingly, Artemis shows AVAX daily transactions as -41% over that same time period and it seems the attribution to their DAA growth belongs to the activity the DEX JOE is fostering & the adoption of the dapp Galxe.

  • Unlocks — BLUR will unlock 196M tokens on Tuesday, 6.5% of the total supply, which will increase the circulating supply by 40% from 509M to 715M. BIT unlocks 2% of the supply (Wed.), LOOKS unlocks 3.75% of the supply (Thur.), & APE unlocks 1.5% of supply (Friday).

  • Bottom Signals — Traders pivoting to legacy markets, increased questioning of crypto’s future, Cramer saying to sell crypto for treasuries, sentiment as low as it’s been since FTX’s collapse, mainstream media publications saying to quit crypto, etc. Of course, while the bottom signals are escalating a rapid pace, the question of who is stepping in to be the marginal buyer and liquidity addition to crypto markets is mostly unanswerable at the current juncture but regardless, the proclamation of crypto being dead has been a historically undefeated signal.

Image

Looking ahead, we have a flurry of macro news and data to process this week starting with what will likely be an incredibly volatile day tomorrow. Tuesday alone brings us new US CPI data, the disclosure of the long anticipated Hinman documents from the SEC’s case against Ripple (expected to massively benefit Ripple), Binance US hearing on a motion to seize their assets, and the SEC’s required response to Coinbase’s petition for ruling originally filed weeks ago.

Following that, macro news becomes front and center as Wednesday brings us US PPI data and the FOMC rate hike decision with Thursday bringing ECB and BoJ monetary policy meetings. As Barry would say: gonna be a big week.

As a reminder, the P1 team consisting of myself, MoonOverlord, terv & boffin are always reachable at contact@pageone.gg. If you want to contact us in regards to sponsoring the newsletter, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-b9chttps://pageone.gg/p/round-tripping-b9cWed, 07 Jun 2023 03:26:20 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: Gary’s big week, s/o Brian & Coinbase, native USDC to ARB & ATOM, takeaways from the past two days, DEXs growth, ETH’s strength & the headwinds are dwindling

BTC dominance 48% | ETH dominance 21% | DeFi TVL $46.5B |

Total Crypto Market Cap $1.17T | Stablecoin Supply $129B |

One of the slowest weeks in recent memory was upended Monday morning when the SEC announced that they were suing Binance and CZ for operating an illegal securities exchange and alleging that BNB, BUSD and various other tokens are securities. While eventual enforcement against Binance was far from unpredictable, it caught the crypto market offsides resulting in the largest day of long liquidations since FTX’s collapse in November of 2022.

image from coinglass.com/LiquidationData

What was unpredictable though, was the SEC outdoing themselves the following morning as they announced that they’re also suing Coinbase for operating an illegal securities exchange. In addition to suing both Coinbase and Binance, the SEC alleges that SOL, ADA, MATIC, FIL, SAND, MANA, ALGO, & AXS are illegal security tokens on both exchanges while BNB, BUSD, ATOM & COTI are illegal security offerings specific to Binance and CHZ, NEAR, FLOW, ICP, VGX, DASH, & NEXO are somehow specific security offerings only on Coinbase.

In response to the SEC’s suit, Brian Armstrong commendably tweeted, “regarding the SEC complaint against us today, we’re proud to represent the industry in court to finally get some clarity around crypto rules…we’ll get the job done. In the meantime, let’s all keep moving forward and building as an industry. America will get this right in the end.” Salute to Brian and the entire Coinbase team for always standing up and fighting for the entire crypto ecosystem.

While the Binance news sent the market lower, the SEC’s enforcement against Coinbase resulted in what appeared to be a poetic stand with Coinbase against Gary and the continued nonsensical approach of regulation through enforcement from the SEC. After a brief initial selloff, BTC and ETH led the entire crypto market higher in the hours following the suit against Coinbase resulting in higher prices than before the Binance news.

The market’s response to the Coinbase news brings up several thoughts including:

  • The reaction to every subsequent US regulatory action has slowly become more muted since the onslaught began back in February — if this regulatory action was as little as months ago, BTC and ETH’s percent loss would’ve likely been multiples higher than the ~5% decline

  • ETH has continued display impressive recent strength with ETH/BTC ratio slowly climbing higher. Additionally, ETH was not mentioned in either SEC filing

  • It’s become incredibly clear that anyone who is left to sell based on potential regulatory actions from the US has already sold. The tourists are gone and long-term convicted holders, builders & investors are the only ones currently left.

  • Markets tend to bottom when the demand for lower prices overwhelms the impact of bad news and the speed with which selloffs are reversed accelerates

  • Centralized exchange volumes which recently reached their lowest monthly levels since 2020 will continue to sputter while DEXs increase their relative market share of volume

As for that last point, both Coinbase and Binance (excluding Binance US which no one used to begin with) have said that they will continue business as usual and the eventual conclusion of the SEC’s lawsuits will likely take years to come to a conclusion (see current Ripple case). Still, the regulatory overhang and headlines created will certainly effect the volumes of Coinbase and Binance moving forward as small net outflows have already begun.

Binance over the past two days has seen net outflows of ~$1.65B, but it’s important to note that Binance has weathered plenty of “bank-run” type events in the past. The most recent example was when FUD emerged in December surrounding concerns over their solvency resulting in users withdrawing over $2B of assets in a two-day span. As Nansen further highlights, insolvency is incredibly unlikely as Binance has withstood larger net outflows and their publicly known wallets alone show $54B of assets.

As for where we go next, continuation of the strong reversal would be the obvious best case scenario but the reality is we’re currently well within the same range we have been since mid-March until proven otherwise. On the bright side, from today’s impressive recovery and overall market structure, the chances of that range breaking to the upside are heavily skewed in our favor.

The unfortunate scenario would be that the same time-based capitulation range we’ve been enduring continues through the summer and into ~late Q3 before that upward expansion takes place as potential new retail market participants and large institutions alike await further clarity and reassess their commitment to “Web3” before deploying capital.

With the uncertainty of possible actions against two of the largest players in the crypto space largely behind us, combined with a year and a half of blow ups resulting in down only, the potential headwinds are quickly diminishing. What remains is possible FUD and legal action against Tether and/or a large DeFi protocol like Lido, the US government planning to sell ~$1.2B+ of BTC (at current price & likely on Coinbase kek) in four tranches throughout the rest of the year, and potential downside legacy market scenarios.

With that being said, all of these events have been known possibilities for some time now and as we saw with the events of the past two days, the market quickly reprices clarity versus the unknown. On the other side of the summer, I expect crypto specific tailwinds to begin taking shape and pushing the market higher mainly in the form of growing catalysts from it’s two largest tokens (BTC’s halvening in 2024 & ETH’s deflationary/yield narrative going mainstream). Onwards and upwards.

As a reminder, the P1 team consisting of myself, MoonOverlord, terv & boffin are always reachable at contact@pageone.gg. If you want to contact us in regards to sponsoring the newsletter, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-3ffhttps://pageone.gg/p/round-tripping-3ffTue, 30 May 2023 19:27:21 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: onchain volume sputters, Hong Kong’s coming retail access, L2 growth, airdrops & new tokens/ecosystems dominate attention, & Optimism’s potential tailwinds

BTC dominance 48% | ETH dominance 20% | DeFi TVL $48B |

Total Crypto Market Cap $1.2T | Stablecoin Supply $129B |

We’re back again, covering what was a relatively slow week throughout the crypto ecosystem. As the week progressed, tokens began to move a few percentage points higher as BTC and ETH followed legacy markets upwards thanks to Nvidia’s insane performance. In after hours trading last Wednesday, NVDA gained an Ethereum and more (~$250B) worth of market cap on the strength of earnings fueled by the explosion of demand for AI tooling since the start of the year.

