Kevin Kelly

Co-Founder @Delphi_Digital Founding Partner @Delphi_Ventures

Sucker for Fed pivots, wide fairways, and dual axis charts.

[Kevin Kelly @Kevin_Kelly_II]

The crypto market is highly cyclical.

Crypto market cycles are also remarkably consistent.

But their consistency isn’t just by coincidence.

They’re predictable.

If we're right, this has huge implications for the crypto market going forward.

Time to air out some charts... 👇

[Delphi Digital @Delphi_Digital]

Flip explains why this crypto market feels healthier than past cycles.

“It’s the first time we’ve gone through a bear market where we have real businesses in crypto that aren’t incentive driven.”

[Yan Liberman @YanLiberman]

Near-term BTC price action is going to be heavily dependent on one thing:

Did Saylor sell enough BTC this past week?

If he sold zero, that’d be a massive mistake on his end and we’re probably cooked.

If he sold $1B of BTC, that helps, but realistically I don’t think it’s enough and we probably continue lower.

If he sold at least $2B, that’s where it gets interesting and sets up a bounce.

The more he sold, the harder we bounce.

My base case is that he sold at least $2B. I also think there’s a decent chance BTC bottoms into Monday if the market starts pricing in that he sold some.

Rationale:

Selling none is my lowest probability scenario. He needs the money.

He already did that weird 32 BTC “test” sale and I have a hard time understanding the purpose of it. If he was planning on selling more, all the test did was give him worse execution. If he wasn't planning on selling more, then he nuked the market for no reason. The latter seems completely ridiculous, so my guess is it was indeed a test and he was planning on selling more.

A tiny sale ($500m) is the worst of both worlds. It damages the “never sell” narrative without solving the liquidity problem. If you’re going to sell, sell enough to matter.

That’s the key here.

A material sale does two things at once. It adds real cash runway, but it also sends an important signal to STRC buyers: he is willing to sell meaningful amounts of BTC to keep funding the dividend.

That signal matters a lot.

Strategy has roughly $871M left in its USD reserve. Against the current preferred + debt cash burden, that’s only about 6 months of runway.

If he sold $1B, that takes runway from ~6 months to ~13 months. Helpful, but probably not enough. 13 months is enough to reduce near-term stress, but not enough to make STRC feel like a self-sustaining issuance product again. STRC buyers are still underwriting a shrinking cash cushion and hoping the market rallies materially within that window. I think it becomes very hard for STRC to get back to 100 in that scenario.

If he sold $2B, that takes the reserve to ~$2.9B and extends runway to roughly 20 months. That is a very different setup. At ~20 months of coverage, blow-up risk gets pushed much further out, STRC buyers can believe the dividend is properly covered by cash on hand, and the product has a real chance of trading back to 100.

It also changes how STRC buyers think about the balance sheet. They’re not just relying on new issuance to get paid. They’re backed by a massive BTC treasury that Saylor has now shown he is willing to selectively monetize to support the credit stack.

Once STRC is back at 100, the flywheel can restart.

This is the “sell to buy” point.

A large BTC sale does not just create cash runway. It can increase his ability to issue STRC, which then gives him the ability to buy more BTC than he sold.

So the hierarchy is simple:

Selling zero is the disaster scenario.

Selling too little helps, but probably does not fix the flywheel.

Selling enough to matter is what gives STRC a path back to 100 and gives BTC a reason to bounce.

[Kevin Kelly @Kevin_Kelly_II]

Worst week for $BTC since Nov 2022...

Good times

[ceteris @ceterispar1bus]

borrowed conviction is the toughest place to be.

"zcash is pumping to $630 right now, if it goes to $400, there's really no fundamental basis it needs to go back up."

this is playing out now. borrowed conviction is much harder for SoV type investment than a cash flow one.

[Delphi Digital @Delphi_Digital]

Yan explains why Strategy may need to sell some Bitcoin.

“He can sell some now and that lengthens his runway considerably... and that also gives the Bitcoin market time.”

[Delphi Digital @Delphi_Digital]

Our New Report "Hermes: The Moat Above the Model" is live!

Hermes is the AI agent that belongs to you.

Your agent builds valuable context about you with every session. When you switch models, you can't take any of this with you. What a closed agent learns about you is its product. You are renting your own work back.

Hermes breaks this model by keeping everything it learns on your machine. Between sessions the agent reviews its successful runs and writes them into reusable skills using GEPA, which beats reinforcement learning with 35x fewer rollouts. These skills travel with you when you switch models.

Two years before Hermes shipped, @NousResearch was already building the fine tuning and reinforcement learning pipelines for their open-weight models. In the last week of May, Hermes was OpenRouter's highest volume app with 4.5 trillion tokens routed currently.

