1/23 Choose a number from this list:
[2, 5, 9, 25, 69, 73, 82, 96, 100, 126, 150]
If you and someone else from the crypto world pick the same number, you both win $1,000.
This game teaches us how narratives grow and which ones are emerging in crypto right now: 🧵
[2, 5, 9, 25, 69, 73, 82, 96, 100, 126, 150]
If you and someone else from the crypto world pick the same number, you both win $1,000.
This game teaches us how narratives grow and which ones are emerging in crypto right now: 🧵
![1/23 Choose a number from this list:
[2, 5, 9, 25, 69, 73, 82, 96, 100, 126, 150]
If you and someo...](https://pbs.twimg.com/media/F27U9lSbAAAqT1T.jpg)
2/23 Mathematicians might choose 2 as it's the only even prime number, but true crypto minds on CT will opt for 69.
All thanks to the memes associated with it.
This idea is the backbone of "Schelling points".
All thanks to the memes associated with it.
This idea is the backbone of "Schelling points".
3/23 Schelling points are game theory concepts pointing to solutions or choices people default to without clear communication.
They're influenced by shared knowledge, common sense, and societal norms.
Essentially, they represent our collective psychology.
They're influenced by shared knowledge, common sense, and societal norms.
Essentially, they represent our collective psychology.
4/23 Diversity in decision-making is essential; it fuels markets.
While people run on emotions and stories, markets thrive on the collective consensus or, as we call it, narratives.
They help us make sense of the seemingly random events around us.
While people run on emotions and stories, markets thrive on the collective consensus or, as we call it, narratives.
They help us make sense of the seemingly random events around us.
5/23 Narratives are how we've made sense of our world since ancient times.
They allow us to band together and influence outcomes.
Take the Gamestop saga; individual investors became a force, shifting market dynamics against bigger players.
They allow us to band together and influence outcomes.
Take the Gamestop saga; individual investors became a force, shifting market dynamics against bigger players.
6/23 The digital age has made converging on Schelling points or narratives easier.
We're always connected, making consensus quicker and more prevalent.
We now spend as much time online as offline.
We're always connected, making consensus quicker and more prevalent.
We now spend as much time online as offline.
7/23 Investing often boils down to a mix of skill, timing, and luck.
The real trick is identifying powerful “heavyweight narratives”.
These are overarching trends affecting all asset classes, like:
• Fed liquidity cycles
• Wars
• New government policies
The real trick is identifying powerful “heavyweight narratives”.
These are overarching trends affecting all asset classes, like:
• Fed liquidity cycles
• Wars
• New government policies
8/23 In crypto since 2022, we've felt the weight of all three narratives.
It's been a tough time.
But things are changing, and these big stories might start helping instead of hurting.
Here are the top two heavyweight narratives to follow, according to @Delphi_Digital.
It's been a tough time.
But things are changing, and these big stories might start helping instead of hurting.
Here are the top two heavyweight narratives to follow, according to @Delphi_Digital.
9/23 In 2 years, the U.S. & crypto have clashed.
Operation Choke Point's emergence paints a grim picture – crypto potentially unbanked, stablecoin flows stifled, and exchanges cut from banking, or leaving the US altogether.
Operation Choke Point's emergence paints a grim picture – crypto potentially unbanked, stablecoin flows stifled, and exchanges cut from banking, or leaving the US altogether.
10/23
Powell's take on stablecoins, SEC’s green light to a leveraged Bitcoin futures ETF, and Hong Kong pushing for crypto client adoption.
Seems like the tide is turning.
Powell's take on stablecoins, SEC’s green light to a leveraged Bitcoin futures ETF, and Hong Kong pushing for crypto client adoption.
Seems like the tide is turning.
11/23 Yet, recently, though, we've seen a shift:
1️⃣ U.S. realizes it's losing market share by being tough on crypto. Tether's $6B profit surpassing BlackRock's is a sign.
2️⃣ U.S. might be concerned about China's mixed stance on crypto - banned onshore but welcomed offshore.
1️⃣ U.S. realizes it's losing market share by being tough on crypto. Tether's $6B profit surpassing BlackRock's is a sign.
2️⃣ U.S. might be concerned about China's mixed stance on crypto - banned onshore but welcomed offshore.
12/23
3️⃣ Gary Gensler's position at SEC might be in jeopardy as Grayscale seems poised to win against SEC.
Is it more palatable for Gensler to bend to BlackRock than face defeat against Grayscale?
The market senses an SEC vulnerability.
