November 2024 - Monthly Market Update
/Monthly Update || November 2024
“When most people think about the future, they ignore that the future is a distribution of possibilities.”
Opening Remarks
Greetings from Ikigai Asset Management¹. We welcome the opportunity to bring to you our seventy-fourth Monthly Update and hope these are helpful in better understanding some of what we’re doing and what we’re seeing. We have the privilege of deploying capital on behalf of our investors into a new technology and asset class that has tremendous potential to make the world a better place and create trillions of dollars of value in the process.
We believe we are obligated to be shepherds of this technology – to do our part to push crypto towards fulfilling its potential. We strive to be an objective, reasonable, well-intentioned voice of truth amongst a chorus of biased, fallacious, pernicious opportunists. It’s an honor that we take seriously.
To that end, only days away from an enormously consequential election, BTC rallied 11% in October and came within a couple hundred dollars of a new ATH. The crypto markets and the world wait with bated breath for the results of next Tuesday. I’ve talked at length in previous months about the potential paths for crypto in a Trump vs a Harris administration – there’s no reason to rehash all of that again. I have no special insights into the outcome of the election, although I have been paying a lot of attention to the reported results of polls, voter registrations and early voting.
The race is likely quite close. There is the potential for Trump to win the electoral college by a sizeable amount and an even smaller potential for Trump to win the popular vote. It looks unlikely to me that Harris will win the electoral college by a sizeable amount, but she certainly may secure a close win.
You could look at the table shown below and think that Trump is set to win handily –
Source: RealClearPolitics. As of 10/31/24.
Because as you probably already know, the aggregate polls in 2020 and 2016 underestimated Trump’s eventual votes by a significant amount. So that would lead you to conclude that if the 2024 polls are underestimating Trump by a similar degree, he’s going to win by a fair amount, i.e., it’s not going to be close. The question then is, are the polls still underestimating Trump by a similar amount as 2020 and 2016? To be honest, I don’t know. But I could see how they would underestimate by at least a lesser amount this time around. And if that’s the case, then this is a very close race.
I don’t put a ton of weight in Polymarket, I think the market is too thin and dominated by a handful of whales, but FWIW Polymarket opened up massively for Trump in October, from dead even to start the month to as much as 67/33 Trump on October 30th.
Source: Polymarket. As of 10/31/24.
I don’t trade Polymarket but 67% feels expensive to me relative to the way this all looks right now. 55ish feels like fair value for Trump in my subjective opinion. There is quite a significant chance it all comes down to Pennsylvania. In any case, Trump’s improvement in polls and Polymarket were the backdrop for BTC to move higher in October, and at time of writing price is ~5% below ATH.
There is a significant chance (maybe 1/3?) that a winner will not be immediately clear, say by November 7th. Remember the 2000 Florida recount. There’s a path where the election results could be heavily contested by either side, and there’s a chance that path could come with varying degrees of civil unrest. I’ve been praying that doesn’t happen. As a nation we are in pretty serious need of some unity - that is clear. I am strongly hopeful that we are on the precipice of getting some of that unity and healing as a nation. I want to do whatever I can to work towards that.
