Verbosity

Anyone still left in crypto?

Apparently^[1] there is heightened fear and acceptance that BTC top is in for the year but at same time there is a thought that ETH could continue upwards for a while longer^[2], however, BTC skew seems to be slowly turning into what is normally seen in equities (i.e. where generally folks are long underlying, long puts as protection and short calls as yield).
Moreover, Sotheby's are now accepting BTC / ETH as a payment; and Joe Weisenthal^[3] seems to be making in-roads into a crypto collective referred to as eGirl Capital - they are referring to him as the intern (will see over coming weeks as to how serious this is), oh and our dear Musk is heart-broken with BTC!

Don't trust; verify

This is an oft-mentioned phrase in the crypto community; yet every bull cycle the community seems to re-learn the meaning once it has had to rally around certain objective. This time around once-again the narrative on billionaires being accepted into community's sub-culture went from euphoric to one of growing mistrust. At the same time the reality of China ban is coming to fruition (post the apocalyptic deleveraging & forced selling). Old timers who are pretty involved in the space + VC space (e.g. Meltem Demirors) are also being very vocal about the direction.

So, will history rhyme?

The story of crypto culture fighting traditional finance or big money interests is at its origins. The last struggle in this arena was 2017 when Roger Ver aka 'bitcon jesus' was ridiculed and kicked out for attempting to impose his thoughts (that led to creation of BCH). In similar fashion Calvin Ayre's billions didn't manage to fork BTC away to obscurity (through his BSV). Lastly, crypto culture even took down Bitmain's co-founder, Jihan Wu for siding with Roger, even though Bitmain was world's largest designer of ASICs.

Occam's razor might just be the narrative that upsets the most people, so which could it?

• stay range bound until all hope is lost to ensure Musk's balance sheet is consistently in red for couple of quarters?
• drop below Saylor's average purchase price (approx.. $25k), to signal displeasure with his thoughts on a mining cartel
• make every crypto fanatic rich by following the BTC's pattern of ~40% drop in past bull runs (2013, 2017) and then 10x
• wipeout a major exchange or crypto outfit... watch USDT/USDC lending rates for that scenario.

Now coming back to fundamental ETH / BTC thoughts. ETH and BTC are essentially the base layers aka layer 1 (there are few other up-and-coming e.g. Solana). The pace of change at base layer of ETH and BTC are very similar; e.g. EIP-1559 - the ETH fork, has taken 3 years and will hopefully go-live soon in summer. Similarly, Taproot^[4] - the BTC fork, has taken 2 years and is being actively signalled for activation. Which essentially means that miners are saying yes we accept the change - lock-in occurs once a certain threshold, 90% in this case, is reached. Its slated to reach 97% easily.

So as can be seen the base layers change at a slower pace to ensure stability, security, scalability across the space therefore, increasingly layer 2 (aka the DeFi space) will be the battleground of innovation. The DeFi space is still nascent in comparison to layer 1, and probably needs another 4 years to reach a level of maturity & penetration that internet had in late 1990s; so we are still super early thus there are bound to be major failures to be seen.

What does the DeFi space have now

• money markets - AAVE / Compound
• decentralized exchanges (aka DEX) - Uniswap / Sushiswap
• stable coins
• derivatives, insurance - Synthetix / dopeX
• aggregators / automation - Solana
• asset & treasury management - YFI
• oracles / data providers
• gambling / speculation