I write a monthly update letter that goes out the 1st of every month. At the end of the Closing Remarks from last month’s letter, I said:

I’ve arrived at this thesis after watching how last year unfolded, how it looks like this year is starting to unfold, and comparing that to prior periods in the 6+ years I’ve been in crypto full time. Unpacking this thesis will be best accomplished in list format:

1. BTC has essentially a free walk to ATHs. We just got spot BTC ETFs, which unlock safe access to BTC for trillions of dollars that haven’t previously had it. The halving is a few months away. The Fed is likely to cut rates multiple times this year. Stocks are at ATHs and look

2. The same setup as above is also essentially in place for ETH, just delayed by 3-12 months. For the exact same reasons that the SEC was forced to approve spot ETH ETFs (lost the Grayscale decision; court ruled that if you have BTC futures and BTC futures ETFs, you have to allow

3. Crypto has never had the “cover fire” of its two biggest, most Lindy, most headline assets having a free walk to ATHs. You combine that view with the view of many crypto market participants that both BTC and ETH “don’t have enough meat left on the bone”. Up 55% and up 100%?

4. If you’re looking for further proof of my point about financial nihilism, look no further than gambling trends. They are staggering.

Look at that chart. Think about anywhere else on Earth you can find that kind of CAGR on that size numbers. You’d be really hard pressed. Semiconductors? Yeah. Financial nihilism is growing like microchips. Sheesh.

5. One last point about financial nihilism and crypto. Americans don’t trust crypto. ¾ that are familiar with crypto are not confident in the safety of trading crypto. 40% of crypto investors are not confident in crypto. And yet, if you polled those same investors and asked them

6. If you believe in four-year cycles in crypto, then 2023 was supposed to be like 2019. But I was around in 2019 and 2023 was nothing like 2019. 2019 was a come to Jesus year for shitcoining. BTC maximalism had a big comeback. The market realized that there were no users for

7. Relative valuation appears to be one of two dominant trends for buying Alts. ETH is a buy because it’s cheap to BTC. SOL is a buy because it’s cheap to ETH. APT and INJ are buys because they’re cheap to SOL. SUI, SEI and TIA are buys because they’re cheap to APT and INJ. The

8. The other dominant trend for buying Alts is “which one is going to airdrop me the most free money?” Airdrops were huge in 2023, one of the biggest narratives of the year in Alts. ARB, JTO, BLUR, http://friend.tech. In 2023, savvy on-chain market participants received

9. Another noteworthy trend that supports my thesis is how much infrastructure plays are leading us so far this cycle. L2’s. Modular vs monolithic. Data availability layer. Parallelized EVMs. Restaking. This stuff is so far down in the weeds there aren’t a thousand people on

10. The SEC is highly likely to lose against Coinbase. We can argue about timing, but I’d give you 3:1 odds they’ll either effectively or literally lose. Bring on the shitcoining.

Pushbacks, Caveats So the thesis is the market is going to shitcoin hard, shitcoin prices will rip, and that setup doesn’t have the perquisite of actual use cases or actual growth in end user demand. Where could I be wrong in that thesis? You might say – how dare you! Actual

AI is a clear opportunity for crypto, but I am wary about crypto’s ability to execute on that opportunity this cycle. I unpacked this view at the beginning of my June letter, so I won’t rehash it here. I realize that I’m somewhat crossways with Fred Wilson and Vitalik on this one

DePIN is poised to potentially be the brightest spot for actual adoption in crypto this cycle. Helium is objectively one of the most successful projects in crypto history. RNDR is seeing meaningful adoption and is very well positioned right smack in the middle of a strong secular

Decentralized Social Media (DeSOC) is another area worthy of experimentation. http://Friend.Tech is unlikely to be the thing that gains mass adoption, but it was incremental innovation that will hopefully lead to additional incremental innovation that will eventually lead to

NFTs are here to stay but their current incarnation does not strike me as being sufficient to gain mass adoption. It’s worth noting that “NFT” is such a broad umbrella with so many vastly different subsectors underneath that the catch-all term “NFT” borders on a misnomer. There

It is my base case that crypto gaming will produce some amount of hype this cycle and should at least be able to feign some real adoption via ponzi-esque incentives. But I have my doubts about the sustainability beyond just a pump and dump. I don’t think a basket approach is

Finally, a couple caveats to the thesis: First off, macro could derail this whole thing. If the Fed were beginning a tightening campaign instead of an easing campaign, I’d be writing a totally different thesis. The good news is, I don’t see any macro skeletons falling out of the

Secondly, if the Binance situation goes quite badly, that could derail this setup of vaporware ripping. Binance is ground zero for vaporware ripping. The US government is now in charge of their compliance department for the next five years. We don’t know exactly how that’s going

So What? This is a bullish thesis wrapped in a bearish thesis… Or a bearish thesis wrapped in a bullish thesis. I’m not sure which. The thesis is that Alts prices are going much higher in the coming 12-18 months, and that this is happening without the expectation that real

@Travis_Kling Sooo... Buying the most useless pumpable shitcoins I can find

@Travis_Kling This is very good articulation of the thesis and likely right from my perspective

@Travis_Kling AI agents with wallets. Will pay each other for work. And 100,000x crypto adoption. Without any additional human operators required.

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@Travis_Kling You wrote all that to say there is no use case in this space? How about the best form of money in existence and DeFi on ETH? This is huge already, plus a ton of alts competing for memecoin space and hype. Plenty of use cases to drive prices much higher.

@Travis_Kling I’ve been following crypto since 2016. I don’t disagree with your thesis, but also don’t think it’s unique to this cycle. A large portion of investors never cared about use cases. And many that pretended to care actually didn’t. The alt world has always been a casino.

@Travis_Kling The bookmarks to likes ratio is wild

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@Travis_Kling That bookmark to like ratio...

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@Travis_Kling @AltcoinDailyio Nothing like a good thesis

@Travis_Kling @ELPandaBamboo Coool

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