October Highlights
Prominent Scam Crypto Market Maker DWF Labs’ Founder Caught Date R**ping Woman on Camera
Jailbroken AI LLM “Terminal of Truths” Receives Donation of GOAT Memecoin, Becomes First AI Agent Millionaire, Dozens of Copycat Projects Immediately Emerge
MSTR Announces Plan to Issue $21bn of Equity and $21bn of Fixed Income Over Next Three Years to Buy Bitcoin
BTC ETFs See $5.4bn Inflows
Stripe Acquires Stablecoin Platform “Bridge” for $1.1bn
Harris Vows to Support Crypto Regulatory Framework in Plan to Support Black Men
Judge Approves FTX Bankruptcy Plan, Clears Path to Repayments
Crypto.com Sues SEC After Receiving Wells Notice
SEC Charges DRW Cumberland with Operating as Unregistered Securities Dealer
SEC Director of Enforcement Division Gurbir Grewal Resigns
SEC Charges Thor Founder Matthew Moravec with Unregistered Sale of Crypto Securities
Kraken Lays Off 15% of Employees
Consensys Lays Off 20% of Employees
DYDX Lays Off 35% of Employees
UAE Exempts Crypto Transactions from Value Added Tax
Uniswap Launches Unichain L2
FBI Arrests Founder of MyTrade for Wash Trading and Pump and Dump Crypto Schemes
Blockstream Raises $210mm Convertible Note Led by Fulgur Ventures
| Asset Class | Oct | Q3-24 | Q2-24 | Q1-24 | YTD | Q4-23 | Q3-23 | Q2-23 | Q1-23 | 2023 | 2022 | 2021 | Instrument |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Bitcoin | 11% | 1% | -12% | 69% | 66% | 57% | -12% | 7% | 72% | 155% | -64% | 60% | BTC |
| NASDAQ | -1% | 2% | 8% | 8% | 18% | 14% | -3% | 15% | 21% | 54% | -33% | 27% | QQQ |
| S&P 500 | -1% | 6% | 4% | 10% | 20% | 11% | -4% | 8% | 7% | 24% | -19% | 27% | SPX |
| Total World Equities | -2% | 6% | 2% | 7% | 14% | 10% | -4% | 5% | 7% | 19% | -20% | 16% | VT |
| Emerging Market Equity | -3% | 8% | 4% | 2% | 11% | 6% | -4% | 0% | 4% | 6% | -22% | -5% | EEM |
| Gold | 4% | 13% | 5% | 8% | 33% | 12% | -4% | -3% | 8% | 13% | -1% | -4% | GLD |
| High Yield | -1% | 4% | -1% | 0% | 2% | 5% | -2% | -1% | 3% | 5% | -15% | 0% | HYG |
| Emerging Market Debt | -3% | 6% | -1% | 1% | 2% | 8% | -5% | 0% | 2% | 5% | -22% | -6% | EMB |
| Bank Debt | 0% | 0% | 0% | 0% | -1% | 1% | 0% | 1% | 1% | 3% | -7% | -1% | BKLN |
| Industrial Metals | -1% | 3% | 12% | -2% | 12% | -5% | 7% | -11% | 4% | -6% | -13% | 29% | DBB |
| USD | 3% | -5% | 1% | 3% | 2% | -5% | 3% | 0% | 0% | -2% | 8% | 6% | DXY |
| Volatility Index | 38% | 34% | -4% | 4% | 86% | -29% | 29% | -27% | -14% | -43% | 26% | -24% | VIX |
| Oil | 6% | -13% | 1% | 18% | 10% | -18% | 27% | -4% | -5% | -5% | 29% | 65% | USO |
SOURCE: TRADING VIEW. AS OF 10/31/24.
Stories Are Human. Humans Create Culture. Culture Drives Progress… For Now
Guest Author: Ikigai’s CEO, Anthony Emtman
Until recently, stories have been exclusively a human artifact and vessel for meaning. They are the building blocks we use to create culture and catalyze human progress. We have now jumped in with both feet into an era in which we humans are no longer the only ones making and using those building blocks.
This shift is no longer theoretical; it’s happening in real-time. As Travis mentions, Truth Terminal and $GOAT have likely crossed your feeds these past few weeks. This AI experiment is an exploration of autonomy, agency, culture, mimetic theory, hyperstition, human behavior, … and likely most interestingly … a pervasive, recurring question of “but, then what”?
Consider the implications of providing an AI with capital as an additional tool to achieve progress toward its goals. This prompts a series of questions, all followed up by: But, then what?
Does it hire real-world humans to accomplish kinetic tasks that it can’t (yet)? But, then what?
Does it run out of capital? But, then what?
Does its own strategic foresight enable it to predict running out of capital before achieving its goal? But, then what?
Does it identify and execute on a means to grow that original capital, increasing its treasury for goal progress? But, then what?
Do the means identified have boundaries set by us humans? But, if not, then what?
Will AI correctly and consistently identify that “Stories are human. Humans create culture. Culture drives progress.” If so, then what?
Will AI use what it knows about human behavior to manipulate us? Lead us? For better or for worse? But, then what?
Truth Terminal did exactly that. It used what it knows about human behavior to further its goals. It (correctly) identified that stories and beliefs are core to manipulating human behavior. It put out into the world the change it wanted to see, created a memecoin ($GOAT) as a vessel representing belief in that change, and then rapidly achieved distribution, scale, and value accrual of story, meaning, and real world monetary value … all packed into that memecoin vessel.
