mongoose'd by Congressman Brad Sherman
The House Financial Services Committee meeting was first time after many years I feel the lobbying game of crypto world has greatly improved. Policymakers were not just prepared with thoughtful questions but also felt less confrontational.
Congressman Brad Sherman was pretty hostile but also decently funny. His mongoose coin; which didn't exist before his comments is now sitting at cool $2.7m market cap; although seeing such a silly meme coin does make me wish for a dear return of a crypto winter. His words have invigorated crypto natives to fund his opponent, Aarika Rhodes for CA-30 2022, this will be interesting to watch.
Moreover, there was clear articulation of relevance of USD even in crypto world; and emphasis by participants of how misplaced is the fear of loss of USD's reserve currency status. Lastly, policymakers were even open about their own children talking about crypto. That's one way to get the adults to be accepting of a new weird scary world of crypto!
"smart money" watch & 2022:
As expected post the wipe-out of last weekend, VCs and funds like 3AC came out slinging tweets about how they stepped up and bought $400m+ of ETH after trash talking it just the prior week.
Indeed, there is a marked difference between Saylor's purchase "notification" vs 3AC. Saylor seems to not care if he is paying absurd amounts of premium (last one sounded like approx. $10k per BTC premium) while 3AC (and other ETH funds) make it painstakingly obvious that they bought at the low. This makes me wonder about the game theory of it all:
BTC for the past decade has been the Sun of the crypto solar system. Everything travels towards zero if BTC enters bear market. Additionally, not everything rises when BTC returns to bull market. I am 90% confident; this time is not different.
So, 95% of alternative L1s that are competing against BTC & ETH will fail over next 4 years. SOL might be one survivor due to its strong financial backers who will dig deep and fund the development out of their own pocket. AVAX might be another - but its backers seem rather busy playing twitter games.
The infighting amongst the various crypto camps is reaching a point that is usually only seen as we approach the top of the bull market. Once the crypto winter begins, some will heed the advice of past experiences and prefer to adjust their allocations; others will destroy their $ budgets as their assets valuations will collapse 95+%.
The silence of crypto twitter will be the optimal time for researching & allocating. Regulations of year ahead will put the final nail into the token prices of alternatives that hadn't organised themselves appropriately.
The play-to-earn market will rise; but first it will need to learn creating games is a multi-year effort with minimum up-front funding into 100s of millions of dollars. The crux of the word 'earn' - how does one earn? Player earns tokens by playing a game those tokens need to be sold for $ to feed oneself. So what happens to a token that has infinite emission and always has its sell side replenished? Where is its floor price?
Coming full circle towards ETH as the sole competitor to BTC. Proof-of-stake will bring out many marketing materials - like ESG compliance; yet, there are bottlenecks to the system that will also become obvious e.g. just like SOL's network; the ETH in the proof-of-stake world will be selecting a "master" validator; this validator will be "master" for time T (in SOL world its seconds;
in ETH its minutes); if you wish to negatively impact the network; you could target this validator whose identity will be publicly known.
last musings of the year:
bore the crypto world with ranging prices + bearish sentiment till around Christmas; go parabolic till Feb and abruptly stop until prices dripped away 80% back to current levels, or
test the lows of May 2021 and not come back into a sustained bullish trend until late 2022 (or when market has understood exactly where Fed is at)
side note: interest rates on crypto platforms (for USD & crypto assets) have markedly decreased over past 2 weeks - hints to market cooling down + not a lot of willingness in market to push prices either way
Interesting Reads / Listens:
Arthur Hayes
