This editorial is from this week’s edition of the newsletter Week in Review, sent to subscribers on Friday. Subscribe to the newsletter to get this weekly editorial the second it’s finished. The newsletter also includes the biggest stories of the week with a comment on each story.
Bitcoin pushed up into $65K resistance early in the week before following equities down. Let’s see if it reaches and holds the $62,000 support. Donalt, the legendary duck, is paying close attention to the monthly close. Above $61K is good (higher better), below that look out.
As for equities, the Forward Guidance trio believe equity markets are undergoing a violent unwind of the momentum and AI trades, driven by leveraged products and positioning and deteriorating AI-related fundamentals. The fact that Kimi-K3 looks to have bested Claude’s Fable 5 in some tests at a fraction of the cost can’t be good for frontier model companies.
A post on X claims the put/call ratio is the single best top-and-bottom signal in the stock market, and right now it’s flashing complacency as call options pile up. Options traders are aggressively aping the 25-delta calls on SPX. Meanwhile, SpaceX’s SPCX hit a post-IPO low, falling under $140, and has since dipped below its $135 listing price entirely.
On the macro front, Ram Ahluwalia and Chris Perkins said on Bits + Bips that markets are wrong in predicting a U.S. rate hike. Luke Gromen thinks there is a 0% chance Bessent and Warsh will ever be hawkish, because doing so would blow up the US fiscal position. If that’s right, the debasement trade is alive and well. Unlike Mr. Gromen, Brent Johnson believes these seemingly harmful actions are purposeful.
Despite equity weakness, in the digital assets realm the vibes are quietly improving. Pentoshi points out that, if you look at price action, this has been the easiest, most kind and gentle bear market in crypto’s history. Galaxy’s Alex Thorn says his bottoming scorecard is starting to fill up. Chris Burniske, reading Lyn Alden’s Broken Money, says things are starting to remind him of 2015, when impatience washed out most people and ultimately rewarded those who stayed. Even the great trader Horse, hardly a permabull, can feel a slight spark in the space.
Of course, sentiment indicators come in all grades of quality. Chamath is talking about crypto again, this time with a deep dive on privacy coins, the only tokens up in this crypto winter. The last time he did this it was Solana, which he proceeded to dump on his followers.
Strategy, after two consecutive weeks of selling Bitcoin, increased its USD Reserve by $450 million from selling roughly $467 million worth of MSTR common stock through its at-the-market program. No Bitcoin was bought or sold.
Robinhood Chain dominated attention. The chain flipped Base in 24-hour DEX volume, Robinhood Chain memecoins surpassed $244 million in total market cap, up 33% in a single Saturday (75% of it in CASHCAT), and Mike Dudas called it the single most bullish thing he’s seen in eth-land in years. CASHCAT is down more than 70% from its ATH.
Some find the whole memecoin thing incomprehensibly dumb, with people amped up to buy assets on Robinhood Chain that were already available on Solana. Robinhood chain’s success seemed to prompt a major shift with Coinbase. Cobie is taking over all trading products at Coinbase, including Base from Jesse Pollack. Austin Campbell didn’t mince words: Base has been an outright failure. Base et al is in good hands with Cobie. Perhaps he can spearhead dropping the ‘d’ from dApp, ‘app’ is much cleaner.
For all of Robinhood Chain’s success, the Ethereum L2 has, counterintuitively thus far highlighted the weakness of the asset ETH. According to ARK’s Lorenzo Valente, Robinhood Chain has grossed roughly $816K in revenue since inception. Arbitrum, the middleware provider, has taken 10%, about $80K. Arbitrum then pays Ethereum for settlement: a grand total of $1,538.
Joseph Lubin defended the arrangement, arguing that Ethereum L1 fees should stay low to foster growth, with tens of thousands of companies setting up shop over the next few years, after which fee revenue, staking, and ultrasound burning take care of the rest. Valente responded that there aren’t tens of thousands of Robinhoods.
Tom Lee dismissed the revenue framework (made popular by HYPE), arguing that equity-like fundamentals don’t explain what makes most stocks go up either, which sounds suspiciously like an argument that ETH should go up because fundamentals don’t matter. Eric Trump posted that ETH is pumping hard, great to see, crypto is the future, a genre of post that has historically marked local top. One poster quipped Mr. Eric Trump is the last thing you see before your coins go to zero.
A more cogent bull case is that between stablecoin and RWA adoption, regulatory clarity, and security plus roadmap execution, ETH is a better mid-to-long-term bet than BTC here. The fact that this compelling thesis came from a trader, who is (if they’re good) agnostic about coins, should serve as a warning about the perils of too heavy bags.
Robinhood’s crypto success is surely helping to sustain institutional adoption. Ken Griffin is coming for the CEXs: Citadel Securities invested $400 million in Crypto.com at a $20 billion valuation, the exchange’s first institutional funding round in its decade-long history, and a bit less than half of what the market values Coinbase at. Airbnb founder Brian Chesky posted a bullish thread on real-world asset tokenization. Speaking of which, BlackRock’s tokenized money market fund BUIDL has surpassed $900 million in AUM on Avalanche, doubling in the past week.
Governments were in the news this week. The Bank of Thailand is cracking down on “grey capital,” including a joint SEC audit of USDT transfers above $150,000. The US government moved $8.8 million of BTC to Coinbase Prime, a deposit address previously used for seized Samourai Wallet coins. The White House shilled TRUMP coin with a promo video of the coin sitting inside a gold vault.
A few quick hits to close. Adam Back thinks Bitcoin’s filter-fork drama will fizzle out. Haseeb Qureshi used data to declare the defi “hackpocalypse” fears as overblown. ZachXBT stirred the security pot by calling hardware wallets garbage and recommending a dedicated iPhone instead; Roman Storm disagrees, citing wrench-attack risk. And Algod, though disappointed in the recent Conviction update, is still pouring time and money into Bittensor subnets, staffing up an office for sn11 and sn53.
Finally, Ansem laid out his ANSEM thesis, which is summarized well by this meme.
-David Sencil
