CryptoCondom
Crypto Market Commentary
Berachain is unsustainable while its token emissions and vesting are still underway, even with its rewards structure. The alt-L1 race has been lost: corporate chains from Robinhood, Stripe and Coinbase will not rival Ethereum because they are its layer 2s, and current contenders will persist mainly on privacy and monolithic design. x.comÂ
Berachain, Sonic, zkSync and Scroll lack the real economic activity needed to justify running their own financial systems. Aave is winding down on six chains that each made under $5k a quarter and set a roughly $2M annual revenue hurdle for new ones. The top five chains hold about 91% of stablecoins and TVL and 94.5% of chain fees. Berachain earns $22 a day in chain fees, Sonic's TVL is down 98.67% to $14M, zkSync earns $166 and Scroll $21. Crypto may end with only 5-10 real financial centers. … Show more
Ethereum's layer-2 networks are insanely bullish long term because they give every major institution a substrate to build on while reinforcing the use of ETH. There is no good reason to build a modular chain anywhere else, and today's very low fees to do so, without running your own consensus, are a feature, not a bug. Expect many more L2s in the next few years. The L2 roadmap did pull focus from L1 scaling, which is still needed, but zk proving will get there. x.com x.comÂ
Ethereum can't do well over time unless it regains the strength and market share it lost to Solana, especially with inflationary tokenomics. Crypto is maturing, and Bitcoin will no longer lift the rest of the market the way it used to, contrary to @Nam_1r's view that a big bitcoin rally would surely pull ETH to a new high. x.comÂ
Layer-2 networks are Ethereum's competitors disguised as allies, slowly draining it in a vampire attack. They take the users, keep the fees and lobby the base layer to stay small, returning almost nothing; the small fraction of fees sent back to ETH only confuses the narrative. L2s will either migrate or become their own L1s, and either way ETH is left holding the bag. x.com x.comÂ
ETH should stay stuck for a long time because of the many trapped buyers created by BitMine and Tom Lee. Nearly every use case for it has been tried since 2019, and tokenization is more exciting than ETH itself. x.comÂ
Hyperliquid is among the crypto projects proving that real revenue used for buybacks and burns drives the best long-term performance. Tokens without revenue, or whose buybacks do not offset emissions and unlocks, are inflationary assets relying on sentiment. Projects with revenue and value accrual, including Hyperliquid and GEODNET, held up surprisingly well through the bear market. x.com x.com x.comÂ
Ether is rated Avoid in a June 7 ratings update written during the AI-sector crash, in the same bucket as bitcoin, CoreWeave, IREN, Tesla and the SpaceX IPO, while Alphabet, Micron, SanDisk and SK Hynix are rated Strong Buy. x.comÂ
Most Ethereum layer-2 tokens will likely keep bleeding as Ethereum scales its base layer. They have destroyed wealth over the past two years: Polygon's POL is down 90%, Arbitrum's ARB 94% and Optimism's OP 97%. x.comÂ
Ether and Solana lack a path to profitability, which any sound investment should have, so severe underperformance is happening and will continue. x.comÂ
Ethereum is where institutions and smart capital keep their value in DeFi. Its TVL is nearly double the roughly $23 billion combined on BNB Chain, Solana, Tron, Base and Bitcoin, because its collateral is deepest, apps are battle-tested, stablecoin rails are strongest and large capital can move securely. Fundstrat and BitMine could be among the biggest winners in the second half of the decade. x.comÂ