3️⃣ Gary Gensler's position at SEC might be in jeopardy as Grayscale seems poised to win against SEC.
Is it more palatable for Gensler to bend to BlackRock than face defeat against Grayscale?
The market senses an SEC vulnerability.
13/23 Short-term: Grayscale's legal win vs SEC might pave the way for a BTC ETF.
Long-term: With the U.S.'s tech Cold War, crypto's geopolitical role will be pivotal.
If China keeps favoring crypto, the U.S. might follow suit.
Long-term: With the U.S.'s tech Cold War, crypto's geopolitical role will be pivotal.
If China keeps favoring crypto, the U.S. might follow suit.
14/23 The second heavyweight narrative is macro liquidity.
After 2022's central bank hikes, we're in at the top of higher rates and inflation fears, impacting our appetite for assets like crypto.
Despite many predicting a doomsday scenario, equity markets have shown resilience.
After 2022's central bank hikes, we're in at the top of higher rates and inflation fears, impacting our appetite for assets like crypto.
Despite many predicting a doomsday scenario, equity markets have shown resilience.
15/23 But markets are forward-looking.
U.S. ISM manufacturing index is nearing its 2-year downtrend bottom.
And here’s the intriguing part: both equities and $BTC show signs of reversal when ISM hits its bottoms.
U.S. ISM manufacturing index is nearing its 2-year downtrend bottom.
And here’s the intriguing part: both equities and $BTC show signs of reversal when ISM hits its bottoms.
16/23 Meanwhile, China, the world's 2nd largest economy, combats the risk of deflation.
The PBOC has shifted towards a pro-growth stance and has historically acted when facing growth issues.
This move directly impacts global liquidity.
The PBOC has shifted towards a pro-growth stance and has historically acted when facing growth issues.
This move directly impacts global liquidity.
17/23 Crypto has previously benefited from China-driven liquidity expansions.
And Bitcoin Halving in April 2024 could align perfectly with renewed global liquidity uptrends, reinforcing the idea that liquidity cycles play a huge role in influencing the crypto market.
And Bitcoin Halving in April 2024 could align perfectly with renewed global liquidity uptrends, reinforcing the idea that liquidity cycles play a huge role in influencing the crypto market.
18/23 The halving is not just an event; it's a narrative.
And narratives have consistently played a crucial role in bull markets.
The recurring patterns of macro cycles are the reason why $BTC has followed a similar trajectory as in the past.
And narratives have consistently played a crucial role in bull markets.
The recurring patterns of macro cycles are the reason why $BTC has followed a similar trajectory as in the past.
19/23 As macro narratives play out, their impact on the crypto space is evident.
Understanding and leveraging these major narratives is crucial, and they pave the way for smaller "lightweight" narratives.
Below are just a few that are likely to dominate in the bull run:
Understanding and leveraging these major narratives is crucial, and they pave the way for smaller "lightweight" narratives.
Below are just a few that are likely to dominate in the bull run:
20/23 Three Bitcoin narratives:
• New use-cases for BTC - Ordinals, BRC-20s, Stacks sBTC, and Bitcoin's DeFi integration
• "BTC as Outside Money" amid the Banking Crisis Panic
• Bitcoin Spot ETF Approval
• New use-cases for BTC - Ordinals, BRC-20s, Stacks sBTC, and Bitcoin's DeFi integration
• "BTC as Outside Money" amid the Banking Crisis Panic
• Bitcoin Spot ETF Approval
21/23 In a bull market, the following crypto-centric narratives can bubble to the surface:
• The merge of AI x Crypto
• LSTs
• Memecoins
• EIP-4844 for L2 narrative
• New spot & derivative DEX
• The merge of AI x Crypto
• LSTs
• Memecoins
• EIP-4844 for L2 narrative
• New spot & derivative DEX
22/23 Finally, not all narratives are equally impactful.
The Liquidity Narrative will likely influence asset markets until 2024, while smaller narratives emerge.
I recommend reading the full @Delphi_Digital report on "Will Narratives Drive Fundamentals?"
The Liquidity Narrative will likely influence asset markets until 2024, while smaller narratives emerge.
I recommend reading the full @Delphi_Digital report on "Will Narratives Drive Fundamentals?"
23/23 I wanted to share this insightful research by Delphi because we're at a turning point for macro narratives.
As always, I'd really appreciate if you could like and retweet the first tweet below.
And follow me @DefiIgnas for more:
As always, I'd really appreciate if you could like and retweet the first tweet below.
And follow me @DefiIgnas for more:
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