Dispatch #34: The DOGE Days of Spring

In this patch of your weekly Dispatch:

• ETH smashes to new all-time highs
• A new debate around Bitcoin mining origins
• Doge eclipses everything

The Big Idea

The Doge Rises

Right now, Doge is absolutely inescapable.

The meme coin that started as a joke has just continued to rise, reaching levels above $0.60 apiece. Doge has flippened XRP as the fourth-largest cryptocurrency and its current market cap would put it as one of the 150 or so biggest companies on the S&P500.

There are many competing explanations for the rise of the dog. The most obvious is people buying in anticipation of Elon Musk doing a Doge-related skit when he hosts Saturday Night Live this weekend.

Others are attributing a bit more of a poignant, social-commentary interpretation. Mike Novogratz said there’s something really “pure” in what Dogecoin has done, comparing the rally to people’s “middle finger” to the antiquated financial system. And not long ago Antoni spoke of the “tribe of investors, many of them millennials, who see it as a cause” and likened it to a ”zeitgeist happening before our very eyes.”

Whatever the case, it’s impossible to ignore how much of the crypto discourse is being dominated by Doge right now. Even in a week in which Ethereum smashed to record highs, it could barely keep up with Doge.

Now, whether we’re in for a dump right after SNL ends remains to be seen. For now, it’s Doge’s week.

The Latest In…

ETH’s New All-Time High

Ethereum spent the weekend starting hungrily at $3,000 before smashing through and doing so convincingly. You can feel the shift and tone in energy as ETH has climbed. Price targets for this cycle are being adjusted up. ETH-BTC “flippening” narratives are back in the chatter. And of course, DeFi is soaring. This week in DeFi, Uniswap launched its much-anticipated Version 3, which promises to keep the momentum moving. In any week that didn’t see such absurd price action and discussion out of something as discussable as Doge, ETH would have been at the center of everyone’s attention. And regardless of what Doge does, it seems clear that the next phase of this bull market is about ETH, DeFi, and what they do next.

The Latest In…

A New Discussion Around Bitcoin

As you can probably tell, at least for this part of the bull market, the discussion isn’t really centered around Bitcoin. From a price perspective, it’s largely been sideways. Crypto Cobain even taunted Bitcoiners that they probably couldn’t even remember what a new all-time high felt like. Still, a lot of the chatter this week was about different attempts to segment Bitcoin based on who had mined it. The Marathon mining group claimed to have mined their first “OFAC Compliant Block”, i.e. throwing out transactions from US government-blacklisted addresses. Shark Tank’s Kevin O’Leary has been all over TV talking about why he likes Bitcoin but only wants it clean and sustainably mined. Obviously, this brings up some pretty big questions around fungibility and the fundamental nature of the network. Is this a debate we’ll see more of this year?

The Latest In…

Institutions

Despite Bitcoin not being the central focus of the week, that doesn’t mean there wasn’t some big institutional news. Bitcoin institutional infrastructure provider NYDIG announced a partnership with the leading bank software company FIS that could put Bitcoin buying, selling, and holding features directly in the accounts of some 300 million US bank accounts. Not too shabby! Interestingly, we’re also starting to see the beginning of some interest in DeFi from traditional institutions, exemplified by a 22-page report on DeFi from ING. Finally, Citi is the latest huge US bank to consider launching crypto trading and custody services after seeing heavy demand for BTC from its institutional clients.

The Week’s Most Interesting Data Story

A Surge in Bitcoin’s Realized Cap

Despite Bitcoin’s continued price consolidation below $60K, the capital inflows into BTC – as demonstrated by the asset’s realized capitalization – stand at unprecedented levels. Realized cap is a metric that shows the value of the coins in the network when they were last moved instead of their current market value. It eliminates the impact of lost or dormant coins and is seen as a proxy for the value stored in the asset. The below graph shows that BTC’s realized cap has increased by some 200% to equal BTC’s market cap from just five months ago and is an indication of a healthy bull market ahead of us.

Hot Topics

What the Community Is Discussing

Not to toot our own horn but it feels great to see long-term strategies pay off.

Maybe the most shared and discussed thread of the week - all about the reality of joining a crypto company. Relatable.

As big as Doge has been, the most important story remains that of Ethereum.

Our Take

@AntoniNexo This Week

• It’s Charlie and Antoni again, folks and we know you’ve missed them. In this episode of the Untold Stories podcast, the two talk about everything Nexo, the complexities that come with running the leading institutions in the digital asset space, and the positive implications of Biden's tax law. Enjoy responsibly!
• As you know, for our third birthday we participated in the #ColorTheSpectrum online fundraiser in support of NEXT for AUTISM and the autistic community. The show was a resounding success and thanks to the crypto donations platform that we created in collaboration with The Giving Block, we managed to collect nearly half a million dollars in crypto for the cause! Commenting on the event, Antoni spoke on behalf of the entire Nexo team in saying that: "We are proud with the integral part we played in #ColorTheSpectrum and that we helped raise nearly half a million in crypto to support the autism community. I firmly believe that technology can help us reach out to every single human being in need of support and that we have laid the groundwork for more mainstream organizations to start accepting donations in cryptocurrencies.”

What to Watch for Next Week:

• Will Doge dump after Elon’s SNL performance?
• Can BTC regain some momentum or are we fully in alt season?
• Will we start to hear more about crypto from the new SEC chair Gary Gensler?