The Bull Refuses to Die, Are You Ready?

453: Small Caps Rip, Crypto Consolidation, Minnesota Shooting

Morning lords.

The 37th Episode of Risk On is live with Mark Mi of the NEAR Foundation. Mark is the Head of Partner Development, VC & Investor Relations. Before NEAR he worked at Ernst & Young, Foxconn, as well as a family office. He and I discuss the Layer One NEAR Protocol, the future of crypto, institutional interest in the space, and AI.

If you listen and enjoy make sure to leave a review so we can defeat the algo overlords. If you guys want to take advantage of the free crypto offer from Gemini, make sure to peep the links at the end of today’s post OR head over to the Spotify episode bio.

If you want to get caught up on the top read posts from the last several weeks you can find them below covering positioning, cycle timing, asset choices, and more for crypto and equities.

The Great Shakeout Before Lift Off

Crypto’s Explosive Bull Run is Here

Hope everyone’s week is going well so far. Optimism is alive and well in financial markets but unfortunately we have some darker news events to cover later on in today’s edition.

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Crypto & Markets

Crypto

Your best resource regarding recent crypto updates is going to be the last 4 or 5 posts. The bull run is NOT over despite what skeptics and perma bears have been saying for months now. Rate cuts may very well be coming in September and it seems that we somehow top bullish news each and every day as adoption spreads to Wall Street and beyond.

Institutions are accumulating at a ridiculous pace right now — according to Cointelegraph Goldman Sachs leads with institutional exposure to Ethereum ETF holdings at present. They have 721M of ETF exposure followed by global quantitative trading firm Jane Street and then pod fund Millennium according to 13F data.

• ETH size lord Vitalik Buterin says there’s a 20% chance quantum computers break modern cryptography before end of 2030

• Tether is set to launch USDT on RGB, bringing native stablecoin support to $BTC (Cointelegraph)

• Total stablecoin supply has now surpassed $280 billion for the first time ever (Defillama.com)

• Jan Van Eck called Ethereum the “Wall Street token” on CNBC this week

• Eric and Donald Trump Jr.backed American Bitcoin (miner) will go public on Nasdaq this September (BitcoinArchive)

• Nasdaq-listed Caliber announced this week that its Board of Directors has formally approved the Digital Asset Treasury Strategy (DAT Strategy) and Digital Asset Treasury Policy (DAT Policy) (Wu Blockchain)

• FundBridge Capital & Libeara launched the ULTRA tokenized U.S. Treasury fund on Avalanche recently

Commerce Secretary Howard Lutnick announced recently that the department of commerce will begin publishing official economic statistics including gross domestic product figures directly on a blockchain (Initially targeting nine blockchains per a recent Bloomberg Report). Arbitrum, Avalanche, Base, Botanix, Ethereum, Linea, Mantle, Optimism, Sonic, and ZKsync, using Chainlink and Pyth.

The Chainlink X account announced this morning that Chainlink and the United States Department of Commerce have worked together to bring U.S. government macroeconomic data onchain saying:

Bringing key U.S. government data onchain unlocks innovative use cases for blockchain markets, including: • Automated trading strategies • Increased composability of tokenized assets • Issuance of new types of digital assets • Real-time prediction markets for crowdsourced intelligence • Transparent dashboards powered by immutable data • DeFi protocol risk management based on macroeconomic factors

Fundstrat’s Tom Lee just dropped some massive upside calls: Ethereum at $60,000 and Bitcoin at $1 million long term (which doesn’t seem THAT insane). His view is that ETH is on track to hit $5,500 soon (I agree), then surge toward $10K–$16K over the next year, eventually climbing toward that $60K mark within five years. Bitcoin, meanwhile, continues to attract comparisons to gold with Lee arguing it can rival gold’s multi-trillion market cap over time.

The bull case he cites comes down to three things, items we have discussed at length:

• Institutional flows — companies and ETFs are scooping up billions in BTC and ETH

• Regulatory momentum — more clarity and friendlier infrastructure for traditional finance to plug into crypto

• Historical trend — Lee has been early before, but directionally right that Bitcoin and Ethereum are long-term compounders

Critics and skeptics will say the timelines are optimistic and risks like regulation or volatility can derail the path, but the overarching point is clear to me: if institutional adoption keeps snowballing, these big-number targets stop sounding crazy.

Couple plays I am entertaining given the strength of the market after the most recent sell off. We will talk about these at length next week for paid subs on Tuesday morning around 8am ET.

Ethereum is going to make a move higher very soon. Aave, Pepe, Avalanche, and Chainlink SHOULD follow.

It may also be time to consider a long on Solana.