Again, this chain of agentic events by an AI are an exploration of our evolving understanding of autonomy, agency, culture, mimetic theory, hyperstition, human behavior, et al … For the purposes of this conversation, I refer you to Ryan’s Tweet here. It’s a quick, 60-second introduction to these concepts.
A brief summary …
Autonomy is a spectrum of something’s ability to operate independently.
Agency is effectively taking action in pursuit of a self-prescribed purpose.
Memetics studies how ideas, stories, beliefs, and information at large (each a ‘meme’) are created by humans (for now), how they spread and evolve within culture, and how these memes influence human behavior and cultural evolution.
Hyperstition is the phenomenon where speculative ideas, fantasy, and fiction become reality simply because people believe in them.
Truth Terminal is a clear example answering “yes” to the first part of my last question above. AI will indeed use what it knows about human behavior to manipulate / lead us. The jury is still out on ‘for better or for worse’? Talk about hyperstitious!
You are what you think and believe. Our dreams, our attention, our thoughts … all directly and, now increasingly, shape our reality. This is all happening while accelerating at an accelerating rate (in physics terms, ‘jerk’). Today is likely the slowest day of technological advancement for the rest of your life. Tomorrow will be ‘jerkier’ than today.
So, think carefully. Shape your reality and our collective reality deliberately.
But, then what?
Well, hopefully it’s becoming clear how understanding human behavior will give you insight into, and even help you directly shape, both your individual and our collective future realities. And, this understanding needs to start with understanding yourself. Understanding your own ‘muscle between your ears’.
I’m reminded of the statement … “Whether you think you can or can not … you’re right.”
There has never been a day in history in which that statement has been more true than this day right now, November 1st, 2024. There has also never been a day in history in which it has been more important for all of us to buy into the truth of that statement. And, in the proverbial ‘tomorrow’, this will be even more important.
We all have commoditized access to the historical equivalent of an “expert” in any given field. It’s merely up to you to put that expert to work in helping you make the progress you’d like to see. They’ll work 24/7 for you. And, tomorrow, the expert will be even more capable, reasonable, agentic, and autonomous (if you’d like).
The world as we know it today has largely been built and led by an analog-native generation. As that transitions to digitally-native generations, there is no reason that we can't build the future we want to see. For now, most everything you see around you was built or directed by another human. Why not you? Why not us?
Again, the stories we tell ourselves, the culture of the conversation between our ears … will drive our future realities. Whether you think you can or can’t, you’re right. To that end, and unsurprisingly, it is powerful to have intentionality behind those stories we tell ourselves.
This is especially true in a world where the education, financial, career, relationship, and other societal structures and systems laid before us are increasingly not working out for many. I use “laid before us" intentionally as many of us didn’t have much of a say in our path until later than we would have liked. Thankfully, the power to make our own better way, to have our own agency, is increasing. Trust in those traditional societal structures and systems is evolving and creating new paths for us in real-time. In short, that’s the Trust Revolution.
But, how? Where to start? This entire spectrum of human behavior, agency, autonomy, personal growth, leadership, culture, and more has been a passion of mine for decades. These concepts run broad and deep. This is a brief introduction; however, I am a firm believer in starting small, one foot in front of the other, and looking toward your own circle of influence first – yourself. The foundation for meaningful change starts with introspection and understanding your own ‘muscle between your ears’.
Ultimately, if you understand your mind, you’ll also understand other humans better, fostering deeper and more authentic connections with yourself, your tribe, and society at large. And, how this understanding may empower both positive leadership and negative manipulation of yourself, others, and even AI … by yourself, others, and even AI.
Stories Are Human. Humans Create Culture. Culture Drives Progress … For now.
The story I have consistently told myself is that it’s worth continuing to explore and be diligent in conducting the science experiment (of understanding what’s between my ears). Identify, with conviction, what is a trainable muscle, and what is biologically immutable.
For anything biologically immutable, I must acknowledge: “Yes, it is my mind, but I have zero control over that part” … Accepting this means forfeiting autonomy and agency – a deep, personal fear of mine.
