Podcast Summary
Exploring new narratives in crypto: Stay open-minded to emerging narratives in crypto and consider which resonate with individual investors. Explore Galaxy, a platform for discovering new chains and earning rewards, during the bear market.
While the crypto market is currently experiencing a bear run and there seems to be a lack of clear direction or narrative, it's important to remember that crypto thrives on narratives. Investors Maddy and Fisc from ZPrime Capital discuss the potential new narratives that could emerge in the crypto space, emphasizing the importance of staying open-minded and considering which narratives resonate with individual investors. Additionally, they introduce Galaxy, a platform that allows users to explore various chains and earn rewards through completing tasks, providing an opportunity for exploration and learning during the bear market. Overall, the episode encourages listeners to keep an open mind and actively seek out new narratives that could shape the future of crypto.
Navigating the crypto landscape: Focus on market-validated narratives and underlying fundamentals: Stay informed about market-validated narratives and underlying fundamentals in crypto, and utilize tools like Arbitrum, Brave Wallet, and Nexo to simplify managing assets and stay adaptive in the ever-evolving space.
While personal opinions and resonance can be important, it's crucial to look beyond them and focus on the fundamental aspects of the crypto space. This was emphasized during a discussion on finding the next big crypto narrative with Maddy and Fiscantes from Z Prime Capital. They suggested looking at market validated narratives and the underlying fundamentals. To help navigate the crypto landscape, sponsors like Arbitrum, Brave Wallet, and Nexo were highlighted. Arbitrum, a secure Ethereum scalability solution, is accelerating web 3 development with its fast and low-cost transactions. Brave Wallet, a secure multi-chain wallet built into the Brave privacy browser, simplifies managing crypto assets. Nexo, a financial hub, offers various crypto services including buying, trading, earning interest, and access to a crypto-backed Mastercard. The discussion also touched on the importance of staying informed about the latest crypto narratives and trends. Maddy and Fiscantes shared their insights from a post called "The Next Big Crypto Narrative," emphasizing the need to stay adaptive and open-minded in this ever-evolving space.
A time of reflection, learning, and innovation in crypto: Despite the uncertainty of the crypto market, it's a crucial phase of evolution and growth, with a focus on building practical solutions and moving beyond hype and imitation.
The current state of the crypto market might feel uncertain and disorienting, but it's not a completely new or uncharted territory. Instead, it's a reset period where old concepts are being dismissed, and new ideas are emerging from within the founders and core teams. The market might be experiencing a bear market, but it's not the first time, and it's essential to remember the lessons from past bear markets. Some may draw parallels to 2018, but others see similarities to earlier market crashes like the 2000 dot-com bubble or the 1987 stock market crash. Regardless of the specific comparison, the consensus is that this is a time for reflection, learning, and innovation. The crypto space needs to build more useful and practical solutions to address the real problems and move beyond the hype and imitation. So, while it might feel lost at times, the crypto community is not actually lost. Instead, it's in a crucial phase of evolution and growth.
Crypto Market Crisis of Confidence in 2022: Centralized Entities vs Decentralized Infrastructure: Despite macro pessimism, decentralized infrastructure like DeFi allowed the crypto market to recover faster from a crisis of confidence in 2022, with real-world apps and expanding notions of DeFi offsetting the impact of a failed narrative catalyst like the Merge.
The crypto market in 2022 experienced a crisis of confidence similar to the one in 2013, but with the added influence of macro pessimism. The market structure was held together by a few centralized entities, but decentralized infrastructure, particularly DeFi, held on and allowed for a faster recovery. The failure of the Merge as a narrative catalyst was offset by its fundamental improvement, which will have a significant impact on the price and market in the long term. Unlike in 2013, when a major crypto bank (Mt. Gox) blew up, causing the bear cycle, or in 2018, when there was a crisis of use case, the crypto market today is producing valuable real-world apps and the notion of DeFi is expanding beyond a niche. However, the added influence of macro pessimism, such as fears of nuclear war, makes the market more volatile and uncertain.
