Highest Monthly Closes for BTC & ETH in 2023

Week in Review:

• In November, MicroStrategy increased its Bitcoin holdings by purchasing 16,130 BTC, valued at approximately $608 million, bringing its total to 174,530 BTC acquired at an average price of $30,252 each. This represents a 10% increase in holdings in one month.

• In the latest crypto drama, the hacker who stole $46M from Kyber Network has given a Dec 10th deadline for his list of demands, which includes full executive command of the protocol. The tweet below is the letter he wrote to the team, along with his other requests:

• Grayscale is updating its GBTC agreement, aiming to prepare it for a potential uplisting to a spot bitcoin ETF and to compete with BlackRock. Renowned TradFi ETF Analyst Eric Balchunas gives a 90% odd of a BTC ETF approval by January 10th.

AI is currently the hottest narrative, as we predicted it would be in previous issues of this newsletter. The market continues to look for “fundamental” coins in the DeFi and AI sectors instead of meme coins. This makes sense as we enter the beginning phases of a bull market. In previous bull markets, the first half is driven by what feels like healthy pumps in coins that enable new behaviors. Think DeFi coins in 2020. While there is always speculation, there is also innovation.

The second half of the bull market is driven by greed: memecoins, NFTs, Layer-2 weekly rotations.

This go around, AI coins are driving the first half of excitement. Whether this is a trend or just the latest narrative of the month remains to be seen. But, out of the top 10 coins held by smart money, four are AI-related:

1. Aegis AI - $1.1M held by 17 wallets

2. Autonolas - $526K held by 9 wallets

3. AIgentX - $156K held by 8 wallets

4. VaultTech - $126K held by 8 wallets

The number one coin smart money holds is BANANA with $795K held by 20 wallets.

Narratives

Crypto runs on narratives, and being early to the right narrative can be life-changing. 2024 is right around the corner, and exciting developments are popping up. The time to understand these developments is now, not when the market is parabolic.

Here are three narratives I have my eye on:

AI

OpenAI did us the biggest favor fumbling the bag. “They can nuke a $90B company overnight?” is the same energy as “They can print trillions out of thin air?”

It casts doubt in people's heads that will lead them to crypto.

In addition, AI was THE tech breakthrough of 2023. As we have seen, anything that happens in the real world is amplified in crypto.

While there are no blue chips yet, $TAO & $OLAS have emerged as early contenders. Both are up 234% and 257%, respectively.

For lower marketcap coins, here is a list of AI gems I have my eye on (not financial advice).

SOL

SOL is a cycle away from being alongside BTC & ETH. It has the attention - whether love or hate, everyone in crypto has an opinion on SOL. SOL resonates with the institutional community. In 2020, ETH appealed to TradFi because it was “like BTC but cheaper.” It is a very mid-curved narrative that plays well with suits.

And guess what? They are doing the same thing with SOL, but now it's “like ETH but cheaper.”

Here is Cathie Wood giving this exact sales pitch on CNBC.

More than just narrative, SOL has the fundamentals to match. Anatoly and the high-quality teams in the ecosystem are committed to the long-run. With Firedancer expected to come in 2024, there is a significant event investors can get excited about.

SOL is experiencing early wealth effects w/ airdrops (Pyth, Jupiter, Jito) and alt pumps (BONK, HONEY - up 5x in a month; we covered this very early in this newsletter)

Here is a primer I wrote on SOL when it was trading at ~$26 that is still relevant today.

Gaming

It’s time.

We have fantasized about a GameFi bull market for years, and this cycle, we will get one. GameFi is easy for normies to understand and can expand crypto's user base, unlike most crypto narratives, which just shifts money between participants.

Recent teasers have crypto games on quality with traditional ones.

How to get exposure? GameFi is harder to nail because there is no precedent within crypto for it. Are individual games or studios the better play? Only time will tell, but for GameFi, you need to be in the trenches. Here is a deeper dive into AI gems from Wacy:

🤑 Notable Raises

• Wormhole - $225M series B. Sector: Infrastructure. Lead investors were Brevan Howard, Coinbase, & Multicoin. Notable investors include ParaFi Capital & Dialectic.

• Setter - $5M seed raise. Sector: Consumer Dapp. Lead investor was a16z. Notable investors include Serena Williams, 35 Ventures (Kevin Durant), & Superlayer.

• Izumo - $12.7M seed. Sector: SocialFi. Lead investor were Anri & #hashed. Notable investors include Hashkey.

• Matr1x Fire - $10M series A. Sector: Gaming. Lead investors were Folius & SevenX. Notable investors include ABCDE & Jambo.

• Blast - $20M. Sector: Layer-2. Lead investor was Paradigm. Notable investors include Egirl capital & Standard Crypto.

• Jito: Solana project announces $JITO token and retroactive airdrop

• Cosmos: Former Cosmos founder, Jae Kwon has announced he will lead a fork of the project.

• Kyber Network: Kyber recovers $4.67M from hackers.

• Shrapnel: Crypto gaming project Shrapnel is facing a legal dispute involving claims of an internal coup.

• Tornado Cash: Tornado Cash, which has suffered legal disputes, had its token $TORN delisted from Binance. Price is -50% since.

• Iota: Registers $100M ecosystem fund in Abu Dhabi

• Brazil: To impose 15% tax on crypto held off-shore.

• UK Tax: UX tax authorities are penalizing users for unpaid taxes.

• Vitalik: Must read essay by Vitalik on techno-optimism

• Arthur Hayes: Arthur’s latest essay goes into the complicated relationship between US & China and how this could help crypto prices.

🫡 Chart of the Week

BTC and ETH both have their highest monthly closes of the year. Historically, December returns have been mixed, but with the ETF and macro picture improving, hopefully, we can get a holiday pump.

See you next week,

Mid-Curve Team

The Mid-Curve newsletter is intended purely for educational and informational purposes and should not be construed as financial advice. We encourage all our readers to conduct their own research or seek advice from a certified financial advisor before making any investment decisions. Please note that members of the Mid-Curve team may hold positions in some of the investments discussed in our newsletter.