FTX, the Aftermath: Top 10 Cryptos to Buy on Coinbase for 2023
How could someone so right be so wrong?
Before I get into all the ways I missed the mark last month, I do want to share this bit of wisdom I did get right:
So forgive me if I think there’s still danger out there . . .
We’re not going higher on a permanent basis until all of this toxic stupidity gets flushed.
Little did I know that the stupidity was coming from the supposed smartest guy in the room.
But rather than see the FTX immolation as a reason to stay out of crypto, I see it as a reason to get in. Why? Because those who aren’t in, for the most part, don’t get it. If you get your news from traditional media, you were likely told that Sam Bankman-Fried was a visionary, and either a savant-cum-philanthropist who couldn’t be bothered with rudimentary accounting, or — just in case that made him seem too culpable — as a victim of a bank run.
To ask the most rhetorical question ever: Are you sh*tting me? Alameda took no less than $10 billion of FTX’s customer deposits and just kinda . . . lost it. Jesus, I don’t know how it’s possible to lose that much money. I don’t even think they know. But when someone actually looked, they found nothing but IOUs and cockroaches. To call FTX a “house of cards” is an insult to the structural integrity of cards.
SBF, a supposed world-class genius, had eleven figures at his disposal and didn’t even, like, build a evil villain lair inside a mountain shaped like a giant skull (this is what he erected instead). NGMI.
Speaking of NGMI, just about the only behavior more nauseating than TradPress has been the people who think they have the right — or hell, even the ability — to regulate companies like FTX in the name of “consumer protection.”
“FTX’s implosion should be a wake-up call,” Senator Elizabeth Warren (D-MA) squished her nose and honked in a Wall Street Journal op-ed. Squeaking a bicycle horn, she continued: “Congress must plug the remaining holes in our regulatory structure before the next crypto catastrophe takes down our economy.”
And she’s not alone. Members of Congress . . . want to investigate FTX and protect people from future bankruptcies. The United States Congress.
Again, I ask: Are you f*cking sh*tting me?
Say what you will about SBF — no, wait, allow me: he’s a pasty goblin who lived and worked in the Bahamas but somehow never once saw the sun, and if you look up “privilege” in the dictionary you’ll see a picture of him and his stupid rat’s nest hair — but at least he had the decency to only trap his own victims before blowing their money on Adderall and degen sh*tcoins. Congress has boondoggled every American’s tax dollars, tossed them in every direction like beads off a Mardi Gras float, and even bankrupted generations not yet born.
FTX has a shortfall of somewhere between $8 and $16 billion — the numbers are nebulous, in part because so many of them were made up — but the U.S. government’s current debt is THIRTY-ONE TRILLION DOLLARS (and counting). Congress investigating FTX is 535 vampires investigating a mosquito. Their balance sheet has been IOUs and cockroaches for decades. The very notion is farcical past the point of parody, and the fact that apparently nobody is calling the biggest bullsh*t of all time is g*ddamn enraging.
But even if Washington weren’t currently a spurting sewage line of financial malfeasance, if regulation could be made to stop SBF, it would also have stopped Bernie Madoff, who was only able to keep his Ponzi scheme alive for decades thanks to a clown parade of clock-punching “regulators” who either had no idea what their incompetent eyes were looking at or were easy marks for the con (or, presumably, were on the take themselves).
SBF understood this, of course, because he was lining the current ruling party’s pockets with stolen money in the attempt to lobby the ultimate purveyors of stolen money to codify laws that would allow him to continue stealing money. Just as with the mainstream press, the charm offensive is still working:
Those who would assume to regulate us will attempt to centralize what was designed not to be that way, not even having the first f*cking clue that FTX’s implosion ought to be a victory for decentralization. We have CoinDesk to thank for the original journalism that shone the light on FTX’s cockroaches. Some of Crypto Twitter’s biggest nerds provided real-time updates while the New York Times, Washington Post and Wall Street Journal were grabbing kneepads and mouthwash.
And if FTX were decentralized instead of “CeDeFi”?
Our leaders, almost to a person, either have no idea what they’re doing, or they do and are using that to enrich themselves and/or bankrupt us. They’re NGMI. Hopefully, they don’t take us down with them.
Meanwhile, certainly some of us did fall for the swindle, including . . . ahem . . .
