🐳 Weekly Edition: New Year, New Price Action

The new year seems to have put some energy back in the market as over $115B in market cap was added since the 31st across all tokens. Particularly interesting is the strength in altcoins like the normie-favorite Cardano, which rose more than 10% today alone, reclaiming its spot in the top 10 list from BCH. All in all it will take a lot more days like these to make up for the price action in altcoins through 2025, but it’s a great start nonetheless. Given how low sentiment was for the latter half of the year, one might assume that crypto market metrics performed similarly poorly; in reality, the exact opposite is true. Stablecoins were the major success story of the year, as total issuance exceeded over $300B, a 50% rise over 2024 peaks. While I may not be convinced that we need the hundreds of stablecoins that we currently have, seeing industry titans like Paypal and BlackRock hop on board with their own stables is objectively bullish for blockchain infrastructure. I suppose you could also argue the Trump-backed World Liberty Financial scaling their stablecoin to a few billion is also bullish, but it comes with its own drawbacks.

My two biggest wishes for a crypto-friendly administration were pretty straight forward: 1) make it possible for US-based crypto companies to exist without fear of persecution, and 2) institute beneficial regulations that allow the industry to mature to the next level. The first has certainly happened, and we’ve already seen some of the biggest players in our game like Galaxy Digital move their headquarters back to the States. The second, however, still feels very far out. On top of the inherent complexity of designing regulations that don’t strangle a budding industry, when your sitting President is actively engaging in things that should likely be illegal (memecoin pump and dumps, political grifts, business deals with foreign entities seeking to gain leverage, etc), it’s pretty difficult to push the right bill forward.

The one coin that stands out performance-wise in our portfolio today is Aave, which rose nearly 12% on news that Aave Labs plans to distribute non-protocol revenue to token holders. This doesn’t necessarily mean the end of the conflict we discussed over the last 2 weeks, but it is exactly the kind of clarification panicked news-traders needed to see to hop back in. As we mentioned before, the conflict itself felt completely avoidable; watching a bastion of DeFi devolve into childish bickering was sad, but things can turn around just as quickly as they fell apart. Keep an eye on Aave over the next few months, as I think most of the market (both normies and crypto natives) aren’t fully grasping how important their infrastructure is to the future of finance.

I realize this isn’t our normal comedic tweet of the day, but Simon is spitting facts here. The dual token/equity structure in particular is becoming a major pain point for our industry, and I expect to see some change in how our companies deal with ownership in the near future.

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