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Not All Coins Deserve a Reserve - Digital Vision 13

Another week, another volatile move from Trump. After pushing Bitcoin to $110K on inauguration day, his policies have since sent prices tumbling.

On Sunday, in what felt like a hail-mary attempt to win back the community, he announced a crypto strategic reserve include $BTC, $ETH, $SOL, $ADA and $XRP sparking a brief rally before prices quickly retraced. Many investors all said the same thing, only one asset belongs in a reserve, and it’s Bitcoin.

As these other assets derate against Bitcoin, the “reserve” will inevitably become what it should have been from the start: a Bitcoin reserve. Expect more volatility as the crypto summit unfolds.

In this week of Digital Vision, we cover:

🔐 Cryptoverse: The ByBit Hack, Revisiting the Fallout $RUNE)

🪴 Digital Insight: Solana Moves Beyond Memecoins ($GRASS)

🔀 DVDealings: Preparing to rebalance once the market finds its footing ($TRX)

https://bagster.substack.com/p/not-all-coins-deserve-a-reserve-digital

🚨 Rebalance Alert 🚨

Yesterday, $ONDO announced Ondo Chain—a new Layer 1 blockchain built specifically for institutional-grade RWAs 🤔

Its design advisors now include fresh members of the Ondo Ecosystem, such as Franklin Templeton, Wellington Management, WisdomTree, Google Cloud, ABN Amro, Aon, and McKinsey. The ecosystem already features industry heavyweights like BlackRock, PayPal, and Morgan Stanley👀

Given the strength of this news and the impressive roster backing Ondo Chain, we’ve decided to add $ONDO to our strategy as part of our RWA narrative bet, a sector we believe will be a leading driver in the future🚀

To accommodate this change, we’re removing $RUNE from our structure and slightly reducing our exposure to $NEAR so we can allocate 5% to $ONDO 👌

https://x.com/OndoFinance/status/1887522597480337672

Post 2/2

We will need huge amounts of liquidity for the alt season to properly start, multiples compared to previous bull runs, and even then it will be important where this liquidity flows. The problem in the end are the investors themselves, because they are impatient and want 100x or even 1000x returns over night instead of trying to grow their portfolios incrementally and that's why at least so far the liquidity has not flowed into major alt coins.

If anyone tells you at this point that they know where the market will go they are either lying on purpose or are overconfident in their truth. We can just try to predict, we cannot know, but in our view we have a few months left for the alt season to play out, before the period of low summer liquidity kicks in. If there will be an alt season we think it either happens in Q1/start of Q2 or towards the end of the year in late Q3/Q4. A lot depends on Jerome Powell’s speeches (one is happening tomorrow) and how traditional markets will react, we do not see a scenario where traditional markets go down and crypto markets go up.

There has been a lot of different talks, from pro-crypto administration in the US to the Strategic Bitcoin Reserve, ETF for $ETH staking and so on. The big picture has been the same when we zoom out, the global liquidity is still increasing and will continue to at least for the next few months, after that it is a bit more blurry, because the FED has already started reducing their balance sheet, but liquidity is coming from other sources.

As stated multiple times, we still believe in alt season, that is why we have not rebalanced our portfolio a lot, we still believe in $INJ the most, but only time will tell where we will end up. We will be switching $RUNE to $LDO, because Thorchain’s future is somewhat unclear at this moment and if $ETH staking ETF will happen then $LDO should perform well in theory.

We are keeping track on what is going on in the market on a daily basis, but as stated in the posts from the past, until our thesis changes we will not be making any major changes to the portfolio and are staying hopeful for the potential alt season.

YESTERDAY'S EMERGENCY RESTRUCTURING EXPLAINED:

Yesterday we decided to dump $RUNE for $USDT due to the risks it faced because of it's lending services which became insolvent as the price of rune greatly underperformed the assets in the lending service.

This situation created a lot of confusion on social media and led to panic selling, as people feared that we'd see another Terra Luna type of crash. With our mandate being to act swiftly on verifiable threats to protect investor funds, we cut our losses on it which were just over 3% of the total portfolio.

It's worth mentioning that we still greatly believe in the $RUNE protocol which continues to function properly (swaps, LP, deposits & withdrawals) and it continues to be 1 of the most profitable protocols in the Blockchain space. We however understand that token price action is driven by market confidence.

Once (if) the team resolves the debts from the lending services and confidence returns with them giving us a solid way forward within the 90 days they've committed to, we'll likely add it back into our portfolio.

For now, we have just under 3% of capital waiting to be deployed into another project on our next restructuring & rebalancing which should be soon.

Thank you for your continued support, we shall continue to protect this portfolio while harvesting fruitful profits for you. #MzansiCrypto

First of all, we are big believers of $RUNE. It is a great project.

Nevertheless we decided to liquidate our position on this bounce.

It lost trust and when we invest in altcoins, we need to pick alts with a strong relative performance.

Projects like $AAVE and $XRP didn't perform very well in the 2021 bull but they are clear outperformers right now.

$RUNE and $INJ were the cryptostars of 2021 but now they look weaker. The same is true for $ETH , but we consider it a long term buy and hold.

We added the proceeds to $BONK, $ETH , $LINK, $INJ and $SOL.