ROLLUP: 4 Year Cycles | $JUP Airdrop | ETH ETF Rumors

What really causes the four year boom bus cycles in crypto? Is it the Bitcoin happening like everyone says it is, or is it something else?

Banglastation is the first week of February, and it is time for the weekly roll-up. David, you know we've never done a roll-up on a leap month?

February has 29 days this month. Do you know that

Oh it's our it's our first bankless yeet leak month. Yeah. Is that something to celebrate?

I don't know. I don't

I don't

mean it's

make it. I don't think it is.

no

I don't think it is.

celebrate the 29th of

February? This is below my line.

their birthday. All right, well, let's talk about what is above your line this week. Uh, Farcaster Frames. They are the hot new thing on the app called Farcaster. All right. But the question is is this the killer app that crypto social media actually needs to take off? We haven't had our iPhone moment yet, but could this be it?

And surprise, people with money in FTX are being paid back pretty damn soon here. But how much is the question? And also, where is that money coming from? Speaking of money, Jupiter on Solana has launched its dupe token at an Earth shattering $7 billion valuation. I think one of the largest airdrops, uh, maybe top three airdrops of all time. How did the Solana network hold up? Was it able to keep itself upright? We'll talk about that.

And speaking of valuations, we've got to talk about uh the Fed. It's getting a little hawkish. All right, that might impact our crypto valuations.

All of that and more, but first, we're gonna talk about DYDX because

All right, let's get to the markets this week, David. Uh, what is Bitcoin showing us on the week?

We got some pretty round number price movements this week. Uh 40,000 is where we started the week. 43,000 is where we are ending the week, up about 7.5%. Uh pretty good. 7.5%. We like we like that. Uh, I mean, it was pretty pretty red week uh last week. So now we're kind of like starting to fill in that gap. ETH price, also some round number movements starting the week at 2200, ending the week at 2300, uh, up 5% on the week.

How about the ratio, David?

Ratio down slightly on the week. We are below 0.054, but not news.

Thanks to Kraken for these charts. Uh, like to see them going up. And uh that that that's what happened this week.

Make them go up

Uh David, how about total crypto market cap? What are we looking at?

1.71 trillion. Call it flat, flat on the week, flat. It's been flatty.

And layer two B.

Layer two beat, also flat. So slightly up in TVL. We're at 21 billion locked in TVL on layer twos with a 5.5X scaling factor. Arbitrum uh coming in at $10.5 billion in TVL, followed by Optimism at five, followed by Manta Network, a brand new uh ZK Layer 2, uh, which I think is the subject of a big old airdrop farm at $1.6 billion.

Manta Base number four, Metis number five, six is ZK Sync era and number seven mantle and then DYDX. Interesting. Immutable

and ZK Fair. Um so this is

ZK fair.

the horse race to watch though. And uh yeah, it's one of the most interesting that's going on right now. David, let's flip though to the Fed. What is going on in the broader macro markets this week? I think Jerome Powell had something to say. What did he say?

Yeah, I heard I heard it was a hawkish uh FOMC meeting this week. Uh the TLDR that I've gotten the vibe of is uh the last FOMC meeting, everyone was like, we just got the pivot. And then this FOMC meeting, everyone's like, oh, maybe we didn't, maybe we didn't get the pivot. That's kind of like TLDR. Do you have any more color to add?

Yeah, I mean uh so Fed Jerome Powell said inflation is still too high. And recall the the rates right now are 5.25% to 5.5% in kind of that range. And he said inflation is too high. There's ongoing progress to bring it down. It's not assured. Uh he wants to get inflation back down towards 2%, which is uh, you know, the the central bank target. And he said rate cuts would not be appropriate. Yeah, and I think you're right, David. Some investors were surprised by this because there was talk of this, maybe the pivot, that is the decreasing of rates happening as early as March of this year. And it looks like that's not going to happen. Uh Powell is not giving us a full pivot yet, though that could happen later in the year, David. I think that's still on the table, and the FOMC indicated as much, expecting rate cuts later in the year. We just have to wait on those, I guess.