Solana has been consolidating near key support levels, with on-chain activity and DeFi volumes steadily rising. Its ecosystem continues to attract developers and liquidity, and traders are eyeing the recent uptick in network usage as a sign of renewed momentum. If broader crypto sentiment holds, SOL looks primed for a breakout toward higher ranges in the near term.

As I said earlier this bull market is far from over.

Make sure to set some time aside to research plays for the coming weeks if you haven’t done so already. Post below is the best refresher/starting point.

We’re going to have a pretty epic couple of months.

Equities

Stocks ripped to new highs this week with the S&P hitting fresh records and the Dow grinding higher on broad strength.

The real surprise though (although not for Arb Letter readers)was small Caps. The Russell 2000 went Size-Lord mode with a seven percent weekly gain, its biggest flex over the Nasdaq since Reagan was in office.

Fed cut whispers are continuing and we are seeing a rotation into the forgotten corners of the market, something I discussed in the past several weeks on the heels of noting hedge funds were max short small caps.

Nvidia’s monster earnings briefly spooked semis with chatter about slowing Data Center demand, but the tape barely flinched and today looks solid so far. The message is clear I think: this market still wants higher, and leadership is expanding beyond the Big AI generals.

If Small Caps keep charging and papa JPOW caves next month we might be looking at the early stages of a much larger leg higher into the end of the year.

• Ousted fed governor Lisa Cook has filed a lawsuit against President Trump, and Jerome Powell, and the federal reserve board (Synoptic)

• Apple AAPL 0.00%↑ delivered a strong fiscal Q3 with $94 billion in revenue which was well above forecasts and buoyed by 13 percent iPhone growth and record services sales

• Tesla rolled out its “robotaxi” service over a 173-square-mile area in Austin, boosting its Model Y fleet by 50 percent

• Alphabet just dropped another strong Q2 with revenues beating expectations, and Cloud growth pushing above 30%

• Amazon AMZN 0.00%↑ is pouring roughly $33 billion into cloud infrastructure

• Adobe’s stock is trading near its yearly lows, pressured by Google’s latest Gemini image tools and intensifying AI commodification

Nvidia once again reported blowout numbers with revenue coming in at 46.7 billion dollars, up 56 percent from last year. Net income rose by nearly 60 percent and margins stayed extremely strong around 73 percent.

Data center sales hit 41 billion dollars which set a new record but fell just short of what some analysts were hoping to see. Adjusted earnings per share came in at 1.05 dollars, slightly ahead of expectations.

The company also announced a massive 60 billion dollar share buyback and guided third quarter revenue to 54 billion dollars.

Despite the huge beat, Nvidia NVDA 0.00%↑ stock dipped a few percent in after hours trading yesterday, although it is in the green today. Investors had sky high expectations and some were disappointed by the slower growth rate compared to previous quarters.

Others pointed to uncertainty around sales in China where restrictions on advanced chips remain a major overhang. Although I should mention, it feels as if we are going to get positive news surrounding potential China sales SOON.

Re: Small caps, I generally just buy ETFs and recently added some IJR 0.00%↑ and VB 0.00%↑ — as far as individual names go BBAI 0.00%↑ is still a core hold for me.

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US & Global News

Plenty moving outside of markets this week. From revised GDP numbers and political shakeups in Washington, to cyber campaigns traced back to China and shifts in US trade policy, the macro and geopolitical backdrop remains just as volatile as the charts. Below are the key developments worth tracking and two major stories blowing up on social media this week.

• US Q2 GDP revised higher to 3.3 percent

• CDC director Susan Monarez has been abruptly removed from her position less than a month into her tenure. Director of the National Center for Immunization and Respiratory Diseases Demetre C. Daskalakis, has also quit

• Gavin Newsom, California Governor, said recently “Trump is simply the most destructive and damaging individual in my lifetime."

• The FBI, alongside allies, sounded alarm on the ‘Salt Typhoon’ cyber campaign this week, a massive, indiscriminate hacking operation tied to Chinese state actors that now spans over 80 countries and threatens critical infrastructure globally

• The US has lifted duty-free status for low-value imports leading into next week, signaling a wholesale revamp of trade policy and marking a potential squeeze point for e-commerce merchants and those who shop cross border

Minneapolis Shooting

The US was rocked with yet another mass shooting this week. An investigation is ongoing into the August 27 shooting at Annunciation Catholic School and Church in Minneapolis, where two children were killed and 17 others were injured, most of them students. The attacker, identified as 23-year-old Robin Westman, died by suicide at the scene. Officials confirmed Westman acted alone, using multiple legally obtained firearms, and had blocked exits during the assault.

