Rainbows, S2F, BitBoy? What Next?

Oct 12

[October 2023, London]

(Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)

Welcome!

Firstly, before I begin. My own personal disclaimer: My VP, Levi and I are obsessed with quoting the film, American Psycho. There is an undertone in this "article" in that style - thus, I'm going to apologise in advance. I also write quite erratically at times as I like to try and convey my opinions in as readable and engaging language as possible. If I write more of these in the future, I might flip flop from candid to more easing going such as this one. So strap yourself in.

As we enter Q4 and approach the end of the "recovery" year post-bear market shenanigans of 2022 in the crypto market, I find myself reflecting on the past two-to-three years of how the market has developed and the events that have foregone us.

How trends have come and gone. How influencers have blown up famous and now been recalled into the darkness. How crypto went from the hottest ticket in town to a laughing stock. (again and again and again and again -- every four years)

I could sit here and list an A-Z of the crisis events we've seen, not just in the crypto sphere but also from the wider world out there. However, in crypto, the signs were there - let's explore three obvious ones aside from the likes of Luna and FTX.

Obvious Incoming Crisis Sign #1

Once upon a time, there was a literal rainbow chart was being taken seriously. Feel free to admire its beauty. You're literally looking at crypto heritage.

This is an actual thing, that actual people actually used as actual investment research and actual decision making processes. Actually.

It. Is. A. Rainbow. My. Friends.

I don't want to hear this "regression is applicable here" madness. The "Basically a Fire Sale" coloured line was added in like Oct-Nov 2022 for crying out loud.

Obvious Incoming Crisis Sign #2 - "StOcK tO fLoW"

This is alongside a stock-to-flow model where the author hadn't completed Economics 101: no understanding of statistical modelling and no incorporation of demand - yeah, seriously...you can't make this stuff up. You had to be there, man!!

But guess what, that doesn't sell, does it? No one wants to hear the hard truth especially when the good times are rolling. But the market doesn't owe you anything and thus served up the second harshest bear market in history from a price action perspective and arguably the harshest from an infrastructure one i.e., FTX.

Hopefully it follows the red line again, BTC to the moon 🚀 (I hope the sarcasm was picked up here)

Obvious Incoming Crisis Sign #3 - The Increase of Insufferable Personalities in Crypto

From SBF to Do Kwon. From BitBoy to Kim K. From Richard Heart to Floyd "Money" Mayweather.

We've had it all, utterly spoilt for choice from clowns and criminals.

The Cointelegraph Top 100 People has become infamous for its 2021 edition. The link is available in the sources at the end. Generally, these types of personalities follow the hot topic which is usually a sign of an incoming top. It goes to show, following the crowd is never the recipe for success. Most of the time its the polar opposite.

(There are some howlers on the list by the way. No dis to Cointelegraph btw, it's not their job to discover fraudulent activity and protect investors -- *wink, wink SEC*)

Now, more importantly for 2024 and beyond - or as I'll hopefully call it in 2026, (as I'm sure you reading this will too) the good ol' days.

I'm never going to put a price on where I or my fund, Athena believe the market top may or may not be for Bitcoin, it's a silly exercise to partake in. We all believe in the long-term outlook of an exponential price increase from here in 2023. If we're going to see actual size enter the market, the market price from today's dollar value becomes a drop in the ocean.

I'll just list some things that might be helpful to see actually sustainable, institutional capital flows into crypto. I'm sure if I do write more of these in the future, I'll divulge in further detail on all of these points below. But hopefully you agree with some of the suggestions/observations.

An entire market cap more than 50% the size of Apple. (AAPL)
A reliable, trusted clearing system.
Increased capital efficiency tools.
Increased regulatory guidance and frameworks.
Being able to post collateral in assets other than fiat and crypto-assets i.e., UST bills.
Investment banks offering some form of prime or concierge-style service similar to traditional hedge fund services for expanding crypto funds.
Increase in the amount of renewable energy mix used to mine Bitcoin.
A basket of spot Bitcoin ETFs.

Those basics would be a start. I get that some of the things there are going to come with time as the space develops, especially with 4, 5 and 6.

But, we can dream, can't we? (for now)

Thanks - I'll see myself out.

AB.

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