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Lots of bearishness on the timeline which based on recent market volatility. When we are locked into a small bubble of recirculating opinions, this view is easy to understand. IMHO it’s time to take a step back and look for the forest through the trees.
A few weeks ago I listened to a podcast from a big TradFi institution on the future of crypto. Even one year ago, this likely would have been a bearish discussion filled with the risks and reasons why it should be avoided at all costs. This discussion — wasn’t that. It was optimistic about crypto’s integration into finance, tempered by recognition of current limitations and regulatory timelines.
🪙 Their short-term view indicated broader ETF approvals and flows will drive growth at both a retail and institutional level. ETF inflows have even exceeded those of gold ETFs when adjusted for inflation.
🪙 With regard to BTC, the view was its correlation is still too close to equities and tech stocks to be ‘digital gold’. But as the market matures there is a view it could reach that status as a diversified asset.
🪙 Further, utility and use cases (e.g., stablecoins, tokenization) have a stronger investment thesis over speculative meme coins, which lack intrinsic value and are classified as collectibles by the SEC. Stablecoins serve as an on-ramp to crypto and along with tokenization, are highlighted for their real-world applications, like payments and operational efficiencies.
🪙 Long term, Crypto’s maturation into a distinct asset class hinges on adoption and regulatory clarity, though patience will be required as legislation lags behind the fast-moving industry.
IMHO there is a lot to be excited for and it’s probably coming sooner than later. From an operational standpoint, TradFi wants crypto adoption because it will create massive efficiencies in a system that’s aged and built for an analog world. Once normal retail users are using stablecoin wallets, it becomes a much shorter jump into the digital collectible and token pools than it has ever been. Not everyone will want to play on this market — but like AOL and the broader internet in the 1990s — new pioneers will emerge.
I’m 🐂 for the future.
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