Steve's Crypto Thoughts

Good evening, some market thoughts in long form. You probably know by now that I'm a permabull mid/long term. Specifically about crypto but really, all risk assets. The cycle is pretty simple if you let it be, as in zoom out and not over complicate. We had very high inflation worldwide. Central banks raise rates, risk assets suffer badly, everything cools off, in some cases cools too much, recession looming, rate hikes slow/stop (or about to), and then rates start going down and risk assets rally again. As old as the hills. Simple as. The above is the very zoomed out, simple version that anyone with half a brain can understand. If you have a long enough view and you are happy to be hands off, it can indeed be this simple. Be in the market when it favours risk assets, be out when it doesn't. Thing is, we all like to complicate things, because we prefer a 15x run rather than 5x. And crypto taught some of us that if you are willing to put in the work, research, create systems that work for you, and properly manage risk, you get significantly rewarded. I suspect, however, that too many in the space are way too confident at times. I know I am on occasion, and fortunately I've been around enough, and been humbled enough times, to be able to recognise when I'm getting too confident and re-consider. Fact is, we're not out of the woods yet, and while I'm sure we'll see higher prices for quality assets in 12-18 months, I try not to be too confident about what the path to get there looks like, and more important - who really are the quality assets. If we take a step back and evaluate the space without moon thoughts in mind, there really are a handful of coins/tokens that have 95%+ chance of making it big. In my opinion the obvious one is Ethereum, and I can make a case for a few others. But everything relatively new and small (With a great team, great product, great community, great tokenomics etc) is usually just a very promising bet that can go as high as Solana did and as low as Luna. We don't know. The worst you can do is follow super-confident influencers. Anyone who's too confident on small caps is a danger to follow. So how do I play it? I like a good bet and you've seen me mention some small caps that I like. But I recognise they have potential and they're not there yet. I allocate a relatively small amount and I try to also earn yield on top, to mitigate some of the risk. In almost all of my small cap bets, I don't hold them directly but rather LP and farm with ETH. The rest is boring af. I hold ETH or stETH or other combinations of yield bearing ETH strategies. And this week I've allocated 15% of my portfolio to stables. Haven't really had much in stables since August of last year, but I want to be prepared in case we have another flush ala 7/2019, 3/2020 or 5/2021. These are all big dumps in a relatively bullish market. I'm not against gem hunting at this stage, but not for the long term. If you're able to flip, there are opportunities. But for smaller projects that are yet to prove themselves, there might be better entry if we get another dump later in the year. Why do I think there's a good chance for a dump in the next 6-12 months? Some reasons are crypto specifics (MT. gox, regulation, etc.) and some more macro - yes I think we're nearing or have already entered a change of paradigm, but there might be some interesting collapses that (temporarily) frik the market out. Bottom line - it's good to have conviction but always be prepared for the market behaving differently. Don't over allocate to unproven bets but don't overlook them either. If you're willing to set and forget you'll probably do great with blue chips. That's my opinion and not advice in any way - I can be wrong. Cheers.

I was hoping to write a long post looking at all of the suggestions for small caps people made last week, and show how I evaluate each. But unfortunately I'm very low on time these days so won't be able to do that. Instead, in a very summarised fashion, some of the stuff I liked, both from these comments and elsewhere. These are new additions to my portfolio or on the watchlist. Again apologies but will keep it brief. PILOT (unipilot) - a protocol for managed v3 positions. Allows you to get exposure to concentrated liquidity pools without managing them yourself. Stakers of PILOT get a share of the revenue. TAROT - see the previous post RDNT mentioned by Maron#6223 -  I've actually talked about it here back in July 2022 and bought a bag. I sold it too early though. Putting it on my watchlist but at the moment, for these market conditions, the price feels a little high. I like the project though - money market across chains. CNC recommended by "N T". As I said in the past, I'm a fan. I've been airdropped a bunch a few months ago and bought more. You can search this channel or my twitter for CNC. Basically a system that makes life easier for curve LPs, as it allows them to set and forget with Conic moves funds around to capture the best stable APRs. Currently at 28m MC and 68m FDV and I can see it making the same run as CVX did the previous bull. LVL (Level) - yet another perp protocol, this time on Binance chain (I think expanding in the future). A lot of GMX-like mechanics but different. Getting good traction and good volumes though I'm sure some is wash trading due to rewards. The risk is of course Binance getting in trouble but I don't see the chain going down. I took a small punt as I like the UI and the communications and community so far.  As usual these are my thoughts, not advice, I can be wrong, I AM wrong sometimes, so do your own research please. Cheers.