Valid use cases for crypto beyond Bitcoin: NFTs represent one use case where people collect and engage with digital assets for identity and community purposes, but the crypto market needs wider adoption to fully validate these uses and discard speculative ones, while navigating macroeconomic challenges with a nuanced approach.
While the crypto market is currently experiencing low volumes and skepticism, there are valid use cases for crypto beyond just Bitcoin. NFTs, despite being heavily speculative and massively overvalued, represent one such use case where people collect and engage with digital assets for identity and community purposes. However, the crypto market still needs to reach wider adoption to validate these use cases fully. The current bear market may be a reset period to focus on proven applications and discard speculative ones. Additionally, unlike in 2018, the crypto market now faces external macroeconomic challenges that require a more nuanced understanding and approach. It may be beneficial for the market to lack a single narrative for a while as it navigates these complexities.
Reflecting on the crypto market and learning from past crises: Instead of rushing to find quick solutions, it's important for the crypto community to accept the market downturn, evaluate use cases and product-market fit, and focus on innovation to prepare for eventual recovery.
The current crypto market situation could benefit from a period of reflection and soul-searching, similar to what the industry went through during past bear markets. Instead of rushing to find a narrative or quick solutions, it may be healthier for all market participants to accept the void and spend time evaluating and improving use cases and product-market fit. History shows that it took several years for the market to recover after major crises, such as the dotcom bubble burst and the 2008 financial crisis. It's essential to remember that the crypto market is also influenced by macroeconomic factors and that the industry tends to be more pessimistic than traditional finance. Rather than focusing solely on external narratives like the Fed pivot, the crypto community should focus on innovation and creating better applications to prepare for the eventual market recovery.
Focus on crypto industry narratives and innovation: The crypto industry should generate its own narratives and offer better ideas and products beyond quick profits to appeal to a wider population.
While macroeconomic events and narratives dominate the crypto market, it's still essential for the crypto community to produce its own narratives and focus on improving the industry from within. The macro narrative of crypto as an uncorrelated asset class has yet to fully materialize, but it holds potential for the future. However, to make a real impact on the wider population, the crypto industry needs to offer better ideas and products beyond just quick profits. The geopolitical situation and US dollar's role in the global economy are also significant factors that could impact the market more than Fed's actions in the short term. Overall, the crypto community should not rely solely on external narratives and should continue to innovate and create its own.
Creating Value Through Innovation: The crypto industry should focus on creating innovative, functional applications instead of relying on external market conditions or self-referential token feedback loops. Maintaining the hunger and creativity that drove the industry forward during challenging times is crucial for success.
The crypto industry needs to focus less on external market conditions and more on creating innovative, functional applications. The speaker expresses concern that the industry may have become complacent due to the influx of money and developers, which could lead to a lack of groundbreaking ideas. He also notes that the hunger and drive among builders during the 2018 bear market seemed greater than it does now. The speaker emphasizes the importance of creating value through new, creative applications, rather than relying on market conditions or self-referential token feedback loops. Additionally, he touches on the impact of governance and regulation on tokens, which can hinder their success. Overall, the industry should strive to maintain the hunger and creativity that drove it forward during challenging times.
Tokens evolving and improving in crypto ecosystem: Tokens will continue to adapt and innovate, focusing on value accrual and better models, with a few dominant models emerging for most use cases.
Tokens, despite regulatory challenges and evolving models, are here to stay in the crypto ecosystem. According to the discussion, tokens have gone through an iteration cycle and will continue to improve, focusing more on value accrual and better models. The speakers believe that tokens will continue to evolve and adapt to new environments, just like insects do. They also highlighted the success of certain token models and their bullishness on those that aren't afraid to push boundaries and innovate, even if it means potentially breaking some regulations. Overall, the consensus is that tokens represent various forms of value and will continue to play a significant role in the crypto space, with a few dominant models emerging for the majority of use cases.