That said, some of the pessimists out there have been expecting someone else to go down since the immolation of the Terra ecosystem.
I was too smart to be one of them, though, nosiree!
. . . the LUNA/Celsius/3AC ménage à twerp seems like a perfect circle of stupid, where the contagion was confined to themselves.
Everybody else who’s on the precipice is so minor a player that Sam Bankman-Fried can be a one-man bailout machine, which makes sense. I mean, the man’s name literally is Bank.
It’s possible that FTX is the final victim of the crypto Red Wedding, and that the markets were pricing in the Reaper claiming one more body. The ticker seems like it’s weathering the storm pretty well:
But I’m done assuming it’s all uphill from here. Like diarrhea, sexually transmitted infections and Indiana Jones sequels, crypto crashes tend to strike just when you think they’ve gone away (here’s me proclaiming we’d never see $20K BTC on March 15).
So this list is going to be strong to the point of boring. This is no time to get married to a bag of sh*tcoins. Rule number one is Don’t get rekt.
As always: next to each coin is how much I’d allocate out of a $100 position. However, I Am Not A Financial Advisor™, and I don’t know your specific investment needs. Assume that I have owned all of these coins at some point, own most of them now, and will likely own several of them whenever you’re reading this. Not enough to matter. #DYOR
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1. Bitcoin (BTC) — $50
November: ️️⬇️ 16.2%
Yup, half of it, and honestly it should probably be more.
The king crypto has no direct FTX exposure, as their balance sheet had $1.4 billion of bitcoin liabilities but no bitcoin assets. Presumably, SBF & co. sold the stuff people wanted before they realized the jig was well and truly up.
The negative pin action might extend to Bitcoin, however. Earlier this year, SBF loaned BlockFi $250 million, then FTX.us signaled it might buy them out entirely. Obviously that never happened, and they gave up the ghost last week.
BlockFi, in turn, was the second-biggest holder of the Grayscale Bitcoin Trust, the asset that offers Bitcoin exposure to the broader stock market, but is currently on an “express elevator to hell.” The FUD got so thick that Grayscale took to Twitter to confirm Coinbase has every penny of their assets. Some snarked that this wasn’t transparent enough, forgetting that if it’s on-chain, it’s transparent.
For the record, I don’t believe in the Grayscale FUD (though I’m absolutely not a buyer), nor do I see New York’s recent ban on proof-of-work mining as a bad omen. If it were that popular an idea, recently-reelected Governor Kathy Hochul wouldn’t have waited until after her surprisingly hotly-contested campaign to sign it into law.
Mining companies going toes-to-Jesus is a problem, though, as their liquidations create sell pressure. But this is not new, as this 2018 headline proves:
In fact, this is a signal that Bitcoin is bottoming, according to approximately half a million articl-ickbaits written over the last month:
Much like kids who constantly ask “Are we there yet?”, if you have to wonder if this is the bottom, it’s not the bottom. And if it isn’t, Bitcoin wins by losing the least:
2. Uniswap (UNI) — $10
November: ️️⬇️ 15.9%
It’s somewhat uncouth to speak of the beneficiaries of FTX’s demise when so many investors lost so much — sorry, Tom Brady . . .
. . . but the biggest gainer stands to be automated market maker Uniswap.
The FTX users who were able to get their money out were understandably gunshy about reinvesting into another centralized exchange, especially one under control by a single person:
Rather than put Uniswap’s decisionmaking in just one pair of hands, UNI holders vote to implement changes because they possess the governance token.
Uniswap is not just the largest decentralized exchange on Ethereum, it’s growing: in the week after November 8, when FTX became FUBAR, Uniswap’s trade volume tripled. Uniswap did nearly two-thirds of all DEX business that week, according to Dune Analytics. How much is that?
This much:
But buying UNI on Coinbase is a way to profit from the system without sacrificing one’s own liquidity.
Speaking of which, Coinbase also benefits from FTX going DOA. If Congressional regulation requires every exchange to do what Coinbase already does, might as well stick with the O.G. (Full disclosure: after riding COIN up from the 50s to almost $100 this past summer, I bought some shares in the 40s last month.)
