I Know What You Did Last Summer
Cryptic ball: Gaggenheim Investments and Scott Minerd.
Ah, we're feeling like this is the perfect time for a bounce, now that everyone and their mother are calling for continued bearish activity. Remember that the weekly and monthly close was the opportunity for bears to do the incredible feat of dumping an asset 20% to 30% after having already crashed it 50% a couple of weeks ago. And they failed at it. While the infamous dead cat bounce may definitely happen with sh*tcoins, we're pretty confident that both bitcoin and ether, as well as all major alts, won't suffer such a fate - at least for now.
Why? Because those purely focused on technicals forget that markets are made by sentiment and bots. The former can be easily reignited by renewed altcoin moon memes - with dogecoin pumping up to 44% since yesterday's lows, on occasion of being listed on Coinbase (oh, the good old days) and on the back of a new tweet from Mr. Musk. And the latter can be countered by renewed institutional buying - with the markets excited by some curious news. In brief, Guggenheim Partners - a major investment firm headed by a vocal Bitcoin commenter who had been calling for a 50% dip since April - just disclosed it will use up to 10% of a new fund to gain exposure to Bitcoin through Grayscale's Trust. Did they influence the media to get a better buying price for their $530 million allocation? You bet!
Chart art: this is what the moon looks like.
Market musings: this dip was a nice reset for the next bubble.
But it's not only memes pumping today. DeFi projects and exchange tokens are also the talk of the day. While we continue to believe the summer will be uneventful for the major coins, it could be that, like in 2020, we see heated activity in these emerging sectors. Note that, paired against ETH, many DeFi projects are far away from the all-time highs achieved last summer. While some of those may be effectively abandoned (it was a mini-bubble after all), it's also typical for investors to cycle their profits between ether and speculative DeFi tokens.
But, as long as memes continue to impact markets - and, look, some meme stocks are pumping nearly twice as much as dogecoin today - then at least solid DeFi projects will have a chance. Especially because, as summer kicks-in, rich whales want to have fun without following the markets. So it's likely they will park their profits in projects with high yields. And the DeFi Summer meme will also be a good opportunity for the industry to test how robust are Ethereum's new sidechains, like Polygon, and their DEXs, like QuickSwap. We'll keep explaining this, but if it's new to you, keep scrolling and watch B21's latest Desi Crypto Show!
Visual block: this is what fear looks like.
Three things: it's all about scaling those institutions.
- Curious about institutions buying the dip? Jeff Dorman explains why that doesn't happen from day to night and what you can expect.
- Curious about Ethereum's scalability plans? Benjamin Simon explains rollups in a non-technical way. Learn more about this popular layer-2 solutions.
- Curious about diving deeper on Ethereum's rollups? Paul Veradittakit explains Arbitrum, a particular rollup implementation that Mark Cuban invested in.