Are Crypto Fundamentals as Bad as the Sentiment? (REKT Vision)
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Welcome everyone to this Friday's episode of Rex Vision. Today we have substituted Mando for Jamie Coutts in an effort to raise the moods and the vibes after a rather depressing show to kick off February last week. So Mando out, Jamie in for this week. Welcome back, Jamie. How are you doing? Hey, Robbie. It's nice to see you.

Yeah, good to see you too. I'm actually in Paris right now for NFT Paris. Apparently, there are still NFT events that happen every year still. I think it's funny because it's called NFT Paris. I don't think I've been to a single actual NFT event. I'm on two panels today.

One of them is trading meme coins. So one of them is a market update. So I think NFT, perhaps at this point, is probably just some sort of branding. But yeah, it's just like everything is like meme coin focused, AI focused. I don't think I've seen a single NFT booth. Even the Yugo Labs guys, which I guess would be Bored Apes, even their booth is 8chain and 8coin. So yeah, pretty amazing how that's all changed.

That's got to be a pretty good contrarian sentiment signal, though, right? I mean, I think so. Yeah. I mean, can it get any worse? Can it get any worse? Yeah. Price action for NFTs hasn't been too bad. You know, there's been pockets of rallies and it's not like it's just been down a leap anymore. I think, you know, things have relatively floored.

Obviously, it seems like some of the larger projects, the game there has been to launch a token. So the projects that have not yet launched tokens tend to be the ones with slightly higher floors. But yeah, I mean, volume and activity levels are still not even 10% of what they were back in 2021. So I don't know. I don't think we see that same mainstream mania that we did three years ago. But I do think there are pockets of potential performance there.

But we'll see. I don't know. I'm yet to be convinced. I'm yet to be convinced. Well, if you're saying that prices have actually come up a little bit or they've stabilized and sentiment's still falling, I don't know. It was always a play like on the sort of mid to later stage of the entire cycle, which arguably you could say is roughly where we are. We're definitely not at the start and we're not at the end either. So I don't know. I don't know.

Feels like I need to go and actually start looking at the space. Like I am the worst NFT advisor or expert. So I've never, never really looked at it. It's never scratched an itch for me. Not until music comes along, but just based on what you're saying, it sounds starting to sound interesting given where I think the market's going to go. Yeah. I mean, it definitely formed the later part of last cycle. Like when NFTs really kicked off, it was towards the end and,

NFTs continued performing actually even into the first half of 2022. But my view on it is just every crypto cycle, there's some form of narrative, which is the casino narrative. And then 21, it was NFTs. 2017, it was ICOs. 2020, it was DeFi. 2024, it was meme coins. This year, potentially AI. That remains to be seen, I think. Yeah.

So, yeah, I don't see it coming back in that fashion, but, you know, we could potentially see some performance, performance, I think, towards the end of the cycle, which we're also trying to figure out when that will be, if it will get there. I think I'm subscribing to the view that Bitcoin is kind of no longer going to be in this four-year cycle and will sort of be a sort of thing as a much more mature asset now. And look, we can look at the

Look at the altcoin sectors and how else to perform versus Bitcoin with BTC dominance still close to the highs, but it feels like we've already had that underperformance or big sell-off in alts. Hi, Raoul here.

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Yeah, I'm curious of your thoughts on can we get a rebound in alts? Will we ever get an alt season? Did we get a very brief alt season around this time last year and that was it? Or was the altcoin season just memecoin season last year and that was it? It's hard to get your head around it now, especially at these levels, I think.

Yeah, I mean, I've got a lot of index data now. So part of the ProCrypto product is sort of bringing some index data to life because there's a lack of that in the entire space. So now I'm able to break down all the different sectors and subsectors. When you go to subsectors in crypto, it gets a little bit difficult because...

some of the subsectors don't have enough assets in it to really constitute. So you look at the sort of sectors and there's five, there's digital currencies, which essentially Bitcoin and the dino coins, I unfairly call them because they've still got massive whopping market caps. And then you mean coins,

And there's a smart contract platform sector and that's about 22% or yeah, roughly 22%. I think my last check was, uh, yeah. Um, and then, so you put that with the digital currency sector and that's like 95%. And the other three sectors are DeFi applications, which is just a, um,

It's just a name or a general name to give all the other stuff that you don't know what to actually call them or where they should belong. And then there's another sector called infrastructure, which includes a lot of the oracles and AI type stuff, compute and whatnot. And I can sort of see, you know, if you look at all the different sectors versus Bitcoin versus digital currency sector or versus just the overall market, which is heavily weighted toward Bitcoin,

Like it's all been trending down in this very clear downtrend really since 2022 with just some counter trend reversals. But when those counter trend reversals happen, they're spectacular. And the two that we've seen, we've seen two essentially altcoin rallies or outperformance periods here.