Since October, NVDA’s market cap has now gained ~$750B as the frenzied demand for AI continues to accelerate. NVDA’s rally combined with their forward guidance and growth projections will add fuel to the fire that is the pivot from crypto to AI. While Page One is excited about the eventual future synergies between crypto and AI, we want to state on the record that we’ll never pivot to covering AI as we’re stuck in the crypto hole for eternity.

Now, back to what we know, crypto specific developments. First, the memecoin narrative and rotation is clearly fizzling out with onchain trading volume and ETH gas prices slowly coming back down to Earth. As you can see from the below dashboard, after peaking at around $2.7B of weekly trading volume in the start of May, the “Meme Total Trading Volume” was around ~$375M last week.

While not a perfect metric as exchanges have been quicker to add high volume tokens removing the on chain aspect, the chart combined with the number of blatant cash grabs we’ve seen develop paint a relatively bleak picture. Opportunities in crypto remain endless if you’re looking in the right areas, but the amount of time available to capture them shrinks as the PvP nature of the market increases where unrealized wins can quickly become losses.

When the onchain environment sours, smart market participants usually reallocate their time and energy to exploring newer domains and airdrop farming. Since the market has continued to range for the past ~3 months, this has clearly been the case as evidenced by ETH’s collective L2s reaching new monthly highs of publishing fees to mainnet in May.

The fees paid to batch and settle transactions to mainnet reached ~$17M this month as the memecoin and onchain trading volume spiked gas fees and market participants continue to explore and farm for future airdrops of L2s and their developing protocols. Artemis’ dashboard showing the 3 month change in daily active users across chains highlights the daily active address growth we’ve seen across ETH L2s in recent months. In addition, while most crypto TVL metrics remain around recent lows, zkSync Era, Polygon’s zkEVM, and Starknet all hit new ATHs in TVL recently while all conveniently not yet releasing a token.

image from Artemis

Speaking of ETH L2s, Optimism likely has a volatile week+ ahead beginning with a token unlock later today worth ~$600M that represents ~9% of the token’s entire supply. On the other side of that, the L2s long-awaited Bedrock upgrade that will provide a flurry of benefits including “improving the security and resiliency of the OP Mainnet bridge” and significantly reduce transaction costs will take place on June 6th. While Arbitrum has since dominated the L2 landscape, OP’s Bedrock upgrade along with Coinbase’s Base and Worldcoin’s eventual launches and commitment to OP’s Superchain vision should provide tailwinds to Optimism’s growth and adoption.

Lastly, overall crypto adoption and trade volumes could see a sizable boost later this week as Hong Kong enables retail access to crypto trading starts June 1st. For their part, OKX’s exchange will initially list 16 tokens (BTC, ETH, SOL, ADA, MATIC, DOT, UNI, LINK, SAND, LTC, AVAX, AXS, ATOM, XLM, USDT & USDC) available for retail investors to buy, sell and trade natively in their app which are purchasable with HKD, P2P or via ApplePay, Visa and Mastercard.

The ability of retail in HK to directly access crypto comes at a time when visibility, tolerance and awareness for crypto appears to be growing in China as Beijing recently “released a web3 white paper to promote the industry’s development” and CZ claims (obviously in Binance’s best interests) Chinese speaking communities are “buzzing” after the CCTV (China Central Television) broadcasted a segment about cryptocurrencies that featured BTC’s logo and NFTs. Hong Kong joins countries throughout Europe and Latin America that are positioning themselves to benefit from the US continuing to push crypto offshore.

As a reminder, the P1 team consisting of myself, MoonOverlord, terv & boffin are always reachable at contact@pageone.gg. If you want to contact us in regards to sponsoring the newsletter, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.

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  • 0xsmac & Compound Crypto release an exploration of “A Crypto Future”

  • Joel John’s “Moneyed JPEGs” detailing the landscape of NFT finance products

Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-73ahttps://pageone.gg/p/round-tripping-73aTue, 23 May 2023 12:59:25 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: majors continue chop, Visa deepens crypto experimentation, Apple’s growing warmth to crypto apps, BTC’s scaling phase, & DEXs increasing market share

BTC dominance 48% | ETH dominance 20% | DeFi TVL $47B |

Total Crypto Market Cap $1.16T | Stablecoin Supply $130B |

My apologies for the recent Page One hiatus as I’ve been out touching grass, traveling to Miami and my sister’s college graduation (s/o to her!!), and have spent far too much time watching the one minute chart on shitcoins, sorry memecoins, instead of writing. Anywho, we’re now officially back, locked in, and grinding harder than ever.

This week’s Round Tripping will cover the past ~10 days of the crypto ecosystem while a post I’ll release Thursday will detail the main trends, fundamental improvements, narratives, developments, and important data/flows that have occurred throughout the last ~month.

As for this past week, it was another stretch of muted volatility and price action, specifically for the majors. ETH and BTC continue to chop around 27k and 1.8k respectively with the past ~11 days enduring extremely muted volatility. As Frank highlights, daily crypto exchange volumes have hit their lowest level of the year after peaking at $46B on March 19th, they currently sit just above $10B at $10.42B.

Image
7 day moving average of centralized exchange volumes

The beneficiaries of the suppressed CEX volumes have been DEXs throughout the crypto ecosystem as centralized crypto exchange volumes are at an all-time low for the year while the ratio of DEX volumes relative to CEXs is at an all-time high, clocking in at ~22% in May.

image from TheBlock’s Data

What we’re seeing develop over the past few months is a US regulatory environment that is bifurcating liquidity throughout the crypto ecosystem. On one end, volume is increasing at the most centralized levels as evidenced by the CME gaining volume from CEXs while the other end of the spectrum, decentralized exchanges, continue to increase their market share relative to their centralized exchange counterparts.

There’s several factors contributing to the above scenario with the most impactful including the continued US regulatory crackdown resulting in market makers such as Jane Street and Jump scaling back their operations, broadly lower liquidity and book depth as a result, capital shifting from the majors to play onchain in the ongoing memecoin frenzy, and key settlement infrastructure missing through fragmented banking rails after the closing of Signature and Silvergate.

How and when the US regulatory environment once again enables a thriving CEX ecosystem is anyone’s best guess, but in the mean time traders, volume, & volatility are pivoting to DEXs and onchain solutions. While the CEX and liquidity environment appears bleak, crypto is a global asset class and someone will always fill the void where money is to be made. In addition, stagnant price movement generally begets complacency and more stagnant price movement until volatility dampens to the point where it ends up exploding. While I’m expecting downward pressure to occur as a result of the consolidation we’ve seen, the eventual move is TBD while ciniz eloquently memed the current environment I’m referencing with the below image.

Image

One of the biggest developments this week outside of DEXs continuing to gain market share came from Visa and their continued embrace of account abstraction and crypto at large. Visa continues to be at the forefront of the growing convergence between traditional payment rails and unique, new possibilities enabled by crypto rails which they first embraced in 2021 by using USDC to settle payments on ETH.

This week, Visa once again displayed their commitment to developing and contributing to crypto solutions by experimenting with the cutting edge tehcnology of account abstraction. In the words of Cuy Sheffield, the head of crypto at Visa, they’re, “excited to see Visa deploy our first paymaster smart contract on testnet as we continue to research and experiment with account abstraction and ERC-4337.”

As for exactly what Visa did, Catherine Gu, a developer of protocols, payments & infra at Visa, described it by saying, “we tested two core user operations: paying with ERC-20 tokens using ERC-4337 Paymaster; and sponsoring transaction fees for users (aka gasless txs) with ERC-4337 Paymaster.” While incredibly complex in nature, the simplest way to view account abstraction is developer magic that improves the UI, UX, programmability and security of operating throughout the Ethereum ecosystem by orders of magnitudes and expect account abstraction to continue being a major focus and catalyst for easily onboarding users moving forward.

Visa was not the only legacy giant to make waves in the crypto ecosystem this week as it appears that Apple is slowly warming to mobile crypto applications through recent developments surrounding their App Store. The Block reports, Apple’s crypto policy softens as Stepn offers in-app digital asset trading — “Stepn users will be able to buy, sell and trade the game’s NFT sneakers without having to leave the app”.

Stepn’s breakthrough follows Axie’s recent announcement that ‘Axie Infinity: Origins’ will be available on Apple’s App Store in a select number of countries throughout Latin America and SE Asia before an eventual global launch. While Axie’s gameplay is available for download, an in-app marketplace and NFT transactions are still unavailable as Sky Mavis co-founder Jeffrey Zirlin said, “we are hopeful around adding in-app purchases for NFTs and Apple allowing for the linking to third-party marketplaces.”

Historically, Apple has made it incredibly difficult for any semblance of crypto mobile adoption by forbidding the ability of companies to allow users to buy, sell, and trade NFTs. In the past, mobile iOS development was a non-starter for crypto applications trying to facilitate trade of digital assets as Apple would severely restrict how and where users could participate and/or demand a 30% cut of all in-app sales.

To date, crypto has been dominated by desktop usage with the mobile experience severely lacking despite the massive growth, specifically from emerging markets where crypto is currently most useful, that continues in mobile internet traffic. Apple slowly embracing the demand for crypto applications is a great sign for the growing wave/access of crypto mobile adoption, further evidenced recently by Solana’s Saga launch and Uniswap’s mobile wallet receiving approval from Apple last month.

While Stepn will initially launch complying with Apple’s egregious 30% tax, the ability of users to natively, in-app transact NFTs is a massive step in the right direction for the entire crypto space. Stepn also confirmed that Apple Pay will be directly available in their mobile application allowing users to purchase digital assets using traditional debit and credit cards. The ability of users to buy, sell, and trade NFTs through a functional, App Store available mobile application is a positive leap forward necessary for crypto mobile adoption to eventually take off.

Speaking of growing trends, MariaShen of Electric Capital highlights the shifting tide in BTC land as she says the most discussed topics at last week’s BTC Miami conference included:

It’s a brave new world for the future of BTC and its horizontally expanding ecosystem as evidenced by Bitcoin Frogs, an Inscription NFT collection on BTC, leading all NFT collections across all chains by volume traded on May 17th. As most everyone is aware by now, BRC-20s, Inscriptions and Ordinals are drastically changing the dynamics of BTC transaction fees, blockspace, future security and what’s possible on the bitcoin blockchain.

As with anything else that explodes to capture mindshare in crypto, Inscriptions and Ordinals volume/hype will fade in the short-term but the trend of their growing adoption and usability will only steadily increase over time. What’s necessary for that to occur, as with any blockchain, is improved tooling to manage, operate, and monitor the burgeoning space.

To that point, the focus on better tooling is dominating BTC mindshare and developer effort evidenced by discussions throughout the BTC community and BTC Lightning Network developer Lightning Labs announcing Taproot Assets v0.2 enabling an unlimited amount of assets to be minted and/or moved in a single onchain transaction. Monitoring the ongoing developments of tokens and scaling on BTC will be crucial in the coming months to years as the space continues to expand.

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This edition of Round Tripping is sponsored by Kraken! Kraken — one of the most trusted names in crypto for over a decade — has built a new way to securely explore, collect, and trade NFTs across multiple blockchains.

With zero gas fees for all trades on their platform and built-in rarity rankings, Kraken lets you build your collection your way using cash or 200+ cryptocurrencies. See how Kraken is building a better trading experience at https://kraken.com/nft

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-9d2https://pageone.gg/p/round-tripping-9d2Tue, 25 Apr 2023 04:01:51 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: ETH keeps burning, U.S. pushing crypto offshore, stablecoins & Tether’s dominance, NFTs are very alive, SOL’s recent NFT success & sell in May questioned

BTC dominance 47% | ETH dominance 19% | DeFi TVL $48.5B |

Total Crypto Market Cap $1.2T | Stablecoin Supply $131B |

Leverage giveth and leverage taketh away. Two weeks ago, short liquidations (~$250M worth) propelled the crypto market higher as BTC and ETH broke 30k and 2k. This week, the markets gave back those key psychological levels as $262M worth of long liquidations helped fuel markets lower.

image from coinglass liquidation data

Last week, I wrote that, “while the signal is unclear to me, meme coins going parabolic usually marks the top or the beginning of unbridled degeneracy.” While we of course only have a one week sample, the early results on PEPE going parabolic appear to be signaling a broad market retrace as BTC (-10%) and ETH (-14%) gave back significant gains last week.

While PEPE remains ~30%+ off its highs, the market cap of the 10 day old coin still sits above $100M. Personally, I don’t have the slightest of interest in the token at these levels but I’m incredibly interested in the future price action and potential staying power it displays. As mentioned, the start and stop of previous cycles have been signaled in advance by meme coin rallies and I’ll be monitoring the flows into PEPE over the coming weeks to months to determine if PEPE has any semblance of becoming the new DOGE.

Regardless if that comes to fruition or not, the amount of ETH burned since PEPE’s launch and the ensuing meme coin frenzy is incredible. Preceding PEPE’s launch was a two day string of elevated ETH gas prices which has continued over the past ~two weeks. Over the past seven days, ETH’s burn rate has paced at a level that would see the protocol become deflationary as the supply reduction in total ETH reaches -1%+.

image from ultrasound.money

Throughout essentially the entire “bear market”, onchain activity has remained convincingly elevated signaling that users of ETH, and crypto at large, are making onchain transactions. As I’ve written numerous times, extrapolating ETH’s bear market activity and supply reduction levels to past bull market activity creates a picture where demand for ETH approaches a parabolic phase while the protocol quietly burns tens of thousands of its native currency per week due to said demand.

Outside of ETH burning due to elevated transactions as a result of PEPE’s launch, there were two other main focuses of the crypto ecosystem this week. First, as everyone has seen by now, Gary Gensler testified in front of Congress and the House Committee on Financial Services last week. While it was unquestionably an unmitigated disaster for the head of the SEC, it’s unfortunately important to remember that the usual bipartisan politics and camera performances were likely at play as public hearings don’t result in regulatory changes.

Still, Gary’s answers failed to provide further clarity to a regulatory environment that is confusing at best and malicious at worst towards the crypto industry. Having him publicly, on the Congressional record, fumble his responses to direct questions regarding the SEC’s treatment of crypto will benefit the industry over the long term.

The above SEC treatment of crypto in the US continues to have ripple effects throughout the industry as crypto is continually, and methodically, pushed offshore. In the same week that Gary stumbled around answers to basic questions, the European Union passed a comprehensive framework for crypto while Gemini and Coinbase announced their intentions to launch offshore derivatives products.

Established crypto companies and startups alike are not the only thing being pushed offshore, as the market cap and dominance of stable coins continues to shift in Tether’s favor. USDT’s dominance has now reached 62%+, levels not seen since April of 2021 when USDC was just beginning to bootstrap its network and growth.

stablecoin overview from DefiLlama

Secondly, there’s been a flood of recent talk throughout the crypto ecosystem about NFTs, their future, and the current market dynamics. As everyone is likely aware, BLUR’s incentive driven airdrop “seasons”, combined with OpenSeaPro’s (Gem’s) likely future airdrop, have “wrecked havoc” on the NFT market. Twitter threads and influencers blaming BLUR for the current state of the NFT market is not new, but it appears to have reached a boiling point over the last week+.

To be clear, from my view, Blur didn’t “wreak havoc” on NFTs as the team simply capitalized on a market inefficiency. If Blur didn’t do it, any number of other startups would have. NFTs are not valuable because of their semi-illiquidity, they’re valuable because the technology behind them, the ERC-721 standard, is a digitally native, global wrapper that can be applied to assets that are unique and previously hard to value.

A common fallacy in crypto is that bringing assets onchain instantly guarantees liquidity. This couldn’t be further from the truth (see most recent example of PEPE running to $100M+ market cap with sub $3M in liquidity) and NFTs operated in a market of weak liquidity for much of their existence. While the common knowledge of NFTs has been that they’re unique and semi-illiquid, the future of NFTs, and crypto at large, is betting on NFTs becoming liquid. Just because something is non-fungible, there’s no reason that it can’t be liquid.

Sure, Blur is incentivizing the increased liquidity of assets that were once semi-illiquid, but if their prices have collapsed with increased, constant liquidity than the previous “value” was never real to begin with. Blur doesn’t inorganically force prices down, it’s just accelerating market dynamics that would’ve played out in the long run irregardless of what NFT holders want. On the bright side, Blur, increased liquidity, and the growing number of teams working on NFT financial products massively benefit from higher liquidity NFTs. In the long run, as every unique asset (cars, real estate, manufactured products, loans, etc.) are represented by an NFT onchain, the ability to price them properly will be appreciated as NFTs become “real” assets.

Finally, while we’re talking about the demise of ETH NFTs, it would be malfeasance not to mention their strong revival elsewhere. As you can see from the image below, the top two NFT collections across all chains in sales volume over the past 24 hours both reside on SOL. Another pocket of NFT strength comes from BTC Ordinals breaching a new all time high in daily inscriptions at 89,698. Mad Lads are leading the way in recent NFT success as the team behind the first backpack xNFT collection not only showed impressive demand, but successfully completed SOL’s first scaled localized fee market test.

the top NFT collections by sales volume from cryptoslam.io

Despite what many are painting as a bleak future for NFTs, Page One considers the enhanced liquidity selloff good for the long term future of the space. Almost one year ago, I wrote in Cyclicality and What’s Next, “often forgotten in the everyday chaos of the simple, yet all-encompassing revolution NFTs present as a verifiable, digital wrapper around any unique asset…eventually, the market cap of NFTs will be the most valuable asset class in the world as they continue their evolution to impact every industry.”

Whether that future is Blur induced or not, it’s eventually coming regardless of what market participants think about their once pristine, semi-illiquid non-fungible tokens. Liquidity enhances optionality and it was always destined to come for NFTs. Moving forward, the strong, broad consensus is “sell in May”. Of course, that consensus framing makes me question the validity of the statement and ponder whether the selling last week was once again front running the consensus. We’ll reconvene next week to decipher that equation. Cheers to constant onwards and upwards growth.

As a reminder, the P1 team consisting of myself, MoonOverlord, terv & boffin are always reachable at contact@pageone.gg. If you want to contact us in regards to sponsoring the newsletter, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-cf0https://pageone.gg/p/round-tripping-cf0Tue, 18 Apr 2023 15:07:00 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: Shapella bears capitulate, FTX 2.0 floated, Arbitrum’s L2 stranglehold, BTC dominance retreats, ETH & alts given life, Solana’s big week & PEPE’s uncertain signal

BTC dominance 47% | ETH dominance 19% | DeFi TVL $53B |

Total Crypto Market Cap $1.33T | Stablecoin Supply $131.5B |

Another week has passed and I’ve successfully survived NFT NYC and meeting terv irl for the first time, while ETH survived the daunting Shapella upgrade. While some forecasted fear of mass dumping, the effects of Shapella were incredibly overstated ahead of the event. In last week’s edition of RT, I wrote,

“in my view, the fear of a selloff is drastically overplayed and there are numerous reasons that Shapella results in more of a nonevent than anything…I’m currently positioned for Shapella being a successful nonevent that provides tailwinds to the LSD sector along with the medium and long term outlook on the ETH/BTC ratio…hopefully I’ll be back next week to talk about the continuously improving CPI numbers and the lack of immediate sell pressure from Shapella.”

While Shapella has since come and gone, with ETH gaining an impressive 14% on the weekly as a result, the effects and concerns of ETH withdrawals being enabled have also largely dissipated. Aided by continually improving CPI data that came in at its lowest level since May of 2021 and cumulative BTC short liquidations reaching ~$250M on April 13th, a number not seen since the rally off the lows to start the year, the crypto market once again climbed higher.

Liquidation data, specifically new yearly highs, from coinglass

As you can see from the free public Nansen dashboard, the peak of withdrawal pressure, which was mainly a result of centralized exchanges withdrawing on their customers behalf, (specifically Kraken who was ordered by the SEC to do so for U.S. customers) has come and gone. Outside of that centralized exchange blip on April 15th, ETH deposited to staking services has continually exceeded ETH withdrawals.

Nansen’s dashboard clearly shows that ETH withdrawals within the first ~48 hours of Shapella being live were “shockingly” outpaced by new deposits and the majority of ETH withdrawn from staking occurred in an isolated ~48 hour window. That window was opened by regulatory pressure and centralized exchanges processing redemptions and has since been shut by the demand for global ETH deposits into decentralized staking protocols.

image via Nansen’s Shapella dashboard

Shapella not only enabled withdrawals but also completed ETH’s years long transition from PoW to PoS. While ETH’s price and the withdrawal queue have taken center stage this week, the fundamental changes enabled through the transition to PoS (EIP-1559 implementing the burn, decreased issuance in PoS, staking yields) continue to provide background tailwinds.

As you can see on ultrasound.money, since EIP-1559’s integration 620 days ago Ethereum is burning ETH at a rate of $5.4B annually. As a result of the burn and the PoS transition, ETH’s supply growth since EIP-1559 is pacing at -1%+ a year. Those numbers if ETH remained PoW would stand at supply growth of 2.6% and $11.3B worth of ETH issued as mining rewards per year.

images of ETH burn/supply in PoS v. PoW from ultrasound.money

ETH is quickly approaching a reduction in supply of 100k ETH since the merge 215 days ago. At current prices, that’s $210M worth of potential sell pressure eliminated from circulation as a result of the PoS transition and onchain activity burning ETH. All of this is occurring in the face of crypto climbing out of the depths it was sent to from fraudulent collapses. Despite the “bear” market, NFT activity drastically reducing, and market participants fleeing, onchain activity and crypto’s broad fundamentals remain healthy. It’s easy to imagine the above images becoming increasingly wonky as market participants return and ETH L2s continue to increase their gas consumption.

Aiding ETH’s rally over the past week+ is BTC dominance respecting the 700+ days range high at around 49%. Two weeks ago I wrote, “as for the updated market conditions, BTC dominance is still approaching multi-year highs providing a semblance of hopium for an altcoin rally”. Thankfully, that has come to fruition over the past week and a half as BTC dominance has fallen 2%+ since the range highs providing room for ETH/BTC and alts to expand upwards.

