1.2 ETH and the World Computer(s)
Ethereum achieved two landmark milestones:
- The Merge (September 2022) transitioned Ethereum to Proof-of-Stake.
- Shapella Upgrade (April 2023) enabled staked ETH withdrawals.
These upgrades cemented ETH as a deflationary digital asset. While I’m bullish on Ethereum’s ecosystem, ETH resembles a blue-chip financial asset (like Visa or JPMorgan) more than a high-growth tech stock (Google/Microsoft).
ETH’s Investment Dilemma
- BTC dominates as "digital gold" for institutional investors.
- Ethereum alternatives (L0/L1/L2 chains) may outperform ETH by capturing transactional volume.
- ETH’s 60% market share among altcoins is unsustainable long-term.
"I wouldn’t bet against ETH nominally—it has resilient tokenomics and lost ETH likely won’t re-enter circulation."
👉 Explore Ethereum’s latest upgrades
1.3 The Liquidity Landscape
BTC, ETH, and stablecoins comprise **75% of the $1.6T crypto market cap**. The remaining 25% (altcoins) could grow **100x in a decade**, potentially matching global private capital markets ($20-25T).
Why Stick to BTC/ETH?
- Historical outperformance: Early ETH/BTC adopters captured 75% of crypto’s gains.
- Supply safety: Avoids dilution risks seen in smaller-cap tokens.
- Institutional trust: Fewer insider sell-offs compared to altcoins.
(Source: Messari Token Unlocks Dashboard)
Alternative Strategies
- Kaiko’s liquidity rankings: Buy assets with higher liquidity than market cap rank (green) vs. overvalued (red).
- Manual indexing: Quarterly rebalancing avoids high-fee crypto ETFs.
1.4 Private Market Revival?
Crypto VC funds faced brutal downturns in 2022–2023, but 2024 shows signs of recovery:
- Deal flow rising: $500M+ funding rounds resumed (track via Messari’s fundraising screener).
Top funds to watch:
- Multicoin Capital (high-risk/high-reward)
- 1confirmation (transparent DPI reporting)
- a16z Crypto (policy advocacy)
"AI and crypto are synergistic—avoid the false choice between them."
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1.5 IPOs and M&A
2024’s Likely Public Listings:
- Coinbase (Already public; dominates U.S. exchanges)
- Circle (Expected IPO; $800M revenue in 2023 H1)
- Galaxy Digital ($3B market cap; positioned for acquisitions)
Notable Absences:
- DCG: Fraught with legal/regulatory issues post-Genesis bankruptcy.
- Tether: Financially robust but no IPO plans per Ryan’s note.
Yang Dong’s Note: S-1 filings indicate IPO readiness—Tether remains private despite its strength.
FAQ
Q: Will Ethereum lose dominance to L2s?
A: ETH may cede transactional share but remains the security backbone for rollups.
Q: How to invest in altcoins safely?
A: Use liquidity-based strategies (e.g., Kaiko rankings) and avoid low-volume tokens.
Q: Is crypto VC dead?
A: No—2023’s low entry prices could yield outsized returns for disciplined funds.