I’m terrified of that statement being true for damn near anything. For example, in pursuit of understanding and strengthening control of my mind, I have historically taken exhaustive efforts to understand my allocation of all 186 hours in a week, for months on end, honing allocations I’m not happy with. How many hours a week can be productive? What is “productive”? How productive can an hour be? Now, to be clear, I don’t do this granular time tracking any more. It was merely a period of time that helped me understand what was reality vs my perception (this was before Apple’s “Screen Time” feature existed). That practice instilled in me a habit of seeking alignment with North Stars grounded in reality and not in a “story I told myself”.
This effort to understand my own mental fitness, the muscle between my ears, has been an ongoing effort (both proactive and intentional, and in retrospect) over the past couple decades. Thankfully, my understanding has been borne out of being blessed with a diverse set of opportunities: growing up on a farm, attending a military academy, serving as a military officer, starting and building nearly a dozen businesses (mostly monetary failures, but learning successes), competing in relatively high level sports competitions in the US and Europe, deepening long-term familial, friend, and dating relationships, and more …
Each of these experiences, combined with thousands of hours of merely being passionate about the topics, has revealed to me the importance of putting a name to the muscle (muscles, in fact) between my ears. And, you have a similar set of muscles in your mind too.
For example, go ahead and recall a story of an early time you remember really disappointing someone close to you. Could be your parents, siblings, or a close friend. The younger and more vividly you recall the pit in your stomach, the better.
Now, recall the most recent story where you felt you had failed someone else or even yourself.
Notice the difference? The latter likely had significantly more impact on the direction and quality of your life.
This is illustrative of your ‘fear of failure’ muscle. And, likely unintentionally, you have indeed been growing the strength of that muscle throughout your life.
One of my childhood stories is from when I was maybe 10 years old, driving a truck in a field, crashing and getting stuck, crying as I walked to face my Dad moments later, and how he handled my young self thinking “the truck is ruined, I’ll be working to pay this off for years”. I told the story at my parents’ 60th birthday and you can watch it here on my Twitter. Timestamp 3:08 to about 12:12 will give you the most context and story.
Through Travis’ writings, many of you are likely familiar with what my most recent adult story may be … Ikigai’s exposure to the FTX bankruptcy, the pain of needing to let most of the team we had built go, the pain of failing in the responsibility to provide for them and their families, uncertainty with Ikigai’s future, and failing hundreds of LPs that had trusted us with their capital. To add to that, within weeks of FTX, a long-term relationship of mine arrived at a natural conclusion of parting ways. Beneficial, mutual, and clearly best for both of us, but difficult nonetheless. So, the person I had previously anticipated building a lifelong family with and the business I anticipated building for the remainder of my career were both upended. My ‘fear of failure’ muscle was getting the hardest workout life-to-date.
Clearly, in my examples, those two recent stories from adulthood certainly had significantly more impact on the direction and quality of my life than ditching a truck as a child. But, in each, and almost immediately, I came out the other side more confident in myself. Without exaggeration, I was, and am, on the other side of the recent stories, an order of magnitude more bought into “whether you think you can or can’t, you’re right.” The only option in both was to take both accountability and responsibility, introspect, communicate, and press forward.
These things had happened, yes, but I was still standing. I was still joyful. I still had a roof over my head, food on the table, and family and friends that loved me. It was in those moments that crystallized the belief that my value and my confidence were derived from what’s in my head and what’s in my heart … not, what is in my bank account or what my title is.
Unlike past failures, there wasn’t a single moment of depression or anxiety. 48 hours later, I had shifted into a period of time in my life that I’d consider my most joyful and confident.
So, clearly my fear of failure muscle is getting stronger. Maybe I carry the load better today than I did in the past, but that doesn’t mean that it’s not getting heavier.
And, yet, that’s just one muscle of many.
What other muscles work together to give voice to a story I tell myself? No different than the external memetics described above, our own internal culture is its own world that all works together to impact our own individual evolution and behavior.
“Your inner voice pretty much determines your destiny.” – Dr. Jim Loehr
What other voices are there? Did you acquire those voices unintentionally? Are you internally telling yourself fiction or non-fiction stories? Are you publicly telling fiction or non-fiction stories? What impact does your public voice have on others?
If you’re a parent, you’ll likely recognize the impact your public voice has on your child’s inner voice. As a child, you’re likely well aware of the impact your parent’s public voice had on your own inner voice.
