Ride Together, Die Together - The Daily Gwei #167
We're all one big dysfunctional family.
To say that the cryptocurrency industry is a roller-coaster would be the understatement of the century. One day you could be feeling euphoric whereas the next day it could feel like the world is ending - this is, of course, all dictated by the extremely volatile market action.
Source: https://twitter.com/Freddmannen/status/1352498352211034113 (I took a screenshot because it’s a GIF)
If there’s one thing that Bitcoiners and Ethereans have in common it’s that both communities feel the price volatility of crypto in the exact same way because over the short-term (and especially during market sell-offs) pretty much all of crypto is correlated. I actually think that, over the last few years, this has created an invisible “bond” between the 2 communities whether they like to admit it or not and I believe that these bonds only get stronger through resiliency in the markets over time.
If we think about the non-crypto world, they view everything in our industry with a Bitcoin-first lens - that is, “crypto” is basically Bitcoin to them. Almost all of them are unaware of what Ethereum and DeFi are so when they decide to actually enter crypto, they will most likely buy BTC first. After that, some of them will venture down the rabbit hole and discover other networks like Ethereum and buy ETH. Then, they’ll venture even deeper down and discover DeFi - all of this is what people in crypto refer to as “rotation” and why, in a bull market, you usually see BTC go up first, ETH follows then DeFi/other tokens go up last. Though it’s not just the price that rotates - it’s the user-adoption as well because I believe that once you enter Ethereum and DeFi, there’s no going back.
Going a step further I’d also say that Bitcoin acts as a “shield” for Ethereum in that it takes a lot of the heat from the “traditional” world - especially on the regulatory front. We all know that what’s happening in DeFi is basically treading a very very fine line with regulations (and constantly overstepping it if we’re being honest) so having regulators’ attention on Bitcoin instead of DeFi is a very positive thing. I expect this to persist for quite some time but eventually regulators will catch up and we better damn well have a DeFi ecosystem with a little more “De” in it to resist whatever comes our way.
At this point in time Bitcoin and Ethereum are pretty much linked to each-other to the outside world whether our inner-circle communities like it or not. These new people entering the ecosystem are not “maximalists” and don’t put themselves into any sort of tribe - they simply want to use products that provide them with value. So from that point of view, Bitcoin and Ethereum will continue to ride together and die together.
Have a great weekend everyone,
Anthony Sassano
Join the Daily Gwei Ecosystem
All information presented above is for educational purposes only and should not be taken as investment advice.
Excellent piece as always, Anthony.
Regarding your last sentence:
“These new people entering the ecosystem are not “maximalists” and don’t put themselves into any sort of tribe - they simply want to use products that provide them with value.”
Don’t you think that first they simply want to buy the assets with the highest returns? And then, when they discover DeFi, they want to use the products that provide them with value? 😊