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Have you heard about the mysterious, unidentified drones flying over the US eastern seaboard and some military bases?

Crazy stuff. Reminds me of weather balloons.

Some say they’re alien spacecraft scouting locations for a potential invasion. Not ideal for anybody who dreams of a 2025 bull run.

(Unless the aliens decide to FOMO into PEPE and adopt Bitcoin as their reserve currency, in which case it’s Lambos for everybody!)

Always fun to speculate, but you have to accept there are some things beyond our control and impossible to predict. “Unknown unknowns,” as an old war planner once said.

Let's talk about “known knowns,” such as the topics of my December 11, 2024 update.

In that update, I looked at some metrics, discussed some strategic considerations, and reviewed APT, ICP, POL, ETC, HYPE.

Look for another market update and the monthly issue this week. Scroll down for poll results and some content you may enjoy.

You can reply to this email to contact me directly. Or, use this button to leave a comment at the bottom of any post.

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Chart of the Week

What tokenization expectations are getting wrong

One of the more amusing parts of writing about cryptocurrency?

So much chatter revolves around interesting ideas that don’t substantively change anything, with far less attention paid to fundamentally revolutionary applications.

A recent Crypto is Macro post, What tokenization expectations are getting wrong, delves into this notion using private equity as its topic.

A recent survey showed tremendous enthusiasm for tokenizing private equity and other assets that normal people don’t own or show any desire to own.

Wall Street and VCs love it because it’s a way for them to profit from you. They take something they already make money on, slap a token on it, and sell it to a whole new group of people.

While that’s a benefit of tokenization, that’s not the point. The point is to give people like us a way to sell these things without Wall Street and VCs taking a (sometimes hefty) cut.

This reliance on legacy financial entities sets an unfair expectation about what crypto can do for you and me. It gives us a sense of immediacy and importance around adoption, but only the adoption that benefits a small group of insiders and elites.

Worse, it limits the imaginative potential hidden in more mundane, less lucrative aspects of the technology, such as those I discussed in my November post, Crypto's Hot, But Are You Missing the Bigger Picture?

Read the Crypto is Macro article for another slant on this topic.

Yes, real world assets, aka RWAs, are a big deal, but that's a big bucket of products, concepts, and innovations that go far beyond whatever’s getting hyped on your timeline.

Poll results

In last week’s rundown, I asked, “What’s the lowest price Bitcoin will ever reach after today?”

Half of responders said $70,000.

If you believe that, there is no excuse for keeping any cash in hand. Your downside risk is 30%, the same type of volatility we see every 3-6 months in all market conditions, even at the bottom of bear markets.

(Bear markets are moments of maximum financial opportunity.)

A few said $0, $32,000, and “only up from here” while the rest said $48,000 would mark the next lowest price.

$48k is a realistic expectation no matter how high Bitcoin reaches on this go. Some technical and on-chain metrics suggest it’s the eventual destination (not worth discussing until we need to).

What's so magical about $70,000?

El Salvador to Change Bitcoin Law as Part of New IMF Deal

Bottom line: As one of several concessions, El Salvador will ditch the mandatory acceptance of Bitcoin in exchange for $3.3 billion in loans from Western financial organizations.

My take: No surprise. While not a big concession—the country still has Bitcoin in its treasury and it’s still a fixture in its public agenda—this is not the first proponent to compromise a principle for something more important. Expect more as “adoption” grows. Don’t read too much into it, especially when it happens during or after a big crash markets. Nobody can stop this train.

Why you should care: You shouldn’t.