At Hermes's scale, that signal lets Nous keep improving the user experience. Your memory and skills stay on your machine the whole time.

[Delphi Digital @Delphi_Digital]

Kevin explains why Hyperliquid's outperformance is important for crypto.

"It’s good for HYPE to be outperforming right now... because it’s arguably one of the most important potential catalysts to drive more capital into this market.”

[Yan Liberman @YanLiberman]

Still think STRC had legs if Saylor hadn't burned so much cash repaying the 2029s.

@fundstrat's setup is cleaner. Zero debt, zero preferred at @BitMNR, and ETH yield makes the coupon more serviceable. Caveat: ETH down = yield dollars down.

One tweak worth considering: pre-fund 12 months of dividends out of every raise (~10% set-aside). Almost certainly grows raise capacity by more than the 10% in foregone ETH buys because the market prices in the lower coupon risk.

Hoping @saylor sold a lot of BTC this week to fix his cash situation. If he did and STRC issuance restarts, same playbook applies. Set aside a portion of every raise to give the market confidence on coupon coverage.

[Anil Lulla @anildelphi]

Our Consulting team @Delphi_Digital works with just a dozen projects a year, becoming extensions of their team to help with everything from token design to gtm to product development

They put together this report to give away a lot of the insights they’ve gathered from the work they’ve done

In it, they break down exactly how and why token markets broke and dissect what works and needs to change to fix them

Instead of setting this behind a paywall, we wanted to make sure anyone who was interested in reading it could access it for free. Link below to read the whole report.

[Kevin Kelly @Kevin_Kelly_II]

Link to full episode

https://t.co/LG62tXfGfr

[Kevin Kelly @Kevin_Kelly_II]

Where's the incremental bid for bitcoin:native going to come from?

All the big buyers are now sellers

The longer bitcoin:native underperforms the higher the oppty cost too

But this isn't the same market as before...there are pockets of outperformance with real fundamental drivers

That signals maturity...even if it hurts

Names like $HYPE outperforming is actually one of the best promos for crypto markets right now

New Hivemind out now ⬇️

[Delphi Digital @Delphi_Digital]

A new episode of the Hivemind is live!

This week we discuss Bitcoin's breakdown, Hyperliquid's future, Crypto fundamentals, and more.

Timestamps:

0:00 Introduction & Is Bitcoin Cooked?
5:44 Saylor, Bitcoin Liquidity & Market Structure
12:28 Why Crypto Is Finally Detaching From Bitcoin
19:06 The New Altcoin Market & Capital Rotation
22:35 Why HYPE's Outperformance Matters
26:22 Zcash, Value Investing & Crypto Fundamentals
31:57 Hyperliquid, Lighter & Crypto's First Compounders
33:47 Can Crypto Thrive While Bitcoin Stagnates?
38:32 Why Retail Left Crypto For AI & Stocks
40:46 BlackBerry, Equities & Staying In Your Circle Of Competence
47:54 Lighter Deep Dive
53:16 Kalshi, Perpetual Futures & Regulatory Tailwinds
55:03 Polymarket's UMA Problem
1:07:09 Ethena x Coinbase Explained
1:16:43 Bitcoin To $49K? Jason's Bear Case
1:19:43 Can HYPE Keep Going Higher?

[Delphi Digital @Delphi_Digital]

Jason explains why Bitcoin is struggling to find a bid.

“All of the buyers and the people responsible for driving Bitcoin up to and through $100k are gone. Many of them are underwater and a bunch are selling.”

[neel daftary @0xdaft]

https://t.co/PnuiNORwSj

[Delphi Digital @Delphi_Digital]

Token markets are broken by design.

Buying every new listing across the major CEXs since 2025 would have lost retail about half its capital.

The median listing fell 82%, and exchanges have become a place where early holders sell into retail buyers.

Tokens with monthly unlock schedules underperformed BTC by about 7% in the week leading upto and weeks after each unlock event.

What makes token outperformance difficult is that the next unlock usually arrived before the market has had the opportunity to absorbed the last.

Six major airdrops saw 78 to 94% of recipient wallets sell off most of their allocation by day 90. One of those programs paid roughly $1 billion in token value to wallets that haven't stayed around.

The best designs are simple. They now route revenue back to holders and tie supply releases to performance milestones. A revenue-weighted basket of the 10 highest-revenue protocols has outperformed BTC, ETH, and SOL since January 2025.

What's left is one of the strongest setups crypto investing has had: fewer tokens, better designed, and structural buyers replacing the hedge funds that exited.