OK. Here's the first one. Not financial advice of course. I bought a small bag of TAROT today, and this twitter thread which got a little messy when some of my tweets disapeared explains why. https://twitter.com/SuperSteveFarms/status/1642870413456982016?s=20

Thanks to everyone who responded to my shitcoin challenge last night. Keep it coming. I'll go over the ideas (some of which are indeed new to me) and update back in a few days. 

I decided to allocate 10% of my portfolio into 5-10 small caps (ideally <30M) that I am not yet familiar with. Please shill me your favs, with some reasoning. Either as comments here or dm me on twitter at SuperSteveFarms if it's a secret. Thanks!

I wrote a little Twitter thread about how I LP/farm.

Why are markets going up this time? Who is going to buy Bitcoin at 100k?  We've been conditioned to think the world is about to end in the recent year and a half. But as fear subsides, we take more risks. Simple as. When you worry about being able to provide for your family and pay last month's bills, you focus on survival and you spend as little as possible. When the fear is gone, you take more risk. At least most investors do. Not gonna larp as a huge macro expert but unless you've been hiding under a rock you know that the tightening monetary regime has ended. QT is pretty much done and QE started last week. Rate hikes are either done or soon will be and the market is pricing big rate cuts coming soon(ish). In such an environment, risk assets go up. Abundance of cheap money and bullish momentum does that. Yes, the economy is still bad with high inflation and banks failing, but markets are pricing the reaction of decision makers and the steps they take to ease. We can also find more specific narratives. Banks falling may be fuelling Bitcoin's store of value idea. ETH's upgrade next month may support an ETH up only regime when everyone rushes into staking. Arbitrum's airdrop may support alts mooning. These "narratives" are fine but secondary to overall market conditions. In a rate hikes + QT environment, you can have the best product in the world and its value still goes down. In a rate cuts and QE economy, even weak assets can go up. So take these narratives as a way to decide HOW to allocate, not as a way to decide whether or not TO allocate.  This is not to say we are out of the woods entirely. "Macro" is still decided by very few, often old decision makers. They look to be changing their ways in a way that drives bull markets, but they can fail, make mistakes, and change course. When you zoom out though, it seems like the easing train has left the station. Maybe we get sharp corrections but on a weekly/monthly trend, I think we've entered a bull market. Another thing that I specifically need to get better at and I suspect most do, is to rely much less on past price action. All sorts of things have changed since 2019, so this rally that's being compared to the Q2 rally of 2019, doesn't need to behave the same way. Is it an echo bubble? Is it a new full blown bull market? don't know, can't know, won't be bothered guessing. Let's listen to the market together and see how it goes. I'm excited. Cheers. (as usual, these are just my thoughts, I can be wrong, don't buy or sell anything just because some random dude on telegram said something).