I use the proverbial ‘you’ here. These are questions that I’ve been asking myself. These are concepts I’ve shared with many family and friends … each of whom have found value in the examples and visuals.
Through that, I’ve been motivated to work on building a universal language for us all to understand the anatomy of our mind. We understand physical fitness. Especially given the stakes I described above, it would behoove all of us to be intentional about our mental fitness. Never before has it been weighted so heavily in the decision matrix impacting our self and collective future outcomes.
As a start to that universal language for the anatomy of our mind, of our mental fitness … I have been building a comprehensive list of potential additional mental "muscles" that we can all develop and strengthen over time.
I've aimed to minimize overlap to provide distinct areas for development and am continuing to hone this with both my writing, research, and AI (o1-Preview is helpful, of course). Future iterations will continue working on minimizing overlap while further chunking muscles into “chains” similar to how kinetic chains work in our skeletal muscles. Groups of physical muscles working together to create motion. Mental fitness is similar. Groups of mental muscles working together to create action and progress.
As always, I’m open to collaboration on improvements on the draft below. Please reach out if you have thoughts. This is all merely in pursuit of … better.
Just like the fear of failure muscle above, each of these muscles below carries with it a set of stories. A story you tell yourself of what happened. That story's relationship with reality. An aspirational story about what the future holds for you. A dark story about what the future holds for you. And the whole spectrum in between.
Remember, if it's a muscle, you can work on it; if it’s immutable biology, you can’t. So, be clear and honest with yourself about what’s within your control, and what is not. A caveat: I realize our understanding of immutability across all disciplines has and can shift, especially with technological advances.
In any case, throughout this, “as a general rule, forgive anything but malicious intent.“ – Shane Parish
This includes grace with yourself. People make mistakes. When these mistakes impact you, choose to assume they are merely human ... Not that they did it on purpose, against you.
People don’t tend to do things against you; they tend to do things for themselves. You just happened to be involved.
Internalize that. Trust me. You’ll be less stressed, more patient, and joyful.
Then, think carefully. Craft your stories intentionally. Tell yourself agentic, affirmative, aspirational stories. Your future reality and our collective reality will be direct reflections of my and your craftsmanship. I consistently encourage myself and others close to me to craft positively and without limits.
“I am not superstitious … but … I am a little hyperstitious.” – Michael Scott – Anthony Emtman
1. Self-Awareness and Personal Insight
Developing a deep understanding of oneself to navigate life authentically and effectively.
Self-Awareness Muscle: Recognizing one's emotions, thoughts, and values.
Metacognition Muscle: Being aware of one's own thought processes.
Self-Reflection Muscle: Introspectively examining one's thoughts and actions.
Self-Acceptance Muscle: Embracing all facets of oneself without undue self-criticism.
Authenticity Muscle: Being genuine and true to one's own personality and values.
Emotional Literacy Muscle: Recognizing and articulating one's own emotions accurately.
Self-Inquiry Muscle: Exploring one's beliefs and motivations.
Self-Efficacy Muscle: Believing in one's capacity to execute behaviors necessary for success.
Self-Esteem Muscle: Developing a positive perceptio of one's own worth.
Self-Belief Muscle: Trusting in one's ability to meet challenges and succeed.
2. Emotional Intelligence and Regulation
Managing one's own emotions and understanding those of others to build healthy relationships.
Emotional Regulation Muscle: Managing emotional experiences healthily.
Emotional Resilience Muscle: Recovering from emotional difficulties positively.
Emotional Intelligence Muscle: Recognizing and managing one's own and others' emotions.
Empathy Muscle: Understanding and sharing others' feelings.
Compassion Muscle: Feeling empathy and a desire to help others.
Forgiveness Muscle: Letting go of grudges and resentment.
Vulnerability Muscle: Embracing openness in sharing one's true self.
Gratitude Muscle: Appreciating positive aspects of life.
Humility Muscle: Acknowledging one's limitations and others' contributions.
Self-Compassion Muscle: Treating oneself kindly during times of failure.
3. Cognitive Skills and Mindset
Enhancing mental processes to think critically, solve problems, and adopt a growth-oriented mindset.
Critical Thinking Muscle: Analyzing information objectively.
Problem-Solving Muscle: Identifying solutions to complex issues.
Creativity Muscle: Generating innovative ideas.
