THE PHENOM CRYPTO LETTER

GM,

Annnd we’re back. Welcome to the Phenom Weekly Update, where we tell you everything you want to know about crypto this week and some stuff you don’t. After some rough weeks in price action crypto is back in the green!

Here’s what we’ve got this week:

Jump to :

• Video Update from Eric

• Market Rundown

• Reading Corner

• Blockbuzz

• Crypto Twitter

• Memes

MARKET RUNDOWN

News Recap

• Craig Wright updates his website with an admission that he is not Satoshi Nakamoto following a court order and faces potential perjury and forgery charges.

• Bitcoin back above $65K as traders shake off Mt. Gox BTC transfers, with $6bn moved in Bitcoin signaling an imminent payday to creditors.

• Bitcoin prices have been receiving weekend bumps this summer, with mining stock values rising faster than the BTC they produce according to JPMorgan.

• Bitcoin ETF traders bought the dip and are now buying the rebound as inflows topped $300M on Monday.

• Deribit to launch bitcoin and ether options to bet on US election.

• Trump's VP pick, JD Vance, could mean a new era for crypto, with Trump campaign's crypto donations amounting to $3M of $331M raised last quarter.

• SEC signals possible ETH fund launches next week, with institutions more bullish on Ether than retail ahead of ETH ETF launch.

Markets have bounced back hard this week with most tokens in the green with sentiment rising strongly back out of negative levels.

What Does J.D. Vance as VP Mean for Crypto

On July 15th, during the Republican National Convention, Donald Trump named Senator J.D. Vance as his running mate. This came just days after an assassination attempt on Trump and amid increasing calls for Joe Biden to withdraw following a poorly rated debate performance on June 27th. With Polymarket placing Trump’s chances of winning at 71%, Vance is poised to become the next Vice President.

Political analysts are now dissecting Vance's record on various issues, but what does his vice presidency mean for digital asset policy and us, the crypto community.

Vice Presidents traditionally wield limited policy-making power. However, they often champion secondary policy areas delegated by the President to bolster their credentials for future political aspirations.

Trump's recent pro-crypto stance suggests a positive outlook, but it's clear he lacks deep knowledge of blockchain technology and digital asset regulation. Crypto, being a secondary issue for the Trump campaign, is an ideal policy area for Vance to lead.

Vance is a strong advocate for crypto and is well-suited to be the administration’s crypto policy leader.

Proof is in the pudding:

• Vance is spearheading new crypto legislation in the Senate, which industry advocates describe as “much, much better” than the already favorable FIT-21 bill passed by the House in May.

• He is the first presidential ticket candidate to hold cryptocurrency, with disclosures revealing he owns between $100,000 and $250,000 in Bitcoin on Coinbase.

• Vance has openly criticized SEC Commissioner Gary Gensler, stating that “Gensler’s approach to regulating blockchain and crypto is exactly the opposite of what it should be.”

• At 39, Vance brings youthful energy to the political arena and has valuable VC experience in the tech industry at Peter Thiel’s Mithril Capital, positioning him as a forward-thinking leader in tech policy.

While the election landscape is unpredictable, Vance’s potential influence seems promising for the crypto industry. @DCINVESTOR and Jake Chervinsky said it well, can you imagine an SEC that is on team crypto??

State of the Market with Raoul Pal and Chris Burniske

Raoul Pal, co-founder of Real Vision (see Eric’s Real Vision interviews here) and Chris Burniske, former head of crypto at ARK Invest are two of the most respected experts in crypto and over the years I’ve found valuable insights in their work. Recently, they had a 90 min podcast and the discussion shed light on several key aspects of the current state and future of the crypto market. I’ve broken down a few highlights from their long form discussion here that I think are important for everyone.

Token Growth vs. Attention Growth

One of the standout points from the conversation was the disparity between token growth and attention growth. Token growth refers to the proliferation of new cryptocurrencies and projects, which are rapidly expanding. However, attention growth, particularly from quality investors, hasn't kept pace. This imbalance can lead to volatility and speculative bubbles, as retail investors often chase less stable, high-risk altcoins instead of focusing on more established assets.

The Shift Towards Layer 1 Blockchains

Pal and Burniske emphasized the increasing focus on Layer 1 blockchains such as Ethereum and Solana. These platforms offer more stability and have garnered substantial attention from serious investors. The shift towards these blockchains indicates a maturation in the market, where value is placed on the foundational technologies that support a wide range of applications and innovations.

Retail Investors and Speculative Altcoins

A recurring theme was the behavior of retail investors who often flock to speculative altcoins in hopes of quick gains. This approach, while potentially lucrative in the short term, can be perilous. Pal and Burniske advise that a more strategic focus on established cryptocurrencies can offer better risk-adjusted returns.

Integrating Crypto into Traditional Finance

Looking forward, the integration of crypto into traditional finance systems and everyday applications is seen as a significant driver of new attention and investment. This integration will likely bring more stability and wider acceptance of cryptocurrencies, bridging the gap between the traditional financial world and the emerging crypto space.

Long-Term Success in Crypto

For those committed to long-term success in crypto, Pal and Burniske highlight the importance of managing portfolios based on market cycles rather than getting caught up in price predictions. They advocate for filtering opportunities carefully and focusing on projects with solid fundamentals.

Surviving Market Volatility

Surviving the inherent volatility of the crypto market is crucial. The experts noted that enduring through the downturns allows investors to capitalize on future peaks in adoption and liquidity. According to their projections, the next significant wave of mass adoption and liquidity might be expected around mid-2025.

Conclusion

In summary, the insights from Raoul Pal and Chris Burniske provide a roadmap for navigating the often tumultuous crypto landscape. By focusing on quality investments, integrating crypto with traditional finance, and maintaining a long-term perspective, investors can better position themselves for future success. .

For those interested in diving deeper into their discussion you can watch the entire interview here

READING CORNER

A collection of longer form content we are consuming this week

BLOCKBUZZ

Quick Hitters from the week

• Coinbase Introduces Wallet Web App: Launches a web app designed for seamless onchain activities.

• North Korean Hackers Target Crypto Job Boards: Engaging in a covert operation that has netted $600 million.

• BlackRock’s BUIDL Joins MakerDAO’s $1 Billion RWA Initiative: Participates in the Spark Tokenization Grand Prix, part of MakerDAO's Endgame strategy starting August 12.

• Metaplanet Bolsters Bitcoin Holdings: Japan's Metaplanet adds another $1.2 million worth of Bitcoin to its corporate treasury, announcing the purchase via a press release.

• Crypto Enthusiasm Wanes as US Economy Peaks: Coinbase suggests that retail investor interest in crypto may decline following the peak of the US economy in Q2.

• Goldman Sachs to Launch Tokenization Projects: Plans to roll out three new tokenization projects by the end of the year, according to reports.

THE TWITTERVERSE

A collection of the most interesting stuff on Crypto Twitter this week

WAGMI

For the (crypto) Culture

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