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Welcome to crypto, where the AI agents are made up and the prices don’t matter.

Our timelines are telling us that certain parts of crypto are now processing the notion that AI agent coins are just LARPs powered by custom ChatGPTs.

Yes. That could be the point: All the world’s an LLM, and all the people merely prompt engineers.

Elsewhere: 

• Ethereum only has to mint 30,000 ETH net to return to pre-Merge supply levels.

• At current burn rates, that could happen in the next 20 days.

• OP Superchain throughput is coming down from all-time highs, currently 124 tps compared to 164 at the start of the year.

🔒 Locked in

You’ve probably heard by now that ETH is a cursed asset. Doomed. 

Maybe you’ve read tweets that say Ethereum is destined to go the way of Intel — a stock that has collapsed in value by two-thirds over the past five years while competitors (Nvidia and AMD) have thrived by comparison.

It’s a take that only works if you focus solely on price and ignore how much activity persists on Ethereum and its surrounding web of layer-2s and layer-3s.

Ether has only gained 30% in the past year while its direct rival, SOL, has about doubled.

Even XRP has easily beaten ETH over the bull market to date. XRP is now up more than 600% since the bottom of the last bear market in November 2022. 

BTC has otherwise gained about 500% and SOL almost 1,500%. ETH does appear spookily dull by comparison.

Here’s an alternative theory: The relative overperformance of coins like SOL and XRP has nothing to do with ETH. 

Let’s start with XRP. Ripple Labs’ ongoing clash with the SEC (which started in December 2020) had sidelined XRP for practically this entire market cycle, not to mention its underperformance through the 2021 bull run.

So, whatever gains XRP made in light of Trump’s win in November has more to do with catching up with the market than anything particularly special about the asset itself.

As for SOL, it pays to look back at how the top end of crypto really looked over the years.

Generally, the top three coins have stayed more-or-less the same since 2016: BTC, ETH and then XRP.

In 2017, the next most valuable were litecoin (LTC) and monero (XMR). It was those, plus bitcoin cash (BCH) and cardano (ADA) in 2018; EOS in 2019; BNB in 2020.

LTC is now in 27th place — much further down in the market — while monero in 37th and bitcoin cash 23rd.

Compare the chart above to the first one, which only mapped price performance. It tracks the market caps of the top end of the market — and it makes clear just how much smaller all those coins are to ETH. 

It’s only natural that they’d outperform ETH at certain parts of the cycle. While liquidity doesn’t necessarily map to market capitalization, smaller assets generally need much less fresh capital to move the needle that far.

It’s also not a coincidence that LTC, XMR and BCH, all bitcoin alternatives, have fallen off so dramatically between cycles.

Bitcoin has won the race as a store of value and stablecoins emerged to better fulfil the digital payments use case than litecoin.

Whatever mind and market share the major coins from yesteryear — the ones that never found product-market-fit at scale — may have simply been transferred to Solana.

So, the Solana renaissance has little do with the anticipated demise of Ethereum, and more to do with the shrinking significance of much older coins. 

As for whether Ethereum will also become one of those “much older coins” sometime down the line — handwaiving that concern requires entirely different cope. Let me get back to you.

— David

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Unichain is launching soon!

Designed to be the home for DeFi and liquidity across chains, Unichain is an L2 that will launch with up to 95% lower transaction fees than Ethereum L1. Shortly after mainnet launch, the chain will introduce 250 millisecond block times for near instant transactions. Plus, as part of the Superchain, Unichain is optimized for seamless cross-chain transactions.

Stay in the loop — visit Unichain.org and follow @Unichain on X for updates!

• A second court chastised Gary Gensler’s SEC, with a judge asking the regulator to “explain itself” over the lack of clarity regarding crypto rules. Oops. 

• A new unicorn has entered the chat: A $58 million raise put crypto bank Sygnum over a magical $1 billion valuation. 

• Donald Trump Jr. joined the board of prediction market Kalshi ahead of President-elect Donald Trump’s inauguration. (There’s also a Polymarket focused on what Trump will say in his speech.)

💲 Price check

Given the volatility we saw yesterday, I thought it might be a good time to do a mini temp check.

We saw bitcoin briefly drop below $90,000 briefly on Monday, and this morning we’re back up over $96,000.

The volatility seems like it’s here to stay, perhaps until Inauguration Day. ETH, shadowing bitcoin’s movements, also took a tumble before regaining momentum. 

And then there’s top AI agent coin AI16z, which is up 21% in the past 24 hours, having bounced after undergoing its own selloff. Ah, the diversity of crypto. There’s truly nothing like it. 

Bitcoin’s sudden drop didn’t exactly worry Unity Wallet’s James Toledano. 

"The current price action may appear concerning but for those of us who have been in the space for a long time, it is simply business as usual. It doesn’t necessarily signal the end of the bull run either,” he explained. 

“The inauguration of President-elect Trump is just seven days away and could be a pivotal moment, with markets anticipating announcements of pro-crypto policies that might spark renewed buying interest. Institutional accumulation, as reflected in falling exchange reserves also supports the view that demand remains strong despite low trading volumes.”

Pairing that with what we’ve been told by Ledn’s John Glover, we very well may close out this month with a run. Glover thinks we could see bitcoin move 20-30% higher in the next few weeks, especially given that the $91,000 level seems to be a decent support level. 

I am once again asking for you to be patient, especially given that we’re only a week out from the new administration.

— Katherine

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