Good morning. Markets go up and down. The main question everyone needs to ask themselves, and take the time to think about and be honest with themselves, is whether you want to/think you can, make money off the volatility. This mainly means trading but can also mean providing liquidity. It takes a lot of time and effort to master and is hard to do. It's time consuming and at times feels like a rollercoaster.  I believe that for the majority of us, the best way is to avoid trading. Barely anyone is successful over a significant period of time and it involves a lot of skill and emotions. The good news is that if you skip trading and focus on long term investing, the crypto market can still reward you like no other market in the world, so instead of feeling bad about missing 20-50% local moves (letting go of "I should have bought/sold" thoughts), you can have a normal life without being glued to the Twitter timeline to check who said what about the next FOMC meeting. Providing liquidity is a different approach. If you know me for years, you've seen me evolve from "not participating in defi, it's not worth the risk" to being 100% in pools and farms these days. It can be time consuming too, but something that is more scientific than that art of trading, hence less nerve wracking. But still not for everyone. If you have at least two hours a day and think you are good at picking good projects, you can consider it. We've been through a lot of crypto and macro events this past 12-18 months. Inflation, rate hikes, wars, Luna, 3AC, FTX, Celsius, Saunders, USDC, US regulation, to name a few, but you know it's always darkest before dawn. I am still a big believer in the space, to the extent that I rely on it heavily for paying my bills. I think for most of us just holding BTC and ETH, with the occasional small position of a "gem" will do wonders in the next few years. Stay strong.

There's a narrative that says you need to chase narratives... "Chasing narratives" is something I don't know how to do successfully. Never did. I think it's a bit of a meme. Yes, you can try and find similarities between coins that pump today, figure out what's in common and make assumptions about what's next, but for most of us, the chase is impossible. Unless you're a master data watcher, someone who knows which wallets to watch and how to analyse volumes and TVLs across blockchains and projects, I wouldn't even be concerned with what the narrative is. Just don't listen too much to ct telling you what the current narrative is. You're being groomed to become their exit liquidity. When you zoom out, I don't know if I'd use the term 'narratives' but there are some areas where it's pretty clear to everyone who's been here a while that there's money to be made. Not all of these pump together, but who cares about pumps? mid/long term I don't know how one cannot be bullish on the usual suspects: L2s, inter-chains communication, DEXes (spot / perp / options), games, gambling, to name a few. Bottom line, I wouldn't worry about finding out what tomorrow's narrative is. This is in response to a comment, which I thought might be better to post for everyone to see. Cheers.

Impressive moves across the boards for Bitcoin, ETH and many alts. This is obviously nice to see and feels great, but a few points I want to make: 1. Don't start shorting too quickly. Major resistance levels have been breached. Higher lows are in place, now building higher highs. Shorting, if at all, is something you may consider doing when braking resistance fails (ideally after a confirmation or two of said failure).  2. Prices are still low. If you're on the sidelines because you were hoping for another chance to buy ETH at 800$, don't think you've necessarily missed this wave. 1690 is way lower than 4900.  3. Don't ape in either. Make a plan. If you think we're going through a bullish period (I do), consider buying the dips 4. If you're a farmer like me, check out what yield you're getting. Now is not the time to sit in 20% APR pools - your IL is likely larger than the yield. But if you're in 700% uni v3 pools, that's a pretty sweet deal. 5. I think everything we see now has a good chance of roundtripping at some point, probably not all the way down though. So don't mary bags just yet. Or ever. As always, this is not financial advice. I can be wrong so these are just my opinions. Cheers.

If you've been in Crypto a while, you know the feeling - you've invested in a small cap that few notice or mention, and after a long time, people take notice. This happened to me recently with $THALES, and more recently with Synapse ($SYN). I've been investing and LPing SYN/ETH for a year or so, and now it gets on everyone's radar, even Pentoshi charting it. If you want to learn a bit about why they aren't just a bridge token, here's a thread from CryptoCondom. Not Financial advice - it can go to zero (and it almost did! 40c a few months ago). You can also check out Daniel Cheung's Twitter(@HighCoinviction), he's been mentioning it recently with more details.Cheers. https://twitter.com/crypto_condom/status/1624881120343912449?s=20&t=AxVcM2D1LXnmWcA0cDOdDg

