You know things are bad when CEOs are reminding us that insider trading is, in fact, illegal.

Coinbase’s Brian Armstrong said as much on X overnight. “Don't break the law! And don't try to get rich quick. You should get rich by contributing real lasting value to society (or at least be trying - it's not easy!).”

Wise words. But some also believe that massive growth in tech and finance often demands moving fast and breaking things, even the law, and hoping that regulations quickly catch up to all that innovation. We truly live in a society.

Meanwhile:

• BTC looks like it wants to retest $98,000, which would be its highest since Valentine’s Day. Current price: $97,450.

• Crypto information portal Kaito has debuted its own coin on Base, with a current FDV of $1.2 billion.

• Nearly $1.76 billion net has altogether flowed into five exchanges in the past week, including Binance, HTX, Bitfinex, Bitget and Backpack.

✅ Vibe check

Admittedly, it’s been a pretty bearish week for crypto, though an optimist can still find pockets of good news.

Amberdata’s Greg Magadini thinks the data out of the derivatives markets shows that options trading volume on Solana peaked around the inauguration last month which could imply that SOL hit its top.

“I think the bearish story within altcoins is that the supply of altcoins is essentially unlimited. And so we're seeing so many new altcoins … every day there's just kind of a new increase in the total altcoin float, which is completely opposed to the limited fixed supply of the bitcoin value proposition. And so I think that dynamic is hard to overcome,” Magadini explained. 

The divide is simple and can be seen outside of crypto, too. It’s what Magadini would call the hard money narrative: Gold’s going up while commodities like coffee and cocoa become more expensive. Add in the discussions we’ve had about a potential AI bubble and, well, the bitcoin vs. crypto discussion makes a bit more sense.

Bitcoin, in this case, is still the solid narrative. Everything’s going swimmingly right now and we’re all waiting to hear about a potential bitcoin reserve. For altcoins, which don’t have the same catalysts on the horizon, the picture is unfortunately more bearish. 

This isn’t to say that bitcoin’s going to pop off though. Magadini thinks that we’ll continue to see it trade sideways, between $85,000 and $100,000 for the next two to three months. He told me this action is needed after the bullishness we saw going into the end of last year.

“I think during that hanging out period, bitcoin actually gains dominance. It's a relatively strong asset. I think for the altcoin space, we're getting a little bit of a flush out, and we're really seeing that right now with SOL and ETH.”

“If we just look at the charts of ether and bitcoin [in terms of] the relative price, the fact that we had a huge spike lower for ether versus bitcoin is pretty rare because those are very correlated assets. The move that it had was a very volatile move, which is unusual. That was significant, that meant something. And we're seeing the same thing with the SOL-BTC ratio, where it pretty much popped out at a local high on inauguration day and has just come down since,” he explained. His read is that it’s a sign of retail flow — or lack thereof.

It’s not something to be terribly worried about, he added, but rather it’s a natural sign that we may be hitting the speculative phase because there aren’t fundamentals tied to many altcoins just yet.

But, hey, at least we don’t have to blame everything on memecoins… right?

— Katherine

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• Nigeria’s not done with Binance yet. The country filed a $80 billion suit against the exchange claiming that it suffered economic losses and is now trying to recoup taxes.

• The FTX repayments are finally happening, even if victims are only getting a fraction of their crypto back.

• Still interested? Kraken could pursue an acquisition of Deribit, which has been looking to sell itself, according to a CoinDesk report.

🤐 Better left unsaid

There’s a deep yearning for fundamental valuation metrics in crypto. 

Any basic formula would do, in the same way that dividing a company’s share price by its earnings per share spits out a P/E ratio that can broadly decide whether a stock is overvalued or not.

Blockworks Research’s Real Economic Value could very well lay the basis for something similar in crypto.

One little problem: whatever metrics come out in the wash, nobody is going to be happy about the results. 

Just like how P/E ratios are generally much higher than they were in previous decades — making many stocks appear wildly overvalued by comparison — it could well be that cryptocurrencies are priced much higher than what’s implied by the activity they support.

So, if that’s the case, I’m here to throw fuel on the fire.

Here are two charts, for Ethereum and Solana, respectively. Each one plots the native token price against the backdrop of their NFT and DEX volumes.

Pay attention to the white space between the trading volumes (in green) from the price of ETH (in blue) — notice how separated they are.

If onchain trading activity were a fundamental metric on which to value native coins, then Ethereum DEX volumes would need to more than double from here to close the gap. 

And that gap would then represent the value of the hype surrounding a particular chain — pushing the coin up to match the network’s future potential.

The kicker: the price of ETH has only really aligned with onchain trading volumes once in the past four years — where the blue line touches the green space during the Terra market crash in June 2022, when ETH bounced off $1,000 while the chain recorded $73 billion in monthly volumes across NFTs and DEX. 

Now, here is the same chart but for Solana, shown over two years instead of four. 

See how the price of SOL stretched far above any onchain activity — until this year, when monthly DEX volumes had surged tenfold in five months to almost $340 billion alongside memecoin and AI agent hype.

If any of this holds any weight (and that’s a big if), then it would imply SOL is reasonably priced right now compared to its DEX activity. It would be a shame if something happened to it.

— David

On our minds: Sideways price action