3. Chainlink (LINK) — $9
November: ️️️️️⬇️ 2.3%
Yes, you can now stake LINK, or at least you could if you got in early: they allowed 22.5 million LINK to be staked earlier this month and they sold out in less than three hours.
But like most hyped events, that was buy the sizzle, sell the fizzle:
Staking rewards are not exactly a novel concept. However, there is a novel concept now shooting across the space: proof of reserve.
Chainlink is well-positioned to take advantage. It’s an oracle network, which means it takes data that’s off-chain and incorporates them into smart contracts. Since it’s decentralized, it automatically earns the trust of those who trust code over people.
And let’s just say they’re aware of that:
4. Ethereum (ETH) — $8
November: ⬇️ 17.7%
I obviously have very little love for Elizabeth Warren, as shown by my reaction above to her op-ed. But I can at least give her this: she’s been intellectually consistent.
But coming in a close second to the true believers are the sudden zealots, those people who need to take hardcore stances as a form of denial of their previous sins. (This is by no means a partisan trick: John McCain never met a campaign-finance reform bill he didn’t like after getting fingered as one of the Keating Five as a freshman senator.)
In addition to pouring millions of ill-gotten dollars into the coffers of any elected official in Washington who he thought could help him, Sam Bankman-Fried was also apparently personally grooming regulators, according to this surprising act of journalism by The Washington Post.
One of the beschmoozed is Rostin Behnam, chairman of the Commodity Futures Trading Commission.
SBF also hired a slew of former CFTC employees who knew the lay of the land to help in the cause of tilting regulation toward crypto as a commodity, rather than a security under the eye of Security and Exchange Commission chairman Gary “Come Into Compliance!” Gensler. SBF’s opener late last year was a proposal that would let investors lever up by posting collateral directly to FTX. Can’t imagine why FTX would have wanted more collateral, can you?
So, when Benham spoke at Princeton University on November 30 at a roundtable discussion (that took the place of an originally-scheduled SBF keynote), it probably shouldn’t come as much of a surprise that he exhorted lawmakers to move faster. “We don’t have the luxury of waiting,” he said. “Inaction is paralysis.”
What does that have to do with ETH? At that event, Benham stated that the only crypto that should be a commodity is Bitcoin. This — you’ll be shocked, I’m sure — is a 180-degree flip-flop from what he said in October, when he supported ether as a commodity.
If ETH is a security, then that’s trouble. Ask Ripple.
5. Polygon (MATIC) — $7
November: ⬆️ 3.35%
Yes, it printed a plus month even after all of that. Polygon continues to build like crazy, so they get more of my money.
6. Litecoin (LTC) — $6
November: ⬆️ 44%
I always hate to recommend coins after a huge pump, but if we’re planning for the future, Litecoin is carving out a spot for itself. Its very name suggests its primary investment thesis — the more accessible version of Bitcoin. It’s easier to mine and, due to lower transaction fees and quicker block settlements, easier to spend than the orange coin.
Which is why it frequently finds itself on lists of cryptos that are enabled for traditional payment networks. Last month, it was MoneyGram.
Another long-term reason why investors should have some Litecoin is as a Bitcoin hedge. While Litecoin is proof-of-work like Bitcoin, it requires far less electricity to mine. If Bitcoin banning catches on, Litecoin could be seen as an alternative that’s, if not green, at least greener.
But LTC might outperform BTC on its own merits in 2023, due to its halving event. As the Litecoin Foundation themselves put it:
Historically, in regards to market action, the Litecoin halving has seemed to contribute to two notable events — one, a surge in price leading up to it, and two, a crypto bull market that ensues the years following it, leading into Bitcoin’s halving.
They also produced this chart showing LTC in terms of BTC, with the smiley faces representing Litecoin’s halvings:
7. Stellar Lumens (XLM) — $4
November: ⬇️ 19.2%
A couple of months ago, I posted this video explaining why international money transfers are still so time-consuming and expensive, and the simple answer is because it requires a complicated balance of accounting that will be made much easier by blockchain — in fact, it literally is the use case for blockchain:
As I said at the time, that’s fantastic news for Chainlink, who announced an exploratory partnership with the Society for Worldwide Interbank Financial Telecommunication to verify those transactions (which continues).
But another winner from that process is Stellar Lumens, whose token, XLM, is one of just two cryptocurrencies verified to be compliant with the new SWIFT standard, ISO 20022 (XRP is the other). And XLM has already been laying that groundwork.