As you said, it was at the end of 2023 and 2024. And that was pretty substantial. Like there was some real big outperformance there. And that was, that happened just at a time that everyone said, you know, alts were dead. And then we had a mini one in Q4, which pretty much ended by the start of January or smaller in scale.

Um, and that was, you know, so when I look back at the last cycle, you had about three of those big moves or three or four, you could argue. Um, so I still think that there's going to be juice in this market for all coins to outperform and let,

If we believe that blockchain adoption is going to continue to increase, capital will flow into not just Bitcoin, into other networks. And when you look at the amount of fees some of these networks are spinning off, it's remarkable. I mean, it's starting to get very concentrated in the smart contract platform with Solana.

and Ethereum. But I mean, you know, there's, I think there's so many announcements coming out this in the last couple of weeks of so much more activity happening on some of the other chains is yet to realize substantial amount of fees. But I think, you know, that there won't be two chains that,

you know in five years time there will be you know probably five to ten chains um you know it's the everyone's sort of objective to sort of try and find which ones will be you know those second tier um chains and when you think about applications themselves like some of these applications that are sitting on these chains either they're sort of mainly um d5 type tokens

They're trading on like one, two or three times their fees. So effectively the equivalent of like one, two or three times revenue. So some of these applications are no longer like super expensive, right? And in many cases now, especially with the regulatory changes, they're going to be returning capital or find a way for value accrual and the underlying token, UD swap comes to mind.

So, I mean, it's extremely bearish. The problem is you've just got this constant fucking dilution.

Right. So, so many, whatever the number is these days, I think it's like 7,000 coins plus God knows how many millions of meme coins. You've got two problems. You've got dilution from just so many new coins snapping up attention, but you've also just got the inflationary nature of a lot of these tokens. And until they get mature enough or they get traction enough that inflation doesn't come down,

That's why it's hard to be an altcoin investor because you're fighting a massive tidal wave of supply. So go where the activity is, go where the usage is. And it's pretty clear. You look at the Unchained Day where that is and if you're sort of exposed to those. It doesn't matter if you don't get this massive whopping 2017 altseason. It doesn't matter if you don't get the 2021 altseason. I think you'll do great.

really well, having some exposure to altcoins where you can see people are using the chain. Yeah. I definitely agree with your point on delusion. It's like one of the criticisms of ETH right now compared to perhaps three or four years ago is that

the kind of ETH scalability narrative has been L2s. And so there are now so many L2s that you can buy and which one do you buy? And it sort of dilutes the attention and the capital for ETH alone. And then if you expand that concept to the Altcoin market and the L1 market, it's a very similar thing. It's like, okay, do I buy Solana, Surrey, XRP, ETH?

I feel like there's three or four times more options for L1s now than there were three years ago. So it's hard to... If you want to express a view on alt season, that's maybe a general view. It's really hard to pick which one could potentially be the winners. I guess you could buy a basket of L1s, but it then feels like you're just...

you're just like offsetting good performance and perhaps sold versus like some of the other stuff. If you look at that basket last year, so it's really hard. Like I found it really hard to express in just like a, okay, I want to outperform Bitcoin. What do I buy? Like, it's been really hard to express that view, I think. And last year you could have done it with mean coins and then,

After the whole pumped up fun thing, it's just even with meme coins now, I mean, right now, a good meme coin will last, have a lifespan of about 24 hours. And then it's just like, okay, so we've gone to the next one. So it's just really hard to pick things that give you that outperformance against Bitcoin. And I know lots of people watching this show will maybe benchmark themselves to,

a stock index or something else, but people who are like really fully crypto native do benchmark themselves to Bitcoin. And many people will maybe even benchmark themselves to something like Solana. So it's just becoming increasingly hard to outperform it. And my hunch is that you have to kind of like pick a sector that will have some sorts of a narrative. And it was meme coins last year. And my hunch is perhaps it still could be the AI industry

sector this year i noticed you know if you look at the ai agent market cap is down 75 percent from its highs or something like that um that's the only thing i can see like fundamentally that could potentially have a strong enough narrative to outperform otherwise like you know there's stuff like monads and mega eth that are coming which are heavily you know heavily anticipated but it just feels like it's the same thing you know you buy one of these coins and then

Three months later, there's another new one. And then you have to make the difficult decision as to whether you want to rotate, what you want to rotate into. It's been very hard to just buy and hold something other than Bitcoin. And I guess Sol. Sol continues to outperform and gain dominance. And on the previous slide that you have where it had the dominance numbers, it struck me that Sol dominance is just...

