Monday Alpha #37

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TL;DR: Memes Weren’t Wealth Creation, They Were Wealth Destruction

BTC ATM IV

• 1W: 46.66%

• 1M: 49.54%

• 3M: 54.45%

• 6M: 56.96%

• Index Price: $97,430

• DVOL: 52.92

ETH ATM IV

• 1W: 68.95%

• 1M: 66.81%

• 3M: 67.19%

• 6M: 67.74%

• Index Price: $2,653

• DVOL: 69.91

Note: Check the ETH front-end. Lots of US-specific data coming out this week, keep your eyes open

Marty's Thoughts / Recap

When you put the price like this instead of candles, BTC has been holding its group for the past 3 months. ETH on the other hand is just slipping. Institutional ETH ETF flows haven't caught up at all to BTC. I previously wrote that the final thing to save ETH might be adding native staking to the ETF, something that should attract more and more institutional clients.

Current all time ETF inflows:

• BTC 40.77B

• ETH 3.19B.

I feel like I have been a negative nancy lately, slightly negative, but I hope that at least one person took the advice and re-evaluated their portfolio, and didn't get rekt over the last few months. I wanted to start off with some more positivity and as my editor in chief puts it… Optimistic for the long run Marty.

Let’s start with some things I am looking forward to.

1. More institutional product offerings in crypto. Let’s name a few: ETH ETF staking, crypto index products, structured products. More product offerings are a great way to introduce more people to crypto, either through DeFi, or their brokerage, etc. This overall will increase liquidity and volumes across the board.

2. Clear cut global acceptance of crypto, ease of access of banking, taxes, and a stablecoin network to make payments. This would take a lot of coordinated effort from global gov agencies to make happen, but the future is headed towards instant global settlement, it is just a matter of time. A quick example will be if SWIFT just made their global settlement instant instead of multiple days for international transfers, this will grow trade and benefit all globally.

3. I hope we see a stop to all of these scam memecoins and rugpulls. It is detrimental to our industry, and doesn't help anything. Memes haven't been wealth creation, they have been wealth destruction.

4. I pray we see more innovation of this space, I am not sure where it leads or if AI is going to be on Solana (a joke, Degods Frank said this)… But it overall leads back to global instant settlement of various products. Money transfers, deed transfers, contract transfers, etc.

5. Ok I do have one comment, maybe negative… Why would they build on ETH? or SOL? or other chains… Why wouldn't most of this be on private blockchains or public ones they control? If anyone wants to come on the Marty show and talk it up, we would love to have you on.

Crypto is here to stay, but ultimately, it’s just another asset class. BTC is often compared to gold, it’s finite supply suggests it will continue to appreciate against fiat over time. However, the fate of other cryptocurrencies remains uncertain. Competition increases, fees decrease, and technology evolves. This moment feels similar to the early 2000s fiber optic boom in the U.S. and world, where excessive infrastructure was laid far ahead of demand.

The industry crashed, only to recover years later. Classic bubble dynamics, crypto feels like this sometimes... We are building the ground layer and expanding with no real demand, demand will follow at a later date. Looking forward, and being positive… This is a total shift in the global views of crypto, we are still early, but it’s now about the long term growth over the next 10-15 years, not the next 15 to 30 seconds on shitters.

We are at a regime change, we are early, only a few will survive.

From top to bottom, 2-week returns in large caps, mid caps, and small caps.

I refuse to bullieve that anyone on CT made any money within the last 2 weeks. Sell off season, REKT season, pack it up season… Yikes. The last 2 or 3 newsletters have been mostly negative… mostly about preservation season, or chop city… We are seeing exactly this. Go pull up a chart and see the pump you have to get to be back at levels just seen 2-4 weeks ago. I’m not a memer, I just simply don't understand them, so I stay away. Which ones will survive? I took a bet against CT's Mckenna for if Fartcoin, and HYPE are higher/lower in October. Being the betting man that I am, I took the lower. Brotha, both of these coins didn't even exist 6 months ago, crypto folk mindshare is worse than TikTok brain, there is a new “shiny toy” to trade everyday. Best of luck to all players.

Quick Chart Dump Below:

Funding is overall reset, besides earlier in January, we saw Ondo have a huge unlock and things get very wonky.

All baskets negative on the month, worst loser MEMES, best loser? L1s.

Europoors are still in control of price returns the last month. US burgers are slipping up a little losing some of their steam since the beginning of January.

Let’s zoom for a minute and cover basis. The "recent” basis high was March 2024, right as BTC ETFs were getting approved and the hype was building. Since then, we are fading hard. Any pick up in basis is just getting sold back down. Institutions are here, you wanted them to come, this is what we get. BTC basis 7%, ETH sitting around the same 6%ish. This isn't that great, nor is it getting better. Basis squashed.

The past 3 weekends have been detrimental to our industry. Crypto is getting fleeced on weekends to say the least. The past 3 weekends has been tariff scares.

Charts from Velo Data: https://velodata.app/

Twitter: https://twitter.com/VeloData?s=20

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Interesting week of trades. Again, seems to be all the same type and sizing leading us to believe it was from the same entity. All near dated, besides April one upside via mostly call spreads. Call spreads provide cheaper upside than outright calls, with a cap on total profit. The April one is a little high, with the top end over 120k, they need price over 120k at expiry to cash big. Let’s keep an eye on these and how they did over the coming weeks.

Wrap-up

The crypto space as a whole is still small, we are generally still early, maybe in the middle of it overall. The goal for crypto now is to scale and get more mindshare. Crypto overall is just another asset class, some will out perform, and most will go to 0. Looking at where we are now, similar to the early 2000s, only a few tech companies actually survived until now. The ones that survived got majority of the mindshare, regulatory capture, and monetary capture. The coins that survive the next 5-10 years will be worth significantly more than they are worth today, but others have to lose for those to win, pick and chose wisely.

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Recap:

• Weekends rinsing us

• We are still early to the regime change, play it wisely

• Basis is squashed

• Largest liquidation since FTX

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