Bitcoin's changing narrative in the economy: As interest rates rise, Bitcoin's role as an inflation hedge is being reevaluated. Stay informed about the industry's transformation and adapt to new narratives and technologies.
Bitcoin's role and narrative in the current economic climate is undergoing a shift. Previously seen as a hedge against inflation, the market's perception of Bitcoin has changed as interest rates rise. Maddie and Fisk discussed this topic during the podcast, questioning what Bitcoin's new narrative might be. They also explored other crypto-related topics, such as the importance of hardware wallets like Ledger, the potential of modular blockchains like Fuel, and the need for efficient layer 2 bridges like Across. The consensus seemed to be that Bitcoin and the crypto industry as a whole are in a period of transformation, and it's important to stay informed and adapt to these changes.
Bitcoin as a hedge against fiat currency debasement: Bitcoin's value has risen amidst criticism of unsustainable monetary practices, making it an attractive alternative investment. However, its market cap is approaching gold's, and its growth potential and saturation as an investment vehicle are uncertain.
Bitcoin has been seen as a potential hedge against inflation and debasement of fiat currencies due to the monetary policies of central banks. Bitcoin's value has increased throughout the criticism of unsustainable monetary practices, making it an attractive alternative investment for some. However, its market cap is approaching that of gold, and some believe it may be close to saturation as an investment vehicle. Narratives around Bitcoin's potential as a settlement layer for international commodity trade or a major tech stock continue to evolve. Custody providers and traditional finance institutions are pushing the Bitcoin narrative, but the excitement around new and innovative uses for Bitcoin may have waned. Despite this, Bitcoin remains the biggest crypto brand and a popular topic of conversation. The debasement thesis, which posits that Bitcoin will hedge against the debasement of fiat currencies, still holds, but the extent of debasement and Bitcoin's growth potential are uncertain.
Next Bull Market Driven by App Layer Innovations: The next bull market will be fueled by new innovations in the app layer of Bitcoin and Ethereum, particularly in the DeFi ecosystem and ZK EVMs, leading to new use cases and macro catalysts.
Bitcoin and other cryptocurrencies, specifically Ethereum and the DeFi ecosystem, have different ideologies and narratives. Bitcoin is seen as a defensive and reactionary technology that looks to the past, focusing on what went wrong in the financial system. In contrast, Ethereum and DeFi are more optimistic, looking to the future and creating new technologies and applications. The speaker suggests that the next bull market will be driven by the app layer, with new technologies and use cases emerging, as seen in the DeFi summer and NFT boom. The speaker is particularly bullish on ZK EVMs due to their ultra-low transaction fees and potential to open up new brand new use cases. The model for the next bull market is that there will be a lot of new developments in the app layer, which will then be catalyzed by a larger macro event.
Focusing on real-world use cases for mainstream adoption: The crypto industry is shifting towards creating practical applications for everyday use, aiming for mainstream recognition and adoption, with potential growth areas including uncollateralized lending and life-improving apps.
The crypto industry is continuing to build foundational technology, but the real catalyst for a bull market will come when these innovations gain mainstream recognition and adoption. The industry is focusing on creating more utility for everyday people, moving beyond just tokens and yield farming. One potential area of growth is uncollateralized lending, which could bring credit systems to DeFi and make it more accessible to the real world. The next bull run is expected to be driven by apps that materially improve people's lives, rather than just token price speculation. The industry is moving towards a more sustainable and production-oriented economy, with a focus on creating real-world use cases and disrupting traditional finance.
Building a regular economy in the metaverse for future generations: Focus on creating a digital economy for younger generations, building a world for them in web 3, and unlocking new financial products through commerce in areas like GameFi and tokenized IP.
