Chase Good Crypto UX, Not The Next Hyped Meta
by Andrew Lee (https://x.com/alee)
Most crypto traders seem to be focused on finding the next “meta,” or hyped crypto narrative, to trade and make a profit on. I suggest this is actually an underperforming strategy, and we should all be hunting for the next good user experience.
There is always a collection of hyped “narratives” that everyone seems to be dead set on. One day it’s ordinals, another day it’s liquid restaking, memes, AI coins, generative art NFTs or some new token standard. You could be watching the space all day and it’s still hard to keep up. Narrative pumps are hard to find early and they’re hard to ride.
With a more long-term outlook on the space in mind, I believe the biggest hurdle crypto faces has always been user experience. I believe finding the applications and protocols that reduce user experience friction and improve ease of use and speed are the biggest opportunities to be hunting for.
Here are some examples of innovations from the past that drastically improved crypto user experience:
- 2015 — Ethereum ERC-20 standard and Ethereum wallets made the user-experience of minting and trading tokens far superior over what was possible on top of Bitcoin.
- 2019 — Uniswap was the first AMM that made it super easy for anyone to launch a Liquidity Pool.
- 2021 — Solana made the user experience simple and great with fast and cheap transactions.
- 2024 — Coinbase made the user experience of bridging to an ETH L2 far easier with its Coinbase Wallet applications which could connect directly to Coinbase
- 2024 — Pump.fun and Friend.tech make no-code no-capital token creation platforms
Looking forward, I would be interested in the following areas of innovation:
- Smart contract chains that can sustain low fees and high throughput (e.g. Base, Solana) and an easy fiat on-ramp source (e.g. Coinbase)
- Applications that have novel use cases and social network effects that allow creators to create tokens without any code or capital requirements (e.g. SocialFi, meme launchers) — I believe there’s a lot more innovation to be done in this area.
I am fascinated and impressed with the concept of token creation platforms like Friend.Tech, because it essentially allows anyone to create a token with real social utility without any code, capital or any technical knowledge. I am also impressed to see Pump.Fun make it super easy for anyone to launch a coin without any ETH or SOL to fund a Liquidity Pool.
Chasing narratives can be risky, because there are endless new ones sprouting everyday, and there’s an endless army of me-too projects who are not long-term players and just riding the narrative. The narrative-chasing tokens can be too late, or crash at any moment’s time. It’s easy to be caught with a “me-too” dud. Narratives can pump so long that it feels like it’s the new normal, but can die within a moment.
Ethereum is the internet of value. It’s a public and open protocol for decentralized transfer of value on the internet. Anything and everything people want to assign value to on the internet, can be tokenized on Ethereum. There is massive potential for applications and new trends that will capture mainstream attention, just like NFTs, DeFi, memes and whatever the next trend may be.
What We Can Learn From Observing Bitcoin Beta
In the bear markets, Bitcoin volatility falls off a cliff. And this makes crypto and Bitcoin extremely scary to hold, because it may feel like it can never come back.
To visualize this data, the following is a chart of Bitcoin’s Beta value since 2017. There are visible declines in volatility in the bear market in the circled regions.
Bitcoin Beta since 2017 (Weekly Candles, 10-Week Average, Relative to S&P 500).
This contrasts sharply with today’s biggest tech stocks, which, on the other hand, don’t have extremely contrasting volatility cycles.
This evidence suggests to me that Bitcoin is still extremely early, and we’re at the point of global acceptance and adoption of Bitcoin being a perfect store of value.
I believe it is possible in the next 15 years we will be transitioning to a mainstream consensus that crypto is a good store of value and hedge against inflation, and there is a chance that Bitcoin’s extremely cyclical volatility may wean off. Bitcoin’s price might have a more steady annual price appreciation growth, as opposed to wild swings in the early days.
It’s not a perfect comparison, Bitcoin might be similar to the Dotcom bubble where stocks like Amazon and Apple swung violently as their future was unknown, but eventually overtime grew and stabilized in volatility. And if Apple and Amazon are 100x-200x since the 2000, I think it’s possible for Bitcoin to do another 200x in the next 25 years (or, a 24% CAGR over 25 years). So, $12M a Bitcoin in 25 years. Which equals 83 BTC to be a billionaire.
An article from June 2000 questioning whether Amazon could be profitable.
When people refer to “this bull cycle” or “this cycle” in anticipation of guaranteed fast price appreciation, I am very skeptical, because there is no guarantee that Bitcoin will go parabolic as it did in previous years. Or, it might be another year or two when it does.
Being long various forms of compute is going to be a very important investment play in the coming years and decades. I believe these 3 categories of personal computers/compute are extremely bullish for the long haul.
- Personal Computer — Microsoft and Apple
- Decentralized Computer — Bitcoin and Ethereum
- AI/GPU Compute — Nvidia
If Bitcoin was a perfect Store of Value with minimal drawdowns, it would not have such asymmetric return potential as it is still unproven. We are still early, and it’s still a very good time to get in.