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Happy Friday. 

Bitcoin’s just barely under $100,000 as we prepare for the weekend. It’s perhaps too soon to tell whether or not we’ll survive this weekend without another selloff, but we’re knocking on wood and crossing our fingers. We’re a superstitious bunch over here. 

Have a restful weekend and we’ll see you bright and early Monday morning.

⛵ A rising tide…

What’s a good way to gauge how crypto’s faring without depending too much on price action?

If you ask Kaiko, it’s L2s. 

So far, since the election, the research firm’s L2 index has traded higher, which is — admittedly — perhaps not a huge surprise, given that all of crypto took on an optimistic outlook starting in November.

The index tracks five L2s across Bitcoin and Ethereum. It also tracks Polygon. 

As you can see above, we have Stacks, Optimism, Arbitrum, Polygon and Starknet in the same bucket. 

Keep in mind that L2s are making a comeback so far after falling behind the market last year. And there’s been plenty of discussion around whether we have too many L2s.

That’s not to say that there isn’t still demand though. 

Take, for example, a Galaxy report from November that projects that $47 billion of bitcoin could be “bridged into bitcoins L2s by 2030” — or roughly 2% of bitcoin’s circulating supply.

Anyway, back to the data: There might be some more positive catalysts in store for L2s, especially if bitcoin doesn’t dominate the narrative as much moving forward. 

“Sector rotation is another potential tailwind for L2 assets. BTC dominated the crypto market in 2024, setting record highs before and after the U.S. election as institutional investors poured billions into spot BTC exchange-traded funds. However, the rally hasn’t yet extended beyond BTC, as has historically been the case. While the crypto market structure has evolved, a rotation to smaller assets remains likely as investors seek higher upside potential via high-beta tokens,” Kaiko analyst Adam McCarthy wrote. 

Taking into account that the changing regulatory headwinds play a huge factor here — especially in Polygon’s case given that the SEC previously labeled MATIC a security — and perhaps the future’s looking a bit brighter. 

While investing in bitcoin is accessible to the masses, it’s hard to find opportunities beyond it, McCarthy wrote. 

“While the broader crypto bull market has yet to fully extend to altcoins, evolving regulatory dynamics could serve as a catalyst for renewed interest. As policy shifts in Washington and investors explore opportunities beyond Bitcoin,” L2s are “positioned for significant growth in 2025,” he continued.

Man, it’s hard to be pessimistic in crypto right now. 

— Katherine

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Get ready — Unichain is launching soon!

Designed to be the home for DeFi & liquidity across chains, Unichain is an L2 that will launch with 95% lower transaction fees than Ethereum L1 — and will soon offer blazing-fast 250ms block times for near-instant transactions. As part of the Optimism Superchain, Unichain is built for interoperability and will support ERC-7683 for seamless cross-chain transactions beyond the Superchain.

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

If there’s one question I’m starting to hear it’s this: Have we topped?

I jokingly responded to Bitwise’s Ryan Rasmussen that I didn’t want TRUMP to be the top, and I stand by that. I’m admittedly, perhaps wishfully, hoping that we don’t top till later this year. 

It sounds like Empire’s Jason Yanowitz was on the same page but the “funky” price actions led to a theory for him. Strategy, the firm formerly known as MicroStrategy, has propped up the price of bitcoin. 

Without the $20 billion-plus spending spree that Michael Saylor’s company went on throughout the end of last year into this year, we’d have bitcoin at a far lower price. 

Here’s the catch: Yanowitz thinks that puts us earlier in the cycle. And his theory’s backed up by Dan Matuszewski of CMS Holdings.

As Yanowitz explained in the Round Up this morning, we haven’t seen enough venture capital yet, it’s “very PvP.”

“I don’t know why this is different this time around or if I’m just off on where we are in the cycle but my guess is the overhang of 2021 is still with us. Liquid basically doesn’t exist and therefore can’t materially drive flows or collect inflows and venture remains the big yardstick for alts,” Matuszewski wrote.

Santiago Santos noted that we need to see “more flows coming in,” and that we haven’t see that yet outside of a “selective” few. 

Are we there yet might be the next question we start asking as we debate the top. No matter where we are in the cycle, though, we should acknowledge that we’re in the early days of this new administration and one can only imagine that some of their actions will act as a catalyst moving forward. 

And now you know.

Speaking of the regulatory environment, I listened to the Operation Chokepoint 2.0 hearing held on Capitol Hill yesterday. 

None of it, admittedly, was as interesting as the court transcript shared by Coinbase’s Paul Grewal. But if there was one takeaway by all parties involved, I’d say that everyone seemed ready to move on. 

I, too, hope we can move forward and get some answers on what happened and why. In case you need a refresher: Operation Chokepoint 2.0 was carried out by regulators, including the FDIC, to debank or prevent crypto companies from being able to bank with traditional institutions. 

Admittedly, I was skeptical initially on how much of this was intentional versus just the fault of vague or nonexistent regulations but there’s enough hard proof now, including in the aforementioned court transcripts, to show that there was intention. 

If you want the TLDR but still want to get some of the spiciest bits from the transcript, I’d recommend checking out Scott Johnsson’s thread below.

Grewal was a witness in the hearing alongside WSPN USA CEO Austin Campbell and Better Markets Banking Policy Director Shayna Olesiuk.

At one point, Campbell told lawmakers that regulators decided to debank crypto firms just because of some bad actors (cough cough FTX amongst others). And Grewal argued that the targeting of digital asset firms “discourages” banks from even trying to bank companies in the space. 

“What we saw in the documents that were produced yesterday, case after case, when the bank stepped forward and raised their hands and asked for permission to offer basic services, they were either ignored or they were given detailed examination and re-examination and re-examination until they simply gave up,” Grewal said.

While we’re in friendlier waters, I think it’s fair to say that we need to see some changes — beyond the changing of the guard at the FDIC — before we can fully say we’re past Operation Chokepoint 2.0.

— Katherine

From macroeconomic shifts to the evolving role of crypto in global markets, Mohamed El-Erian brings decades of financial expertise to the stage. Mike Novogratz, one of the earliest institutional investors in digital assets, unpacks what’s next for the space. And Anatoly Yakovenko, the mind behind Solana, breaks down how high-performance blockchains are shaping the future of finance.

DAS NYC is where the real conversations happen — no hype, just sharp insights from the people driving digital assets forward.

📅 March 18-20 | NYC

Last week we were curious how you think about crypto. 

50% of you said that crypto’s the future of finance, with some of you saying that crypto’s “nowhere near” its final form. 

This week, we’re curious to get your take: