🤡 6 Thoughts On The State of Crypto

Inside the mind of our favorite crypto storyteller, Redphonecrypto

May 22nd, 2021 | Sign Up

Happy Saturday. We’re excited to bring you this Saturday’s edition with a very special guest post from our friend redphonecrypto.

If the past week has you shooketh, just keep telling yourself: “Crypto volatility separates the believers from the tourists”.

Max Pain

🩸  Bitcoin: $37,252

🩸  Ethereum: $2,430

🩸  Dogecoin: $0.3582

🩸 Aave: $373.66

🩸  SushiSwap: $12.77

Prices as of 11 PM EST 5/21, data from FTX

Drum roll please… 🥁

A 🤡’s thoughts on the current state of affairs…

1️⃣ Shakeout

For the past few weeks/months, doggie coins and dead 2017 projects mooned. Meanwhile, a lot of DeFi blue chips traded sideways. Leverage and speculation was out of control, and a sell-off felt like a holy and necessary cleansing. I’d like to see dip buyers focus more on defi blue chips over the months to come, and I expect they will. The true cowboys who were buying anything anyone mentioned on TikTok probably got liquidated. They’ll need time to refill their warchests w dumb money.

2️⃣ Sentiment

The anti-BTC narrative makes me grin. Sure, I think $ETH could flippen $BTC one day… in fact, it feels inevitable to me. But things that feel inevitable often take much longer than expected. 

We’re already seeing the earliest signs of inflation in lumber and building supplies. But we probably ain’t seen nothing yet. Federal debt to GDP in the U.S. hasn’t been this high since WWII. Put another way: it’s been 75 years since we’ve been where we’re at right now.

You can’t put that fact under a rug. The Federal debt is a generational-type monetary event. It’s epochal. It could overwhelm us. It could send people fleeing into assets that already have parabolic-looking charts. No one will give a shit about decentralized smart contracts if they’re seeing their purchasing power evaporate. They’ll care about protecting their purchasing power by any means possible.

3️⃣ Regulation

The wild card, of course, is regulation. If inflation truly gets out of hand, regulators will be forced to implement policies that would be unthinkable during normal economic times. Demonizing crypto is easy. It’s convenient, and it’s going to happen. How bad it gets will depend on how bad inflation gets. If inflation hits double-digits, my advice to you would be to keep your crypto in a wallet you control… don’t keep it on exchanges. If shit truly hits the fan, regulators could shut down centralized exchanges. Unlikely, perhaps, but not impossible.

4️⃣ Gold

A counterpoint here: Bitcoin’s recent volatility has probably scared off some of the institutional money managers. That’s why one of my favorite plays atm is gold. It’s boring as f to most crypto investors, yes, but you can make it fun. Buy some synthetic shares of the iShares Gold Trust (mIAU) on Terra and then pool/stake it on Mirror for yields north of 115%:  

5️⃣ Opportunities

We’re finally approaching the turning point in the L1 wars. Expect Polkadot, Kusama and Terra tokens to start stealing capital out of the Binance Smart Chain ecosystem. Investors will flock to new token offerings and yield farming opportunities on these chains. And I expect some crazy valuations. We’ll also see Cosmos, Thorchain and other bridging mechanisms speed up the flow of capital across blockchains. Shit’s about to get real.

6️⃣ HODL

If the recent market selloff taught me anything, it’s that you’ve got to do whatever it takes to stay in the game. The real tragedy would be if you knew crypto was going to change the world and you went through all the effort to get invested but somehow you lost your money along the way.

Investing in crypto shouldn’t be hard. We’re witnessing true adoption, and that means you should be able to buy solid projects and just forget about them for a while. Don’t overwatch your portfolio. Don’t take on leverage. Don’t chase coins with shitty fundamentals.

Facebook will launch Diem soon. Banks are integrating crypto support, and I imagine we’ll soon see a bitcoin ETF approved in the U.S. 

The giant crypto machine is in motion. It is massive and knows no kings. It cannot be shot at, imprisoned or stopped. It can only be slowed. We who know will the ride the machine to the golden kingdom. I hope to see you there,

-Red


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