Massive Selloff, Mamdani Wins, & Jonah Ditches His CryptoPunk
- •System buy but structure cracked: Max Bronstein’s models flipped to short-term long after the sharp selloff, yet Max Bronstein sees higher time frame structures in majors as damaged and is ready to go neutral if signals fade.
- •DATs fading as marginal buyers: Above $120,000, Bitcoin showed distribution with visible OG whale selling; DATs absorbed supply on the way up but now trade near or below 1.0 MNAV and struggle to raise cash, weakening the bid.
- •Bitcoin resilient, alts fragile: A 30 percent Bitcoin drawdown is tolerable for diversified investors, but altcoins face larger downside and charts have been unreliable for timing under fast momentum shifts.
- •Hyperlquid as investable onchain finance: Hyperlquid’s fee buy-and-burn, strong usage, and VC-free airdrop make it one of few compelling long assets, though regulatory pressure and a looming airdrop long-term tax unlock could create supply.
- •ETH and Salana mixed outlook: ETH’s marginal buyer is unclear as activity consolidates to base and corporate L2s where sequencer fees accrue off-chain; Salana remains a retail onramp but its ultra-low-fee economics and a recent “forward buy” up to 250 followed by a fall to ~150 dent confidence.
- •Internet Capital Markets tailwind: A long-run “export U.S. markets via DeFi” thesis positions stablecoins and compliant rails as government-aligned growth areas, especially in a world that needs faster settlement than T+2.
- •Redistribution risk clock: Rising redistribution politics, highlighted by the “mom Donnie” discussion, can compress asset multiples; privacy assets like Zcash and Monero surfaced as optional hedges.
Market Set-up and Systematic Signals
Max Bronstein framed decision-making around a systematic overlay to contain emotion and outsource conviction to data. After an extreme dislocation, signals turned long around roughly $101,000 in Bitcoin and $3,200 in ETH, with selective alt exposure like plasma added after bottoming action. Max Bronstein blends signals with “quantmental” discretion, using relative signals, funding and basis in majors, and positioning metrics to pick among assets. He cautioned that despite the bounce, higher time frame structures broke on ETH and Salana, so he will quickly pivot if the system reverses.
Bitcoin Distribution, DATs, and Marginal Buyers
Max Bronstein flagged clear distribution above $120,000, defined by sellers overpowering buyers and a lack of follow-through. OG whales have publicly sold into strength, with Galaxy and accounts like Garrett Bullish telegraphing large exits. The up-move was amplified by DATs, including aggressive weekly buys of 10,000 to 20,000 Bitcoin by Sailor after the election and copycats like MetaPlanet and others. Many DATs now trade under 1.0 MNAV, have limited ability to raise incremental debt, and some, like Metapanet, raised simply to restore MNAV. That shifts supply to “dad holders” and fair-weather capital. IBIT’s bid helps, but it includes retail and slow pensions rather than a hyper-sophisticated base. Max Bronstein sees no FTX-style credit hole post October 10th, but residuals remain. He would change stance if catalysts like an S&P inclusion or more preferred demand reopened large-scale raises, but until a new marginal buyer emerges, distribution is a headwind.
ETH, Salana, and Altcoins
ETH rallied after being written off, but Max Bronstein sees a tougher path now. Tom Lee’s stated desire to reach 5 percent in ETH, with current exposure closer to 3 percent, removes a notable buyer. Value accrual is murky as institutions prefer base or their own L2s, where they capture sequencer fees rather than pass them to ETH. ETH retains store-of-value traits but is inferior to Bitcoin in that role, and onchain fees remain compressed. Salana’s role as the youth onramp is real, yet ultra-low fees complicate value capture. The “Ford Industries” forward buy up to 250 totaled about one a half billion, was transparently traceable from broker to custodian, and preceded a straight-line drop near 150, which Max Bronstein called one of the easiest fades he has seen. He noted only Bitcoin, ETH, and Salana have meaningful alt DAT size; others like AVAC have already slumped and remaining alt DATs are small, limiting systemic risk from that vector.
Hyperlquid and Onchain Exchanges
Hyperlquid stands out as a rare investable core asset. Product usage drives fees that route back to holders through buy-and-burn, so performance can dominate even if the name is “owned.” Hyperlquid launched without VCs, a key retail preference as cap table coins are being shunned until ICO valuations compress. Risks include regulatory pressure on non-KYC onchain venues and a near-term overhang: many airdrop recipients structured to benefit from long-term capital gains and could sell at the one-year mark, which Max Bronstein expects within about a month. He cautioned that centralized exchanges could lobby for restrictions, although changing political winds reduce the chance of an FTX-level crackdown. Despite that, “onchain Binance” style finance is a potential trillion-dollar category over time.
Internet Capital Markets and Stablecoins
Both speakers aligned on a durable thesis that DeFi will export U.S. capital markets globally. Faster settlement than T+2 matters when rates are not zero, and the ability to move non-stable assets for payments or collateral unlocks trapped capital. Max Bronstein and Abby wrote in 2019 that stablecoins are euro dollars 2.0, a tool to export the dollar. Under a Trump policy