Yeah, 3.2%. Potentially, looking at that against ETH or against Bitcoin, that's something that potentially I look at as maybe something that could rise because...

every single new coin and all the activities still seems to be, all the TVLs still seem to be on Sol. All the fees generated are predominantly from Sol ecosystem coins. So I guess that would kind of like be my bet. Yeah, look at the problem with all of those other sectors is, as you described it, narratives. Like everyone in crypto loves the narrative play because it's worked in the past. I think...

There's just too much competition now. And with all the supply that's going on, yeah, a narrative can take hold, as we saw with AI agents and AI infrastructure in November, December. But by January, it was pretty much pitted out. Now, like, there's a lot of potential in that space. But like, it's really the unsexy way to sort of build a portfolio in crypto. But like,

Why not just do the picks and shovels? Where are the AI agents operating? They're predominantly on Sol. They're predominantly on base. So you can form a portfolio. You can create a portfolio based on boring old fundamentals. And that's why, you know, I'm skewed to Bitcoin massively because product market fit, growing network. You can't say that about a lot of these other L1s or other applications, but yet there are

other applications and L1s that are growing faster. And, you know, it's a question of just sort of what's the right position size to try and get that little bit of outperformance and also trying to understand where we are in the cycle. You know, it was November, like early December, I was...

On Twitter and writing about it, just that, you know, you can see all the macro conditions tightening, like the dollar, the DXY had rallied from 100 to sort of 105 in a straight line. And it was touching on sort of, well, 107 at that point. And I was like, well, that's the top of a range that it's been in for two years. There are breaks above here. It's bad news. And, you know, and predominantly talking about Bitcoin at that point. And people didn't believe it.

And so, like, of course, everything is going to go down, especially the narrative driven sectors that don't have yet the fees, the adoption to justify their valuations. So, you know, everyone went all in on a narrative and you have to be a bloody good trader. You have to set price targets up 50%, up 100%, you know, take it. But everyone's looking for the 10x and then suddenly it's now their AI positions are long term investments. Yeah.

Sorry. It's a really unsexy way to think about the space, but look at the volatility of the asset class. It's bonkers. People just make it really hard for themselves by going at the risk of a bit too much. Yeah, no, I hear you. It's just like there's no asset class that has this level of volatility, even Bitcoin alone. And then if you think extend that to the thoughts of like alts and some of the lower caps, it's pretty insane. And it's just like,

I don't know. It doesn't matter how good a trader you are. It's impossible to navigate that perfectly. It kind of just feels like you're flicking a coin for the most part, unless you're privy to seeing all the flows and et cetera and knowing what's going to come next. But otherwise, I think it's pretty challenging. What do you think happens to Bitcoin dominance has risen substantially over the last two years of what we

feel like we're considering as a bull market. In the past, we've seen Bitcoin dominance rise, and then we have this great big alt season, et cetera, and Bitcoin leads first. Maybe this time is different because of the ETS plus the sovereign game. But what do you think happens to Bitcoin dominance if we move to a bear market? Because we also typically see it rise then. Let's say...

in six months time things turn and we haven't really changed from the levels which we're at now does that result in bitcoin dominance going above 70 percent and even higher than where we are now like i'm trying to wrap my head around what happens in in that situation

Well, yeah. So if you're talking about Bitcoin dominance being at... I know everyone refers to the trading view metric, so I can't remember where that is, but my Bitcoin dominance versus the top 200 assets, I think it's around...

Yeah, did you mention 64%? I think... I said 60, yeah. So everyone talks about the trading view metric because it's accessible and that's like 50, 55 or something or maybe 60%. So people are probably freaking out when they're looking at this number versus the one they're used to seeing in trading view. So my view is that it'll be lower by the end of the cycle because there will be a push higher and capital sort of

distributing through not through the entire space like that's the thing i just do not think we're going to see the rip-roaring old seasons of the past we don't have the kind of liquidity of the last cycle like you know direct checks to consumers or to taxpayers um created the conditions for you know bad shit crazy old season right um everyone's stuck at home and then just everyone's just flicking narratives and memes and

That's not going to happen. But as more institutional capital comes in, ETFs are being filed across a wider range of assets now, so Solana and Dogecoin, but they're other L1s. And then you'll start to see creative index products for DeFi and other sectors and blends of certain things, and that's what institutional investors will want.

So, you know, I think we'll get a period of outperformance, but it'll be so selective. And that's why I keep banging the table, like look at the activity, follow the activity. That's what drives prices. Like liquidity drives the asset class. But really, if you want to be a crypto asset picker, try to use some sort of fundamental rationale for it, which chains or which applications are growing fast and are not really overly expensive. So, yeah.

I would expect that number from 64 to be somewhere lower, under 60%. But if you're saying that it's going to finish the cycle where it is today, then yeah, in the bear market, Bitcoin will outperform everything else for sure. It's just higher beta in the rest of the space. So yeah, I'll push it to 70s and maybe even 80%. But I think it'll maybe end the cycle. This is a really hard number to pinpoint. It'll be lower from here is my suspicion, even with all the

investment that's going on, but probably not a lot lower. And therefore, you know, yeah, it's probably 70% in a bear market. Easy. Yeah. Yeah. That makes sense. I'm curious to see the other chart that you had up a moment ago on the alt season indicator. Talk me through what this means and what we're looking at here.