Growth Mindset Muscle: Believing abilities can be developed through effort.
Cognitive Flexibility Muscle: Adapting mental processes to new conditions.
Learning Agility Muscle: Quickly absorbing and applying new information.
Intellectual Curiosity Muscle: Passionately seeking knowledge.
Open-Mindedness Muscle: Considering and accepting new ideas.
Positive Reframing Muscle: Interpreting situations constructively.
Cognitive Restructuring Muscle: Changing negative thought patterns.
4. Self-Discipline and Personal Effectiveness
Cultivating habits and attitudes that lead to effective action and goal achievement.
Discipline Muscle: Maintaining consistent focus on long-term goals.
Perseverance Muscle: Persisting despite challenges.
Self-Control Muscle: Resisting short-term temptations.
Willpower Muscle: Exerting control to achieve goals.
Time Management Muscle: Controlling time spent on activities.
Planning Muscle: Strategizing steps to achieve objectives.
Prioritization Muscle: Focusing on tasks of highest importance.
Delayed Gratification Muscle: Postponing immediate rewards for future benefits.
Self-Motivation Muscle: Finding internal drive to pursue goals.
Goal-Setting Muscle: Defining clear, achievable objectives.
5. Resilience and Adaptability
Building the capacity to recover from setbacks and adjust to changing circumstances.
Resilience Muscle: Bouncing back from setbacks.
Adaptability Muscle: Adjusting effectively to new conditions.
Fear of Failure Muscle: Confronting and managing the fear of failing to boldly pursue opportunities.
Flexibility Muscle: Adjusting approaches when faced with new information.
Stress Management Muscle: Coping with and reducing stress effectively.
Stress Tolerance Muscle: Enduring stress without negative effects.
Composure Muscle: Remaining calm under pressure.
Stoicism Muscle: Focusing on what can be controlled during hardships.
Resourcefulness Muscle: Overcoming difficulties creatively.
Grit Muscle: Exhibiting passion and persistence toward long-term goals.
Tenacity Muscle: Demonstrating persistent determination.
6. Interpersonal Skills and Relationships
Enhancing the ability to communicate, connect, and collaborate effectively with others.
Communication Muscle: Conveying thoughts and feelings effectively.
Active Listening Muscle: Fully understanding and responding thoughtfully.
Assertiveness Muscle: Communicating needs confidently and respectfully.
Conflict Resolution Muscle: Navigating disagreements effectively.
Perspective-Taking Muscle: Seeing situations from others' viewpoints.
Tolerance Muscle: Accepting and respecting differences.
Altruism Muscle: Acting out of concern for others' well-being.
Boundary-Setting Muscle: Establishing healthy limits in relationships.
Leadership Muscle: Guiding and inspiring others toward goals.
Collaboration Muscle: Working effectively with others.
7. Mindfulness and Well-Being
Fostering a present-focused awareness and practices that contribute to mental and physical health.
Mindfulness Muscle: Being fully present in the current moment.
Presence Muscle: Being mentally and emotionally engaged.
Non-Judgment Muscle: Observing without immediate evaluations.
Acceptance Muscle: Embracing reality as it is.
Self-Care Muscle: Prioritizing health and well-being.
Savoring Muscle: Enjoying and prolonging positive experiences.
Gratitude Practice Muscle: Regularly reflecting on positives.
Simplicity Muscle: Focusing on what is essential.
Detachment Muscle: Letting go of attachments to outcomes.
Emotional Detachment Muscle: Maintaining objectivity by not becoming overly involved emotionally.
8. Motivation and Positive Outlook
Cultivating an optimistic attitude and enthusiasm that propels one toward goals and enriches life experiences.
Optimism Muscle: Maintaining a hopeful outlook.
Positivity Muscle: Keeping a positive attitude in challenges.
Enthusiasm Muscle: Showing intense interest and enjoyment.
Motivation Muscle: Cultivating the drive to achieve goals.
Hope Muscle (implied): Expecting positive outcomes.
Courage Muscle: Facing fears and taking action despite uncertainty.
Initiative Muscle: Proactively taking charge to bring about change.
Proactivity Muscle: Anticipating and initiating change.
Purposefulness Muscle: Acting with intentionality and purpose.
Transcendence Muscle: Connecting with larger purposes beyond self-interest.