I strongly recommend you go out of your way to listen to Chris Burniske on this Bankless episode. Over the years I've been following a lot of people on CT as I learned how to best make money, protect gains and approach potential allocations. There are very few that I started following years ago and I still follow. Chris is at the top of that list. I share a lot of his ideas but he explains them way better than I do. It's the zoom out, somewhat contrarian approach that he brings that helped me grow (and keep growing) a set and change my life. Cheers. https://www.youtube.com/watch?v=OE6HXA_G3nE

UMAMI getting rugged by the resigning CEO but the team keeps going possibly. Another lesson in risk management as if we needed one. I had gret hope and at one point it reached 4% of my portfolio. Luckily got out a few days ago with minor gains. This thread talks about a possible recovery, I just think reputation is cooked and there are better things I can do with my money. https://twitter.com/crypto_condom/status/1623538184637546496?s=20&t=kswv59MPvv_997J48_dZZw

Funds safu https://twitter.com/CoWSwap/status/1622885833782054913?t=iZbAYBmvFS57TjXABxzebg&s=19

Cowswap may have been exploited. Remove permissions on revoke dot cash.

Lots of rumours about an Arbitrum token airdrop coming soon. It's been "coming soon" for a while and transactions like below clearly mean people are trying to be "active" on different addresses and harvest future airdrops. I don't normally try to farm airdrops but it's not a bad idea to do so, especially for small accounts. We don't know if it will be a fixed amount for each active address or related to activity, but some past airdrops, such as UNI, were impressive. My suggestion is to give Arbitrum a try anyway, if you haven't already, it is the fastest L2 I know and a lot is going on there anyway. I think 75% of my activity is on Arbitrum nowadays. Cheers.

gm. A little bit about the one indicator that hasn't failed me.  Around the time Luna and 3AC collapsed (mid 2022), I went on a Crypto shopping spree. With ETH at 3 digits I just knew that even if this was not going to be the eventual bottom (held so far), prices are low enough across the board. I didn't just buy to hold, I was actually LP-ing most of my new coins, usually in ETH pairs, so that even if we kept going down, I would make a juicy APR while doing so. I have a long checklist of attributes I look for in a project/token but to be honest, one of them, especially in bear/chop periods, seems to be much more important than others. That one attribute is the community around the project.  I went into telegrams and discords to find out which projects have a decent sized community, and how the community interacts within the community and with the team. Bar none, whenever I saw good, productive discussions, the price did not disappoint. I want to see team members being responsive to criticism and feedback, I want to see community members care enough to provide such feedback in a positive fashion, and I want to see positive interactions between members. Also, I want to see size. Good communication between one builder and two supporters is not enough for me. In a bear market, many teams give up and go awol. Those who have enough runway, a good team and product, tend to work harder and appreciate any support they get. In many ways spotting these teams in a bear market is easier than in the bull. I've seen that with Treasure Dao (MAGIC), Dopex, Lyra, Thales, GMX, to name a few, and toxic communications from the FOLD team. Check out how they've done since the lows. There are many others of course. What's a project/community you've been impressed or disappointed with recently? cheers.

The kids are back at school, we've had a very busy (good kind) of school holidays and I'm ready to be a bit more active here.  I want to simplify things as much as I can for anyone who feels confused about the next move. 2022 was brutal. 2020-2021 was amazing. What came after 'amazing'? what comes after 'brutal'? You don't need to overthink things and try to catch exact bottoms and tops. The major bearish damage has been done. Will we get some more? don't know, possibly. But it won't be to the effect, or anywhere near, what we've suffered in 2022. I think we've entered easy-mode, where you can buy and forget. This is easily visible in the monthly RSI (see chart above). We are at historic buy levels.  Now, "hodling" to me is a meme when it comes to shitcoin bags but a great strategy when it comes to a proven bluechip like ETH. So don't take this post as an encouragement to go full degen and buy microcaps. Most of them can still rug and / or go to zero.  This is not financial advice of course as all I've written above is based on my 5+ years observations, but paradigms can always change. Which is why risk management is always key.  Cheers.

Explaining in a sec.