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- The Crypto Thesis 2023 šµš» - DAY 4
The Crypto Thesis 2023 šµš» - DAY 4
Lets find š out the trends of 2023
GM Guys and Gals,
As we are on the trail on covering the awesome crypto thesis - Here we are with the 4th Day where we'll cover Top 3 Crypto Currency Trends š
1. Bitcoin is āOutside Moneyā š°
Bitcoiners often get ridiculed for āmoving the goal postsā on bitcoin as an inflation hedge, but most of us have always used inflation as shorthand for ālong-term monetary debasementā (QE is permanent), not point in time hedges on changes to Fed rate policy (target interest rates are temporary and subject to rapid adjustments).
Bitcoin is big now, and its continued ascendance will be slow, but powerful.
Weāre in a foot race to see whether more emerging market central bankers begin to bid on BTC or the big reserve currency nations move to kill the invention.
Pro-crypto reservists are starting to pop up in unlikely places like the Harvard economics department, so weāre getting closer to the end game than ever before, despite this yearās market stress.
Bitcoin maximalists are often rightly derided for their tone and toxicity, but itās telling that Vitalikās tongue-in-cheek April Fools post on maximalism does steelman the thesis for Bitcoin.
2. Memes & Ripples š
Out of the top 25 crypto assets by market cap, the top three performers in Q4 have been Dogecoin, Litecoin, and Rippleās XRP.
If you had told me this when I started writing ~200 hours ago, I would have done a tweet thread instead and called it a day.
3. Bitcoin Yield āļø
Thereās no such thing as a free lunch. One of the knocks on bitcoin over the past few years has been that it doesnāt generate yield or ādo anything.ā That is a feature, not a bug of a store of value that is difficult to confiscate (or borrow).
Bitcoin canāt be staked, and recent history has shown why you donāt really want to lend it out to centralized counterparties. But what if there was a way to generate yield on bitcoin natively without incurring counterparty risk?
Thatās something Sami wrote up for us earlier this year, and Iām fascinated by the concept, particularly for countries and companies that are otherwise sitting on large stashes of BTC.
It all boils down to a bet on the Lightning Network, which I have grown tired of betting on as it has only ever disappointed me. Current lightning capacity is about $90 million. Wrapped Bitcoin on Ethereum (WBTC), which is itself just 10% of the TVL in DeFi applications, is 40x larger.
In a rising rate environment, Iām not sure that many corporate treasurers are willing to load up on balance sheet bitcoin.
If anything, weāre more likely to see supply-side shocks from miners covering costs and debt service payments, tax loss harvesting, and (in very bearish scenarios) potential default driven sales from Microstrategy. Short of a significant Fed pivot on interest rate policy, the next demand-side shock for bitcoin will likely happen at the global government level, not big corporations.
That's it for the day, Web3Shala š
To the moon šLFG š„