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In today’s newsletter:
🔎My expectations for the next few months
📊On-chain alpha
😂Crypto meme of the week
🗞️The latest DeFi news
🔎My expectations for the next few months
BTC is now almost back at all-time highs.
Despite this, the market has been pretty boring over the past few weeks.
But I believe this is going to change soon after the US presidential election, which is now only 4 days away.
Financial markets hate uncertainty. This is why things seem so quiet now.
And even though Trump seems likely to win the US election according to Polymarket, this is still a very tight presidential race.
What does the US election have to do with crypto?
Well, 2024 is the first year when crypto has actually started to matter in politics.
Over the past years, the crypto industry has donated a whopping $200 million to US candidates and political organizations.
And according to recent surveys, somewhere between 10-20% of US citizens hold crypto. Hence, political candidates can no longer ignore crypto.
If the US would start embracing a pro-crypto stance for the first time ever, this could be ultra-bullish for the market.
What I expect post-election
Based on promises, Donald Trump is clearly the more pro-crypto candidate.
During his attendance at the Bitcoin Conference earlier this year, he promised to fire Gary Gensler (the Chair of the SEC), create a strategic national BTC reserve, and make the US a leader in crypto.
On the other hand, Kamala Harris also subtly announced her support for a crypto regulatory framework, but without sharing any concrete details.
So a Trump win is probably going to be way more bullish for prices.
Still, I’d say that no matter who wins the upcoming US election, BTC is still going to perform well in the coming months.
If you look at what happened in 2020, 2016, and 2012, BTC and crypto in general saw a massive rally in the months following the US elections as the uncertainty around who is going to be the next president disappeared.
In the short term, though, don’t be surprised if we see a small BTC dip that lasts a few days.
Highly anticipated events tend to end up being sell-the-news.
But as long as you don’t use high leverage and stay patient, I believe most of us will be very happy with the gains we will make over the next 4-6 months.
The setup for the next few months looks promising:
BTC is almost at ATH while there are no signs of retail being here (which means there is still a lot of capital that can flow into crypto)
The supply of BTC on exchanges is rapidly declining
Both gold and S&P 500 are close to all-time highs
New rate cuts are coming soon
My opinion is that the best part of this cycle (which historically happens in the last few months of the bull market) is still ahead of us.
But get ready for some market volatility in the coming days.
Together with Puffer Finance
The Solution to Ethereum's Fragmentation
Puffer Finance is known as a leading innovator in the ETH liquid restaking sector.
But now it is evolving into a comprehensive Ethereum scaling solution, with the goal of tackling one of Ethereum’s biggest challenges: liquidity fragmentation.
As part of the Puffer ecosystem, there are now 3 key components:
Puffer’s ETH Liquid Restaking Token - which is supercharged by EigenLayer, offering superior yield and slash protection
Puffer’s UniFi Based Rollup Stack - enabling seamless interoperability between L2s and the L1
Puffer’s UniFi Preconf AVS - enabling near-instant finality for both L1 and L2 transactions
Not only Puffer’s solutions aim to significantly improve the on-chain UX, but they’re also addressing critical issues like centralization.
While most L2s rely on centralized sequencers, Puffer’s UniFi leverages Ethereum validators for sequencing, inheriting Ethereum’s security.
With UniFi, the need for bridges is eliminated.
Learn more about Puffer’s solution to Ethereum’s fragmentation!
On-chain Alpha🔎
Memes, AI, BRC-20, and RWA have been the best-performing narratives in 2024
There’s a saying in financial markets:
Winners average winners.
I think the market has shown its hand and if you want to outperform over the next months, it’s best to bet primarily on projects related to one of the above narratives.
Crypto Meme😂
The latest developments in DeFi
MicroStrategy plans to raise $42 billion over the next 3 years to buy more Bitcoin
Chainlink’s Data Streams have launched on Solana mainnet
Coinbase introduced 'Based Agent', allowing users to create AI agents to automate on-chain actions in just a few steps
Jito launched restaking for SOL and SOL liquid staking tokens
Fluid DEX, a novel DEX that improves capital efficiency, went live. Fluid DEX enables borrowers to earn trading fees on their debt
mETH Protocol released its token COOK and Mantle’s new restaking token called $cmETH
pSTAKE Finance launched its token PSTAKE on Sui Network
NATIX Network’s deep staking platform for $NATIX went live. The average long-term yield for staking NATIX is estimated at around 17.5%
Synthetix proposed acquiring Kwenta from token holders
MANTRA teamed up with Google Cloud on an accelerator program for RWAs
Stacks’s Nakamoto Upgrade has finally been completed. The upgrade brings a significant reduction in transaction times
Kraken announced the launch of its Ethereum L2 using the OP Stack
Base L2 implemented fault proofs, enhancing decentralization
Arkham has added support for Solana
Base introduced Checkout, enabling merchants to accept USDC payments with one-click checkout
Infinex has raised $67.70M in total funding
That’s all for this week!
Until next time,
The DeFi Investor
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