Right. So this is looking at the top 200. So I use an index provider called Bitformance and they have like really robust data at sort of the accessible to punters because a lot of the institutional index providers and I've worked, you know, I built the Bloomberg index classification system. You know, you'll pay, you know, an obscene amount of money. So it's not really, it's for funds. It's for ETF providers. It's not for the general public. So yeah.

You've got the ability to access this Bitformance product, which I think is pretty good. And so what I've done is I've just created an index of the coins outperforming Bitcoin on a 90-day look back period and mapped it as a time series. And so when you see these large spikes, it goes from zero to one or zero to 100%.

When these numbers here, like if you look back to 2021, when we said the all time high in the all season index, what that was saying was that 93% of the top 200 at that point in time were actually outperforming Bitcoin.

So, you know, when you get up to anything around 70% to 80% and you're holding a bunch of alts, you've probably done well that you should start be looking for the exits because that's when things are just way overheated.

And so if we look at the bull cycle that started in the end of 2022, but really for the broader market, it was 2023 because Bitcoin led and the rest of the market didn't even wake up until mid-year. We've had this one big, rather big one here in 2023, Q4, Q3, Q4. And then we had this really sharp but short-lasting spike in November, December.

um recently so if we go back to 2019 2021 the last bull market you had one two here you could argue and this was pretty sustained for a while and then three then four and then you know the last one was about 70 of the of the alts were outperforming so you know four to five sort of bursts um here we've had two

Look, if we get liquidity and liquidity hasn't even started and there's a big problem that they'll need to do something.

sooner rather than later with this geopolitical game that's being played. So while everyone's shitting themselves over their positions in the market, we're getting closer and closer to some action on that front. And so if global M2 is currently around 105 and it expands by 30% generally, just based on the last couple of cycles, and the low is 90%, we're probably looking at another 20%.

in 20 trillion in global M2 or the money aggregates of various top countries. And so that will fuel investment in everything, all assets, property, risk assets, but obviously crypto because it's a small asset class to go up. And so alts will benefit from that. So I think there's another one or two bursts higher. But as you can see, like sales outperformed

Bitcoin this cycle and, you know, God, XRP and some of the other ones have done really well, if not outperformed Bitcoin as well. You know, it's just the nature of the beast. But yeah, there's like L1s that have got, you know, traction and Sui has gone from, you know, no users to 700,000 daily actives.

They're starting to get some dApps. They're starting to see some DEX volumes, TVLs flowing in. So it's got the signs of network activity picking up. So, you know, there's assets to be looked at, but it's fairly narrow at this point because the activity is fairly concentrated. What's interesting to me about this chart is the last time we hit 0.8 on it back in the...

At the end of 2024, that was right around when Trump got elected and people were talking about Bitcoin Reserve. And the time before that was, looks like it was perhaps December 23, January 24, which was when we had Bitcoin ETF. So it's kind of interesting to see that actually like the two big market things, which have been like very Bitcoin focused, seem to be the times when

alts actually outperformed into it because maybe that's when everyone just goes risk on but the move following that is just like a down only pattern for this but I wonder if like the next like I'm always a believer in

I understand charts and seasonality and momentum, etc. But I'm always believing there's some sort of fundamental narrative behind that to perhaps explain it or that sort of times up well with it that people are positioning around. So I wonder if we get to a potential approval start of Bitcoin Reserve soon.

which you know maybe yes make time estimate for that is something like six to nine months i don't we haven't had any information yet so i'm just completely guessing there but um i wonder if we get as as news for intensifies around that if that ends up if ironically again that ends up being the sort of like fundamental catalyst that actually causes alts to to outperform again um

And then we'll see what happens after that, because, you know, maybe it's once again short-lived. But it seems like, you know, the big market, the big positive market news for crypto have generally been Bitcoin-focused. And in order to speculate on that, DGEN seems to want to gamble on everything else other than Bitcoin, which is like alts and memes and all that kind of stuff, which is what causes these like very short-lived spikes, because it's obviously not very sticky capital compared to the capital that goes into Bitcoin. Yeah.

So I'm curious to see if that's something we see play out this year. We should definitely circle back on it. Yeah, I think it's just because it was deemed a commodity by the SEC, so it was in the clear from a regulatory standpoint. It has global adoption, which is superior to every other asset. It has arguably the best product market fit.

It's the most decentralized. The amount of hash rate that's securing that network is many, many times the compute of the largest companies and nation states in the world. So everything happens first to Bitcoin. That's major. First one for an ETF. First and personally, hopefully the only asset the US puts in some sort of strategic reserve.

