I bought the dip. Plus meme coins and a portfolio update

This is my first actual newsletter send, so welcome to everyone. I really appreciate you subscribing, and I’ll do my best to write interesting, helpful things.

I figured the only way to start a crypto newsletter is to dive right into the degeneracy with some specific coins.

I bought the dip

The markets continued to chop this week, mostly down. The Fed was dovish despite the hot inflation print last month, manufacturing data and employment numbers were revised weaker, the Hong Kong BTC ETF flopped, Friend.Tech launched their airdrop (and it immediately dumped), and cryptoTwitter was overrun with videos of commie losers protesting on campus.

So I decided to buy the dip.

I bought ETHE, the Grayscale Ethereum Trust. This is basically the same product as GBTC was for bitcoin before the BTC spot ETFs launched back in January, and I’m buying ETHE on the same trade setup as that.

ETHE was trading at a 26% discount to its net asset value when I bought (it’s still trading at a discount right now - around 23%). This just means that the price to buy into the trust is cheaper than the value of the ether held inside it — pay $0.74 to get $1.00. In effect, I bought ETH on the dip with an extra 26% discount.

It’s unlikely that ETH spot ETFs will be approved later this month, but my bet is that an ETH ETF is inevitable after the BTC approval, landing either late this year or sometime in 2025. When that happens, I expect the ETHE NAV discount to close back to par and ETH to pump on all that fresh ETF demand.

My Two Biggest Meme Coins Bags

I’ve been deep in the meme coin chaos over the past few months. It kicked off with Bonk going parabolic in Nov/Dec, and then WIF took the crypto world by storm. PEPE and DOGE and the memes from last cycle took their turn, but nothing compared to the degeneracy in small cap shitcoin land on Solana.

I expect the memecoin mania to continue for much of the rest of the year. I don’t think we’ve seen the ultimate blow off top yet across this category. It’s all a ponzi, and that’s so pure. No fake narratives or bullshit promises from egomaniac founders and VCs. It’s raw, unadulterated crypto mayhem.

I plan to keep making small bets on ultra low cap Solana memecoins as long as things are frothy (things cooled off in April, but already seeing early signs of another wave (cat memes are having a moment, and there’s lots of new memetic activity happening on Base, an ethereum layer 2 backed by Coinbase).

My two biggest meme coin bags right now are WIF and BODEN.

I’ve been riding WIF since December, and its become one of those coins that make me hate risk management. Easy to say that now, looking backwards at a 100x+ rocketship. But hey, the take-profits are locked in, and I’m letting what I have remaining ride.

WIF has the mindshare in the crypto community, it’s started to breakthru into more mainstream channels, and it’s volume, liquidity, price action continues to look strong. It isn’t going to 100x from here (you have to dip much lower into shit coin land to gamble for 100x’s), but at 2-3B market cap today I think there is room for another 10x if it catches a tailwind like what happened to DOGE, SHIBA et al in 2020-2021.

Jeo Boden is a meme that makes fun of Joe Biden. There’s other celebrities and politicians with coins like this one (Tremp, Whoren, others), but none has taken off like Boden. Its below $400 million market cap after this pull back, the volatility has been thru the roof on top of great volume and liquidity.

Heading into a contentious election season, I can’t think of a better way to gamble that Americans are going to be pissed off about politics. DOGE melted up from $7b to $70 billion in less than a month when Elon started tweeting about it. What are the odds that Trump starts using “Boden” in speeches and on social media? Where does BODEN go if it becomes a regular in Trump’s vernacular? It goes up. A lot.

The meme is already starting to show up on campaign signs and billboards. I think the risk/reward on this one looks really good. It’s got all the market characteristics you want to see in a coin ready to explode onto the mainstream.

Portfolio Update

If I’m going to write about crypto on the internet, I need to be transparent about what I own vs what I don’t own. Eventually I’ll build something automatic, but for now, I’m including a portfolio update section in each email so no one can accuse me of shilling my bags unfairly.

Generally speaking I think about my crypto as two sub portfolios.

Discretionary: I have a portfolio of coins that I like for reasons in my own head, based on some analysis or thesis or bet. (FWIW value investing doesn’t work all that great in crypto. You can leave your copy of The Intelligent Investor at home for now).

Systematic: I also move in and out of some positions based on momentum. I don’t believe in technical analysis, and this is not that. But I do take a more quant / systematic approach given the crypto markets strong trending characteristics. Interpret these more as trades, less Warren Buffett.

These are NOT recommendations nor financial advice. I implore you to not buy blindly based on something you read on the internet. I’m sharing because I know this is a big part of why many of you subscribed and also because the transparency is important. If all my crypto went to $0, I’d be totally fine. A little bit of crypto goes a long way.

What do you want me to write about next?

I have a ton of topics planned, but I’d rather write about the things you’re most interested to hear about. Respond below, most votes get written first.

That’s all for this week. Thank you again for subscribing. If you enjoyed it, please forward to your friends. I’d appreciate it!

Jay

Market Vibes