The battle for crypto is just beginning...

Crypto Over Coffee #1 — Sunday, April 30th 2023

TLDR;

🎢 Crypto prices took us for a roller coaster ride this week; first taking a nosedive on the back of persistent economic concerns and profit-taking, then rising sharply in the wake of the stock collapse of First Republic Bank. Memecoins like 🐸 $PEPE exploded for huge gains.

🧛🏻‍♂️🧑‍⚖️ Regulatory and legislative pressure continues to heat up for cryptocurrency projects and companies, with Securities and Exchange Commission Chairman Gary Gensler and members of Congress (e.g. Senator Elizabeth Warren) pushing rhetoric, enforcement action and legislation to stymie cryptocurrency innovation.

👀 All eyes are focused on the unraveling banking crisis, the Fed’s May meeting, and economic indicators that will have a profound effect on crypto market action this summer. Is May the time to sell? Time will tell.

The Crypto “Need to Know”

🧛🏻‍♂️ Securities and Exchange Commission Chairman Gary Gensler released another video in his “Office Hours” series to launch another attack against crypto, stating that “the lack of compliance by these crypto platforms means that you don't have basic investor protections”. However, Gensler’s criticisms appear to be levied not at cryptocurrency platforms in general but at centralized finance companies like Celsius, FTX, and others who somehow avoided the regulatory scrutiny they should have received before their implosion.

🪂 Speculation surrounding a $ZRO token airdrop to support the LayerZero omnichain protocol has driven usage of the Stargate bridge to all-time highs with over $1B in volume in April 2023. The Stargate bridge serves as the primary entryway for capital to flow into the LayerZero ecosystem, and has seen speculators rushing to move assets hoping to qualify for a yet unconfirmed airdrop.

📈Bitcoin rose sharply on Wednesday, April 26th in response to first reports broke about First Republic Bank’s financial turmoil. Fox News reported that First Republic Bank was likely on path to government receivership after its 50%+ stock drop at close on April 25th. Bitcoin’s rise back to the brink of $30K reinforced the strong trend of bullish price action in response to the banking crisis.

🏛️ The Federal Reserve is expected to raise rates by 0.25% again in the May 3rd, 2023 meeting, an outcome ascribed a 90%+ probability by analysts. Any hike higher than this will likely cause turmoil in the markets.

📊 According to a survey conducted by Bitget from mid-2022 to early 2023, 46% of millennials in ‘major economies’ own some form of crypto. This study included a relatively large sample size of 255,000 respondents across 26 countries, and signals a clear trend towards acceptance of and interest in cryptocurrency amongst the predominant generation in the labor force in countries like the USA.

Biggest Movers: Winners and Losers

Portfolio Moves

• Bought $BTC on the price drop from $30K to $27K (April 21st and 25th). Watching May as a potential time to capture profits.

• Positioning for Celer Network ($CELR) buy after large scale price drop

• Moved $USDC to exchanges to position for buying opportunities, if they arise

   

Alpha

• Render ($RNDR) looks far more appealing with the passage of a new token economics model that caps emissions and brings balance to supply with a burn-and-mint equilibrium design. Render has sustained steady growth since the DAO approved plan in February 2023, if usage of Render’s services grows, it could carry the price higher still.

• The demand for decentralized storage options for NFTs, interfaces, and other use cases continues to grow — Arweave ($AR), Storj ($STORJ), and others stand to gain from this trend in 2023-2024 if their products are adopted more readily.

• Decentralized social media is an immature niche, but projects like Lens Protocol are placing an emphasis on making decentralized social media protocols user-friendly and scalable for mainstream use. The recent launch of ‘Momoka’, a layer-3 scaling solution built to mitigate scalability and data storage limitations on Polygon, will give those who build on Lens Protocol plenty of headroom to work with in building at scale.