Investigators have recovered writings and video material showing violent thoughts (that are circulating on X), depression, admiration for past mass shooters, and anti-Catholic statements. The case is being treated as both domestic terrorism and a possible hate crime.

It appears this individual was transgender, which seems to be a common theme in MANY of the recent mass shooting including the one in Tennessee.

Senator Jim Banks (R-IN) put it well this week when he said: "When you “affirm” mental illness instead of treating it, people get hurt."

I would not recommend viewing or listening to the manifesto or related videos or content, it is some evil and disturbing material.

This was a sick sick puppy.

The shooter’s firearms and gear

Authorities are examining a manifesto, social media activity, and other evidence to understand whether the attack was driven by ideology, mental health struggles, personal grievances, or a mix of factors. Based on what WE know and have already seen, it is pretty obvious this was a idealogical attack.

The clown show mayor of Minneapolis said in a presser that “the trans community is being attacked.” It would seem my friend that children are under attack by individuals with severe mental illness sir. The commentary and gun grabbing rhetoric for political gain is circumventing the core issue at play here which is mental health: individuals like this should never have access to firearms.

You really have to ask: how did the parents not realize this kid was a risk to others?

The rhetoric, signaling, and language from corners of the internet and far left community is clear on these topics and influenced this sick individual. This is, to some extent, a manufactured extremist ideology and culture that is a grave threat to the public. The shooter himself said in his manifesto that he was “tired of being trans” and that “I wish I never brain-washed myself”.

This event will continue to expand conversations about the targeting of Catholics and Christians by far left inspired groups in the US. Churches, schools, and other locations are soft target opportunities for lunatics and this event is a reminder that the mental health crisis in our country is a major issue that needs to be addressed.

New Braveheart

It’s a sad state of affairs when a 12 year old girl has to be the one to finally say enough is enough.

In Dundee, Scotland, a 12-year-old girl was arrested and charged after being filmed carrying both a knife and an axe in St Ann Lane. The video spread rapidly online and was quickly seized on by political commentators, with many claiming the girl had been confronting a migrant attacker (which of course she was). Those claims escalated into a wider social media storm, turning the child into a sudden symbol for groups framing the event as resistance against immigration.

Police Scotland moved swiftly to clarify the situation, because of course they can’t possibly have the narrative spread that defending yourself from criminals or aggressors from other countries is good or just.

They said that while the girl was indeed in possession of offensive weapons, there was no evidence of any migrant involvement or attack. Authorities also underlined the seriousness of a child being armed in public and confirmed that she is facing charges lol.

OI MATE THIS IS SERIOUS A 12 YEAR OLD GIRL DEFENDING HERSELF!!!!!!

The viral nature of the footage and the speed with which it spread has turned the case into a flashpoint over social media amplification and the politicization of local crime. Leaders in Scotland have urged restraint, warning that misrepresentation of the facts risks inflaming community tensions.

Contrary to the sterile marxist government cover story we are getting from the media, a reported interview with the mother of one of the girls tells a wildly different story (obviously).

She says the girls were accosted and attacked by migrants.

"Yes. So what happened was the girls were out just walking and the man in the picture made comments to lola(the younger girl) calling her sexy and other sexual remarks then the girls started to tell this man to leave them alone and stop following them and making sexual remarks to them”

We know this 12 year old young girl didn’t just decide to pull or carry weapons randomly.

Anyone with a fucking pulse and 50+ iq knows this. So why are local law enforcement and government officials painting her as a terrorist?

As I said. Where are the men? Why does a 12 year old girl have to be the one to defend herself against aggressors in her own country?

Disgusting state of affairs and one that is spreading through Western countries with a high degree of speed, it’s full blown anarcho tyranny. It all ties back to the Aleksandr Solzhenitsyn’ quote I draw on continuously (and most recently in response to the video of the man being threatened by a scumbag with a knife on the NY subway).

“Your punishment for having a knife when they searched you would be very different from the thief's. For him to have a knife was mere misbehavior, tradition, he didn't know any better. But for you to have one was 'terrorism. '”

You’re not allowed to defend yourself. You need to just let things happen. Criminals? Criminals will be re-released, allowed to terrorize your communities and countries, and act with impunity.

If you dare stand up YOU are the extremist and you will face repercussions from might of government for daring to inspire others to stand up to clear injustices.

That’s it for today.

I am back from vacation on Saturday and we will hit the ground running on Tuesday with a review of alt coins, specific small cap stock picks, and more.

Enjoy the weekend guys.

Andy

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Disclaimer - I am a former trader, enterprise sales rep, and current entrepreneur with a monkey brain. Nothing I say should be considered formal financial advice or life advice, these are my opinions - always do your own research and diligence before investing or trading.