BTC dominance from TradingView

Alts that stand out over the past week+ timeframe include ARB, SOL, RPL, BLUR, SYN, INJ, AVAX, DYDX, JOE, & SYN to name a few. As you can see, BTC dominance doesn’t spend much time deciding it’s direction in the middle of the range and those positioned for alt continuation are hoping to see BTC dominance continue to trickle downwards. In addition to a broad altcoin rally, risk is advancing further out the curve as PEPE, a memecoin launched on Friday, has exploded to a market cap of $40M+. While the signal is unclear to me, and as Ansem eloquently states, memecoins going parabolic usually marks the top or the beginning of unbridled degeneracy. Hopefully it’s the later of those possibilities.

Speaking of alts, Solana has been one of the top performing tokens recently on the back of their big week. Page One has been adamant of SOL’s potential for a strong recovery since the collapse of FTX and that belief was bolstered last week as Solana displayed their Saga mobile phone while Helium (HNT) completed its move to SOL and Render’s (RNDR) community voted to transition the protocol to SOL from MATIC citing the need for increased throughput that Solana can provide.

Two final notes to wrap up. First, the slow, but steady progression in the development of crypto’s coming mobile wave (where most users are) were advanced last week by the aforementioned launch of Solana’s Saga phone and Uniswap finally being approved by Apple to deploy their mobile wallet to the app store.

Secondly, the L2 wars continue as the growth in ETH gas consumed to settle transactions on L2s steadily increases. Arbitrum has remained dominant, but Optimism’s Bedrock upgrade is coming, zkSync’s TVL is up only (although heavily concentrated in a singular DEX as the airdrop is farmed), and Polygon’s zkEVM searches for scalability and product-market fit. Eventual launches from Scroll, Base, StarkNet, Aztec, Fuel, appchains and many other modular solutions complicate the picture but monitoring their developments and if Arbitrum can continue its stranglehold on users and TVL is important to understand how crypto develops in the coming quarters.

Rollup overview from DefiLlama

As a reminder, the P1 team consisting of myself, MoonOverlord, terv & boffin are always reachable at contact@pageone.gg. If you want to contact us in regards to sponsoring the newsletter, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-45chttps://pageone.gg/p/round-tripping-45cTue, 11 Apr 2023 22:30:21 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: white hot funding week, ETH withdrawals are here, BTRFLY details Dinero, Layer Zero’s $3B valuation, RBN’s Aevo is live, USDT dominance grows & we’re so back

BTC dominance 48.5% | ETH dominance 19% | DeFi TVL $52B |

Total Crypto Market Cap $1.28T | Stablecoin Supply $132B |

As far as general news goes, this week was rather quiet and we successfully avoided any further banking calamities, macro chaos, or regulatory action. The previous two Mondays have been the exception to the generally quiet week as they’ve endured the brunt of some much needed volatility.

Last Monday, peak crypto insanity ensued which began with Elon changing the Twitter logo to the Dogecoin Shiba Inu. DOGE obviously printed, rallying 30%+ and briefly breaking 0.10 before eventually selling off over the course of the next few days. A few hours later, a seemingly innocuous sha256 shitpost from Cobie (which he’s done several other times) threw the market into a panicked frenzy when the output was “solved”. The solved output read “Interpol Red Notice for CZ” and the once private conversation rumor tweeted in unsolvable form echoed from group chats to Twitter, eventually being reported on by respectable news outlets spreading brief fear throughout the crypto market.

Since that chaos, the Interpol rumors have been quashed, CZ of course responded with 4 and Elon has reverted Twitter’s logo back to the usual bird icon. Just another Monday afternoon in crypto innit. Both of those events slowly faded into the background as the BTC lead market slowly climbed higher.

Yesterday, the slow grind up turned into a rapid expansion upwards as BTC reclaimed 30k for the first time since June of 2022. Late last week, Glassnode noted that for the first time, the amount of open interest in BTC options contracts ($10.3B) has surpassed that held in futures contracts ($10B). Those who were expressing their views on BTC’s next move via call option buys were rewarded as short liquidations mounted. The market has since continued upward ahead of the big day tomorrow that includes new CPI data and the long awaited ETH Shapella upgrade.

liquidation data via coinglass

Speaking of Shapella, which is now apparently the proper terminology for the Shanghai + Capella upgrade that will enable staked ETH withdrawals, opinions on the upgrades effect to ETH’s price are as wide ranging as you’ll find.

In my view, the fear of a selloff is drastically overplayed and there are numerous reasons that Shapella results in more of a nonevent than anything. The Curve stETH/ETH pool remains healthy, stETH and other liquid ETH derivatives aren’t trading below their peg which would indicate people are scared of selling/liquidity, the event and unlock has been confirmed for weeks (with the general timeline known for months) allowing people to position ahead of it, Lido (33%+ of liquid staking marketshare) won’t have withdrawals enabled until mid-May and there currently aren’t any validators lining up to be first out of the exit queue.

Putting all of the above together amounts to no currently visible signs of people ecstatic to withdraw and sell their ETH. Still, I can’t shake the feeling of potentially being directly in the middle of the curve while the ends stare at me saying “ETH unlocked bad”. Despite that background feeling, I’m currently positioned for Shapella being a successful nonevent that provides tailwinds to the LSD sector along with the medium and long term outlook on the ETH/BTC ratio. Regardless, new CPI data tomorrow morning and ETH’s correlation to tradfi markets will have a greater short term impact than withdrawals finally being enabled.

Lastly, I’m once again obligated to note the current stablecoin environment as the market continues to condense into the offshore hands of Tether. USDT’s marketshare has breached 61%+ and reached levels not seen since April of 2021. Hopefully I’ll be back next week to talk about continuously improving CPI numbers and the lack of immediate sell pressure from Shapella, but I’ll be in NYC tomorrow morning through the weekend so the Page One complaint office is closed if I’m wrong.

stablecoin overview via DefiLlama

This edition of Round Tripping is sponsored by Kraken. Kraken, one of the most trusted names in crypto for over a decade, has built a new way to securely explore, collect, and trade NFTs across multiple blockchains.

With zero gas fees for all trades on the platform and built-in rarity rankings, Kraken lets you build your collection your way using cash or 200+ cryptocurrencies. See how Kraken is building a better trading experience at https://www.kraken.com/nft

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Sorare & the Growing Crypto x Sports Sector]]>https://pageone.gg/p/sorare-and-the-growing-crypto-x-sportshttps://pageone.gg/p/sorare-and-the-growing-crypto-x-sportsTue, 04 Apr 2023 02:44:17 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

Sports Highlights to Six Figure PFPs: The NFT Cycle 

As we slowly progress through 2023, many late entrants drawn to the insanity that was the first true NFT cycle may not realize what ignited the initial frenzy. What kicked off the lunacy that was the eventual NFT bull run of 2020-2021 was largely a result of the launch of NBA Top Shot. Top Shot was a booming market for those that were early as the bottled fever of no live sports and lockdowns during covid directed pent up money and attention to alternative assets. Top Shot captured the fever of this parabolic growth in time and money spent online in a massive way. 

While Top Shot’s mindshare and volume has decreased, the imagination that began with the launch of CryptoKitties in 2017 was rejuvenated and the excitement around ERC-721s and what NFTs could become was reimagined. TopShot drew in hundreds of thousands of users that eagerly waited in a queue, hopeful that the market gods would reward them with NBA highlights in a digital card form distributed through the pack drop of the day. 

Around this same time, NFTs began to slowly reach exit velocity as the number of market participants and money online, NFT projects launching, and infrastructure necessary to service the burgeoning market found a home with the excess money flow Top Shot inadvertently created.    

it’s impossible to describe what this moment in time was like

As everyone knows, crypto is extremely cyclical in nature and the broad NFT market is currently experiencing its largest drawdown to date. Despite this, one sector of NFTs continues to grow, onboard users to crypto rails, and highlight the ability of crypto to provide users with digitally native property rights. 

