Mid-Year Crypto Update: Unbundled

Ryan Selkis, CEO of Messari, and known for his hot takes and entertaining threads is back at it with a big one.

Every year, Selkis goes to great lengths to produce Messari’s much-anticipated End of Year Report. And every year, we consider it borderline required reading. It’s jam-packed with research-backed predictions, quality insights, and overall, paints a good picture of consumer sentiment and the current trending narratives surrounding crypto.

Lucky for us, this week, Selkis unexpectedly went on a bender to produce a quick-hit 2023 “mid-year” update via Twitter.

In his words, he wanted to get this out because “a lot has changed in the first half of year” and that he’s never been more bullish on crypto than he is now.

We couldn’t agree more.

So in the light of saving you time (although you can still read the entire thread here), we wanted to share an overview of what we thought was most interesting and important.

🧵 Thread Highlights:

1.) Right now, it’s all about the macro.

In other words, all eyes should be on Bitcoin and Ether and not things like DeFi, NFTs, the metaverse, L2’s and all the other distractions that came about between the 2021-2022 bull run.

• We agree. There’s a reason your friendly writers at CoinSnacks continue to pound the table on BTC and ETH adoption stories over the drama-ridden spats about DAOs, lending protocols, meme coins like PEPE, NFT insanity and so forth. The king-of-the-throne cryptocurrency, BTC, and the industry titan cryptocommodity, ETH – which, together, already take up ~75% of the market – are undoubtedly the primary drivers of today’s evolving crypto economy.

2.) The Bitcoin spot ETF itself won’t matter that much.

While a BTC spot ETF would certainly boost adoption, its price impact will be baked in well in advance. The actual shift in crypto demand will come from the credibility of new institutions like Blackrock piledriving into the space, not just from ETF flows. This means that retail investors right now can front run an ETF and any subsequent price moves.

3.) There are three medium-term macro narratives to live and die by right now.

The narratives/tailwinds that currently matter are:

• The lack of confidence in central banks: Funny money monetary policies are quite the norm these days. Don’t be surprised if there’s more inflation, even higher rates, and more money printing.

• The role of crypto in an AI-driven world: In an age of digital abundance, tech that provides reliable, global, mathematically guaranteed scarcity is critical.

• The importance of a balkanized global economy amidst great power conflict: Countries that are not aligned with the US, whether they are independent or rival states, will increasingly use gold and other forms of digital currency to diversify their reserves.

4.) People and projects worth paying attention to in the meantime:

Important People:

• @iampaulgrewal, Coinbase’s (COIN) Chief Legal Officer, who is leading the fight for crypto in the US

• @ddisparte, Circle’s Chief Strategy Officer, who is pushing for bipartisan stablecoin legislation

• @s_alderoty, Ripple’s Chief Legal Officer. Their case vs. the SEC will likely have a mass effect on the future of digital assets not named bitcoin; ruling is due soon

• @RishiSunak, UK’s Prime Minister, who recently formed a CBDC Taskforce, and successfully pushed for regulatory crypto clarity in the UK

• Other people to watch include: Binance’s CZ who is getting absolutely pounded by regulators (and rumors), BlackRock’s Larry Fink who recently joined the BTC spot ETF race, and the cofounder of MakerDAO who is pushing for operation “EndGame”

Products to Watch:

• Firedancer, a Solana validator client developed by Jump Crypto

• Sovereign SDK, a flexible, chain-agnostic framework for rollup development

• BASE, also known as Coinbase’s entrance (with its 110 million users) to the Layer2 ecosystem

• Hooks (UNIv4), customizable smart contracts with specific integration rules to a given protocol

• The booming ETH staking ecosystem

• Decentralized Databases, a much-needed Web3 component

• Lens Protocol, an early leader in the decentralized social media onramp

• XMTP, a generalized messaging protocol and network that allows end-to-end encrypted messaging between crypto addresses

• Safe (and other wallets) benefitting from ERC-4337 (account abstraction)