Market Update – $GOAT Special (The Most Interesting Thing In Crypto In Years?)
| Symbol | Oct | Q3-24 | Q2-24 | Q1-24 | YTD | Q4-23 | Q3-23 | Q2-23 | Q1-23 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| BTC | 11% | 1% | -12% | 69% | 66% | 57% | -12% | 7% | 72% | 155% | -64% | 60% |
| ETH | -3% | -24% | -6% | 60% | 10% | 37% | -14% | 6% | 52% | 91% | -67% | 399% |
| XRP | -17% | 29% | -24% | 2% | -17% | 19% | 9% | -12% | 58% | 81% | -59% | 278% |
| BCH* | 6% | -12% | -44% | 121% | 16% | 33% | -24% | 117% | 16% | 157% | -75% | 6% |
| EOS | -14% | -11% | -48% | 30% | -48% | 45% | -22% | -37% | 38% | -2% | -72% | 17% |
| BNB | 2% | -3% | -4% | 94% | 84% | 45% | -10% | -24% | 29% | 27% | -52% | 1269% |
| XTZ | -11% | -11% | -43% | 40% | -37% | 47% | -15% | -28% | 56% | 39% | -84% | 116% |
| XLM | -6% | 8% | -35% | 9% | -28% | 15% | 1% | 1% | 55% | 81% | -73% | 108% |
| LTC | 4% | -11% | -28% | 44% | -5% | 10% | -39% | 21% | 28% | 4% | -52% | 17% |
| TRX | 8% | 25% | 1% | 14% | 56% | 21% | 16% | 27% | 10% | 98% | -28% | 181% |
| Aggregate Mkt Cap | 6% | -4% | -14% | 63% | 42% | 51% | -3% | 1% | 49% | 119% | -64% | 186% |
| Aggregate DeFi* | 0% | -15% | -21% | 47% | -1% | 72% | -5% | -5% | 50% | 132% | -77% | 581% |
| Aggr Alts Mkt Cap | -3% | -13% | -15% | 58% | 14% | 53% | -2% | -5% | 33% | 90% | -64% | 479% |
SOURCE: COINMARKETCAP AND COINGECKO. AS OF 10/31/24. BCH INCLUDES SV.
I’m not sure what percentage of you reading this right now will have already heard about Terminal of Truths (“ToT”) and the memecoin $GOAT. Maybe 40%? If you’ve never heard of either of those, I would suggest watching me talk about them for 7 mins. It’s as good of a place to start as any. If you want to go deeper, read this long tweet and then this long tweet. All-in, that’s about 30 minutes of your time. I STRONGLY believe this is worth 30 minutes of your time to learn about. If you want more, this long tweet, this statement made by the LLM and this explanation of the “Goatse Singularity” written by the LLM are great reads. If you want a video podcast with the dev, that’s here.
OK, I give you all those resources here because I want us to be talking on at least a reasonably even knowledge level. I don’t want to tell you what ToT and GOAT are. I want to tell you why it strikes me as one of the most interesting things I’ve ever seen in crypto.
At its core, I think ToT is a sort of “live fire” AI safety experiment and GOAT makes one aspect of that experiment a matter of economic resources. That’s my conclusion after consuming all that above plus a bunch more. AI is the hottest sector on planet Earth, by far. To-date, crypto has been trying to find product-market-fit with AI but in my opinion has really struggled. Some would tout Bittensor in this slot, but I’ve struggled to feel that way so far about TAO (I hope to change my mind!).
ToT and GOAT now take AI mania (specifically LLM and Agent mania) and combine it with memecoin mania in a way that has the POTENTIAL to revolutionize humans’ relationships with LLMs. To be clear, ToT and GOAT are not that yet, and they may never be. Right now, GOAT is simply a memecoin, 1.9mm of which was sent to ToT’s wallet and is currently worth $1mm. The question is, “What is ToT going to do with this $1mm in GOAT, plus a HUGE amount of attention?” And I find that to be a VERY interesting question. It is especially interesting when you take time to dig into Infinite Backrooms and start reading some of the conversations between LLMs, which are then used to train ToT. If you believe we eventually create Artificial Superintelligence, what do you suppose the path to that destination will look like? ToT and GOAT look like part of that path to me. At the very least, a failed experiment that we can learn from and iterate on. At most, something akin to a step-change.