Other cryptos may make the grade, too. But there’s a darker reason why XLM might wind up as the kingpin of transactional finance: central bank digital currencies.
For the majority of the world, where macroeconomic financial stability is not a guarantee, CBDCs are probably a net positive, and hooray for XLM if it’s the foundation that undergirds them. But for anyone interested in civil liberties, CBDCs are terrifying. Imagine a dystopian government (like, you know, Canada) that doesn’t just have the power to cancel meddlesome enemies of the state from banks, but from all cash transactions period.
Sooner or later, the temptation will be too great for the Elizabeth Warrens and Justin Trudeaus of the world, who will eventually make a play to implement CBDCs — for our own good, you see, so we won’t be victimized by the next LUNA or Sam Bankman-Fried.
I don’t want that future, but if Nineteen Eighty-Four ever comes to pass, I want to spend 1983 owning a piece of whoever’s making the jackboots.
8. Curve DAO Token (CRV) — $3
November: ⬇️ 24.2%
We have our friends at Grayscale to thank for this one:
9. Cardano (ADA) — $2
November: ⬇️ 21.4%
Everybody’s got jokes about Cardano. But while nobody’s looking, they’re getting new traffic. Like, a lot.
And they’re building stuff over there. Like, a lot a lot.
Granted, much of this was in the runup to the 2022 Cardano Summit, which was held November 19–21 in more than 50 locations and virtually.
But here’s the thing about Cardano: pretty much any token can host its own Woodstock in Seoul, Dubai or Miami. Most major ones could probably handle a dozen simultaneous events in Europe.
But which other coin can have ten conventions in Africa?
They have a vibrant, global community and are doing some of their best work on the continent where web3 will do the most good — and, perhaps not coincidentally, where the population is booming.
Play the long game. While you’re at it, book the 2.6% APY just for owning ADA on Coinbase.
10. Solana (SOL) — $1
November: ⬇️ 56.5%
Speaking of coins people are joking about.
Until @GiganticRebirth dropped the mic on his $10 million LUNA bet with Do Kwon, SBF might have had the biggest crypto Twitter flex in history:
![SBF tweet, January 9, 2021, to @coinmamba: “I’ll buy as much SOL [as] you have, right now, at $3. Sell me all you want. Then go f💩k off.”](https://miro.medium.com/v2/resize:fit:1400/format:webp/1*ibQdvDzIi_D5rYd694g7kQ.png)
Solana was the blue-chip chain most associated with SBF, as both FTX and Alameda adopted it for many of their projects, many of which are kaput. Peak to trough, SOL hemorrhaged more than 70% after FTX munched it.
And it had already had kind of a tough year.
But look, unlike FTX, there is actually a chain there, with projects that continue. It’s just hard to notice because much of the TVL has evaporated and the transactions have jettisoned:
I mean, sure, that graph looks dead, but $752 million is still a lot of weight to push. And yeah, SOL is down 95% from its all-time highs, but some of its layer-1 neighbors are seeing their property values crater, too: NEAR Protocol (NEAR) is down pretty far (93%) from its peak, Avalanche (AVAX) has slid 92% from its ATH, and VeChain (VET) is off by 91%.
But, as Miracle Max from The Princess Bride taught us, there’s a difference between mostly-dead and all-dead:
Solana’s community is still putting in work:
Can Solana bite the dust completely? Sure, which is why I’m only dipping a toe in it. But the potential returns are overwhelming.
But any crypto can go to zero, or even all of them. Conventional wisdom already believes it:
Bitcoin, specifically, has died (as of this writing) 467 times, according to one “Bitcoin obituary” repository.
But that’s nonsense. FTX died because it was built on nothing, and only kept itself up, Wile E. Coyote-like, because nobody looked down.
But blockchain protocols keep flawless, immutable records of their own history. They’re not any more “dead” than an unread book. The book itself has value, and the longer it’s written the more valuable it is.
And it may be at its most valuable now, when the so-called “smart money” is writing it off:
Will crypto bottom in 2023? No idea. But if you’re in for the long-term win — and I am — this is as good a time as any to pull the trigger.
Follow me on Twitter. Get in the game. And as always,
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