Finally, we’ve been waiting for this moment: the SEC has approved BTC ETFs.
Millions of people will have easier access to BTC through 401ks, IRAs, and similar accounts. This will be billions of capital going into Crypto over the next decade.
We went through Terra / FTX collapsing in the past 1.5 years. Salute to you for sticking it through – we’ve earned this.
Pause the Korean dramas and anime. We have work to do.
Here’s what we got today:
- BTC Spot ETFs are live. The floodgate is now open for investors.
- The Narrative Trading Playbook. A guide for 2024-25 bull market.
- The Manta Moment. Track the exponential rise of a new rollup.
- Around the Web. Synthetix expanded to Base, Arbitrum voting on the next incentive program, Fox Corporation on Polygon PoS, and more.
Here’s your Edge 🗡️!
ETFs are live: BTC Floodgates are Open!
A new chapter of crypto began yesterday.
SEC has approved 11 BTC Spot ETFs. And they’re now live on markets. The door for institutional money is now wide open.
According to yesterday’s filing, the SEC has approved proposals by BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Valkyrie, Invesco, WisdomTree, Franklin Templeton, Hashdex, as well as one by Ark Invest and 21Shares.
Why is this a big deal? Institutions find it difficult to manage crypto directly. They don’t have the right systems or regulatory environment for it. BTC Spot ETFs make it easier for institutions to buy BTC. They can just buy the ETF on the stock exchange. Bitwise’s Matt Hougan expects ~$55 billion in net flows in its first five years on the market.
According to a survey by Bitwise and VettaFi, 88% of financial advisors interested in buying BTC were waiting for the ETF to launch.
ETFs will make it easier for people to shift 401K and retirement allocations to crypto. Also, some people want BTC exposure, but they don’t want to deal with the risks of self-custody.
The competition between different ETF issuers is intense. The issuers were in a heavy fee war just before the ETFS were approved.
BlackRock initially proposed fees of 0.30% and then reduced them to 0.25%. Many other issuers also reduced their fees.
Fee war is bullish for BTC adoption. Since the fees are very low, these issuers must sell a large quantity of them to be profitable. So, we can expect a heavy marketing war between ETF issuers. In the process, BTC and crypto will get a facelift.
Market’s reaction to the news was lukewarm. BTC just traded sideways for a bit. $ETH reacted a bit more positively, it gained ~10% after the news.
Many short-term price movements are noise unless you are a day trader. In the long term, the price of BTC will be influenced by how much money these ETFs will attract.
What’s Next? Now that BTC ETFS are approved, this should pave the way for ETH ETF approvals. And then other tokens in the future.
The Bull Market Playbook
The bull market’s here.
Soon, every dork will be shilling you “100x” strategies or how to be a “millionaire” with the bull run. The bull run has plenty of opportunity, but you need to stay level-headed.
So I’ve written a guide on how I will play the bull market.
Here’s MY approach.
1. Long Term investments
3. Focus on 3 Narratives
Note: You might go through multiple narratives throughout the cycle to maximize profits.
% allocation depends on your risk tolerance & goals
Long-term investments are the tokens that you’ll hold for a multi-year cycle. I believe that ETH will be worth $10k each within the decade.
My goal is to hold as much ETH as possible. Sure I could DCA every month and call it a day, but right now the market’s inefficient.
I can gain outsized returns because I have an edge, having spend 12+ hrs a day in Crypto for the past several years (edge or mental disease…not sure)
My goal is to concentrate my focus into a few narratives.
The crypto space has grown too large to reasonably keep up with everything happening. There’s a limit to the number of Discords/TG you can be active in. Focus on two to three narratives at a time to get an edge.
Here are some examples:
- Alt L1s/L2s
Narratives are the trending sectors. Getting in on them early is the key to high returns.
How do you pick which narratives to focus on? I’d look for narratives at the intersection of three variables: your thesis, your strengths, and the right timing.
Once you select a narrative, pick 1 alpha and 1 beta play.
Alpha plays are the leading protocol of a narrative. $GMX for the Perps narrative, $LDO for LSTs, and so on. Alpha plays are safer bets.
- Attention flows toward the market leader – especially in retail.
- Betting on the alpha is safer compared to getting rugged by higher-risk betas.
- It’s simpler to bet on the leader than to determine which of the 15+ forks to pick.
Beta plays are higher risk, but they also offer higher rewards. Ideally, these shouldn’t be just a smaller version of the alpha play. Instead, they should have better technology or a different value proposition or be on a different chain, etc.
Ok I’m gonna stop here because emails have a size limitation. Check out the thread to see the complete picture, including a full portfolio.