I just do not buy the argument from people's, you know, flogging their own tokens that should be included in, you know, in a strategic reserve of a nation state let alone the world reserve.

you know, the world's superpower. So, yeah, I mean, it's just, it all happens to Bitcoin first, but it also overshadows, I mean, it does overshadow all the other amazing developments that's happening across the ecosystem. Like we understand that blockchains have attracted a certain type of user up to this point or a majority of users up to a certain point who are basically gambling or trading.

whatever you want to call it um but it's basically proving out the infrastructure that is the blockchain to come what comes next which is tokenization of real world assets financial assets and we're starting to see that hondo just basically launched his own chain and is partnered with you know the who's who of traditional finance to bring stocks bonds you name it on chain

Every single bank has got a tokenization team by now. And if they don't, they should be a little bit worried looking over the shoulder. So that is going to happen. So it just feels like Bitcoin overshadows the other stuff. And it is, you know, to a large degree,

trading and having fun, but it shows that this infrastructure is actually the infrastructure of the future for financial rails. So, you know, I think it just overshadows things. It'll probably be a Bitcoin announcement or a Bitcoin development that pushes the market up, but, you know, blowing the surface is just a constant stream, you know, Visa integration, Web2 companies integration, you know, you name it.

Yeah, yeah, that makes sense. I think it's something that's worth talking about, again, kind of on the same path that we've been on for the show is ETH. So ETH BTC is, I mean, God knows, the lowest it's been in about two or three years or something like that, is my guess. But we did see this week the CBOE filed with the SEC for approval of 21 shares staking ETH ETFs.

which is a big thing in the TradFi world because everyone loves yield in TradFi. What do you think about this chart? There's a fundamental narrative there, which is it's the only other coin with an ETF. A stake in ETF, I have to imagine, would see a decent amount of inflow. Is that something that you think ties with the potential reversal of this? Because if there's one other...

I don't know if it's one of the things other than Bitcoin that does have a very strong story, I think, is still ETH. And I understand that a lot of the activity, et cetera, is on Sol, but from a higher level, the decentralization of ETH, I think, commands, I don't want to say greater superiority, but maybe allows greater capital, more sticky capital to be invested without feeling like it needs to dart to the next favorite L1. So

And then what are your thoughts on this chart, attempt to reversal? Do you think staking ETS and yield is something that's going to move the needle because the ETF, which have picked up a little bit this year actually, are still completely dwarfed by what we've seen for Bitcoin ETF? So I'm actually, yeah, look, I think we're rapidly approaching a pivot in Ethereum performance. Yeah.

Things are really, really bad at the moment. Against Bitcoin, I think we'll see outperformance coming soon. So I just tend to wait for the bottom to create and then a discernible break from a trend. So right now, if you look at this on the chart, you can see that it's like trying to catch a falling knife. Yeah.

interestingly just looking at the rsi in a weekly so rsi weekly divergences are more more powerful than daily because it's just too much noise and we've got a bullish divergence on the rsi the weekly rsi because this low on the rsi is i'm sorry this low here that the most recent one is higher than the previous one even though the price action went lower so that's a

interesting, bullish divergence, but it needs to sort of formulate, it needs to break out of the downtrend for me to sort of buy the story. But I think it is picking up for a couple of reasons. Like you mentioned the ETFs and staking. That will play really well into private wealth and institutional investors. And then...

If you, you know, Raoul's view on this, if you look at his research, is he's very much convinced looking at previous cycles that the ISM breaking or the ISM reversal above 50 is when Ethereum has started to really outperform previously. And that was sort of early 2021 in the last cycle. And...

where sort of like it's just a it's just i think an elongated cycle everything's been drawn out a little bit longer liquidity hasn't come as fast as has well we would have thought um so you know i think rouse pretty well i can't speak for him but i think he thinks based on historical correlations that you know ether is going to start looking interesting here as well um

What's interesting is like the Ethereum soul cross. So to sort of answer the question, it's like, yes, I think actually now things are as bad as they are. The Ethereum chain is...

From a network effect perspective, growing, more L2s are joining. That's compensating them for the massive cut in fees after Dancun. So they're edging towards sort of deflationary again when activity really starts to increase with liquidity and just more adoption and corporates coming on and all this tokenization that will happen a lot on Ethereum, more so than other chains, not to say that won't happen on other chains.

So it's all setting up really, really well for Ethereum, Bitcoin to reverse, to have Ethereum outperform Bitcoin. But when I look at the activity that's happening on Solana, it's eating so much of that market share of ETH. I think that cross, I think Sol continues to outperform Ethereum because they're growing faster.

at least at the base chain level. And Ethereum's network may be growing fast because Skull is multipliers of L2s, but boiling it down to the fees that the validators get on the Ethereum chain and the Solana chain, like Solana is getting rewarded for massive growth. It's still highly inflationary still, but it's growing a lot faster. And like that difference in market cap between the two feels like it has to close.