My understanding is that the pivot is inevitable because high interest rates means that the United States government has to pay a ton of money on its debts, which are massive. And so it just is a matter of incentive. We have to have the pivot. But that's like, if I keep on saying that, it'll be the bajillionth time that I said that in the last like 18 months. So I I'm kind of like starting to feel like I'm beating a dead horse or I'm broken record or something. That's still true, right?

Yeah, that's still true. All you gotta do is wait. So just wait.

They're not going to be able to do that.

A few months. I don't know. It's gonna happen this year. I'm still and let look, something crazy could happen. You never know, but it looks like we're still on track, just a little bit delayed. Okay. Uh, David, you know, we talk about crypto and the boom bust cycle happening every four years. And of course, this is sort of our base prediction. Yeah, a four year cycle. And so we are like

We're we are getting into the bull territory of this this full four-year cycle. The reason that many in crypto have always pointed to for this four-year cycle that I have not fully bought into is the havening, because it turns out that the Bitcoin havens its supply about every four years. And of course, the um magnitude of that as a percentage of Bitcoin supply is decreasing over time. This is the tiniest happening yet in terms of total Bitcoin supply. But still, that's one of the reasons given for four year cycles in crypto. Mike Ipolito has a different take on that. Maybe the four year cycle is not caused by the Bitcoin happening. Maybe it's something else. What are we looking at here?

We are looking at a graph that basically looks like a sinusoid. It is a wave going up and down, up and down in the background. It's just like a model for a sinusoid. And then there's a chart in front of that sinusoid that is the global liquidity index, as in how much liquidity is there in the global markets around the world. And that that line is a little bit more choppy, but it generally follows a that four-year sinusoid in a very rough fashion, but like the pattern is pretty clear. And then if you just look at this in the crypto context, right? We had uh the 2013 fork and fair launch bull market, which was at the peak of the uh the the rise in the peak of the 2013 to 2014 sinusoid. Then we had the 2017 um bull market, which uh also same thing. Uh, and then also we had the 2021 uh peak as well. And so it all just lines up with liquidity. And I think this is the big

Conclusion that people got to after Bitcoin went from like 69,000 down to 20,000 as inflation set in, where everyone was like, prior to that, everyone was like, Bitcoin is an inflation hedge, and then inflation happened and Bitcoin went down because interest rates went up. And turns out we are now remodeling our idea about what Bitcoin is. It's an index for liquidity, which is exactly what this theory would say.

Yeah, I I think that's right. And I think this sort of explains um crypto four-year cycles even more than Bitcoin. I I will point out it could be both, though, right? It doesn't just have to be one thing. But I do think that um worldwide global liquidity is kind of the big explainer here. And just to give a sense of what this global liquidity index is based off of, it's basically the central banks of the world. So all of the, you know, the central banks, so that's the Fed, um central banks of China, Japan, EU, all of them, and also commercial banks. They are kind of the levers or control mechanisms for how much liquidity is in the actual market. So at the end of 2023, we had a global liquidity of about $170 trillion. And that is on pace to rise in this cycle. So we're at kind of the trough of global liquidity and now making our way up as more liquidity is injected by the banks into the market. That that is what this trend line kind of predicts. And those are the waves that you were just saying.

I want to double down on that punchline. Uh, we are past the trough of the recent sinusoid and we are on our way up. That's kind of the that's where we are in this trend. Uh, and so if it as was as violent of a of an uptrend as it was last cycle, uh, we have a long way to go in terms of more liquidity coming into the markets, which always impacts risk assets the most, which is crypto. That's us.

I mean, you could see this on other charts too. This is a comment from Mike's tweet. If you know this, but Satoshi was actually a macroeconomist. It's so interesting how the Bitcoin four-year happening cycle is also timed with these four-year cycles of liquidity in and out of the market. And it goes to show, David, like one thing that's um always true of markets is it's all about inflows and outflows, isn't it? Right. And so fundamentals make their way into prices over time. But in the in the business cycle time range, like the two to five year uh time range, it's all about liquidity. And uh so I mean this looks very bullish for um crypto assets and then probably risk on assets in general. And uh, you know, the punchline here is it's actually less about interest rate. So people look at the interest rate and they're like, it's five percent, it's five percent. That's high. It's higher than it's been in the last like 10 years, right? It's not just about interest rate, guys, it's also about the liquidity that is sloshing around in these markets. And it looks like all of the banks are ready for another cycle of money printing.