(and help your buddy out with a like or retweet if you’re on Twitter 😊 )
The Manta Moment: Rise of a New Chain?
The above chart tracks the TVL of the Manta Network. On December 14th, they only had $16.61 million in TVL. And now, it has crossed $460 million.
So, it looks like we have an ecosystem that’s gaining traction at massive speed.
What’s the Manta Network? It includes two chains: Manta Atlantic and Manta Pacific. Manta Atlantic is a Parachain on Polkadot. But the growth isn’t coming from that.
Manta Pacific is an L2 on Ethereum that uses Celestia for data availability. It is the first EVM-native chain built specifically for Zk-applications.
What are Zk-applications? Zero-knowledge proofs are a way of proving you know something without actually revealing what it is. It’s like proving you know a secret password without actually saying it out loud. Apps that use this technology are called Zk-apps.
Some examples of in-app Zk-proofs are privacy-preserving shuffling for onchain games, compliant private payments for DeFi, and secure voting systems for DAOs. Normal dApps devs can’t do any of the above (at least not as easily).
Other chains for Zk-applications, such as StarkNet, aren’t EVM-native. In those cases, devs have to learn new languages like Cairo. This is a headwind for their adoption.
In contrast, Manta Pacific is EVM-native. Devs can use Solidity, the most popular smart chain contract language, to create Zk-applications. Many EVM devs will now be able to create innovative apps that couldn’t before.
Why is the Manta network suddenly experiencing massive growth? They are running a campaign called “New Paradigm.” Users can invite others, deposit ETH and USDC, engage with the Manta ecosystem, and more. In return, they’re showered with rewards. Five different sources of yield for deposited assets have been listed.
Deposited ETH and USDC earn yield from ETH staking and US T-bills respectively. They’ve also partnered with StakeStone and Mountain Protocol to provide these rewards. And airdrop incentives are layered on top.
These tokens are liquid. So, degens can use them across the ecosystem and earn even more yield and rewards. And, right now, a lot of capital is chasing these rewards. That being said, the reward program ends in four days.
Will Manta be able to retain this capital? Manta enables the creation of novel apps. They claim to already have 150+ dApps on their chain. Many of these apps don’t have tokens. So, degens might keep using them for airdrops.
TLDR; We might be in for a Manta season!
🚀 DeFi Catalysts
Cosmos is voting on a proposal that’ll nudge the inflation rate towards 0% once the 67% goal of bonded ATOM is reached.
Osmosis is voting on burning all OSMO revenue generated from the ProtoRev module. And on sending non-OSMO revenue to the community pool.
Arbitrum DAO is voting on a Long Term Incentives Pilot Program for the DAO to test new incentive designs.
Radiant is voting on their v3. The upgrades are aimed at new fee capture, user engagement & improved UX.
Starknet has enabled the use of STRK tokens as gas token on the Starknet chain. But the STRK tokens aren’t live yet.
WAGMI, the new brand of Popsicle Finance, has launched on Metis. Currently, there are 3 strategies that you can join with.
Synthetix has expanded to Base. 40% of fees generated from Base will be used for buyback and burn of SNX tokens.
Unibot has enabled support for Arbitrum. Now users will be able to bridge to Arbitrum and swap from the bot.
Y2K Finance introduced Turbo Vault Options. They are Call/Put-like options that use the same deposit asset as the speculation asset for a potential of outsized returns, or hedging.
Sommelier Finance can now access Curve Finance and Convex Finance for their vault strategies. These are new yield sources for them.
📰 Industry News
Base released its mission, strategy, and roadmap for 2024. They even plan to bring Coinbase’s existing assets and products onchain.
EigenLayer is exporting Ethereum security to Cosmos chains. Cosmos chains will now be able to use staked ETH for security.
Fox Corporation launched the public Beta of Verify, an open-source protocol for authenticating content, on Polygon PoS.
Celar Network is adding support for BRC-20 tokens like $ORDI and $SATS in their cBridge. BRC-20 will now be able to join EVM DeFi.
Metis has released their Decentralized Sequencer on Metis Sepolia Testnet. One of the major criticisms against rollups is centralized sequencers.
🧠 Twitter Alpha
- Pendle is cooking.
- The Risks of Restaking.
- Simple Narratives > Good Tech.
- Big firms are fighting for the initial ETF flow.
- Arthur Hayes is forecasting a crash in his latest article.
The bull market’s officially here. Feeling underprepared for it? Consider investing DeFi 2nd Brain, my DeFi research system.
We’re running a $50 discount on DeFi 2nd Brain to celebrate the ETF approval. for the next 48 hours.
Here’s the code: GENSLERSUCKS