What could trigger the next bull?

July 13, 2023 Stan

G.M. There’s been a lot of talk about a potential bull run in either 2024 or 2025. Maybe it’s hopium considering the amount of pain this industry has gone through the past year.

We will share some possible catalysts that could spark the next bull run.

Here’s what we got today:

Seven Potential Catalysts. What could fuel the next bull run?
The Arkham Drama. The on-chain analysis tool that pays people to snitch.
Around the Web. Blur v2 is live. Hidden Hand v2 is live, IDEX announces a Superchain, etc.

“Wealth isn’t primarily determined by investment performance, but by investor behavior.” – Nick Murray

Opinion

The previous cycle’s all-time high was in November 2021.

It has been a long 1.5-year bear market marked by Terra Luna’s collapse, FTX’s collapse, and countless other disasters.

So the big question is…” when’s the next bull run?”

Look, no one has a crystal ball. Many people are predicting we’ll be on the upswing around 2024-2025 (please hurry, I don’t want to work at McDonald’s anymore)

Let’s look at potential inflection points that could fuel the next bull run.

#1 The Bitcoin Halving

Every four years, the reward for mining new Bitcoin blocks is reduced by half. This reduces the supply of new Bitcoin coming in.

The BTC price will increase as supply decreases and demand remains constant or grows. In the past, BTC halvings have led to Bitcoin price hikes and triggered crypto bull runs.

The next Bitcoin halving is scheduled to happen in April 2024.

#2 Institutional Adoption

For the past few weeks, we’ve been talking about BTC ETFs. There’s a good chance they’ll be approved.

This will make investing in Bitcoin easier for institutions and traditional investors. They won’t have to manage Crypto directly; they can buy the ETF on the stock exchange. This will make it easier for people to shift 401K and retirement allocations to Crypto.

Also, the Bitcoin ETF is a Trojan horse. Its approval should make it easier for Ethereum and other ETFs to flow in.

#3 The Government Finally Decides on Some Rules

Regulatory uncertainty is one of the biggest challenges for crypto adoption. Companies are worried about non-compliance. No one wants to go all-in with building a company and get rugged by the U.S. government.

A clear, supportive regulatory framework will solve all these problems. It will give companies and retailers the confidence to enter the crypto market.

And since Crypto is global, it doesn’t have to be in America. Regulatory clarity in any major economies (India or the European Union, for example) would be enough to spur the next bull run.

Or we could see Gary Gensler be voted out of office or a more crypto-friendly political party in 2024.

#4 The Money Printer Turns Back On

The U.S. is drowning in debt to the tune of $32.5 Trillion! That’s a debt-to-GDP ratio of 123%, and it’s unsustainable.

The House and Senate recently approved a bill to raise the debt ceiling. The bill will defer the federal debt limit for two years. This will allow the government to borrow unlimited sums to pay its obligations.

As interest rates rise, so do the interest payments required. This has become an unsustainable spiral. There’s only one way out. Sooner or later, the money printers will be fired up.

Inflation is high, and the cost of living is insane. The average person will be more at risk. And some of that liquidity will come on the chain.

#5 It Could be Fueled by China

Arthur Hayes, a respected voice in the Crypto scene, recently published an article claiming that China, not America, will drive the next bull run.

He argues that China will increase its money supply, and a substantial amount of this money will end up in Crypto via Hong Kong.

Bitcoin Exchange Traded-Funds in Hong Kong is an example instrument. Chinese investors will be able to buy those as a hedge against the inflation of the Yuan.

You can read the details here.

In the meantime, let’s brush up on our Chinese. Ni Hao!

#6 Crypto Narratives

Value investors can talk about fundamentals and metrics all day. But let’s face it. Most people are into Crypto to speculate. The crypto market runs on narratives.

All it takes for a bull run is a narrative powerful enough to capture the attention of retail. And Crypto has no shortage of narratives. We’ve discussed several of them in this newsletter.

LSDfi – Defi sector built on top of Ethereum staking rewards.
Meme coins – Pepe had a crazy run earlier this year. The appetite for meme coins is there.
BTC Ordinals – Ordinals is the technology that gave Bitcoin a new life. Due to it, people are discussing tokens and NFTs on Bitcoin.
A.I. Narrative – Artificial intelligence is the hottest technology on the block. In a world full of deep fakes, the blockchain could tell us what’s real.

#7 Unknown Killer dApps

Killer apps are what first bring attention and money to an ecosystem.

Defi 1.0 protocols were the killer apps of the 2020 bull run. It was called the Defi Summer for a reason. NFT applications fueled the 2021 run. I still remember all the noise around NFT profile pictures.

There are many apps under development. A few of them will go on to become killer apps. It could be anything from a GameFi app to an RWA protocol.

It’s been over 1.5 years since the previous cycle’s peak. It can be tough to remain hopeful if this is your first bear market. This is my third bear market, so I know how excruciating it can be.

In the meantime:

Focus on learning. You don’t want to play catch up when the bull market’s here.
Accumulate solid projects. Which projects have the legs to go higher in the next bull run? Also… don’t empty your chamber yet. Keep a bag specifically for new projects that may emerge.
Increase your earning potential. Learn new skill sets. Launch that side hustle. Doing 10x on $1,000 is $10k. Doing 10x on $25k = $250k. Get the point?

News

Do you remember Arkham Intelligence?

It’s a free on-chain analysis tool that I mentioned in this newsletter a few months ago. It’s a solid tool for doing on-chain analysis and has some interesting features like tracking the profit/loss of different wallets.

When I first started referring to Arkham, I was under the impression they were going to do a monthly subscription product (Like Nansen). But instead, their plans are pretty controversial…

Let’s investigate this shitstorm.

