Sup, nerds!

Here’s what you’re getting in today’s edition:

• 💅 This is cool: Coinbase is running out of Bitcoin (here’s how that benefits you)

• 🔎 This seems important: The Good News Catalogue (Pt. 5)

• 🤝 Partner: Unlock your startup's potential with Raze 🚀​

• 🔪 Let's dissect this: “27% annual yields.” Sound good too good to be true? It is.

Terms used in this edition (click for an explanation, or ​ask Web(GPT)3!​):
Wallet, Web3, DeFi, Stake, Stablecoin, Bull Market.

💅 This is cool:

Coinbase Is Running Out of Bitcoin (Here’s How That Benefits You)

In one sentence: BTC supply is drying up on Coinbase → Coinbase is where the ETFs buy BTC → the ETFs are buying ~$2.4B of BTC per week = potential supply crunch/price run up.

If you’ve ever thought about buying a house, you’ll be familiar with the term(s) “Buyer’s/seller’s market.”

(I.e. if there’s an excess of homes on the market, prices lower to entice buyers. But if there’s a lack of homes on the market, prices increase to meet demand).

Same goes for crypto.

And as we all know, the big daddy that drives the market is Bitcoin — and what’s good for BTC is often good for most major cryptocurrencies.

Now, with all of that in mind, let this sink in:

Bitcoin holdings on Coinbase just reached their lowest levels since 2015.

Think of exchanges (like Coinbase) as real estate agents — if folks are moving their crypto onto exchanges, it indicates the intention to sell.

On the flip side, if they’re moving their crypto off exchanges, it shows an intent to hold.

Here’s the math on why we’re all giddy with excitement over this:

BTC supply is drying up on Coinbase + Coinbase is responsible for buying BTC for most of the ETFs + the ETFs are buying ~$2.4B of BTC per week = potential supply crunch and price run up to meet demand.

And if you’re not a Bitcoin holder, remember:

What’s good for BTC is often good for most major cryptocurrencies.

We love to see it!

🥇 Want the news before anyone else?

🔎 This seems important:

The Good News Catalogue (Pt. 5): Three Pieces of Positive News That’ll Give You the Zoomies

In one sentence: ETH hit $3k for the first time in two years, BTC traders are avoiding taking large short positions, and MetaMask is nearing its all-time-high of monthly active users.

Man this feels good!

Towards the end of last year, we had to start bunching news stories together into lists, cause there was just too much good news breaking at once.

Unfortunately, the cadence was often few and far between (it’d happen once every couple of months, at best).

Now, here we are, running ‘The Good News Catalogue’ for the second time in six days! Not bad. Not bad at all.

Here’s what’s going on:

1. Ethereum hit $3k for the first time in two years!
   
   Those narratives we spoke about yesterday — the ones surrounding a potential ETH ETF and the increased supply burn? They’re kicking in!
    

2. Bitcoin traders are avoiding taking large short positions 

   
   (Short positions = bets that BTC is going to go down in price).
   
   A whole bunch of people that are way smarter than us are avoiding betting against Bitcoin? That’s a good sign for price appreciation!
    

3. MetaMask is nearing its all-time-high of monthly active users.
   
   The MetaMask wallet is the world’s most popular Ethereum wallet/most people’s chosen gateway to Web3.
   
   More use = more demand for ETH tokens = higher prices across the Ethereum ecosystem.

Who’s game for a running chest bump??

🤝 Partner:

Unlock Your Startup's Potential with Raze 🚀

We get it. Raising funding for your startup is hard!

You have a killer idea for an epic new product…all you need is a bit of funding to build out the team and market the damn thing!

Problem is, you're probably stuck in a maze of paperwork, investor meetings, and legal complexities.

That’s where Raze comes in.

Whether you're a budding entrepreneur or a seasoned Web3 innovator, Raze is designed with you in mind. They understand the struggles of finding the right investors and navigating the intricate web of regulations, especially in the U.S.

The Raze platform streamlines the entire capital-raising process and helps you put your investor networking on autopilot - connecting you with the perfect investors and providing expert guidance every step of the way.

(It’s basically a cheat code for raising funding).

So, if you have no lawyer, no investors, or you’re stuck trying to raise capital without gaining much traction, check out Raze – the ultimate solution for seamless capital raising!

Click the big red button below to learn more 👇

🔪 Let's dissect this:

“27% Annual Yields.” Sound Good Too Good To Be True? It Is.

In one sentence: A new DeFi platform, Ethena, is promoting a 27% annual yield for users that stake its stablecoin (which sounds way too good to be true, and probably is).

In middle school, Kevin (our intern) spent an entire summer forming a ‘deep friendship’ and ‘unwavering bond’ with his hero, Criss Angel, on Facebook.

(This is something he still holds claim to this day — and none of us have the heart to tell him that he was almost certainly being catfished).

There’s a parallel with that story, and Ethena — which is a new DeFi platform, promoting a 27% annual yield for users that stake its stablecoin. 

Which sounds way too good to be true. 

And it probably is. Let's Dive in: 

We need to preface this with a reminder that stablecoin projects like this one, which offer ridiculously high yields, have a tendency to fail miserably.

(*Cough cough* Terra). 

High yields can often be maintained in a bull market, when no one’s asking questions…

But when conditions weaken and folks start pulling their money out — it's hard to liquidate multiple large holdings without ‘destabilizing the stablecoin,’ and crashing its price.

So how’s Ethena trying to differentiate itself?

It’s stablecoin yield pulls from two sources:

Staking Ethereum (which earns ~5% per year), and by shorting Ethereum futures (earning ~20% per year).

Here’s what that last bit means:

Shorting = betting the price of a crypto/share will go down.
Futures = betting on the future price of a crypto/share, by agreeing to buy it at a set price, on a set date in the future.

So when someone ‘shorts futures’ — they’re betting that these futures buyers ‘bet on the future,‘ is wrong…confused? Same.

Here’s an example for you:

• Someone buys a futures contract, guessing that Ethereum is going to be worth less than it is today, in two months time →

• You think they’re wrong, so you borrow their futures contract from them and sell it →

• You wait for two months, and (hopefully) are able to buy the contract back for less than you sold it, and collect the difference.

All that’s to say: when you stake Ethena, you’re essentially lending your money to the project and saying “Go stake/invest my money and send me a kick back.”

To which they’re responding — “Sure, we can offer 27% annual returns.”

Which sounds:

1. Lovely!

2. Way, way, WAY too good to be true.

(It’s giving: Kevin’s relationship with Criss Angel).

Crypto Staking, Explained.