Is The Crypto Bull Market Already Over?

This episode dissects the crypto market's identity crisis, where bearish price action clashes with landmark developments like the Uniswap fee switch and Coinbase's revival of ICOs for US investors.

Market Uncertainty: Is the Bull Market Over?

• The episode opens with an analysis of the current market sentiment, which feels unsettled despite the end of the 43-day US government shutdown. Tom Schmidt, a partner at Dragonfly VC, notes that while short-term price action is down, a long-term perspective reveals significant industry progress.
• Key Market Levels: Bitcoin is hovering around $1,900 and ETH at $3,312, both relatively flat for the week. A critical technical indicator discussed is Bitcoin's 50-week moving average—a long-term trend indicator—which sits around $13,000. Analyst Ben Cowan has noted that historically, two consecutive weekly closes below this level have signaled the end of a bull market. The market is currently trading precariously close to this threshold.
• Conflicting Signals: The host highlights the tension between macro indicators and market psychology. While factors like quantitative easing (QE) and potential rate cuts suggest upward momentum, the gut feeling for many is that the cycle is over, driven by crypto's nature as a "self-fulfilling asset class."
• Tom's Outlook: Tom remains optimistic, arguing that the cycle still has life, particularly because a full-blown "alt season" never materialized. He believes this indicates pent-up market energy that will eventually be released.

  "I would be shocked I guess if we are lower like a year from now. I think given all the kind of positive trend momentum."

Trump's Economic Proposals: More Leverage and Liquidity?

• The conversation shifts to two economic ideas floated by Donald Trump, exploring their potential impact on the economy and asset markets.
• The 50-Year Mortgage: Trump proposed 50-year mortgages to lower monthly payments for homebuyers. While this could provide short-term relief, critics argue it primarily benefits banks with higher long-term interest payments and fails to address the core issue of housing supply. The median age of a first-time homebuyer in the US has risen to 40, meaning a 50-year mortgage would not be paid off until age 90.
• $2,000 Tariff Dividend: Another idea is a stimulus-like check funded by tariffs. Tom Schmidt likens this to the popular stimulus checks during the pandemic, noting that politicians often repeat strategies that have proven popular.

  "Credit to the man. You know, you you learn something works and uh you're probably going to keep running it back until it stops working. And he learns people love the stem check."

• Strategic Implication: For investors, these proposals signal a political inclination towards injecting more liquidity and leverage into the system. Such policies, if enacted, could create inflationary pressures that historically have been bullish for scarce assets like Bitcoin and other cryptocurrencies.

Privacy Season: A High-Risk, High-Reward Arena

• A major theme is the resurgence of interest in privacy-focused cryptocurrencies, contrasted sharply with ongoing regulatory crackdowns.
• The Zcash Rally: Zcash (ZEC) has experienced a massive 4,000% price surge in just six weeks, erasing nearly eight years of downside. This rally is fueled by influential figures like Arthur Hayes and Barry Silbert promoting the narrative of Zcash as "encrypted Bitcoin." Zcash has now surpassed Ethereum in private total value locked (TVL), holding approximately 60% of the market share for shielded assets.
• Developer Crackdown: In stark contrast, the developer of Samourai Wallet, a non-custodial Bitcoin privacy wallet, was sentenced to five years in prison for unlicensed money transmitting. The judge delivered a harsh verdict, stating the developer engaged in "very serious antisocial criminal behavior" and enabled a "criminal world for whom digital currency is a gift."
• Actionable Insight: The privacy sector presents a clear dichotomy for investors and researchers. While there is immense market appetite for on-chain privacy, the regulatory risks are severe and ambiguous. The Samourai Wallet case underscores the personal danger for developers, making a project's legal strategy and jurisdictional choices critical factors for due diligence.

