Kevin Kelly, CFA

Kevin Kelly, CFA


Delphi Digital


Co-Founder & Head of Research. Kevin’s core focus lies at the intersection of global macro trends, financial markets, and their impact on crypto/digital assets. His work is also often cited across major financial media outlets (e.g. TV, print, podcasts).

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I agree -- I don't think we reach some of the crazy price targets you see floating around (like $5-600K) during this next cycle but on the low end I think $125-150K is achievable (and represents a ~250-300% return from current levels)

Agreed - surprise weak inflation print + falling expectations for further rate hikes are putting pressure on the USD (and weaker dollar = good for BTC + risk assets)

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"but has managed to settle at a floor price of ~0.15 ETH"

Would also add price is often viewed as a gauge of "success" even if it's not intended to be.. that's one of the reasons I'm bullish on the FTM trend because it helps mitigate the risk of negative sentiment being projected on an brand's web3 initiative (which we've seen turn sour if price drops and early holders are underwater). The brands that can afford to do this and forgo near term revenue stand to benefit imo

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"Simply put, what crypto really needs is another shot of liquidity."

Fed liquidity bottomed earlier this year (post the March banking debacle) and has remained supportive, but hasn't materially increased that much. The bigger trend to watch - and one we've been talking about for months now - is the liquidity rebound from China...we've seen a sizable increase in liquidity injections from the PBOC over the last couple months for example. China and the US are the two biggest contributors to global liquidity, and we've shown several charts in prior reports that highlight how correlated BTC's price is with changes in the PBOC's balance sheet, so that's an important one to watch going forward...

If it can continue running and break above $30 that would give me more conviction - if it tops out and starts rolling back over towards $22-23 then it may look like just another false breakout

Great call on COMP. Looking at the RDNT chart it also appears ripe for a potential breakout trend reversal...

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"This will be our third and most bullish scenario"

Agree with comments on this, but also important to note that while the total mkt cap of gold is >$12T, the "investable" portion of that is substantially smaller (for example jewelry makes up almost half of the above ground stock of gold based on WGC estimates)

Great insights - what was the best way to play this (including preferred exchange/trading platform to execute)?

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"we estimate that Coinbase has the potential to realize anywhere from 15-20% on the low end to a 150% increase in top-line revenue"

Adding to this, Coinbase has already demonstrated it can be profitable, and assuming our base case that the crypto market is trading considerably higher in 2-3 years than it is today, I don't think it's farfetched that CB will see a significant recovery in trading volumes (and therefore revenues).

Stock prices are a function of both earnings growth and price multiples. Assuming CB can capitalize on the opportunities in front of them, and show signs of a re-acceleration in its future growth trajectory, it could fetch a 20-25x earnings multiple. For context, if it were to return to profitability levels we saw back in 2021, that would imply a ~$60-80B market cap (compared to ~$19B currently).

If nothing else COIN is a good way to get directional exposure to crypto given its strong correlation with crypto asset prices. That alone should help it outperform over the next few years if our thesis proves correct.

I agree with most of your sentiment here. I was skeptical of the early RWA hype when the main focus was on tokenizing assets like real estate - just because an asset is tokenized doesn't automatically mean it will reap the potential benefits like increased liquidity (it's not as simple as "build it and they will come").

Private credit offers some interesting opportunities (though still very early). Tokenized Treasuries have more potential to attract demand in the short to medium-term given they're a staple in traditional portfolio construction, and with yields >5% they offer competitive rates vs. what you can earn in DeFi lending stables. But their use will likely be concentrated among those looking for stable yield + add'l collateral to borrow against. IMO it's going to take a while for tokenized USTs to become more widely used because their function as pristine collateral today operates in a separate financial system. In other words, you can't use tokenized USTs in DeFi the same way they can be used in today's global financial system since the infrastructure most FIs use them within doesn't exist on Ethereum (or any other blockchain network).

I do think perps that track certain RWAs could gain traction more quickly (e.g. gold, oil, commodities, index funds, etc.), though the regulatory hurdles likely keep a cap on these as well for the time being.

