Understanding and Profiting from Crypto Hype Cycles

Enduring on-chain products will measure twice and cut once. While blockchains don't have to be financial, today's market has put a price on almost every token, contract code is public, and the future of crypto regulation is unclear. Because of this, the products that will make it through waves of scammers/hackers, downswings in token value, and pot... See more

Takeaway: 1. This is the first cycle in which crypto is intertwined with the rest of the macro economy. Traditional funds and their portfolio companies agree on that each founder should limit their budget and keep improving.

As is well-known in the crypto ecosystem, the economic interest in crypto comes in waves — we have already gone through two waves of this and are in the middle of a third one. However, all through this, the ecosystem has been maturing quietly and resolutely underneath all the hype and noise. As a result, the crypto opportunity has significantly exp... See more

3. I think this will most likely be the last cycle of cryptocurrencies. Because last cycle Bitcoin went from about 1200 to 20 000, it increased about 20 times, and this cycle from 20 000 to 60 000, it increased 3 times. The increase is much smaller than in the previous cycle. I think it is very likely that cryptocurrencies will trade like Nasdaq in... See more

The institutional ETFs are here en masse and there is now regular traditional media coverage of the crypto startup scene. It mostly lacks nuance but it’s permeating the mainstream zeitgeist. The maturation of market structure also helps here as liquidation cascades are simply less prevalent given the enormous liquidity provided by these traditional... See more

In other words: A group of people direct their attention to something, and that changes its value. This, in turn, draws the eye of various media and attention merchants, which in turn changes the value again. Crypto hype is the purest and most logical endpoint of this phenomenon. What most people are talking about with a given crypto asset is just ... See more