Zoom out or you will be chopped to death with this kind of price action

YTD performance :

$BTC : +47%
$SOL : +46%
$ETH : +31%
$SUI : +31%
$APT : -9%
$AVAX : -12%
$TIA : -21%
$OP : -29%
$ARB : -34%

So BTC/ETH/SOL outperformed the two largest L2s, as well as the two main 'new alt L1s'.

All the top-performers YTD are memecoins and AI coins.

BY FAR !

In March we had both Solana season and Base season.

Staying power for Solana shitcoining seems way larger.

Base definitely still has some juice and potential, but the hype died down, whereas on Solana, it has been memecoin season non stop since December 23.

Total valuation of L2s over ETH :

Market cap : 4.6%
FDV : 13.4%

And then you must add zkSync, Blast, Scroll, Linea, Aztec, etc.

It looks high on FDV, but not stupid neither, imo.

I see the bull case in $TON but with that large valuation, and considering the fact that it might be compared to its equity value, I don't think the r/r is very good.

Thanks to finch_in_flight, as well as Joshua and thiccy :

https://twitter.com/Finch_in_flight/status/1789201288170774552

I don't know if that's just because most alts have been bleeding for 2 months, but the more time passes, the more I only feel comfortable longing memecoins and AI coins.

It's hard to find any other compelling narrative, especially with a good r/r.

RWA : yeah, that might be a good one too, since we've seen the post-BlackRock news giga pump. But it probably reaches a ceiling valuation wise quicker than AI

ETH beta : If you like pain. More specifically, the L2 trade seems very dead. LST/LRT stuff too.

Alt L1s : SOL is great, but it's hard to find other ones. The L1 trade is sleepy since December 23.

Gaming : I like this narrative too, and we've seen in Q3 2023 that it can pump strongly. But conviction is being tested on these coins.

BTCfi : Halving was sell the news and this narrative seems to have run out of steam. But it could come back, it remains on the watchlist.

DeFi : this category is very broad and full of underperformers, but you can catch a PENDLE once in a while.

Perp DEXes : a lot of competition for a category that tends to underperform.

DePIN : only interesting price-wise if it is related to AI.

SocialFi : yes why not, but we've never seen these coins move in tandem.

Just a reminder that this was PEPE/BTC chart from October 2023 to February 2024.

Things can change FAST in crypto.

What was consensus 6 months ago is not anymore, and what is consensus now might not be in 6 months neither.

There are 2 ways to interpret this chart :

‘Wow I just have to hold my tokens with conviction and I will end up getting rewarded.’

Or

‘Wow it is really hard to know what will be the hot trend in 3 months, let me just follow strength and rotate from narrative to narrative, I can flip my bias easily’

There is truth in both of these sentences, but you have to find the right balance between ‘having conviction in your long-term thesis’ and ‘averaging winners instead of averaging losers’.

One of the most used theses for BTC eco plays is the "ratio thesis" :

'The ratio of [largest memecoin / total MC of L2s / largest NFT] over the market cap of the main chain is way smaller on $BTC than on $ETH !'

While this argument is compelling, I think there's a good reason this ratio discrepancy exists... because UX on anything BTC related is incredibly sh*tty, and the BTC whales don't want to spend their precious bitcorns on these things.

The BTC crowd and the ETH crowd are very different. Some people have been trying to build L2s on BTC for years, and most of the time, we can't even cite them.

I don't think that all of these things are destined to fail, and I am happy about this activity that finally pushed the BTC transaction fees higher, but I don't think the ratio thesis is correct.

The halving ended up being a significant sell the news event for anything BTC related, and even the Runes protocol that everyone was excited about seems to have been quite over-hyped.

I am not too confident holding coins from the BTCfi category in the short-term.

If you think this was the top of the cycle, then it was the shittiest of the shittiest bull runs ever.

Higher.

Random VC : ‘I think the memecoins narrative will die because of the oversupply. There are new memecoins launched everyday’

As if this criticism did not apply to altcoins lmao

If you think that $AEVO upcoming unlock is crazy, just remember that $FLOW unlocked $4bn worth of tokens in October 2021.

High FDVs and huge unlocks are not *only* a thing of this cycle.

Roaring Kitty comes back and memecoins start pumping

Recap of the week article :

https://cryptonarratives.substack.com/p/narratives-of-the-week-may-13