Notably, it appears that, "recently, there's been a noticeable tilt toward ETH in particular, as firms chase its appeal as a yield-earning asset thanks to staking." Also, net spot ETH ETFs remained positive through Thursday, extending the winning streak to 14 days. Bitcoin, by contrast, had several days of net outflows.
If spot ETH ETF inflows remain largely positive over the next few weeks, it's likely that institutions have changed their crypto allocations from mostly bitcoin to now include a meaningful amount of ether. That would be very bullish for Ethereum.
If Ethereum continues to run, we're probably in for a proper alt season in the not-too-distant future. Bitcoin dominance, which had been falling sharply for the past four weeks, rebounded from around 60.3% to 62.5% mid-week. If it makes a lower low, that would invalidate my prior expectation that Bitcoin dominance would rise into the low 70s before rolling over. Instead, I'd expect dominance to keep falling for the foreseeable future.
That said, always buy alts with caution! A story in the news this week serves as a reminder that most of us should be primarily buying and holding Bitcoin. Joe McCann's Asymmetric Fund is shutting down after he tried to explain away nearly 80% losses in the first half of the year as a strategy to farm Hyperliquid's next airdrop.
1) What
Good traders from tradfi and crypto alike spoke of their experience about how difficult it is to beat Bitcoin returns.
Indeed, you might've heard the saying, "time in the market beats timing the market." The phrase is a well-known investment adage used widely in tradfi and later adopted by crypto because it's even more true for this new asset class. On the always-excellent 1000X podcast, guest Willy Woo said, "the majority of the gains on Bitcoin, through a cycle, happen over like two weeks, like 14 days."
Still, the allure of high-return altcoins is almost too much to resist. Take for instance the PUMP ICO, which after its initial 2 day ascent, has been down only. Regular readers of this column will remember I cautioned against participating in the ICO. As of right now PUMP is sitting at $0.00245, 38% below the ICO token price of $0.004. On this week's Token Narratives, we discussed whether there is a price at which PUMP becomes investable.
Even more intriguing, the final topic of Episode 62 was a lively debate on whether Bitcoin is a virus that could bring down the global financial system (a bad thing!). We all agreed there's a there there.
Finally, let's end with a first: a positive note on the treasury company trend. While I have spent a lot of time bemoaning the treasury company playbook, perhaps I've overdone it. After all, it's an overwhelming consensus to believe this will lead to a market crash. More substantively, Ryan Watkins posted on X
"...Buying up locked token supplies from paper-handed funds is one of the best case scenarios for altcoin market structure.
Cleans up supply overhangs, pumps liquidity in the market, and accumulates tokens to a permanent capital vehicle."
Food for thought!
-David Sencil
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