BitMEX co-founder Arthur Hayes stated in his latest article that “narrative is more important than technology” in the cryptocurrency market. He favors investing in narrative projects that tell stories of what “has never” happened to what “could possibly” happen, and he teased that he will delve into narratives surrounding various “altcoins”.
In his blog post, Hayes emphasized the importance of storytelling in the cryptocurrency market. He believes that investors assess the likelihood of a project’s success based on others’ perception of the project’s problem-solving capabilities, team skills, and the spread of its story. Although he holds the title of Chief Investment Officer at Maelstrom, he jokingly suggests changing it to “Chief Storyteller”. His mission is to tell concise and widely disseminated stories that drive the appreciation of related tokens.
Hayes explained that when investing in a story or trend that you believe could transition from “never” to “possible”, the attractiveness of the project is low because the market does not have high expectations. Even mediocre results are considered groundbreaking because expectations are too low.
Macro narratives describe observed trends and how a specific project leverages them, while micro narratives explain why a particular project will be the best among all competitors in a specific macro narrative.
He pointed out that people are focusing on the trend of accumulating BTC for the upcoming US Bitcoin spot ETF, which is expected to boost Bitcoin’s value to immeasurable heights, along with the global fiat depreciation frenzy. The upcoming Ethereum spot ETF in the US is also expected to drive up ETH prices. Although he may buy more BTC and ETH in the future, his attention is shifting to altcoins as the bull market approaches.
He teased that he is planning to write in-depth macro and micro stories about altcoins, including topics such as the shift of retail derivatives trading volume from CEX to DEX, related projects being dYdX and GMX, and potentially another challenger; the launch of ETH staking triggering a surge in trading volume for interest rate swap (IRS) transactions in the entire DeFi field, related project being Pendle; a way to drive DEX dual-currency (Quanto) derivatives trading volume using low market cap altcoins worth billions of dollars, related project being Krav; DEX on-chain liquidity being provided by middleware to disintermediate current market makers, related project being Elixir; as DEX becomes the main venue for price discovery, on-chain oracles providing settlement and clearing prices will become increasingly important, related project being Flare; why Tether and any stablecoin relying on TradFi banks to custody fiat will face pressure, and how we can create stablecoins pegged to fiat without relying on TradFi, related project being Ethena; and how to solve cross-chain bridging of assets without building bridges, related project being Axelar.
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