A New Token: ARKM

First, they announced the token launch. They started a token sale for 5% (50 million) of the ARKM supply via Binance Launchpad.

No big deal so far. Over the past few months, people promoting Arkham could be eligible for an airdrop.

But here’s the big question: What are these tokens for?

This is a marketplace for on-chain information. And ARKM will be used here. There are two ways in which it works.

#1 Bounties

Anyone can post a bounty for any on-chain intelligence. And “Bounty Hunters” will give the intel for the payment.

Bounties could be anything from tracking down hedge-fund wallets to uncovering the true identities of hackers. You’re getting paid to snitch.

#2 Auctions

On-chain wizards can auction off their golden nuggets of information. Bidders can buy the info using ARKM.

This is a valuable resource for two groups of people. One, traders and journalists are on the hunt for on-chain intelligence. Two on-chain researchers who’re looking to turn their skills into cash.

But it’s created a lot of controversy, too.

The Arkham Drama

Loads of people are freaking out, saying this marketplace could trash the remaining privacy in the crypto world. Anyone could snoop into another person’s crypto transactions with just a bounty.

(To be fair, blockchain transactions are already transparent. Arkham makes it easier to access them.)

Even worse, Arkham also doxxed the emails of its users.

Whenever a user shared a referral link to their platform, it contained a string of letters that could be easily converted to the user’s email (Thank god no one saw my email, [email protected] would be embarrassing.)

Despite complaints dating back to January, Arkham did zilch about it.

Then there’s the allegation that Arkham has been spying on its users, tying data like device I.D.s and locations to their wallet addresses.

All this info is hoarded on Arkham’s servers, and the platform calls the shots on how it’s used. Lots of folks are majorly pissed off that the project isn’t decentralized.

There are even conspiracy theories about Arkham being a secret government project.

Edgy’s Take

Yea, I won’t be promoting Arkham links anymore. There’s something suspicious about the entire operation. And I think promoting doing is the antithesis of Crypto.

But that doesn’t necessarily mean Arkham is going down. They’re filling an essential niche in the crypto world: a marketplace for on-chain intelligence. And the product’s pretty good.

They might weather this storm. Or someone else might create a decentralized version and take over.

🚀 Defi Catalysts

Aave is voting on deploying $GHO stablecoin onto the Ethereum main net. Everyone was waiting for this stablecoin. And almost 100% of the voters are voting for the proposal.

Redacted Cartel released V2 of Hidden Hands. It introduces a lot of new features, including range bribes, limit bribes, a yield harvester, new markets, UX upgrades, and more.

Algofi, the largest Defi protocol in Algorand, is shutting down. At the time of the announcement, more than 50% of TVL in Algorand was in Algofi.

Polygon and IDEX have partnered to create XCHAIN, a zkEVM layer 2 for the IDEX ecosystem. It will be one of the first Polygon supernet.

Blur v2 is now live. They were a big innovator in the NFTFI space. With their v2, they’ve enabled trait bidding, and trades will now use 50% less gas.

Mantle is discussing creating an ecosystem fund of $200 million that will be deployed within the Mantle Ecosystem over the next 3 years. Historically, they’ve been a catalyst for growth.

Lido Finance’s $LDO is the second largest token in the Grayscale Decentralized Finance (DeFi) fund. This indicates the increasing acceptance of LDO as a Defi blue chip.

StarkNet, an Ethereum Layer 2 network, has undergone the ”Quantum Leap” upgrade. It aims to elevate the network’s throughput to over a hundred transactions per second.

Kava 14, an EVM-compatible blockchain on Cosmos, went live yesterday, July 12th. And it features internal bridging of assets between Ethereum and Cosmos.

Uniswap has announced the tentative timeline for the launch of Uniswap v4. The v4 depends on Ethereum’s Cancun upgrade, which will happen in September. The v4 will be released after the comprehensive audit, which will only happen after the Cancun upgrade.

The former SEC chairman says it would be hard to resist approving BTC ETFs.

🌎 What’s Happening?

📰 Industry News

Compound introduced Encumber, a new mechanism to separate token ownership from the right to transfer it. This will give token holders ancillary ownership benefits, such as governance rights while participating in DeFi.

Google Play will allow developers to let users buy, sell, or earn digital assets (aka crypto tokens) in applications. They only have to maintain transparency and follow other rules.

Binance’s senior executives are quitting. Fortune claims that this is due to the way CEO Changpeng Zhao has handled the regulatory investigations into the company.

Abracadabra DAO is discussing the formation of a legal structure. The proposal said that the aim was to protect the intellectual property of the DAO and manage server expenditures more efficiently.

United Kingdom’s lords passed the Economic Crime and Corporate Transparency Bill. It will help law enforcement agencies seize and freeze Crypto used for crime. The bill is now in its final stages.

DeSo, a layer-1 blockchain for decentralized social media, has issued a $1 million bounty for anyone who builds a decentralized competitor to Reddit using their blockchain. Reddit is currently in a controversy surrounding its API limits.

New York Federal Reserve and several large U.S. banks, including Wells Fargo and Citi, reported success with their experiment using tokenized dollars for speedier and more reliable payments.

Polygon Labs is reorganizing its leadership team. They were under heat after the SEC claimed their token MATIC was security. Previous Chief Legal Officer, Marc Boiron, will assume the newly created CEO role.

Circle released its new product, Programmable Wallets. It is a wallet-as-a-service for developers. Devs can now embed secure wallets in their app in minutes.

Gemini filed a lawsuit against Digital Currency Group and Barry Silbert, alleging fraud and deception. DCG called the case a “publicity stunt.”