Yeah. Do you think we see a flipping of Solana versus ETH market cap? Nah, not this time. I mean, if ETH goes up, I mean, it just makes it harder for Sol to chase. And Sol is getting bigger and bigger as well. Like there's a premium there for a reason. I just think it will narrow or collapse a little bit. I mean, Ethereum is, you know, the big daddy of like smart contract platforms, most decentralized platforms.

Different infrastructure. And I think the market feels that that deserves a premium, but that premium will narrow or shrink a bit. Yeah. I mean, we all know how fickle the market is. It just takes the direction or the momentum to shift. And then suddenly everyone brings back the past narratives that we've seen. It's one of those things where you get the staking ETF and you look at this chart.

And then you start to see ETH move and you see this, you know, whatever it's like, it's two hand on that. It's like 2,600 or 700. I don't think it will take a lot for people to start to buy into that trade. I'm not sure what the timing of this would be. And when we would find out, um,

I guess it's now with the SEC to approve or reject this. Yeah, I need to look into it. Look, my old colleagues at Bloomberg Intelligence have their ears to the ground on the filings dates when they think things will get approved. So there's probably the best resource for tracking that stuff. But now, I mean, the market's catching up and there's a lot of good intel on the street.

But I'm not too sure. I guess the one thing I would just bring up on this chart is that I've just added in here CME futures positioning and it was so like the most short going into that sell-off of late last week.

There was so many liquidations. It was one of the highest liquidations as a percentage of ETH market cap. I think even higher than the lunar sell-off in Q2 of 2022, I think. So like how meaningful the liquidations were, sorry, the long liquidations. And usually long liquidations that are a couple of standard deviations above the norm.

and at levels where historically capitulation lows are formed, like Q2 of 2022, like ETH bottom before Bitcoin, around Q2, Q3, and then Bitcoin bottoms in Q4. But that feels like a complete capitulation washout situation. So it's got the ingredients for a big time reversal. Yeah, I think that's something that had been widely commented on with the OI on ETH being down.

the highest it's ever been for a long, long time. And I can't remember what the notional value of that was and by how much it got taken down, but it does feel, I mean, just looking at this chart, you can see quite visibly, it does feel like we've had the biggest flush out ever of that in terms of people listening.

So, yeah, I mean, like that plus where we are on this chart, you know, the EFPC level is back to where it was, back to the lows of where it was in 2021, plus a potential stake in ETF. Kind of, you know, if you can't move here with all this going for it, I'm not sure what will move it really. Yeah, exactly. Exactly. I mean, you've got probably...

You've got an opportunity, you know, to put on a long trade here with a very tight salt loss. That's the benefit of like maybe taking a view ahead of the reversal because you've got a very definitive support line there. The question is, even if you get it right, is it going to outperform other things? Like it'll go up, but, you know, you'll be sitting there going, well, salt's going up 2x, what ETH is or...

some of these LL1s or apps. So that's the question. So I would look for the reversal on the ratio chart to really like sell me the story that it's now time to iron ETH. Yeah. I think personally, I have too much PTSD from trying to long ETH for the last 12 to 18 months and never really working or I guess the mistake I've really made is catching these moments, these bottoms, but

holding onto the trade for too long and, you know, expecting that, okay, we've had this move, but it should really, you know, it should be this big move here and not taking, taking profits when I should have, because you're expecting a larger move or at least playing for a larger move. It's been a bit, I think it's faked. It's faked on two occasions. Like, yeah. Yeah. Back in sort of mid 2024, then there was end of last year. So yeah, it's, it's been super difficult. Each time it looks like technically it's like trending up and,

But still, even when it was trending up, it was lagging the market. And that was telling you something. Yeah, yeah, exactly. Like it was, you could have just, it was a market move higher with an underperformance in ETH, which meant, you know, you'd be better off in Bitcoin or Sol. And that was the great barbell trade last year. I know part of me still thinks it's the barbell trade for this year as well, but kind of feels like it might be worth having some sort of, you know,

some sort of position on ETH. I guess it's just the other thing as well. Like, you know, for people who are very ETH heavy, they may benchmark themselves against ETH and think about, okay, what's the, what's the beta trade here? In the past, it was perhaps like arbitrary or more optimism and, you know, maybe even Polygon three years ago, but now there's so many L2 that I don't even know why I would pick to express that. Yeah. I'm not,

not that bullish on meme coins anymore. And that was a way to outperform that. So I think like DeFi could have potentially have a resurgence, but especially in this, under this Trump presidency. And if they have the ability to distribute fees to token holders, like that's something I think looks interesting. I look, I agree. Like what's going on in the DeFi sector is extremely interesting. So I wrote a report for ProCrypto back in March,

What was it, December now? It was bullish, but I was looking at the price action and it just looked like it was going to come off and liquidity wasn't there. So it's round trip since then. So you've had these two big spikes since really 2023 bottom. And it's like, you know, this is essentially a, you know, it's gone up three and a half X, right?

