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Table of Contents
Our Place in the Market Cycle
US Inflation
Bank of England
Crypto Macro
Price Action
SUI
SuiPad
SUINS
Conclusion
Internal References
1. Our Place in the Market Cycle
I struggled quite a bit this week to figure out what I would be writing here.
I like to keep these sections relevant but section 1 is never planned. It’s usually a concept or topic that comes to me while I’m writing other sections in these forecast/review posts.
This week, nothing came to me. I’m sitting here now on a Sunday evening with the entirety of this post completed except this.
So we’re going to discuss the current market cycle, where we are, why we are, and why I’m spending time looking at SUI and poking around within the blockchain.
So, where are we?
Right now, we’re in between cycles. The last cycle has essentially ended, but the next cycle hasn’t started yet. If last year was the crypto winter, we’re now in the false spring. It’s definitely not getting any colder, but we haven’t quite arrived at the equinox yet.
Many of the new protocols that will catch a narrative and find room to run during the next bull market are emerging now. The launch timing for these protocols isn’t accidental. Many crypto protocols, especially VC backed protocols like Aptos and SUI have analysts and employees dedicated to market timing their launches.
They don’t choose launch dates by accident. Many protocols will prefer to spend more time bug-hunting and optimizing rather than launching in a bear market. They won’t tell you this out in the open (because that looks bad), but they’ll instead shift launch dates and announce new launch features or integrations (which take more time) so they can push the launch back to a more favorable market timing.
Ideally, you want to launch near the end of the bear for a few reasons. The main and obvious reason is so that the protocol can have a good launch narrative (price goes up for early supporters), and so that the protocol can maintain hype. There is nothing worse than losing attention from your whales and degens if your token stops appreciating or falls below its initial offering price.
Many projects have died and stayed dead because they launched during the peaks of euphoria of bull markets. That’s entirely too late to launch and it’s very difficult to be an investor in such a project because you’ll find that many of your own fellow investors (who are now upside down) will be fighting against the protocol with their own bad attitudes.
APTOS and SUI are the two protocols that I think have launched on time for the next bull cycle and should be able to avoid creating bag-holders who are extremely negative towards the protocol, complain often, or looking for a break-even exit.
This helps us to orient ourselves about where we are in the cycle. If you launch too early in the bear cycle, your token will depreciate from launch and many of your early supporters become early detractors.
SUI launched at $0.10 on several CExes (not for Americans, lol), and is currently trading over $1 on most CExes. For early adopters, this is great and creates a number of users who feel good and are invested in the continued success of the protocol. Rather than fudding, they will instead be pumping their own bags.
Aptos launched about 1 month before the absolute bottom of the market at around $2.75. It’s currently trading at around $8.50. Again, the same effect is created with most holders either pumping their bags or rooting for those bags to continue pumping.
Compare that to a protocol like VET that launched near the top of the ICO craze in August 2017 and raised over $60m, but the actual protocol traded far below its launch price after the token went live except for a few months during 2021 when it was really running.
Despite VET being fairly active in DeFi as well as within its own niche of supply chain service providing, many of the holders are mostly bag holders who have either lost interest in participating in the social media sphere or are a loud minority who complain about the price being below the ICO price.
Having a portion of your userbase fighting against you or complaining is horrid, here’s an example. It’s the latest comment on the first post I found in the VET subreddit.
There is DeFi, there is a stablecoin, there is a large NFT market, and there is legitimate yield, yet we have users complaining about the price. This is the kind of problem that launching at the wrong time in the cycle can create.
So when we see VC-heavy chains like SUI and APTOS launching, we can know what part of the cycle we’re in and plan around that. SUI and APT aren’t going to spend hundreds of millions to make a protocol while making the mistake of launching at the wrong time.
Where are we?
We’re between markets. The bear has mostly ended, the bull has yet to begin. What does that mean for us moving forwards? We get to watch the Federal Reserve set a high-water mark for interest rates soon and then watch capital slowly rotate back into risk assets and risk markets.
But what’s happening in risk markets right now?
Most traders are acting like we’re at a short-term top.
There is ridiculous speculation in crypto for projects like $PEPE, $BEN, $PSYOP, and others that are either silly meme coins, or outright rugs and scams.
There is very little focus on utility or legitimate degenerate activity. Instead, we have this, and it follows along with the discussion around BitBoy from earlier this week, as he bought the BEN protocol for an undisclosed sum just because it had his first name. It does nothing, it is nothing. It’s just an address that users sent ETH to.
So where are we at? Speculators are acting like it’s a short-term top, while VC-backed projects have launched as if we’re at the end of the last bear. Who’s right? Who’s wrong? From where I sit, it’s far too early in the cycle to be getting rugged by a dude who can barely work metamask and a project that’s literally called PSYOP. BTC and ETH haven’t yet appreciated enough to be throwing it away like this in the current cycle. Yet speculators are taking some of their positioning off the table to enter the casino.
This sort of activity is usually reserved for the absolute pico-tops of the market cycle. It’s typically spurred on by investors having made so much USD-value by building Alpha that they feel free tossing some of it away. This is also why market cycles typically follow this order.
Bitcoin > Ethereum > Shitcoins (Alt-Season)
Have we seen that yet? Kind of, but in a very small sense. A mini-cycle if you will.
But in the broader sense we haven’t seen the end of the last cycle yet as the FOMC has not officially paused rate hikes yet. This is too soon, but what it does indicate is that the market will likely still be flat for the near term. Speculators have been so beaten up by the last bear cycle that they have lost some conviction and want to move some profits while ETH had a 2-handle and BTC was in the $30k range.
The demoralization of market participants has left most skittish, with little longer term conviction.
Conviction stems from having our psychological needs met. We all need to take some profits in order to feel good about ourselves and our positioning. Tossing ETH into a black hole named BEN or PSYOP is one of the ways this unmet psychological need gets taken advantage of. Far better to have just sold a portion into USD and bought a new gun, car, or taken your mother out for dinner. Taking profit is how we become comfortable with our investments. When you’re up, take a little off the table to satisfy your soul. Otherwise, you’re susceptible to rugs like BEN and PSYOP.
Similarly, be certain to join communities that are psychologically healthy if you intend to ride a wave. SUI and APT’s communities are currently healthy because everyone is in profit. You need users to similarly support your investment. No matter how strong, or resilient you are, you can’t waste time convincing investors that their investment is functioning. Much better to spend that time shilling, or just engaging in new DeFi.
Now let’s get into the news and the meat of SUI.
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