Bitcoin Treasury Companies (egregiously called BTCs, I love it!) are really starting to ramp up. Or so I thought. I'm not so sure now. As Pledditor on X points out, there seems to be a weird fixation with numerology-investing. It smacks of silly marketing and late-cycle zealotry. However, perhaps we're still in the opening innings of this BTCs trade, as Token Narratives co-host Andrei Terentiev believes.
He makes the point that institutions buying bitcoin, and listed companies raising capital to put bitcoin on their balance sheet move slower compared to the speed within crypto markets. This comports with a post on X that the BTCs playbook didn't become an investable category until Smarter Web Company IPO'd in April becoming "the best performing UK IPO of all times." If this is true, we're only two months into BTCs.
BTCs might just be heating up, but from a broader context, where are we in the cycle? Ruminate on these:
1. A crypto company is a new sponsor for an NBA team.
2. A company perfectly crafted (at least on paper) for this time.
3. When the impending spot Altcoin ETFs are not beta enough.
4. Is this a sign of the insanity to come? Next up must surely be a jello wrestling BTC.
It's clear that Bitcoin looks primed to move, but how about altcoins? While many people I respect have called for the top of Bitcoin Dominance (BTC.D) weeks ago, I called the opposite. BTC.D dipped from 65.4% to 62% before rallying now to 66%. I still believe Bitcoin will lead the market, topping in the low 70s.
That call seems easy to make when you look at how terrible many well-known altcoin charts are. TXMC posted 8 down-only charts from Avalanche, Polkadot, Thorchain, Near Protocol, Arbitrum, Optimism, Blast, and Aptos. I'll quote him here: "Virtually this ENTIRE space is GARBAGE."
The two biggest contributors to such uninvestable charts are the VC supply unlocks and staking emissions. The first problem is well known and nothing can really be done about it. As a general rule, avoid buying tokens with massive amounts of the supply unlocking "soon" to VCs.
The second is fast becoming viewed as a consensus problem. I imagine in the next 6-12 months most PoS projects will attempt to drastically reduce their staking issuance, which, as Haseeb points out in the above video, mostly goes to the same 12 companies that are running the network's validators.
While Bitcoin is the focus, I expect most other coins to underperform. My safest bet for coins that hold their own, or even outperform, are the ones that:
1. Generate revenue.
2. Most of that revenue accrues to the token.
3. Zero or low VC unlocks.
4. Low staking emissions.
Be careful investing in coins that meet all of those criteria, because there's currently only a short list of coins that do, and this revenue accruing narrative is becoming very popular, i.e., perhaps a bit crowded.
-David Sencil
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