Ironically, the same sector that fueled TopShot’s success and the following NFT bull market is currently the healthiest sector of the NFT market in terms of MAU, total transactions, product market fit, and onboarding users to crypto rails. That sector is the Sports x Crypto intersection which remains relatively nascent in development, but is displaying rapid, global growth. 

Accessing the Landscape

Okay, but why should you care about TopShot’s history, Sorare, Stake, Chiliz, or anything tangentially related to the burgeoning gamified NFT sport sector? Because it continues to be one of the fastest growing sectors, operates as a trojan horse onboarding mechanism, has done hundreds of millions in secondary volume sales, and is tapping into a market that will continue expanding.

Substantiating this argument is Fisher8’s great, recent report “The State of Crypto and Sport”, where they highlight the sector as primed for explosive growth. “The global sports betting market is estimated to be valued at approximately $168B in 2021 with a CAGR of 10% from 2022 to 2029…according to the Fantasy Sports and Gaming Association, the number of fantasy sports players by year in the USA and Canada has nearly doubled over the last ten years, with about 63 million active players in 2022.”  

If the projected market growth wasn’t enough, we’re now witnessing digital collectibles that people actually utilize, without fear of damage, selling for more than their physical card counterparts.

With the table set, we’ll dive into the largest players within the Sports x Crypto sector that currently has 5-6 main players. While there are obvious differences between the companies listed below, it’s important to note that Sorare and Chiliz are head and shoulders above the others in the ability to truly own, transfer, and self-custody a user’s assets. 

  • DraftKings Reignmakers — At the intersection of collectibles and fantasy gaming where players can build a collection of officially licensed digital player cards and draft those cards in fantasy contests throughout the year. “Each player card represents an athlete and scores points based on the player’s statistical performance in a given event or game.” 

  • Chiliz (CHZ) — “Building the web3 infrastructure for sports and entertainment”. Creators and operators behind the fan token ecosystem that we saw explode leading up to the 2022 World Cup — offers holders of officially partnered soccer club tokens the ability to participate in fan-led decisions, take part in contests and accumulate reward points to redeem for team merchandise and experiences.

  • Panini — Highlights the fact that even one of the oldest manufacturers of physical cards (founded in 1961) embraces the digital collectible (NFT) era, although their ecosystem is built on enterprise blockchain solutions that is closed and siloed compared to other competitors.

  • Sorare — A fantasy sports game at heart, but instead of just picking player names from a list during a draft, you purchase digital trading cards that are NFTs on the Ethereum blockchain; Sorare has over 300+ partners including the Premier League, the NBA, the MLB & more while currently offering players soccer, basketball, and baseball leagues to compete for ETH and new card rewards.

  • Stake & Rollbit  — while different than the other platforms that generally represent sport IP as NFTs listed above, Rollbit & Stake allow users to bet on sports and gamble online with crypto playing a large role in spreading awareness of BTC, self-custody and crypto at large (think Drake broadcasting million dollar bets in BTC to his 134 million followers). Tapping into this global market netted Stake a cool $2.6B in revenue last year.

As you can see, the crypto and sports IP sector has continued to expand in recent years. At a high level, this specific crypto sector may not interest everyone, but it’s important because it has routinely been one of the largest funnels for people to not only enter the crypto ecosystem, but to understand the value and potential of self-custodial digital goods. As previously alluded to, this fact is evidenced by a significant portion of today’s NFT ecosystem participants finding crypto and NFTs through NBA Top Shot.

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In addition to that, the numbers of participants in each ecosystem and the collective market cap of the assets is worthy of exploration. For example, CHZ market cap is currently ~$600M, the collective fan token market cap, while down significantly from the highs, is still above $300M, Sorare’s secondary marketplace has done close to $600M of trade volume and a Unique 1/1 Giannis Antetokounmpo Sorare card was recently auctioned at record price of $187k.  

Highlighting the scale of the opportunity, Fisher’s report notes that the size of the fantasy gaming industry in the US and Canada has doubled over the past ten years. That growth has resulted in ~63M active fantasy sports players in the US and Canada, a number which is ~15% greater than those countries estimated total crypto holders/users (~55M).

To further emphasize the point, DraftKings, the largest web2 player in the space that essentially IPO’d off the strength of their daily fantasy sports platform, current market cap is $8.71 billion (their valuation is largely supported around their sportsbook’s projected growth).

That ~$8.7B market cap would place DraftKings as the 11th largest crypto token, sandwiched between MATIC and SOL. Clearly, the Sports x Crypto sector’s TAM is massive and the players involved have the ability to scale, within a relatively short time frame, to the equivalent of a top 10 token by market cap.

Onboarding Users

So we know the market is massive and will only grow in recent years, but how about adoption? The potential for an asset class to grow into a hypothetical addressable market is useless if there’s no early signal of demand from people that actually want to use those services. 

The below screenshot is from cryptoslam.io and shows the total cumulative sales volume of all NFT collections across all chains. What immediately stands out, is the size of the NFT market when broken down into buyers and sellers. While certainly a function of their high prices, CryptoPunks have topped out at 6k buyers. BAYC and MAYC have seen 13k and 27k buyers respectively. Doodles, one of the older, more accessible price level collections, has only seen ~15k buyers and sellers. 

In contrast, TopShot and Sorare exemplify that the number of potential market participants in the Sports x Crypto sector is infinitely greater than that of a 10k+ NFT collection.  

Actually, Sorare has around ~250k unique market participants as a number of them haven’t registered a transaction on Ethereum yet. Importantly, Sorare provides that optionality for users. Sorare, as a medium of expression for sports fans across the globe, provides exposure to crypto rails and subconsciously informs users about what a truly owned digital asset can enable.

If total market participants aren’t enough to convince you of the onboarding mechanism, the timing of a couple Sorare data points should. While the broad NFT market has been down only since BLUR’s token launch a month and a half ago, Sorare’s unique monthly active buyers reached a new all time high of over 50k in February 2023. 

In addition to that, on January 30th, Sorare announced a partnership, rumored to be valued around $150M, with the English Premier League. In response to the announcement, clear demand and product market fit were displayed as the day of the Premier League announcement resulted in the largest sign up day in Sorare’s history.

January 30th was an interesting time in crypto markets as the rally that started in the beginning of the year was in full swing, but overall crypto market participation was as low as it had been since before Covid. Cratering prices due to macroeconomic uncertainty, inflation, and FTX/LUNA’s fraudulent collapses painted a grim picture for the crypto market.

Despite that, the demand for Sorare’s product was clearly isolated from the broad crypto market. While Sorare’s product encompasses the ability to operate on crypto rails, the users that wanted to play and enter the ecosystem that Sorare provides showed apathy to FTX and the overall broad crypto market. Users across the globe simply wanted to play Premier League fantasy sports with their friends and support their diehard fandom while also having the ability to potentially win new card prizes, ETH, and irl experiences.  

What this signals to me is that the Sports x Crypto sector represents one of the best onboarding mechanisms, that is sticky through market drawdowns, as the popularity of fantasy sports coupled with crypto rails and the ability of users to truly own, manage, collect, and trade their digital assets has demonstrated clear product market fit. Additionally, as someone who in a past life played daily fantasy sports (DFS) for a living, I can assure you that the mechanisms and ownership that Sorare, DraftKings, and CHZ provide are orders of magnitude better than their web2 predecessors.

The same spillover effects initially created by NBA Top Shot will continue to onboard users to crypto as the Sports x Crypto sector continues to develop. In the not so distant future the fluidity with which this can be done will also be drastically increased by UX/UI improvements to L2s and account abstraction enabling users to create wallets with already existing accounts at Google, Facebook, Apple, Amazon, etc.

