🟣 Being a contrarian is hard, but it's honest work.

The hated rally continues, despite Elizabeth Warren's anti-crypto army.

Did I accidentally think yesterday was the last day of March when writing the newsletter?    Maybe.   Will I tell our thousands of readers?   Nope.   Yesterday was relatively uneventful on the crypto front. Total market cap fell sub 1%, while higher beta alts fell between 2-3%, on average. Yesterday's notable top gainers were Injective with a +8.3% day on the back of news that it will be launching a Solana Virtual Machine (SVM) rollup in partnership with Eclipse, and Arbitrum with a +12.6% day. One week post-ARB airdrop, it seems the hype may have come down to a manageable level and now bulls are feeling...well…bullish. I would be mindful of ARB's fully-diluted valuation of ~$14B though, which would make it the 8th highest valued crypto today right behind fan favorite, Cardano (hopefully you can sense my sarcasm). While Cardano's valuation is ridiculous and Arbitrum's feels more palatable, I'm still unsure of how much higher ARB can climb in this current environment. But again, bulls do bull things sometimes.    With the market heading higher this morning, BTC is attempting to break a key resistance at 28.8k. I'm not a TA wizard, but BTC may have clear skies ahead until 34-35k if we finish strong this week. I'm personally still bullish on magic internet coins, despite Elizabeth Warren's anti-crypto army, as I continue to see more people on my Twitter feed seethe at this continued rally. Being a contrarian is hard, but it's honest work.    On the macro front, we *may* be seeing the labor market cooling off. Yesterday's initial jobless claims came in at 198k, slightly higher than the forecasted 191k. Remember, in this environment, bad news is good news. The Fed is on a path to demand destruction to cool inflation, but an entrenched labor shortage is making their job harder than it historically may have been. The S&P and QQQ slightly gapped up on the news and finished the day +0.57% and +0.95%, respectively.    The markets are clearly walking on eggshells in both directions. Are we really that much more bullish because jobless claims beat expectations by 7k, which constitutes .002% of the US population? As a crypto analyst that lives in the world of constant narratives and a lack of fundamentals, this feels pretty fishy to me. As I said earlier, bad news is good news, but let's not forget that bad news is still ultimately bad news. On a 1yr forward-looking PE basis, the S&P and Nasdaq 100 don't seem overvalued at 17.75 and 24.85, but if jobless claims keep ticking up and inflation baselines above the Fed's target of 2%, we may see earnings revisions later on in the year.    - EffortCapital   Last night, an unexpected post popped up on my Twitter feed from Y2K Finance about the stablecoin FRAX depegging. If you watch our 0xResearch podcast (you should be), you may recall 0xpibblez, one of our most degen analysts on the team, talking about how Y2K allows you to bet against stablecoin depegs. Y2K became quite popular prior to the USDC depeg event and those that bet on a depeg got paid handsomely.   FRAX is known to have a strong peg, and I didn't see it anywhere on my feed prior to this tweet, so I went looking for answers. When you bring up the Chainlink oracle for FRAX, the above pic is what you find. For some reason, which I don't have a real answer for yet, FRAX's price fluctuated enough yesterday to hit the strike price for Y2K betters. Pretty odd, but interesting nonetheless.     As Arbitrum delegates, we at Blockworks Research are on a mission to be the best stewards to the Arbitrum ecosystem we can be. This week, Arbitrum had its first proposal put up for vote, which plans to create an ArbitrumDAO and outlines a constitution for how the DAO will be governed by ARB holders.   Included in this proposal is the request to use 750M ARB tokens (~$1.05B) from the DAO treasury to fund an Administrative Budget wallet controlled by The Arbitrum Foundation, a separate Cayman entity that aims to foster the growth and development of the Arbitrum ecosystem. The proposal names the three initial directors of this Foundation, as well as a 12-person security council that has the ability to perform both emergency and non-emergency actions via a multi-sig wallet.    With an over 98.4% "For" vote already, this proposal will likely pass. We are discussing internally how we plan to vote, but we will always be sure to ask the important questions to hold all parties responsible to ensure the continued success of any project we are delegates for.   Bitcoin Update Bitcoin's Taproot upgrade that went live in 2021 is beginning to see utility as Ordinals gain in popularity and teams like Rollkit begin exploring Bitcoin as a data availability layer for rollups. Read More → Elixir: A Decentralized Liquidity Engine Elixir aims to align incentives between market makers and protocols via its proprietary decentralized liquidity network. Read More → Solana Options Protocol Cega Comes to Ethereum Cega's leveraged options vault strategy is expected to launch in the next quarter Read More → Pentagon, Mine Bitcoin To Stay Superpower: Space Force Major World superpowers should duke it out with hashrate over artillery in a digital Cold War for Bitcoin blocks, says one Space Force major Read More → The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm's Financial Disclosures. 133 W 19th St, New York, NY, 10011 Unsubscribe