Bits + Bips: DATs Are Crypto's Biggest Trend. So Why Aren't They Boosting Markets? - Ep. 865
🎯 Summary
Podcast Summary: Bits + Bips: DATs Are Crypto’s Biggest Trend. So Why Aren’t They Boosting Markets? - Ep. 865
This 80-minute episode of Bits + Bips dives deep into the collision of cryptocurrency trends, macroeconomics, and recent political developments, focusing heavily on the market reaction (or lack thereof) to new tariff threats and the evolving structure of the crypto market.
1. Focus Area
The discussion centered on Macroeconomic Policy and Crypto Market Structure. Key topics included:
- The implications of potential new tariffs threatened by Donald Trump against several nations (Japan, South Korea, etc.).
- The current state of the US dollar and US economic exceptionalism.
- The bifurcation of the crypto market: the performance of Bitcoin versus altcoins/smart contract platforms.
- The significant suppression of volatility (implied by low option premiums) across crypto assets, and where that volatility has migrated.
- The impact of institutional adoption (ETFs) on market maturity.
2. Key Technical Insights
- Volatility Migration: Realized volatility for Bitcoin has plummeted, driven by institutional adoption (ETFs, structured products like covered calls). This suppressed volatility has migrated to public equities holding crypto exposure, such as MicroStrategy (MSTR) and publicly traded crypto miners, whose charts now resemble those of highly volatile altcoins from previous cycles.
- Maturity of Bitcoin: The suppression of volatility suggests Bitcoin is maturing as an asset class, implying that the era of 10x returns is likely behind it, as institutional structures inherently dampen extreme price swings.
- On-Chain Activity Decline: There is a notable lack of on-chain activity; most current volume is occurring through centralized exchanges and public markets, indicating that the demand for many native crypto tokens (beyond the top tier) is weak.
3. Market/Investment Angle
- Tariffs as Theater: The consensus among the panelists is that Trump’s tariff threats are largely “theater” and political bluster, likely intended for negotiation leverage (especially concerning Japan’s upcoming election), rather than an immediate catalyst for severe market panic.
- Bifurcated Crypto Market: The market is sharply divided. Bitcoin is acting as a macro asset, seeing institutional inflows via ETFs, positioning it as an asset “people have to own.” In contrast, the rest of the crypto market (smart contract platforms and smaller tokens) is struggling significantly due to a lack of demonstrable product-market fit (PMF) and waning speculative bids based on “future hope.”
- Contrarian Macro View: A contrarian view suggests the death of the US dollar is exaggerated, as US short rates and growth options remain superior globally, offering a potential hedge against dollar weakness by diversifying into international value plays with momentum.
4. Notable Companies/People
- Donald Trump: Central figure due to the threatened tariffs and his influence on market sentiment.
- Jerome Powell (The Fed): Discussed regarding the pressure he faces from political actors (including commentary from the Secretary of State referencing “working the refs”) concerning interest rate decisions, especially in light of potential inflationary impacts from trade policy.
- MicroStrategy (MSTR): Cited as the prime example of where crypto volatility has migrated, showing dramatically higher annualized volatility than Bitcoin itself.
- Robinhood & Revolut: Mentioned in the context of M&A and strategic moves (like Revolut potentially launching an L2), showing activity is occurring in public or regulated entities, not just native crypto projects.
5. Regulatory/Policy Discussion
The discussion touched on the political pressure on the Federal Reserve, suggesting that the Fed’s recent shifts in communication might reflect forecasting uncertainty around trade policy rather than purely data-driven decisions. The panelists noted the administration’s general pro-innovation stance benefiting sectors like crypto, nuclear energy, and quantum computing.
6. Future Implications
The industry is moving toward greater maturation and institutionalization, making it harder for unmitigated crypto traders to profit compared to previous cycles. The focus is shifting from speculative future promises to demonstrable product-market fit. Volatility is expected to remain suppressed in core crypto assets through the summer, with a potential tick-up in native crypto volatility only likely in Q4. The market is increasingly resembling traditional equity markets in structure and trading dynamics.
7. Target Audience
This episode is highly valuable for Crypto Investors, Macro Strategists, and Venture Capital Professionals who need to understand the interplay between geopolitical risk, Federal Reserve policy, and the structural changes occurring within the digital asset market.
🏢 Companies Mentioned
💬 Key Insights
"I think it's alternative capital markets. You have a public capital markets framework that includes things like NS1 and registration requirements or in compliance. They have to do around that but I think if you think about the promise of democratization of payments, a democratization of capital, the blockchain and the technology on this is actually what can deliver against that promise."
"What does this kind of mean for the future of mining and how it is competing with the demand for AI for infrastructure, energy, etc."
"Tron continues to be about 60% of stablecoin payments. They just dominate stablecoin payments because there's so much USDT on Tron in emerging markets that people are using."
"Tokenized stocks are cruising around Solana's blockchain. It's going to end up in its collateral and like Camino that you can borrow again. So you're going to be able to use them as collateral on Drift or Jupiter to trade the perks. Like one of the new types of animations that are going to happen with sort of thing. And there's no going back from that."
"Within the first 48 hours of tokenized stocks trading on Solana, it dwarfed Base's volume. It's not even close. It's because of the kind of the ability for people to trade very frequently at a very low cost on something like Solana."
"It took them basically two years to get comfortable that their back-office system could do 24/7 collateral mobility with tokenized with stable coins and like, you know, tokenized products like Biddle, etc. Right? It basically they were sitting on this tech stack. And this is one of the most technically proficient trading firms in the world. It took them two years to even think that they could do their accounting appropriately for tokenized tokenized assets."