Sorare the Market Leader

Now that we’re aware of the market size, its potential for massive growth, and have highlighted its ability to onboard global participants to the crypto ecosystem, let’s take a deeper look into the market leader, Sorare. Around the same time Top Shot took off, a lesser known NFT fantasy sports platform was slowly and methodically building.

Founded in Paris in 2018, Sorare is the incumbent in this category as they have managed to obtain licenses from various football (soccer) leagues, the NBA, & the MLB players associations. Sorare takes ownership in sports to the next level as you own your players forever compared to traditional sports games such as Fifa Ultimate Team.

As Mason Nystrom said when Sorare announced their partnership with the NBA in September, “NFT fantasy cards and platforms like Sorare provide ownership to fantasy leagues which further financialized a hobby of millions of people around the world. As a whole, the crypto fantasy sports sector continues to be one of the most promising applications that can bring millions of non-crypto native users into web3.”

With adoption continuing to grow, what’s unique about Sorare is that not all users need to download Metamask or a crypto wallet. Sorare currently supports other top wallets such as Coinbase and enables mainstream users to on-ramp via Moonpay and Ramp with a credit card. Sorare users can then buy digital collectible cards directly with their credit cards and become aware of their ability to fully own, transfer, self-custody, and sell their cards.

Since their launch, Sorare has had ~250k paying users with ~180k of those global buyers figuring out how to download and install metamask and make a secondary marketplace transaction. Once again, we see the scale to which Sorare and other Sports x Crypto platforms can reach as the number of secondary market participants is orders of magnitude larger than the number of users who participate in the traditional NFT market.    

This edition of Page One is sponsored by Sorare. Sorare is the best fantasy sports platform and is powered by NFTs! Users own their cards (NFTs) forever while using them to create lineups and compete for new card rewards, crypto powered prizes & real life experiences. The second MLB season just started while Sorare also recently announced a four year partnership with the Premier League.

Myself, Moon, and numerous people in The One have been playing Sorare NBA since their launch in October so join the discord to come hangout where you’ll find dedicated Sorare NBA and Soccer channels. You can sign up for Sorare today and get 1 free limited card when you buy 5 cards from the primary market!

High level stats of Sorare and what the platform offers:

  • 670k+ monthly active users 

  • Monthly active buyers reached a new all time high last month of over 50k 

  • 3 million+ sign ups, growing exponentially with partnerships such as Premier League, NBA, and MLB along with recently announcing their English Premier League partnership

  • Between 50-100x the amount of daily buyers/sellers compared to all other NFTs

  • Sorare did $500M+ of revenue in 2022 and billions in secondary trading volume

  • One of the best onboarding funnels to crypto and wallet awareness to those across the world who have never used crypto rails before 

  • Bridges the physical with digital experience for sports fans and allows each user to be a general manager, coach, scout, speculator, collector & more

  • Soccer product launched in April of 2019 – US expansion with MLB launch in July of 2022, NBA in October of 2022 – incredibly well funded after raising a $680M series B with a valuation of $4.3B

Sorare’s Game Mechanics

  • Each player card and its associated scarcity is minted as an NFT

  • Primary market — cards are issued by Sorare through auctions, the speed at which is determined by rarity (i.e. the higher the scarcity the less often an auction occurs), which allows users to determine the fair market value

  • Secondary market — allows users to buy, sell and trade cards 

  • Sorare utilizes an ETH layer 2 to scale their product providing users with quick transactions and minimal fees 

  • Sustainability – the slow-drip auction & tiered card rewards format provides Sorare the ability to not over saturate the market 

  • Competitions – managers use the cards they’ve acquired to compete in game weeks that typically last 3-4 days with prizes available including ETH based rewards, new cards allowing managers to build better rosters and level up, and various other real life perks or products managers can win bridging the digital and physical experiences

image from cryptoslam.io showing lsat 30 days of NFT sales volume

As you can see from the above picture, Sorare’s number of transactions, buyers, and sellers are 10-100x more than any other collection. In addition, the average sale price is around $41, providing a much easier entry point for global market participants. 

To further highlight the power of Sorare and similar platforms, I’ll once again reference the excellent “The State of Crypto and Sport” report from the extremely crypto-native fisher8 capital team where they opine, “blockchain-based fantasy sports differ from traditional platforms due to the tradability and composability of cards, where benefits may come in the form of”:

  • Using cards as collateral for NFT-backed loans

  • Being able to utilize cards as characters in other games (eventual composability)

  • Ability to sell cards on platforms and marketplaces along with the ability to withdraw and transfer assets to self custodial wallets

As for the brands, companies and leagues that partner with crypto enabled products like Sorare, they benefit from:

  • Ability to improve fan engagement, appeal to gen Z, & penetrate new markets 

  • Crypto ownership heavily skewed to younger generations 

  • New revenue streams – often a percentage of secondary market sales 

  • Expanding consumer base & driving further brand engagement 

  • Establishing competitive advantages by gaining market share in emerging markets 

So, Where From Here?

As we can see from all available metrics, Sorare, and the Sports x Crypto intersection at large, continues to drastically expand their reach while onboarding everyday users to crypto for the first time. Importantly, the space remains in its earliest days as further advancements can come from sports teams, leagues, and ownership groups implementing benefits to die hard fans through soulbound tokens and potentially utilizing NFTs to issue tickets.  

Soulbound NFTs along with NFTs representing past attended games or events create the ability for teams and individuals to airdrop to holders of past events, deepen the out of season relationship for their most dedicated fans, and enable a direct medium to engage with loyal fans throughout the entire year. 

Additionally, NFTs as tickets eliminate the middleman (like the routinely hated Ticketmaster that just announced a NFT-gated sales pilot) creating more value for both fans and ticket issuers. The secondary market of ticket sales is projected to reach $9.7B in 2027 while currently, from 6529’s estimation, the total NFT market cap sits at a smol $16B. 

Over the next several years, I’m expecting the experimentation within the Sports x Crypto sector to drastically increase and continue to operate as one of crypto’s best onboarding funnels. No matter how the space develops in the coming years, we’re likely to see Sorare continue to pave the way for this exciting new sector. 

]]><![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-902https://pageone.gg/p/round-tripping-902Mon, 03 Apr 2023 04:53:20 GMTas always, thanks for reading, follow me here and reach out at contact@pageone.gg

tl;dr: unusually quiet week, ETH’s always burning, “passive income” & its future powers, BTC & ETH’s growing tailwinds, L2 gas consumption & crypto’s inevitability

BTC dominance 45% | ETH dominance 18% | DeFi TVL $49B |

Total Crypto Market Cap $1.2T | Stablecoin Supply $132B |

The Monday Binance FTC not withstanding, which was covered in last week’s Monday edition of RT, crypto was uniquely calm this week minus some bear-market-induced-greater-than-usual attention on gainzy and Arbi’s governance debacle. Generally speaking, and supported by the number of chats I’m in, people are bored with the current market and protecting capital all costs.

As for the updated market conditions, BTC dominance is still approaching multi-year highs providing a semblance of hopium for a small altcoin rally. But, if everyone is aware it would be “small” then does it even manifest at all? Similar to the ARB airdrop where everyone was playing the $1 close to $2 in a hours/days rotation, this hopeful alt rotation feels DOA as market participants continue to look to sell alts into any semblance of strength. I wrote on this idea last week saying,

“The market (mainly alts, rotations, and onchain) is suffering from a form of survivorship bias as the only market participants left have survived apocalyptic level events and are protecting capital at all costs by exiting rotating with small, if any, gains that bleeds the risk end of the spectrum dry.“

Whether a small altcoin rally occurs or not is inconsequential to the overall health of crypto at large, as the often memed “fundamentals” continue to improve. Since the market has been void of major storylines, and thankfully remains relatively unchanged for the week, we’ll check in on some broad data that specifically applies to ETH.

