Market
2 Things to Think About With BTC's Pump
Bitcoin has been flirting with a new all-time high over the last few days.
Everyone's bullish about two things mainly:
- BTC ETFs. We are seeing monstrous volumes on all BTC ETFs across the board. Even considering traditional markets, we are smashing record after record.
- Halving: Halvings are extremely bullish events for BTC. For the last few halvings, BTC has always smashed ATHs.
Trust me; nothing would make me happier than BTC hitting $100k+ (I'm gonna grab one of those Legos Millenium Falcon sets if it goes $100k+). But I always try to take a level-headed approach to things.
Here are two things I'm thinking about.
The Asset Class Theory. The more BTC attracts mainstream institutional investors, the more it will be treated as a financial asset class.
We all love how volatile BTC is, and the dopamine is kind of addictive. But hedge funds operate differently.
But let's suppose you're a hedge fund manager:
- You are managing other people's money.
- You are now allocating $BTC to your portfolio.
- As $BTC is now included as an asset class, you treat it with a degree of risk similar to how you treat other assets.
As Bitcoin is very volatile, fund managers will have strict management rules in place. Now, the new shiny asset class has to withstand:
- Position sizing
- Money management
- Risk management
So, as institutions start adopting more BTC into their portfolio, they'll have to implement more risk management practices. This means that positions will be sold off if BTC rises too fast.
The Liquidity Theory. Remember how the money printer goes "brrrrrrrrr?"
Liquidity is the number one drug on the market. If liquidity goes up, prices also tend to rise.
You might think raising interest rates reduces outstanding liquidity, but that isn't quite the case yet.
The chart above calculates current liquidity for the United States. Liquidity has remained relatively constant since September 2023.
The index considers four aspects of liquidity: the Fed balance sheet, the Treasury bank account, the Reverse repo market, and the Bank term funding program.
To put it simply, as liquidity increases, prices increase. Check out that same chart, but with BTC.
The correlation index floats between 0.82 and 0.88. Note that BTC is highly volatile, and having such a high correlation speaks very clearly.
BTC's pricing is rising a lot faster than liquidity in the markets. Less liquidity in the markets could scare off fund managers.
Closing Thoughts. There's plenty to be excited about this cycle. Be smart and make sure you take profits along the way.
It won't be a straight line to reach our new all-time highs.
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$KEP: Token Representation of EigenLayer Points
Everyone and their mom is farming EigenLayer points.
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If you want to get your hands on liquid EigenLayer points, buying someone else's $KEP from a DEX is one option. You can do this if you don't have enough $ETH to restake.
Alternatively, you can create your own $KEP as well. For that, you need to restake native ETH with KelpDAO. In return, you'll get $rsETH and $KEP.
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Guides
Sidelined? Here's a Step-by-Step Guide.
Bitcoin's about to touch its all-time high again.
And it's easy to feel like the kid on the wall watching everyone else have fun at the party.
So, what should you do if you're underexposed to crypto right now? Here's some quick advice.
Step #1: It's not too late. Unless you have a time machine, there's simply no use in dwelling on the past. You still have plenty of time—I anticipate Bitcoin hitting roughly 200k around 2025.
Step #2: Don't take on too much risk. Don't use leverage. Don't borrow money. Don't buy coins with your credit card. There's a difference between managing risks and being an idiot.
Step #3: Lock in. Cut the noise from your life. Delete your Netflix account. Stop partying on weekends. No PlayStation 5. Sell it. No anime.
You can catch up on that stuff in the next bear market.
Step #4: Jump in. Memecoins are hot right now, and AI coins have an upcoming catalyst with Nvidia's Game Developer Conference.
Step #5: Master crypto investing. There are many tactics and strategies to sharpen your crypto investing, including:
I've written tons of other threads and articles about crypto investing. Even just reading those will give you a really solid foundation.
However, it will take a ton of time. And by the time you have learned everything, you will have lost a ton of gains. So, what do you do?
We have a course that will prepare you for the bull market in just five weeks. It is a comprehensive program encompassing live online sessions, step-by-step systems, and practical examples.
Enroll in Double Your DeFi to learn my investing tools and frameworks quickly.
The course starts on April 1st.
🚀 DeFi Catalysts
Tokmak Autopilot is on the mainnet. It is in the guarded launch phase. It allows users to provide liquidity through Autopools.
Wormhole introduced Native Token Transfers (NTT). It is a framework for transferring native tokens across blockchains.
Ondo Finance introduced Ondo Global Markets. It'll create onchain access to traditional securities and associated exchange liquidity.
Nostra Finance introduced $stSTRK, StarkNet's liquid staking token. stSTRK holders will get points, liquidity, and eventually, the yield from staking STRK.
NIM Network introduced the first RollApp on Dymension. Their aim is to build a chain optimized for gaming. $DYM stakers will probably receive an NIM airdrop.
Redacted Cartel is taking Pirex ETH multichain using Layer Zero. Users can bridge pxETH and apxETH to Arbitrum, Optimism, and BNB Chain.
Gearbox Protocol's PURE Margin Trading and LSD strategies are now live on Arbitrum. Cheap fees on Arbitrum should attract a ton more to Gearbox.
Metis L2 announced their Superfluid vision alongside partnerships with ChainLink, EigenLayer, Renzo Protocol, Ethena, and DeFi Kingdoms.
Frax Finance has shipped the bridge for their L2, Fraxtal. Users will now be able to bridge assets from Ethereum to Fraxtal.
🧠 Twitter Alpha
- BTC Marketcap > Silver Marketcap.
- Highest liquidation cascade since the previous cycle top.
- Bloomberg live calling the "ERA OF THE MEMECOIN".
- Not a memecoin, just a New York bank nuking.
- Must read about financial history.
😂 Meme
Until next time,
Edgy
p.s. The Wormhole airdrop claim is here!
Today's email was written by Edgy, Yayya, and Lorenzo.
DISCLAIMER: I'm NOT a financial advisor. This content is for education and information purposes only. Crypto and DeFi are risky and speculative. Please do your research before investing.
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