Bits + Bips: ETH Makes a Comeback While Crypto’s Animal Spirits Revive - Ep. 876
🎯 Summary
Comprehensive Summary: Bits + Bips Ep. 876 - ETH Makes a Comeback While Crypto’s Animal Spirits Revive
This episode of Bits + Bips features host Steve Erlich alongside Ram Alawalia and special guests Tadalyn Tishowzer (Sigmund) and Jake Ashtovaskiis (Winterview House). The discussion centered on the recent resurgence in crypto markets, particularly Ethereum (ETH), the return of “animal spirits” across risk assets, and the intersection of macro policy (like tariffs and Fed decisions) with digital asset flows. A major announcement was also made regarding the spin-off of the Bits + Bips segment into its own dedicated podcast feed and channels starting in September.
1. Focus Area
The primary focus was Crypto Market Dynamics, specifically the recent price action of Ethereum following technical upgrades, the shift from macro-driven correlation to asset-specific dispersion (“stock picking”), and the impact of institutional flows (ETFs, corporate treasuries) on traditional “alt season” cycles. Secondary topics included Macroeconomics (upcoming Fed meeting, inflation data, and the implications of recent trade tariffs) and Corporate Finance in the context of digital assets.
2. Key Technical Insights
- Ethereum’s Fundamental Support: ETH’s price rally is supported by tangible fundamental improvements, evidenced by a massive surge in weekly revenues (from under $1M to $5M–$10M post-Dencun), alongside positive regulatory clarity expected from legislation like the Clarity Act.
- Shifting Correlation Structure: The market has moved away from the high, single-factor beta trade seen post-Terra/LUNA collapse, where everything moved in lockstep with risk. There is now increased dispersion and greater importance placed on idiosyncratic price return (security-specific performance) over broad themes.
- Impediments to Traditional Alt Season: The massive accumulation of Bitcoin by corporate treasuries and institutional ETF holders means that Bitcoin supply is effectively locked up and unlikely to rotate into altcoins as in previous cycles, fundamentally altering the path of a traditional alt season.
3. Market/Investment Angle
- Return of Animal Spirits: Both equity and crypto markets are showing signs of renewed risk appetite. In equities, this is seen in rallies among highly shorted, low-quality businesses (short squeezes) alongside strong performers like Robinhood and Coinbase. In crypto, this is evident in ETH’s outperformance and increased flow into altcoins.
- Institutional Flow Divergence: Institutional buyers (treasuries, wealth managers) holding BTC/ETH ETFs are not participating in the speculative rotation into smaller altcoins, suggesting that any future alt season will be driven by corporate treasuries allocating capital from traditional assets into alts, or by retail engagement.
- Retail Re-engagement in Alts: While Bitcoin search interest remains subdued, Google Trends data shows a vertical spike in searches for altcoins, suggesting retail investors, who were largely absent during the initial BTC rally, are beginning to engage in the lower-cap segments.
4. Notable Companies/People
- MicroStrategy/Corporate Treasuries: Mentioned as major holders of Bitcoin, whose large, static holdings are changing market structure by removing supply from circulation.
- Goldman Sachs & VNY: Referenced in connection with discussions around money market funds.
- Jake Ashtovaskiis (Winterview House): Highlighted his role in proprietary trading, focusing on OTC execution for wholesale and corporate accounts, providing insight into smart money flows.
- Tadalyn Tishowzer (Sigmund): Provided the research perspective, emphasizing fundamental shifts supporting ETH and the structural changes in market rotation.
5. Regulatory/Policy Discussion
- Tariff Impact Analysis: The panel analyzed the impact of potential Trump-era tariffs. While importers like Costco and GM showed initial margin pressure, the market has largely priced in the worst-case scenarios, recovering quickly. The consensus was that tariffs are currently viewed as short-term noise or negotiable “kabuki theater” rather than a long-term inflation driver, as longer-dated inflation swaps remain anchored.
- Coherence of Policy: Jake expressed concern that the haphazard nature of tariff negotiations lacks the coherent policy package (infrastructure, workforce training) needed for genuine industrial policy, leaving companies unprepared.
- Clarity Act: This legislation is seen as a major positive catalyst for altcoins, potentially easing innovation around tokenomics without immediate regulatory risk.
6. Future Implications
The conversation suggests a market entering a more dispersion-heavy phase where asset selection matters more than overall risk sentiment. While macro factors (Fed, inflation) remain relevant, the structural changes in Bitcoin ownership suggest that the next major leg up might be led by Ethereum and specific, fundamentally sound altcoins rather than a broad, retail-driven “everything rally” seen in 2021. The market is looking past immediate macro shocks toward underlying corporate fundamentals and crypto-specific developments.
7. Target Audience
This episode is most valuable for Crypto Portfolio Managers, Institutional Traders, Macro Hedge Fund Analysts, and sophisticated Crypto Investors who need to understand the interplay between traditional finance (macro, corporate earnings, policy) and evolving digital asset market structure.
🏢 Companies Mentioned
💬 Key Insights
"The US experiencing higher productivity rates much like the late 90s due to the rise of the internet. And in that environment, Alan Greenspan had rates lower for longer. Therefore, the US experience is kind of AI productivity boom could also keep rates lower for longer."
"So well, that was re-hypothecation. That was non-banked thing to be banks. That's what caused the blow-up of 2021."
"The danger is going to come when they start leveraging their balance sheet and using it creatively and tokenizing shares and and someone's going to be on scrupulous about it. And then like if they if someone's too levered up on debt, they're going to have to liquidate and blah blah blah."
"What we need is something in the middle that's suited to internet capital markets."
"crypto is completely transparent. So setting rules that provide the same kinds of information that people would need to make informed decisions and level playing field and so on, you can actually create these paths for compliance for crypto projects that are feasible to comply with..."
"We need securities. We need tokenized securities for those projects that are generating revenue, which is the right way to advance the ball forward."