First, ETH’s often out of mind burn has continued to work in the background despite the macro induced noise. For the extreme risk averse, simply staking ETH (specifically after a successful Shapella upgrade April 12th) and collecting yield into the eventual next cycle seems like one of the safest bets since DCAing BTC at the advent of crypto.

Supporting that thought process is the projected and currently active yield LSDs generate combined with the slowly, but gradually, diminishing ETH supply. As the below picture shows, ETH’s projected issuance has quietly usurped BTC’s as the effects of the merge and EIP-1559 continue to build in the background of current events that momentarily steal the long-term focus.

image from ultrasound.money

While it may be hard to parse from that image, ETH’s supply peaked around 120.6M ETH shortly after the merge, a total that has since reduced to 120.46M. Since the merge, ETH’s supply has reduced by ~75k+ ETH, compared to an increase of 2.2k ETH issued if it remained PoW, resulting in a selling pressure reduction of $135M over the course of the past 200 days.

ETH’s supply changes since the merge & if it would’ve remained PoW consensus

$135M divided by the 200 days since the merge results in a relatively insignificant reduction of ~$675k in sell pressure per day but, combined with other growing trends, points to an extremely healthy picture for ETH’s future.

A large part of that healthy future is the ongoing demand of ETH block space from L2s. As we’re aware, the L2 ecosystem is currently booming as a result of recent launches including the ARB token and zkEVMs from Polygon, zkSync, and Immutable. In addition, OP continues to have protocols/teams building on their stack and future token/L2 launches from Scroll, Starkware, and Aztec (along with many others including modular solutions that settle to ETH) will only increase the demand for ETH L1 blockspace that further increases the aforementioned burn.

We see this clear as day from @mhonkasalo’s L2 monthly gas spent dune dashboard as the growing number of L2s consumed 2x the level of ETH L1 gas in March compared to any previous month. As previously stated, the below percentage will only increase as there remains a slew of L2s that have yet to launch (don't miss their potential airdrops anon). As with the ARB airdrop, market participants will gladly speculate on the various L2 valuations, but the ultimate underlying benefit, as long as they continue to consume L1 gas, remains with ETH and it’s slowly but constantly diminishing supply.

image from mhonkasalo’s L2 gas spent dashboard

While this has edition of RT has mainly focused on ETH, the king, BTC, is also set up for strong tailwinds in the form of the greatest mainstream ideological presence since it’s inception in ‘08, Ordinals (BTC NFTs providing fees to the network) reaching a new ATH in inscriptions, BTC miners having their most profitable month since May of ‘22, BTC hash rate continuing to make new ATHs, and the cyclical-starting halving approaching closer by the day.

So, whether a small alt season occurs or not seems inconsequential in the face of sticky tailwinds that are ready to propel the asset class forward despite what macro podcast doomers say. Of course, there will likely be correlation (although the severity of which has decreased in recent months) driven moves downward that are macro induced, but the eventual future of crypto and tokenized assets has rarely looked brighter (which I expanded on in the March Recap). Onwards and upwards we go.

As a reminder, the P1 team consisting of myself, MoonOverlord, terv & boffin are always reachable at contact@pageone.gg. If you want to contact us in regards to sponsoring the newsletter, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

]]><![CDATA[Round Tripping]]>https://pageone.gg/p/round-tripping-765https://pageone.gg/p/round-tripping-765Mon, 27 Mar 2023 21:31:09 GMTas always, thanks for reading, follow me here & reach out at contact@pageone.gg

tl;dr: everyone gets sued & everyone gets a zkEVM, USDT transferable in Telegram, alts keep bleeding, ARB’s PA & market participants left survived apocalyptic events

BTC dominance 45% | ETH dominance 17.5% | DeFi TVL $49B |

Total Crypto Market Cap $1.17T | Stablecoin Supply $132B |

Insanity is the new normal and this week was no different. As far as majors price action goes, things remain relatively unchanged from a week ago as BTC sits at 27k and ETH at 1.7k. There was some vol to be enjoyed around the FED’s announcement of a 25 bps hike on Wednesday, resulting in BTC and ETH touching just shy of 29k and 1.9k before they ultimately settled back below pre-hike prices (shocking).

The U.S. government’s attacks on crypto also unfortunately remained unchanged as the SEC continued its regulatory onslaught and the CFTC couldn’t let them have all the fun. As the dust settles on Monday afternoon, the regulatory action that took place over the past ~week includes:

On the bright side, Do Kwon was arrested and Coinbase is prepared to fight the SEC in court. Coinbase’s response to the SEC’s overreach came in a blog post titled, “We asked the SEC for reasonable crypto rules for Americans. We got legal threats instead.” and Brian Armstrong’s response on Twitter.

Two weeks ago in the March 13th edition of Round Tripping, I wrote, “thankfully, the legal system is disagreeing with the SEC’s recent overreach as a judge approved Voyager’s sale to Binance US, the SEC suffered the aforementioned setback in its GBTC case, & the house financial committee held a hearing questioning the Biden admin’s overreach in crypto regulation and Operation Chokepoint 2.0.”

We’re once again reliant on the legal system to provide boundaries on the SEC’s decision to regulate through enforcement instead of providing regulatory clarity. Fortunately, Coinbase will have their day in court to defend themselves, was rigorously evaluated by the SEC to IPO two years ago, and is as prepared, both legally and financially, as any company throughout the crypto space.

On the other hand, Binance’s situation is less clear as the allegations are thorough and further enforcement actions are likely. While the ideal scenario is an outcome that plays out similar to the enforcement actions against Bitmex that gave investors clearer guidelines and exchange confidence/reliability resulting in the entire asset class appreciating multiples higher, the magnitude of Binance’s size creates massive short term uncertainty. In the meantime, I’ll be monitoring Binance’s flows and volume which have already begun to take a hit.

Binance outflows from coinglass

Outside of the FED rate hike and the ongoing regulatory onslaught, L2s have been the focus of crypto markets. In the last week alone, we’ve seen:

While the effects of the zkEVM launches are felt on longer term timeframes, Arbitrum’s token launch provided some immediate insight. First, the market is becoming smarter as *everyone* was playing the buy ARB around $1, sell around $2 strategy which obviously didn’t occur. Second, the market (mainly alts, rotations, and on-chain) is suffering from a form of survivorship bias as the only market participants left have survived apocalyptic level events and are protecting capital at all costs by exiting rotations with small, if any, gains that bleeds the risk end of the spectrum dry.

Finally, the clouds of macro uncertainty and regulatory enforcement certainly impacted ARB’s price action to date, but the implications of the factors above combined with the most hyped token launch in years only gaining ~40% off the airdrop dumping lows doesn’t paint a great picture for the market’s willingness to entertain risk.

Arbitrum overview from DefiLlama

Moving forward, it’s difficult to envision what will propel the market short-term higher and alts look likely to continue bleeding. Hopefully I’m proven wrong and this week will result in significantly less regulatory action, banking calamities, and general chaos but it unfortunately doesn’t seem likely. Take care, frens.

As a reminder, the P1 team consisting of myself, MoonOverlord, terv & boffin are always reachable at contact@pageone.gg. If you want to contact us in regards to sponsoring the newsletter, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.

funding:

news:

Join 11k+ others in supporting Page One.

tokens & protocols:

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Not financial or tax advice. This newsletter is strictly educational, is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

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