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Today's News Recap
Policy Push - White House crypto working group releases lengthy policy report.
Insider Arrest - CoinDCX employee arrested over $44M exchange hack.
IP Expansion - Grayscale launches trust for Story Protocol to tap Into $80T intellectual property market.
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Top Assets
Messari Protocol Reporting
Messari's protocol reports give you a deep dive on the foundation and state of top crypto protocols, including key metrics and notable events. See the complete list of protocol reports here and get a preview of our latest report below.
Modular, multichain protocol building an agent-centric AI infrastructure stack
Combines onchain identity, verifiable data processing, and adaptive AI behavior
CARV introduced a three-phase roadmap—Genesis, Pulse, and Convergence—to develop persistent, economically-aware agents that operate and collaborate onchain
Multi-chain borrow/lend protocol now live on 8 blockchains, including Base
Daily active users rose 71.6% QoQ to ~1,522
Deposits jumped 43.5%, and liquidations spiked 202% amid market volatility
TVL Held Steady at $2.27B: Gains in BTC (+25.9%)
Three primary chains—P-Chain (staking/governance), X-Chain (asset transfers), and C-Chain (EVM-compatible smart contracts)
Avalanche consensus, a unique PoS-based protocol using randomized sub-sampled voting to reach fast finality
AVAX has a fixed supply cap of 720 million, with all transaction fees burned
Avalanche enables bespoke execution via VMs (e.g. EVM, Subnet-EVM, WASM) across its expanding network of L1s
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Two Bits
How to Stop Losing Your Trades: Understanding Irrational Exuberance
By: Mohamed Allam, Research Analyst
The human mind is extremely complex and fragile. At the blink of an eye, what was once a rational thought can be swayed by emotion into a state of irrationality.
That is the essence of irrational exuberance: when decisions are made not based on fundamentals or logic, but on the whim of emotion and perceived optimism. One of my favorite books of all time, Irrational Exuberance by Robert Shiller, gives us an in-depth understanding of this feeling within the world of markets. More importantly, it provides insight into human psychology because markets are among the clearest reflections of the collective mind.
In the preface to the second edition, Shiller makes a simple yet profound statement:
“I marshal the most important insights offered by researchers in these fields. Taken as a whole, they suggest that the present stock market displays the classic features of a speculative bubble: a situation in which temporary high prices are sustained by investors’ enthusiasm rather than by consistent estimation of real value.”
That single sentence captures the psychology we continue to see across markets today. And nowhere is this more obvious than in crypto.
As we head into the next few months, it is worth paying attention to the signs we are seeing now and revisiting recent moments of market euphoria that can offer perspective on what may come next.
Be honest with yourself: When was the last time you truly entered a position because you logically concluded it was a fundamentally strong project, not just because everyone else was trading it? Especially in a field like crypto, investors often chase what they hear about from a friend or see trending on CT. I know this because I speak to a lot of hedge funds and trading desks, and frankly, many of them are acting irrationally too.
We just saw this movie a few months ago: Remember the Trump memecoin cycle earlier this year? That was pure mania. Projects with no roadmap, no product, and no value were pumped into the stratosphere, and people bought them anyway. That entire cycle was built on speculation and vibes, not fundamentals. If we return to that kind of euphoria again, but this time are followed by a recession or macro downturn, it will serve as a textbook example of irrational exuberance. Projects that bear no real fruit will still get bid to the moon. Until they crash down to earth as people realize that there is no economic moat.
The bubble hasn’t popped yet: Not in crypto, and not in broader markets. And alongside that, we have an even bigger one forming in AI. So if you’re trading just because you’re bullish and not because you believe in a project’s long-term value, you need to ask yourself why you’re even in the position. When the market does correct, and it will, you’ll be left wondering: “Why was I even holding this in the first place?”
Few crypto projects have a true economic moat: Diligence is more critical than ever. If you want to avoid falling into the trap of irrational exuberance, especially at current valuations, you need discipline. Set your rules and stick to them. If you don’t, you’ll lose. Maybe not today. But eventually.
So, How Do You Not Keep Losing?
The answer is deceptively simple:
Be a trader when the market is bullish. Be an investor when the market is bearish.
That means recognizing where we are in the cycle and adjusting your mindset accordingly. In a bull market, momentum rules. Narratives dominate. People will throw money at anything that moves, and if you’re nimble, you can ride the wave. But do not confuse short-term hype with long-term value. If you're playing that game, know you're playing that game, and get out before the music stops.
When the market flips, you need to flip with it. That is when trading becomes a trap. That is when investors are tested. You are not going to survive a bear market by chasing pumps or flipping memecoins. You survive by holding things that actually matter: projects with cash flow, utility, or a deep ecosystem that keeps building regardless of price action.
Even better: develop conviction. Have a thesis. Know why you're in something and what you're betting on. If your thesis is strong enough, it should not matter whether we’re in a bull or bear market. But conviction does not mean blind loyalty. It means being able to clearly articulate:
What problem does this project solve?
Why is the architecture or moat defensible?
How might it achieve long-term value accrual?
And what must go right for that to happen?
If you can’t answer those questions, you don’t have conviction. You have hope. And hope is not a strategy.
Also, conviction has to be earned. Do the work, read the documents, track onchain data, talk to the team, listen to community calls, and know tokenomics inside out. The more real your knowledge, the harder it will be for hype cycles to shake you out.
So the real way to avoid losing is this:
Learn to separate noise from signal. Play momentum when it is there, but build conviction when it is not. Most importantly, do not let the market gaslight you into chasing something you do not understand.
Because in the end, the market will humble everyone who is not prepared, and irrational exuberance does not care how smart you are.
That’s all for today, folks. I started a new Twitter account last month, @plagueobserver, where I’ll be publishing a more in-depth article on irrational exuberance soon. As always, feel free to reach out on Twitter or LinkedIn if you have ideas, suggestions, or just want to chat crypto. Until next time.