The Uniswap Fee Switch: A Turning Point for DeFi Tokens

• The episode highlights the landmark governance proposal from Uniswap founder Hayden Adams to finally activate the protocol's fee switch, a move with significant implications for DeFi tokenomics.
• Proposal Details: The proposal directs protocol fees to burn the UNI token, retrospectively burns 100 million UNI from the treasury to account for past fees, and turns off the separate fee that Uniswap Labs was collecting on its wallet interface. This creates a unified value accrual mechanism directly benefiting UNI holders.
• A New Model for DAOs: The move is framed as the "next generation" of DAO governance. Rather than token holders voting on minutiae, they control the core economic levers—fee parameters and the treasury—while the core team focuses on product development. This addresses the widespread issue of voter apathy in many DAOs.
• Pushing Back Against Regulators: Hayden Adams publicly pushed back against a former SEC chief of staff, highlighting the "chilling effect" the agency has had on the industry.

  Hayden Adams: "The fact that we were restricted in how we operated while you and Gensler weaponized the government against us simply proves the chilling effect that a weaponized agency can have. It's not evidence of anything else. F you for thousands of wasted hours of my life."

• Strategic Implication: Uniswap's decision sets a powerful precedent for value accrual in DeFi. Investors should re-evaluate other DeFi protocols that have been hesitant to turn on fees, as this move could pressure them to follow suit and better align their tokens with protocol success.

The Return of ICOs: Coinbase Opens the Floodgates

• Coinbase has launched a token sales platform, effectively bringing back ICOs (Initial Coin Offerings)—a fundraising method where projects sell new tokens to the public—for US retail investors for the first time since 2018.
• Platform Launch: The first project featured is Monad, a new Layer 1 blockchain. The platform prioritizes "real supporters" and aims for sustainable token distributions, with US users explicitly included.
• A Signal of Regulatory Thawing: This move, alongside Uniswap's fee switch, suggests that major, legally-cautious entities in the US crypto space perceive a significant reduction in regulatory risk. Tom Schmidt notes that after being targeted by the SEC despite their conservative approach, Coinbase may feel they have little to lose by pushing forward.
• Actionable Insight: The return of regulated, US-accessible token sales could unlock a new wave of capital for early-stage projects. For investors, this provides a new avenue for exposure to emerging protocols, though thorough due diligence remains critical as Coinbase explicitly states it does not verify seller information.

Bank Adoption: TradFi Dips Its Toes in Crypto Waters

• The discussion covers recent moves by major financial institutions to integrate blockchain technology, though the speakers remain skeptical about the depth of this adoption.
• JP Morgan's JPMCoin: JP Morgan has launched its deposit token, JPMCoin, on the Base network. This is not a public stablecoin but a permissioned token representing deposits on JP Morgan's balance sheet, available only to institutional clients. It operates on a fractional reserve basis, unlike fully-backed stablecoins.
• SoFi Enters Crypto: SoFi, a top-70 US bank, is now the first national bank to allow customers to buy, sell, and hold cryptocurrencies like Bitcoin, Ethereum, and Solana directly.
• Strategic Implication: While these headlines are bullish, they represent TradFi's exploration of blockchain rails within closed, permissioned environments. Researchers should distinguish these initiatives from the open, permissionless nature of DeFi. These moves are more about improving existing financial infrastructure than embracing the core principles of decentralized finance.

Crypto Geopolitics: A New Frontier for Nation-States

• The episode concludes by examining the growing role of cryptocurrencies in global geopolitics, from sanction evasion to strategic asset accumulation.
• Nation-State Stablecoins: Kyrgyzstan is launching a gold-backed, dollar-denominated stablecoin. This move is seen as a potential tool for nations within Russia's sphere of influence to bypass Western sanctions and the SWIFT network.
• The Race to Hoard Crypto: A more speculative take involves a potential race between nation-states to acquire crypto assets, possibly through hacking. This was prompted by China accusing the US of orchestrating a $13 billion Bitcoin hack, which was actually a DOJ confiscation from criminals. The theory suggests nations may use such claims as cover to engage in their own cyber operations to build strategic crypto reserves.
• Actionable Insight: The weaponization of crypto by nation-states adds a complex geopolitical layer to the market. Investors and researchers must now consider how actions by governments—from launching sovereign stablecoins to engaging in cyber warfare for digital assets—could impact global liquidity, security, and regulation.

Conclusion

The episode reveals a market at a crossroads, where bearish technicals are challenged by fundamental breakthroughs in DeFi value accrual and a thawing US regulatory environment. Investors and researchers should prioritize analyzing these structural shifts over short-term price volatility, as they will likely define the next cycle's winners.