All Been Crypto — Week 15 March 2024

Of course we are up again on the week briefly touched 3tr market cap with BTC +8% and ETH lagging +1.5% as ETFs now seem less likely near term. The show was stolen by MEME coins though again WIF +90%, Floki +100% and NEAR +58% on spinning the new AI narrative while RUNE +50% on reaching ATM volumes on the DEX. On the flipside ironically we have OP and ARB down 6–10% despite Blobs going live via Dencun. That’s also our biggest story this week the new ETH hard fork. Looking at market structure and why BTC dominance is continuing to push higher. We have CME OI has reaching all time high with 150k BTC as funding rate continues to be extremely elevated. Microstrategy raising another 500mm via convertible bonds, premium to NAV increasing again apparently leading to short squeeze. They are getting very close to owning 1% of all BTC supply outstanding now. Coinbase also lining up to offer 1bn of CBs. And finally a Judge ruled (what we all knew) that Craig Wright is not Satoshi and he didn’t author the white paper. Enjoy reading and the ride!

Bat Tai Chi — btc21@mail.com

HEADLINES:

Meme Mania in full swing

Last week I shared about Travis Kling’s Financial Nihilism and of course we see that continue to play out. We are deep into the bull market, this morning my twitter feed was full with post about which coin WIF flipped. Memes are back, they are strong and they are also going to be a source of instability and destruction (yes I said that). I’m a firm believer that cycles don’t repeat byt they rhyme and this just looks almost exactly like the 2017 ICO playbook…which went on for a couple of months so no need to fade the rally yet but just like with PFP NFTs that were revolutionary last cycle and are now dumped for shiny new things there will be bag holders with memes too and a lot or RUGS. But newbies are coming in to buy a few of these funny looking icons and hoping to get rich quickly. It’s a collective gable on greate fools and right now we don’t have much normies in so the scope is still big. Some good data here from Kaiko. I predict however that Meme coins will blow up (maybe 99% again like the ICOs) and this will ultimately lead to them coming on the agenda of regulators. Once poor retail lost a bunch of their savings to some shady super coder rug pull this will get attention. Just like we had the headlines of Korean pensioners lose their live savings during the ICO mania and then Korea state stepped in and brought some of the toughest crypto regulation out (years later though). Who’s benefiting from this, well the chains of course cos it’s activity and SOL has been the clear winner here. Messari has some good stats

Dencun live — the Blobs are here

The big hardfork is there, went through successfully and out of all the EIPs that got included 4844 is by far the most significant. It introduces blob space, in simple terms makes data on ETH mainnet chearper for roll ups i.e. L2s. You’ll see a lot about how transaction costs are now down multiple x for Ethereum L2s and how this can compete with alt L1s now in terms of cost. The thinking is that lower cost will drive more usage and reposition Ethereum as the dominant settlement layer. Of course cost of execution is one thing but speed is another and here parallel execution is something that already works on alt L1s like SOL, APT, SUI ect but still in the infancy for Ethereum. Dencun paves the way for further scaling in future and is an answer to alternative DA available layers like Celestia that offer cheaper blockspace for data availability but of course not the same decentralization and economic securities as ETH mainent. Biggest beneficiaries form Dencun and Blobs are L2s on Ethereum that are now able to compete on gas fees with non Ethereum L1s.

Hong Kong Launches Stablecoin Sandbox

HKMA the regulator has announced a Sandbox launch post it’s recent consultation. Why this is interesting because HK been one of the regulators that have positioned themselves as ‘friendly’ towards crypto and stablecoins being one of the killer use cases. FDUSD (the defacto new BUSD) is issued by First Digital a HK trust and so obviously eyes are on regulation. The city has a fair shot at becoming a hub for the new ara of Web3 EuroDollars. “The sandbox arrangement serves as an effective channel for the HKMA and the industry to exchange views on the proposed regulatory regime, and will facilitate the formulation of fit-for-purpose and risk-based regulatory requirements, which is key to promoting the sustainable and responsible development of the stablecoin issuance business,” Eddie Yue, chief executive of the HKMA, said in the statement. sandbox applicants should come up with reasonable business plans and that their proposed operations under the sandbox arrangement will be conducted within a limited scope and in a risk-controllable manner. Question is whether 3bn market cap would still count? They have said already that they’ll try with a HKD stablecoin but given the soft peg that’s really a dollar based one anyways.

QUOTES:

When can you buy Tesla with Dogecoin? At some point, I think we should enable that.

Elon Musk

Now for something surprising: crypto voters leaned to Biden in 2020 but now lean Trump. Among crypto owners, 43% recall voting for Biden in 2020 and 39% recall voting for Trump. Now crypto owners support Trump 48–39. In a close election, this swing could be decisive.

Justin Slaughter — Policy Director at Paradigm

I will make certain declarations which I am satisfied are useful and are necessary to do justice between the parties. First, that Dr Wright is not the author of the Bitcoin White Paper. Second, Dr Wright is not the person who adopted or operated under the pseudonym Satoshi Nakamoto in the period 2008 to 2011. Third, Dr Wright is not the person who created the Bitcoin System. And, fourth, he is not the author of the initial versions of the Bitcoin software. Any further relief will be dealt with in my written judgment. I will extend time for filing any appellant’s notice until 21 days after the form of order hearing, which will be appointed following the hand down of my written judgment and I ask the parties to seek to agree an order giving effect to what I have just stated.

Judge Mellor in COPA vs Craig Wight case ruling