[Delphi Digital @Delphi_Digital]

Walking through the Token Report and Tool https://t.co/CBOeQA00O2

[Delphi Digital @Delphi_Digital]

A new episode of the Hivemind is live!

This week we discuss Bitcoin's breakdown, Hyperliquid's future, Crypto fundamentals, and more.

Timestamps:

0:00 Introduction & Is Bitcoin Cooked?
5:44 Saylor, Bitcoin Liquidity & Market Structure
12:28 Why Crypto Is Finally Detaching From Bitcoin
19:06 The New Altcoin Market & Capital Rotation
22:35 Why HYPE's Outperformance Matters
26:22 Zcash, Value Investing & Crypto Fundamentals
31:57 Hyperliquid, Lighter & Crypto's First Compounders
33:47 Can Crypto Thrive While Bitcoin Stagnates?
38:32 Why Retail Left Crypto For AI & Stocks
40:46 BlackBerry, Equities & Staying In Your Circle Of Competence
47:54 Lighter Deep Dive
53:16 Kalshi, Perpetual Futures & Regulatory Tailwinds
55:03 Polymarket's UMA Problem
1:07:09 Ethena x Coinbase Explained
1:16:43 Bitcoin To $49K? Jason's Bear Case
1:19:43 Can HYPE Keep Going Higher?

[Delphi Digital @Delphi_Digital]

Airdrops as we know them are over.

Giving tokens away to build a holder base has mostly created sellers. Across the largest airdrops, between 78% and 94% of recipient wallets had sold off most of their allocation by day 90.

People cite Hyperliquid and Jito as proof airdrops can work, but neither succeeded because of the airdrop. Hyperliquid had over $1B in revenue funding buybacks that soaked up the selling from recipients. Jito’s eligible cohort was small enough to avoid industrial farming.

Token economics are starting to require real protocol performance. MegaETH locked 53% of its supply behind performance targets. Pendle routes roughly 80% of revenue into buybacks for stakers.

Token distribution is moving from handouts to performance.

[Kevin Kelly @Kevin_Kelly_II]

The team went over the top on this one

Founders, builders, investors -- this is a must read with actionable takeaways for all the above

Bonus: tons of data + beautiful charts

[Delphi Digital @Delphi_Digital]

Our new report "State of Token Markets" is live!

Most tokens spend their lifetime below launch price.

Across 540+ tokens launched since 2020, the average token spent 70% of its life below launch.

Tokens launched at inflated FDVs with minimal float, which handed the initial pop to insiders and farmers. The typical token underperformed BTC by 7% per unlock. By the tenth unlock that underperformance had compounded to -47%.

Now the model is shifting. Hyperliquid routes 97% of protocol fees into HYPE buybacks. Uniswap voted in December to burn $600M of supply and flip its fee switch, with the burn sized to match the fees holders would have received since 2018.

But buybacks alone aren't enough. Jupiter ran a similar program but had $3.78 in unlocks for every $1 bought back. Hyperliquid has been the outlier since no insider supply was fighting the bid. Buybacks only matter when supply discipline matches them.

Revenue alone doesn't guarantee market cap growth. Pump runs one of the largest onchain buyback programs but that hasn’t translated into durable token performance.

A revenue-weighted portfolio of the top 10 protocols by revenue returned 30% since January 2025 while BTC was down 17%.

The market is now paying for real cash flow.

[Kevin Kelly @Kevin_Kelly_II]

@Delphi_Digital Must read 💯

[Delphi Digital @Delphi_Digital]

Our new report "State of Token Markets" is live!

Most tokens spend their lifetime below launch price.

Across 540+ tokens launched since 2020, the average token spent 70% of its life below launch.

Tokens launched at inflated FDVs with minimal float, which handed the initial pop to insiders and farmers. The typical token underperformed BTC by 7% per unlock. By the tenth unlock that underperformance had compounded to -47%.

Now the model is shifting. Hyperliquid routes 97% of protocol fees into HYPE buybacks. Uniswap voted in December to burn $600M of supply and flip its fee switch, with the burn sized to match the fees holders would have received since 2018.

But buybacks alone aren't enough. Jupiter ran a similar program but had $3.78 in unlocks for every $1 bought back. Hyperliquid has been the outlier since no insider supply was fighting the bid. Buybacks only matter when supply discipline matches them.

Revenue alone doesn't guarantee market cap growth. Pump runs one of the largest onchain buyback programs but that hasn’t translated into durable token performance.

A revenue-weighted portfolio of the top 10 protocols by revenue returned 30% since January 2025 while BTC was down 17%.

The market is now paying for real cash flow.