And the last one from the lows of last year was 2.5x. So you get these large moves, but round trips, it's really, really difficult. But then again, the fundamentals in that DeFi space, if you look at the top protocols, how much fees they're generating, the ones that have been around for a while...

And then you've got, you know, you've got newer protocols that are actually out-competing the Uniswaps. And, you know, I think maybe Morpho is doing more than Aave. I could be wrong, but, you know, it's a relatively new lending protocol. But you've got still with those old tested protocols, when I say old, like...

What are we talking about in crypto? Six years? Yeah. But they're battle-tested through bear markets, through massive liquidation events in the markets and counterparty failures and whatnot. They've come through. They're building solutions for institutions to use them in a secure, permissioned or KYC way. And they're cheap. I've got a screen, which I won't show here, but I'll just talk through it. It's like some of the...

The price to fees or market cap to fee ratio for a lot of smart contract platforms like the chains are hundreds, sometimes thousands. And some of these protocols are trading at one, two or three times their fees. So I just think about this of like, where are we going? Institutions are coming in. What are they going to look at? They're going to look at valuations. No one gives a fuck about valuations in crypto. I don't even know what a valuation is.

They think like looking at, you know, Twitter mentions is a valuation metric, like market cap to Twitter followers or Telegram followers. Like...

Yeah, there's probably some signal there, but like you're not going to get institutions coming on that. And what they're going to do is they're going to, you know, do the old boring modeling that they're used to when they look at financial companies or any company. Look at the cash flows, look at the earnings, and they're going to work out like what sort of what's appropriate for these assets. And they're going to look at a lot of chains that are trading on hundreds or even over a thousand times price to fees and

And then they're going to look at the apps and go, right, well, these things are trading on like one, two, three, four, five. Some of them are 10 times, which is, you know, still incredibly cheap. And then they're going to think about, okay, so what happens in the future? Like a user is going to give a shit about whether they're using a chain, a specific chain. They're probably going to come into crypto through an app. And that app is going to be multi-chain and abstract away all the complexity of choosing or swapping between chains.

And so they look like really undervalued assets in this ecosystem at this point because they only represent 1% of the top 200 market cap. Yeah, yeah. I think it's something that's worth looking at. And I think one of the things that really crushed DeFi was regulation for the last, whatever, two, three years. That's not a big change. And as you said, if you look at some of these multiples,

a lot of the stuff screens extremely, extremely cheap. I mean, if you ever looked at Radium, for example, on Solana, but like the annualized fees they are generating there is like a crazy, crazy... Oh, yeah, great. We have the numbers here. Yeah. It makes this look like very cheap just because of all the activity that we're seeing on Solana. And, you know, every pump fund coin that graduates has a Radium pool that's created, which is...

um i'd know something like 15 to 30 tokens a day um all the fees generated from this come from you know stuff like the bigger meme corners like trump and milan you know that kind of stuff i think i think there was one day when medium made like 32 million dollars in fees when um when the trump coin came so you know that's more than that's more than all smart contract platforms make in a day

Yeah. Yeah. It was like, I think it was like the top, top fees, like everything basically on that day. So, yeah. And so like, you know, this is, this is data as of the 9th. So daily fees on that day on a 14 day average was 5.8 million. It had fallen, it's fallen 29% over the last month. Price has actually outperformed that, which is interesting. Usually fees and price are pretty correlated. Yeah.

um but uh over the last three months fees are up a hundred percent like you're as you're saying capturing um that january period um so price is down over three months 16 17 and and fees are up 100 and you know daily active users is 2.9 and we all know that daily active users is a pretty lousy metric um because a lot of fakeness and spamming and whatnot um and

you know, a lot of that activity sort of been definitely having on with Radian. But you can't escape the fact that the, you know, this thing is actually generating, I don't know what annualized that five or 6 million up is, but if you look at it on a, have I got the, wow. Okay. So, you know,

Network value to fee ratio, which is, I just call it something different, but it's like maybe price to sales if you're a travel guy. There's less than one, right? So that's analyzing their fees, by the way. So-

The question is like, is it sustainable? Because this is open source software. So what happens if someone forks? We're writing, it was probably a bit more difficult on Salah, but like on Theria. So what sort of moat do they have to defend their business going forward? And that's the breakneck sort of technological war that happens in this space to try and keep ahead of competitors. But like at least right now looking at it,