Speaking of inflows and outflows, the GPTC outflows have slowed this week, especially in the last two days. So the 29th, 30th, and 31st have been some pretty notable changes in tune in the Bitcoin ETF world. So on net, there was negative $17 million outflows on the 29th between all of the grayscale outflows versus the other ETF inflows. On the 30th, which was Tuesday, there was $378 million inflows into all of the Bitcoin ETFs. And then yesterday, at the time of recording the 31st, $240 million inflows. So over the last two days, we've had over like $600 million of inflows into the Bitcoin ETFs, which have surpassed all the grayscale outflows. The grayscale outflows on the 29th, 30th, and 31st, 289, 192, 170 million. So that number of grayscale flowing out, GBTC flowing out of grayscale to Coinbase being sold, turning all these candles red, uh, is flowing. That is a lower number.

And we we needed to get rid of all of those outflows in order to uh resume the ascent upwards, didn't we? And it it's it might be no accident that this week we saw a 7% gain on Bitcoin, and these outflows um have started to uh to halt and stoltify. So uh that's good. That's healthy market activity. That's what we need in order to go back up. David, what do we have coming up next?

Coming up next on the second half of the show, we're gonna talk about Jupiter's $7 billion token launch. Did you get that airdrop? Bankless Nation. We're also gonna talk about Farcaster Frames and if Crypto found its social killer app, as well as record amounts of on chain user growth in 2023, which chains grew the most? Was it Ethereum layer twos or was it newer layer ones? We're gonna talk about all that and more. But first, I want to talk about some of these fantastic sponsors.

Big airdrop this week. Solana's biggest DEX, Jupiter, just launched its jupe token. What do people need to know?

Yeah, 10 billion jupe tokens. This airdrop was actually announced. There's gonna be four phases. This is phase one. The future criteria of phases two through four are undecided, but this was actually announced all the way back at Solana Breakpoint in 2023 to November 15th, 2023. 10 billion jupe tokens going to 955,000 Solana wallets, almost a million wallets. Definitely not a million users in Solana pre-November of 2023. Of that 955,000 eligible airdrops, uh airdrop addresses, 485,000 addresses have claimed those tokens. About two thirds of the airdrop, which I believe is 10%. I need to double check these numbers, but I believe 10% was airdropped of the $7 billion, which means $700 million was uh airdropped to Jupyter users.

Where are you getting seven billion? Is that is that the market cap of

That is the market cap.

Yeah, that was a market cap at the drop. It is now at six billion, which I mean still plenty of respect.

Yeah. Still six billion dollars. Yeah.

so almost a billion dollars in token value was dropped to six?

Hundred million. At the current price is six hundred million.

Wow. Wow.

Which might be number two behind Arbitrum, which dropped like two billion to users.

Yeah, because Jupiter is like the primary decks on Solana. It's it's it's kind of winning.

It's like a super DEX. It's not just an AMM. It's also a DEX aggregator with like a bunch of just other bells and whistles. It's got it's like a suit, like it's got all the all the DEX bells and whistles like hooked into one app.

Okay, so how did Solana the the actual network? I'm sure this was a flood of activity of people claiming their their Jeep tokens, getting very excited. How did the network uh handle that load?

Uh network stayed stayed up and running, but uh a bunch of failed transactions happened. I think something like 50 or 60 percent failed transactions. So people were pretty frustrated about that. But it was you know significant improvement from what Solana would have done like a year ago, which was topple over. Uh and so it's stayed on stayed online, didn't didn't break a sweat in terms of block production. Uh but now so the Solana as an ecosystem is like just paying attention towards its fee markets and its congestion. Uh, and so this is like the new era of development in Solana. So

No, that