The future of commerce in the web 3 space could be a game-changer for creating new financial products and driving adoption of digital assets. While payments were once seen as the holy grail for crypto, they have yet to see widespread adoption. Instead, the focus should be on creating a regular economy in the metaverse and other digital worlds, where people can buy, hold, and use digital assets for non-speculative purposes. This economy could naturally attract younger generations, who are becoming more productive members of society and are more inclined to use crypto as a financial tool. The key to driving adoption is not pushing crypto on older generations, but building a world for the future generations and making peace with the fact that not everyone will adopt crypto for everyday transactions. Instead, commerce in web 3, particularly in areas like GameFi and tokenized IP, could be the key to unlocking new financial products and driving meaningful adoption.
Traditional brands entering crypto could be a game-changer for adoption: Disney hiring NFT expert, brands offering crypto-enabled experiences, and Web 3 Social platforms offering more control to users are trends that could boost crypto adoption during the 2020s bear market
The future of crypto adoption might not solely depend on crypto natives building crypto-native products. Instead, traditional brands and companies entering the crypto space could be a game-changer in onboarding more users. Disney's job listing for an NFT expert is just one example of this trend. Brands can create on-ramps for new users by offering NFTs and other crypto-enabled experiences, making the process more accessible and appealing. However, it's important to note that these brands will likely follow the lead of the crypto industry, rather than innovating on their own. Another intriguing development is the rise of Web 3 Social, which aims to give users more control over their content and data. Platforms like Lens and Meta's integration of NFTs into their platform are forging new directions in social media, offering users more ownership and control over their digital presence. These trends could play a significant role in crypto adoption during the 2020s bear market.
The Future of Content Creation and Distribution in Web 3: The decentralized future of content creation and distribution will offer creators more control and flexibility through new protocols, with various platforms competing to distribute NFT content using different relevance algorithms.
The future of content creation and distribution is expected to be decentralized, with multiple platforms competing to offer the best production and distribution experiences for creators. This separation of read, write, and indexing through new protocols allows creators to have more control and flexibility, with various identifiers and attestations defining the identity of the piece and the author. REIT platforms will compete to distribute NFT content using different relevance algorithms, providing a diverse range of options for readers. The future of Web 3 social may surprise us with new use cases and narratives, so it's important to focus on the fundamentals and the imagination of builders. For those looking to find the next new thing to bet on in the crypto space, Fiscantes advises starting by looking beyond Twitter and staying informed about the latest developments and innovations in the decentralized world.
Explore new interests during bear markets: During bear markets, stepping out of crypto and engaging in non-crypto communities can lead to discovering new ideas and building something meaningful.
During a bear market, stepping out of the crypto bubble and exploring new ideas and interests can lead to discovering the next big thing. Logging off Twitter and engaging in non-crypto communities, such as gaming conferences or health and biotechnology events, can provide fresh perspectives and inspiration. Starting a DAO around an interesting project can also be a way for non-crypto people to get involved in the crypto space. Following curiosity rather than the money trail and focusing on creativity can lead to innovative ideas and solutions. As Fris Dixon said, "what the smartest people do on the weekend is what everyone else will do during the week in 10 years." Don't let the bear market discourage you, but instead use it as an opportunity to explore new interests and build something meaningful.
Insights from a Crypto Expert on the Future of Crypto: Stay informed and curious about crypto, despite its risks, as it's the frontier of innovation and exploration for those on the 'bankless journey'.
Matty Fiscantes, a crypto expert, shared his insights on the upcoming crypto narrative during our discussion. He believes that there's a lot to be optimistic about in the future of crypto, and his perspective is worth checking out on his Substack, "Wrong a Lot." However, it's important to remember that crypto comes with risks, including potential losses. Ethereum, Bitcoin, and DeFi all carry risks. But despite these risks, the crypto space represents the frontier of innovation and exploration. It's not for everyone, but for those on the "bankless journey," staying curious and informed is crucial. We encourage you to read Maddie's post and make your own informed decisions. Remember, as Matty said, "it's okay to be wrong a lot," but we're all learning and growing together in this space.