It's incredibly cheap versus, you know, the whole space. And if you look at just the whole DeFi economy, you know, there's 5.6 million, you know, daily active addresses in DeFi right now. And it's generating 29, 30 million a day in fees, which is more than the base chains. Yet they trade on multiples of, so, you know,

That's my compelling case. But at the same time, like the chart sucks. Like, yeah, you just, it's not a great shot. It's not a great shot. Yeah. It just, you know, you look at that and that what you just mentioned, like, you know, fees up 108% while prices down 20% in the same period. It's kind of crazy to see. It just, I look at all this and I just think like it's,

Just another reinforcement of the fact that if they're able to turn that fee switch on and distribution to token holders, which is a possibility, I think at some point that all of this stuff could really move a lot higher. I mean, radium and I think stuff like hyperliquid, they do buy and burn tokens with their fees.

and I can't remember the exact proportion in which they do that in and what the numbers look like but that looks very compelling too but for whatever reason it's just not strong enough for people to like jump onto the trade but I think you know if you're able to distribute fees to token holders again that's like a big tradify thing that I think will bring a lot of people in which would be great like I'm now earning a share of these fees from holding this token it has a

It's created a dividend-like instrument that was done after the fact, like after it was launched. So I don't think there shouldn't be any securities issues there, or at least not from the initial launch of the token. But that's something I think that could be pretty interesting for DeFi as a whole. But I just haven't seen like any headlines or any news flow or anything really on fees switches, just speculation. Like when Uniswap does it, I think it'll be meaningful. Like,

It seems to be just the old ETH-based applications. In Seoul, there's definitely value accrual happening. So the tokens are a way to realize the value from the activity on the chain. Uniswap, a couple of others have just not done that. But yeah, it feels like once...

These things are potentially trading real world assets or financial product from TradFi. You've got institutional capital that's waiting to come into the space and they're looking at, oh, you mean I can trade on the CME or I can trade in

you know, the ASX here in Australia, or I can go on chain and do it. And, oh, who's the equivalent of the CME or the ASX in crypto land? Oh, it's this DEX or this multi-DAP application that does at, you know, lending and derivatives and spot, right? Which is you starting to see. And like the, they're just like,

insanely profitable versus those old, you know, the ice and like the internet, yeah, international continental exchange, like, you know, well, I don't know if they own the New York Stock Exchange, but anyway, all the, you know, Hong Kong Stock Exchange, the Australian Stock Exchange, London Stock Exchange, like which businesses are more profitable and on a profitable and on a per employee basis, because it's really just a couple of developers and then which ones are growing faster.

Yeah. So I think my takeaway from the show, where we came into with talking about Bitcoin dominance and how do we outperform Bitcoin? I think my takeaway is actually there's a handful of things to look at where charts are pretty much at the bottom, whether it's ETPTC, whether it's this DeFi chart. And there are potentially some catalysts or narratives where we could see a reversal of that. Like, I don't think

I'm not saying I'm just going to like full port ETH and that's going to be my trade for the next few months. But I think for like a shorter term trade, it does feel like there are some good, like maybe not like the best performing trade in the market, but trades where the downside feels like it's relatively capped right now with some potential for reversal and momentum shifting along paired with some fundamental cast lists. So I think that's something I'm going to look at. Like I think I'm going to look at ETH

I think radium screen is extremely cheap on that chart as well. I think that's something to look at as potential kind of like stories for coins that could perform if we do see Bitcoin dominance fall and what coins do well. Because there are some real, like, especially with the DeFi stuff, you can back that up with some real numbers. That's actual cash flows. That's coming in. It's not just like a flowery narrative. And I think that's my main takeaway from this, which...

I hope it's a bit more encouraging to people out there than the last show that there is. It does feel like there's some genuine, genuine opportunity there. So if you were, if you want to take some risk, I think there's some genuine opportunity there to have some positions on here. I think. I'm disappointed. You didn't try to show me some NFTs. Like one way street. I think, I think, I think Raul will be, will be even more disappointed in that. Yeah. I mean, yeah.

NFTs once were like the Ethereum beta. So maybe that's the argument there. And I think Ordinals did very well while Bitcoin rallied last year. So, you know, maybe that's a potential narrative there. But as much as I want the NFT market to rebound, I'm not holding my breath on that one. Yeah.

Tell me when all your mates have sold their NFTs, then that'll be like, that'll have to be like the contrarian signal. Exactly. Exactly. Right. Well, with that, I think we're, I think we're running up on time. So Jamie, it was a pleasure once again to have you, I think.

internally we will decide whether we bring back Mando or keep with the positive momentum of this show. But we'll be back with Wreck Vision at the usual time next week, 11.30am Eastern Time, 4.30pm Greenwich Mean Time. I hope everyone had a good time watching the show and let's hope we see some of this reversal that we're hoping for.

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