The ETFs are approved. Now what?

Eyes are on ETH and L2/L3s

Good morning, investors,

Today we’ll quickly go through the highlight of SEC approval and later check some minor updates in the portfolio.

Happy reading!

SEC approves BTC ETF fillings

For those who missed it, the SEC gave the green light yesterday evening on the BTC Spot ETF fillings (more info on the Spot ETFs here).

It had some ups and downs - the SEC public X account was hacked (at least that’s what they say) and shared the news before it happened.

Then when the real meeting was happening, the SEC site was down and people couldn’t see if the decision was YES or NO.

But ok, we have it and the fillings are approved by a vote 3-2 —> and guess what, Gary Gensler was one of the voters for approval.

So now what?

The answer is simple. Nothing.

We follow our strategy and don’t trade the news 🤷‍♂️.

So just the fact that it’s approved isn’t changing much.

In this context, I like this image:

Interestingly enough, the approval didn’t make such a big impact. It is already priced in for weeks.

However, the real inflows will be gradual. So just the fact that it’s approved doesn’t mean it will double in market price overnight - with gold the initial ETF approval marked a long 7-year bull cycle for the asset. An asset that was before hardly considered in a typical portfolio.

What happened though is a rise of other major cryptocurrencies, including ETH.

This was something we were hoping for, but can it sustain and reduce the gap between BTC and ETH?

One reason for “yes” could be the ETH ETFs coming later this year.

While it won’t be such a big deal as the BTC anymore, in my eyes it will help many institutions recognize ETH as an asset, and maybe even understand a little what it is about.

Can it tip the scales and make ETH catch up on the gains of BTC?

Most probably not, but taking a little bit of attention out of BTC and to ETH, plus other “altcoins” is surely a good sign for us who DCA into more than just BTC/ETH.

As promised, I’ll be sharing more of my positions as I make them.

Below are a few trades, next week I hope to finalize my adjusted crypto DCA strategy, and will share the same with you.

Polygon 2.0 - scaling done the right way?

Polygon announced some interesting partnerships recently.

The most recent is their partnership with the media empire Fox Corp.

They utilized Polygon’s toolkit to build Verify, an open-source protocol that makes it easy for media companies to register content, like images, videos, and text, so that consumers can confirm their authenticity.

I had it on my “to-check” list for some time and this was the last drop I needed to take a look.

Polygon was quite popular in the last bull run (together with Solana made the most highlights after BTC or ETH).

Since then, it seems they’re building without big bangs - after their partnership with Immutable things went a little quiet.

Still, they prepared a whole new infrastructure for the builders to onboard, plus made some interesting partnerships - a great X post with an overview.

The biggest highlights are Polygon 2.0, the new token (POL), and CDK (Chain Development Kit).

With Polygon 2.0, they are:

A.) switching to Validium rollup, which is a rollup that has transaction data off-chain, while leveraging ZK proof for validation. This removes the limitation of ETH slow transactions, which could increase the TPS - as per Sandeep (Polygon’s co-founder), they can achieve unlimited TPS.

This gives validiums two main advantages over rollups:

  • Significantly lower fees, since they don't consume expensive Ethereum gas, i.e., blockspace to store transaction data.

  • Significantly higher scalability, since rollups’ throughput is bounded by the amount of transaction data that can be published to Ethereum.

B.) They put more emphasis on their Chain Development Kit (CDK) which enables projects and companies to create their own blockchain leveraging this toolkit from Polygon, utilizing the underlying infrastructure and security.

I like the idea of Polygon’s CDK and how they position their strategy to a multi-ZK world where applications can use Polygon’s CDK to create their own use-case-driven blockchains with the ZK mechanism to leverage Ethereum for settlement and security.

It pairs well with the narrative of DAs (see below), but in this case Polygon is building it in-house, reducing the risk of dependency on external parties.

Okx, Immutable, Near, and Manta are the current drivers here, but more will come in the future as Polygon makes chain development simple for the developers and their institutions.

For example, Kraken is considering Polygon’s CDK, Dogecoin is playing with it, Canto switched from L1 to L2 built with their CDK, you name it.

A great video explaining the Polygon and how the CDK actually works by CoinGecko:

A side note, the current MATIC token will be swapped for the new POL token in a 1:1 ration. Right now there is no more arbitrage opportunity, but might be worth exploring from time to time.

I’ve been accumulating MATIC for some time, but I’ll increase my allocation moving forward.

More resources:

Celestia and DAs

On a similar note, there is Celestia - a Data Availability blockchain.

These DAs (Data Availability) blockchains are offering a more affordable place for L2s to post their data, rather than Ethereum.

This results in lower transaction costs on the L2 and a more “modular” approach to the individual layers.

By my mistake I missed this airdrop even though I’m buying and staking ATOM, so I need to pay for TIA now.

It’s a bit expensive right now, so I will start with something around $300 - $500 and see how the price moves in the next weeks.

I want to get in now because of the FOMO for airdrops - staking TIA already unlocked multiple airdrops and seems the narrative remains for a little longer.

But, I’m quite optimistic about the narrative around DAs. While TIA feels expensive right now, until there is enough usage of DA and understanding more of the technology, it’s hard to predict the fair value - it can still be cheap.

Next in the sector of DAs, we can explore NEAR, Avail, or EigenLayer’s DA, to name a few.

To further increase the airdrops in the Cosmos ecosystem, I’m also buying a little bit of Osmo and Injective to spread the chances (around $200 ea).

Here is a great tracker of Cosmos airdrops (thanks guys for sharing!): https://www.cosmosairdrops.io/claimable

Side note: to qualify for airdrops you must stake on your wallet, not on CEX - I use Keplr wallet and their native staking for all Cosmos related.

Launchpads

As move move closer to the bull run, it starts to be interesting on the front of Launchpads.

I’m deciding to make my move and increase positions in some of them.

Again, buying a little now, adding more later - I feel the market is so overheated right now that I’m thinking of just sitting on my hands and looking out the window.

Launchpads did some crazy returns in the last bull run, but the problem is that users need to buy their native token and stake it for long periods, and that can easily burn the profits —> just check the charts of Seedify, GameFi, MakerDAO, Polkastarter, and other launchpads popular in the last bull run.

I mentioned this in one of my previous newsletters, and then a few times on Twitter. People who did the research are now enjoying with me 5x-7x on Seedify and some 5x on Enjinstarter.

My strategy here:

I want to have a guaranteed allocation on a few launchpads, ideally across chains I believe in so that when an interesting project wants to do ICO, I can chip in.

So far I’m using Enjinstarter, Seedify, and Pols.

Next week I should give some updates on the changes and which launchpads I decided to go with.

Please note that the allocations might be expensive and risky. This is more of a “fun” part of my portfolio (very small). Rest I continue with stable weekly DCA into big infrastructure and gaming tokens.

Fun fact: El Salvador is "back in black"

The President of El Salvador started accumulating in September 2021 (raging bull market).

Kept buying the dips, and now, with $12.6 million in unrealized profits, it's yet another success story for constant approach and #DCA.

Until next time,

Matt.

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