Weekly Rundown - April 28, 2024

See through the hype

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In that update, I shared some perspective and data that should make you question the assumption that “the sideways price action is bullish because it proves today’s inflows are strong enough to support Bitcoin’s price.”

Also, I looked into changes in HODLing behavior and Bitcoin activities that reveal the “true colors” of the market, as the poets say. Crucial info.

While you’re at it, get the April monthly issue, Steady Hands, Clear Mind.

In that post (free!), I look at the importance of sticking to a plan, preparing for market fluctuations, and focusing on long-term wealth accumulation despite the uncertainty and unpredictability of the market.

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This week, look for at least one more market update. Next week’s rundown might be a little short because I’m traveling this upcoming weekend. I’ll have a new altcoin report soon, plus other goodies in the coming months.

Scroll down for some content you may enjoy.

Bottom line: Most crypto investors plan to buy more.

My take: Don’t forget the fine print! According to the survey data, only 20% plan to buy more crypto “next quarter.” Another 40% said they plan to buy more at some other time. The remaining 40% said they don’t plan to add to their allocations at all.

That means 80% of people DO NOT plan to buy more crypto any time soon. At some point, sure—but you can say that for everybody, whether or not they realize it yet. Let's hope that 20% will buy enough crypto next quarter to keep the market heading upward.

Why we care: We don’t get caught up in the headlines.

Pay attention to Bitcoin Runes!

Runes are Bitcoin’s version of memecoins. Post-halving, these could usurp traditional favorites like DOGE, PEPE, and SHIB as speculators chase shiny new objects.

Over the longer term, Runes may help developers build DePIN, DeFi, and other applications with Bitcoin’s protocol. We’ll see.

Coindesk published a brief article with diverse perspectives and links to great resources about Runes.

Bankless hosted Runes’ creator, Casey Rodarmor, to talk about it more. Listen to their conversation.

I’m ambivalent about the value of Runes as a concept and specifically Runes as an investment.

Theoretically, you can engineer Bitcoin to do everything that altcoins do. It’s just a lot harder. And since we already have altcoins, how useful are Runes to begin with?

If people find them useful, that’s great. If not, at least somebody tried. And if they end up as a new way for people to gamble on digital trinkets, it’s better than spending that money on coke and hookers.

(“Coke and hookers” refers to fizzy, sugary drinks and Irish fishing boats. What were you thinking about?)

Bottom line: Renzo, an Ethereum restaking protocol, lost its peg. Into the Block covered the event, its causes, its consequences, and other important information about liquid restaking, an emerging systemic risk.

My take: I’m no more concerned about this liquid restaking than any other systemic risk that could destroy the crypto market. It comes with the territory.

Staking is an interesting financial technology. Liquid staking derivatives help Ethereum capture protocol value without pushing ETH’s price higher (you can use your staked tokens instead of buying more ETH). Liquid restaking lets the network apply more of that value to applications and activities that produce economic results.

At the same time, as more ETH gets pulled into these exotic concoctions, it gets harder to know where the risks lie or how people will respond to them.

Certainly, it's not good to see the value of your ETH derivative drop 7% from its peg instantly. That would wreak havoc on any application or financial position that depended on that peg. So you can understand why people worry that liquid restaking is a house of cards or a structural problem.

At the same time, you can always hedge that risk. Or, developers can find ways around it. People may realize liquid restaking isn't useful and stop doing it, so the risk disappears.

Why you should care: You want to be aware of new risks as they emerge.

Relax and enjoy the ride!

A note before you go

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