Bitwise Chief Investment Officer Matt Hougan | Permissionless I by Blockworks
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Those who got into the crypto space via bitcoin are likely having trouble ignoring all the other crypto token names they come across.
Bitcoin’s digital gold narrative has resonated with retail investors and institutions alike. Though BTC’s price has dropped of late (trading below $110,000 on Tuesday, down nearly 7% over the past month), it’s up ~70% from a year ago.
Altcoin rallies typically follow strong bitcoin performance as investors assess the potential of other projects, notes zondacrypto CEO Przemyslaw Kral. That’s one reason why he’s expecting an “altcoin autumn.”
“Diverse opportunities emerge alongside macroeconomic tailwinds,” Kral added. “However, they must acknowledge that the days of broad altcoin rallies, driven purely by hype or vibes, may be behind us.”
Speaking of macro tailwinds, perhaps you saw my post-Jackson Hole market check-in. Globe 3 Capital CIO Matt Lason told me yesterday that expected rate cuts spurred the firm to hold more smaller cap altcoins “as we are seeing early signs of the long-awaited altcoin season.”
Lason declined to share which specific tokens the firm is moving into. But he noted that it targets “boring, deep-stack infrastructure plays that represent the future railroads and toll roads of Web3.” And protocols set to help usher in the next wave of users.
Regulatory developments also highlight the opportunity that exists beyond BTC. Enter SEC Chair Paul Atkins, who last month unveiled what he called “Project Crypto” — the agency’s plan to enable US financial markets to move onchain.
Bitwise CIO Matt Hougan addressed Atkins’ comments earlier this month. “It doesn’t take a genius to see it: If substantially all assets are going to move onto public blockchains, you want exposure to those blockchains.”
For one, ether has turned heads by surging 95% over the past six months. The ETH/BTC ratio is up ~60% so far this quarter, Compass Point analysts note — its highest level in a year.
Hougan also mentioned solana, cardano, avalanche, XRP, aptos, SUI and NEAR. He recommends exposure to these via an index fund, like the ones his firm and Grayscale are looking to convert into ETFs.
But Bitwise and others have flooded the SEC’s desk with single-asset ETF proposals too.
Though the agency again recently delayed its decision on spot solana ETFs, many expect those and others to launch in the coming months as the SEC finalizes general listing standards for crypto ETPs.
And every day, it seems, we see more product proposals to give investors exposure to other tokens.
Just this morning, Bitwise proposed a Chainlink ETF. The decentralized blockchain oracle network’s native token, LINK, is on Ethereum. Also today, Canary revealed plans to launch an ETF that would hold the Trump memecoin.
Bitfinex analysts don’t expect a rising-tide-lifts-all-boats scenario for crypto until later this year. Meaning they think only when we get new investment vehicles for altcoins will we see capital meaningfully migrate there.
“These products are likely to generate sustained, price-agnostic demand, creating the conditions for a broader re-rating across the digital asset complex,” the analysts explained.
Then there’re all the public companies implementing different crypto treasury strategies (aka DATs). You already know about Strategy with bitcoin and BitMine Immersion with ETH.
My colleague Donovan today wrote about solana DATs. And Mill City Ventures just rebranded to SUI Group after closing its $450 million private placement to initiate SUI token purchases.
We also have Trump Media & Technology Group set to establish a treasury company focused on buying CRO, the native token of the Cronos ecosystem. Majority-owned by Trump Media, Yorkville Acquisition Corp. and Crypto.com, the company expects to raise $1 billion for the treasury.
“It’s a large sandbox to sift through, but over time, the future winners of this amazing technology begin to reveal themselves,” Lason said of altcoin opportunities. “The key is to stay patient.”
I’ve indeed heard patience is a virtue. Until an AI bot takes over this newsletter, I’m not going anywhere.