I wonder how much they'll have to reimburse "injured investors" on top of the ~$6M in fines they have to pay. If it's anything less than $24M they'll still wind up making money...

"The order also establishes a Fair Fund to return monies that injured investors paid to purchase the NFTs."

Been thinking about the potential of this too and have some initial thoughts / questions at this stage (some of which may be solvable). I'll use the term "creator" to represent any person/account with tradable shares for simplicity.

  • Don't think a one-size-fits-all bonding curve will prove to be the best model given how quickly we've already seen the price of some shares spike, pricing out a lot of new potential buyers (these curves are hard to scale especially if you onboard larger influential names with much larger audiences).

  • By creating an account today, the inherent expectation is you engage with "shareholders" in some meaningful way. Think most creators won't want to maintain a private channel with shareholders (because constant engagement requires a ton of work and for most is hard to sustain over a long period of time). So need more perks/benefits for shareholders beyond private groups to mitigate this risk and give creators more flexibility to create value in their own unique way(s).

  • Don't believe most people want a real-time price associated with their likeness (can lead to negative sentiment about a creator if price dumps which can lead to emotional distress or just become a big distraction).

  • If the primary revenue source for creators is a % of trading fees then your incentive is to drive as much speculation (and turnover) to your shares to maximize your creator "earnings". Monetizing your audience by selling your own creator shares likely won't be received well by shareholders (and could lead to spiraling prices if sell pressure compounds)

There are some interesting use cases that could spawn from this though:

  • Token-gated content (or exclusive access to things like early product launches, premium features, or even limited merch for fans, etc.)

  • Co-created products or co-authored content (i.e. hold shares of two or more names to get access to X). Again, likely need customizable bonding curves for these things to really scale though.

  • New avenue for discoverability, especially among smaller lesser known creators who are SMEs in specific areas (via curation boards)

I'm sure there's plenty of others, but playing devil's advocate one alternative is why not just issue your own NFT collection and use that to create token-gated products or access to exclusive content (like a private group channel) given you have more control over the supply and pricing dynamics (vs. using a pre-set bonding curve).

Could be because the virality of FT creates a Schelling point where the concentration of attention increases the potential distribution of all creator shares (versus trying to garner interest and demand for an NFT collection in isolation). Not to mention the seamless link to Twitter accounts makes the account creation process much easier for non-crypto native creators. 

Anyway bit of a ramble here but wanted to spill some early thoughts.. curious to hear others' takes too

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"as we’ve noted in previous reports – as evidence that we’ve been nearing a turning point piles up."

If the business cycle shows a false bottom and the ISM continues to trend lower over the next few months. We saw this happen back in March 2020 but that was driven by a huge exogenous shock (i.e. a global pandemic). If that were to happen it could extend the timeline for when we'd get back to prior cycle highs

Really insightful post. This stat in particular jumped out to me when I read it:

"Below we see that this time around last year organic fees were only <5% of the total earnings. The rest of the earnings were being subsidized by block rewards. As of this month this fees make up 44% of the earnings and are growing."

Why do you think this isn't being talked about more? Is it because a lot of people discount the winners of prior cycles in favor of the shiny new thing? Judging by the way $RUNE has drastically underperformed this year it doesn't seem like this is garnering the attention it deserves (maybe I'm wrong)

Do you get the sense that many teams are taking a more thoughtful approach to things like token design, why/when a token launch makes strategic sense, or more generally how crypto assets (tokens, NFTs) can be used as a tool to enhance the UX of a game (rather than starting with tokens and trying to build games around them)?

I still believe gaming will be one of the biggest gateways for onboarding many people, but curious if you've seen a real shift in focus for many "crypto gaming" teams given the learnings of last cycle

This is more of a big picture question, but assuming we do get another bull cycle, at what point do constituents start to get more vocal about the restrictions (or lack of clarity) that prevents them from participating in crypto? Is there a realistic possibility that this becomes a much more mainstream issue when prices start to make a run higher? Or do not enough people care to make any real waves...

Kevin Kelly, CFA has not authored any research reports yet.