2020 was a game changer for Ethereum.

The vast majority of its success was fueled by #DeFi.

Here's what happened in 5 Tweets 🔽

While my time investing in crypto and previously playing poker has gotten me used to experiencing large daily personal net worth volatility, it's never a pleasant experience

Short thread (by my standards...) with some ramblings that help me get through it 👇

1/10 Imo, some DeFi projects represent 10-1000x upside opportunities

Obviously, like all of crypto, it is extremely risky and can go to 0. That said, given the magnitude of potential outcomes, it just doesn't have to succeed that often to make it a massively +EV bet

2/10 As with all early stage tech, realising these outcomes will require 4-8 year holds

Unlike early stage tech, crypto investors will have liquidity, i.e. the possibility, and thus the temptation, to sell

This is both a blessing and a curse

3/10 A look at any of the best performing public stocks will show you that you cannot have 10-1000x upside potential without volatiliy and occasional large drawdowns

Crypto, as early stage tech, is much riskier than established public companies and thus even higher vol too

4/10 Obviously, one should take advantage of this liquidity as it allows for rebalancing. Most importantly, it also makes outcomes less binary and thus less volatile than traditional VC

However, one should not let the liquidity take advantage of us

We're in the phase of the market where there's a lot of retail inbounds but not enough education about the Ethereum ecosystem and DeFi.

So, let's break down the basics of some of the top protocols.

First on deck: Aave (@AaveAave), an Ethereum-based money market protocol.

A 🧵

TL;DR: Aave is a protocol through which any user anywhere in the world can take decentralized loans by collateralizing their assets.

Aave also allows those will idle assets to earn a relatively safe return on capital from lenders, whose rates are determined by a curve.

1/ For years, most crypto assets had no indirect or direct utility.

Users would hold BTC, ETH, and other assets (including many ERC-20 tokens) with no expectation of a native yield or dividends.

ETH, for instance, was long just an asset for transaction fees, as was Bitcoin.

2/ If users wanted to borrow against their assets, they were relegated to centralized platforms—which were few and far between years ago.

3/ Aave, formerly ETHLend, is a protocol allowing users the ability to lend and borrow on-chain, without KYC and untransparent fees.

Users can deposit a variety of assets as collateral, then use that collateral as ammo to borrow other assets to be used in DeFi or beyond.

1/29 #Bitcoin thread, updated version

We’ve doubled since the last time I updated this thread, so I thought it would be of some value to update it. Feeling insecure about price action? Too enthusiastic/scared? Maybe this helps a bit, go check it out!

TLDR at 27-29
Let’s go!🔥

2/ 2 Year MA Multiplier
This indicator uses the 2Y MA. Green line is the 2Y MA, red is the same MA x5

2ya MA multiplier is rising and at ~48k rn. Price goes parabolic. I would personally love to get a decent correction, would give more space for growth long term imho.

3/ Relative Unrealized P/L
Paper p/l in $Btc. Use it to track investor sentiment.
Market is overheating, everybody is in paper profits, but as you can see “we” as a whole take too less profit. We can stay around greed for a whole year, but a correction at this point makes sense

4/ 200 Week MA Heatmap
#Bitcoin likes to bottom out near the 200W MA
Colors are attached to % increase of MA
Blue/purple = Buying opportunity
Orange/red = TP opportunity
The bigger the distraction, the more parabolic price goes, simply said
First green coming(?) Room for growth

5/ MVRV Z-score.
To identify periods when $Btc is extremely under/overvalued.

Green= MV unusually far below RV, buying opp
Red=MV unusually high above RV, TP opp.

Now: heating up. Correction first to cool it off plz :)
Nice uptick in realized value.

Tesla just announced that it had bought 1.5 billion dollars of bitcoin and could in the future sell cars in bitcoins. Since this morning both Bitcoin and Tesla are going up in the market. Maybe there is afterall something in the saying that“Bitcoin is Tesla without the cars”1/ 20

Musk is seen as a genius, a true Midas, by many investors and millennials. For them he can never go wrong. He became recently the richest man in the world dur to Tesla stock valuation (+353% yoy). He moves markets and today´s announcement is “kind of legitimise “ bitcoin 2/

Tesla shares attained $870 which represents a Price/ Earnings ratio of 1.747 (!) on the basis of last year´s profits. Apple is at 37 and the S&P firms average is 23 (against a historical average ≈16). Future profits would have to increase a lot to justify a more normal ratio 3/

Tesla has a good product but the question is if it will sell enough cars to get such profits in face of coming fierce competition. However, this is not the question I want to comment upon. It is also not about what may interest the SEC and market conduct…4/

It was not disclosed when Tesla had made this investment. In December, Musk said that Tesla could buy bitcoin, and this was followed by many statements that he supported bitcoin. Bitcoin kept going up & Tesla investment has appreciated. The SEC will look into this 5/