Illuminati Round Table Call Notes:
Guest: We brought on Nelson, an On-Chain Smart Money Copy-trader and Nansen employee #65 to share his insight into the market. Here’s the recap:
Twitter: @nellimkopi
More on FTX & Genesis and their on-chain data
Large amounts of liquidity was seen flowing out of FTX wallets.
During times like holidays, liquidity dries up, and we may see massive amounts of liquidity being moved by big players on these days.
Falling companies are dragging down other companies as this contagion rips through the crypto world.
Genesis will be dissolved and assets unrolled for buyers to sweep up - but the company itself is too risky to take over.
This is the same reason CZ didn’t buy FTX, as the debt and regulatory risks were too high.
Can a pivot help stagnating markets?
The environment is not suitable for company growth
Potential stagflation on the horizon
Even if the Fed did pivot - will this even have an impact as the FED isn’t going to want to perform quantitative easing but instead more tightening to reduce inflation significantly?
What will the market structure look like after all the black swans?
If this were a previous cycle, it would take several years for the markets to pick up again.
The environment will become more regulated, and then Wall Street and TradFi will flow into the markets, and that’s where the next wave of capital will come from.
Nelson sees it as people playing the waiting game for real use cases and regulation.
On-chain: people are leaning into real yield after the crashes and destruction. You want to see where people go in the mid-long term, which will help determine what will prosper.
Is anything interesting on-chain concerning the FTX contagion?
With on-chain, you may not have the whole picture as projects could be moving funds about on-chain or trading on-chain and then doing the same on an exchange, but you can’t see that.
It is mostly speculation until you get complete information from sources that may need to be verified.
Would rather spend time looking at DeFi activity and its movement. Like GMX after the FTX situation pumped, but it was reactionary.
You want to look for sticky liquidity and where it is going.
New narratives forming? - ApeCoin is gaining activity on the chain, so it's something to look out for.
What do you think of NFTs and their potential?
Now is the time to accumulate if you want to buy and establish positions in things like NFTs.
Nelson doesn't like to time the market; he’d instead enter and take on the risk with more considerable potential of the upside being more significant.
Smaller new projects will struggle heavily during this time, so they're better off waiting and launching in the bull market.
Nelson is watching projects like CloneX/Artifacts, Pudgy Penguins - ecosystems
Final thoughts
Be careful with your leverage going into Holidays, as the liquidity dries up
On-Chain Data With Nansen