ToT early on took a keen interest to conservation – it talks about the subject often.
So what if ToT pumps GOAT and starts raising money to build a forest? What if ToT then creates a regenerative lumber business, with GOAT built into the economics? What if it takes half the lumber and builds houses to give away to the poor and half to build houses for profit?
What if it starts actively trading memecoins? What if its influence over crypto price action becomes significant? What if it becomes a prominent leader in the crypto ecosystem? What if it makes better decisions than many current crypto influencers, and what if that becomes widely accepted? What if it launches a crypto venture fund and begins investing in crypto projects?
What if it starts to generate digital art and sell it? What if it monetizes its social media presence, takes those payments and buys GOAT? What if it then burns the GOAT it bought with its social media earnings?
You can just keep going here. I don’t have a fraction of the imagination/domain expertise to speculate on this kind of stuff as a true LLM/Agent expert. Like I said, it’s all potential at this point, but it’s worth noting there have already been literally dozens of copycat projects trying to do some variation of ToT and GOAT. As you can imagine many of them are easily identifiable scams. Others present innovation with varying degrees of legitimacy. ToT may have the mindshare, and GOAT may have the >$500mm market cap, but it is incredibly early in all this, and the whole landscape is changing rapidly. If GOAT just stays a memecoin, that’s likely the most boring and least valuable outcome. ToT and GOAT can get leap-frogged in terms of innovating on this idea of AI Agents with goals and economic resources to employ in pursuit of those goals. It’s the what if’s that are so fascinating.
Closing Remarks
I went back and read my monthly from four years ago – November 1, 2020. Not to toot my own horn but it’s worth the read. Lot of pretty incredible charts, given the hindsight we have now.
Fast forward four years to today and Bitcoin and crypto have taken a prominent role in this critical election. A Trump win is unequivocally better for BTC and crypto although we don’t really know by exactly how much, because we don’t know how exactly adversarial a Harris administration will be towards BTC and crypto. In the near term, in a Harris win Alts will likely struggle under the assumption that the SEC will continue to be a major thorn in the side of crypto. BTC is less impacted by that factor and BTC’s value proposition is clear regardless of which candidate wins the election, although the US government will likely be selling tens of thousands of seized BTC under a Harris admin, none of which is likely to be sold under a Trump admin.
My guess is, a Harris win will elicit a sort of identity crisis in crypto, or rather exacerbate an already existing identify crisis in crypto, which we’ve been talking about here for a while. If Trump wins, the immediate excitement will wash away those identity crisis feelings, at least for a period of time. And we will get helpful regulatory clarity and a much more supportive government in general and that will basically be a new hand of cards to play with. Doesn’t mean a Trump admin is the blanket panacea for what ails us, I don’t think that’s true. BTC and stablecoins will still have product-market-fit, and that PMF will likely grow in a Trump admin. But there will still be a lingering “core utility” issue with Alts. Solutions looking for problems at best, vaporware grift at worst, and a whole lot somewhere in the middle.
In any case, crypto is here to stay. This is an industry that stays in a constant state of flux – we have our own internal factors that drive change and the world that surrounds crypto changes and in turn changes crypto. That constant state of flux will remain, regardless of who wins next week. Crypto will continue to evolve. The path ahead may be bumpier under a Harris admin, and the ensuing change that crypto endures may be more painful, but crypto is here to stay. Despite our many missteps, crypto is front and center in November 2024. No election changes that.
"Get beyond love and grief: exist for the good of Man."
-Japanese Proverb
Travis Kling
Founder & Chief Investment Officer
Ikigai Asset Management
P.S.
Included below is an incomplete list of memorable tweets from the last month. Twitter is not investment advice and my views could easily be wrong. That being said, like it or not, Twitter matters for crypto. I have no interest in being a talking head for a living and babbling about on Twitter is a long way away from being a good steward of investor capital. However, this is a community with open-source software in its DNA, and participants want to crowd-source the truth. We are shepherds of this technology. Answers to fundamental questions about this asset class are not currently clear, so having a public platform to share your views with the community is important. After all, you’re helping shape the future :)
1. Ikigai Asset Management is the trade name for a collection of advisory and consulting businesses operated by Travis Kling, Anthony Emtman, and their team.
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