Been speaking with a bunch of liquid managers the past few days at Token2049 Singapore. Most people I talk to are cautious on the crypto market. People were concerned the FED might disappoint, about US election outcomes, about VCs selling their vested tokens etc etc. Most managers seem to be risk off and lightly positioned. One manager was even heavily net short. Someone even suggested to me yesterday that Arthur Hayes recent bearishness is a reason to be bearish. Even though people were discussing possibility of a 50 bp cut, not many crypto investors were really expecting it, so this move comes as a surprise and that is why the market is reacting the way they are. Not surprisingly the altcoins with the weakest fundamentals are rallying the most as this initial move is mainly driven by short covering. But after this immediate knee jerk reaction, there will come more buying as funds who are lightly positioned have to rebuild positions or risk underperforming the market. Crypto investors have been lamenting the lack of an altcoin season this cycle and some have even written off the possibility of an altcoin cycle. I can’t disagree more. This 50 bp cut is just the beginning of the biggest rate cut cycle in more than 20 years. The FED is just getting started and I reckon rates will be at 3% or lower by this time next year. Trillions of dollars that are being parked in treasuries and fixed deposits will need to be redeployed. The next 12 months will be an exhilarating ride. Powell has just kicked off the altcoin party. Don’t sleep on it.

On the one hand, everyone on CT seems to think VC is an extractive cabal that rinses retail by dumping on the picotops. On the other hand, I see the DPI (cash returns) of most of these crypto VCs... and yeah, no. They wish they were doing that.