Tom Brady’s profile pic on Twitter, May 2021 (Tom Brady/Twitter)

Opinion

Celebrity founders are a sign that your tech hype bubble might be about to pop

Athletes jumping on the bandwagon may be the ultimate market top signal.

7/26/24 12:29PM

The first thought I had upon reading that Colin Kaepernick is starting his own AI startup was: It’s so over for AI. Comparing the hype and exuberance over artificial intelligence to a similar froth that crypto saw is becoming more common, but nothing tells you a market is nearing its top like celebrities, especially in sports, hopping on the bandwagon.

Take Tom Brady, who, after putting his and his then-wife’s money into crypto exchange FTX, decided to go even bigger and launch his own NFT platform in August 2021. FTX also drafted Steph Curry, Shaquille O'Neal, Naomi Osaka, and others into its lineup of endorsers, which did not end well for any of them. As bitcoin steadily climbed to a record high of nearly $69,000 in November of that year, athletes from the NFL, MLB, and NBA even pledged to take their salaries in bitcoin including Shohei Ohtani – who also got involved in FTX and definitely knows what’s up with his own finances!

Perhaps the real death knell of the hype cycle was the “crypto Superbowl” of 2022, when not one, not two, but four crypto companies laid down big bucks to air ads during the most-watched sports event in the US. LeBron James should be happy Matt Damon’s terrible “Fortune Favors the Bold” Crypto.com ads took the focus off his spot where he spoke to his CGI-generated younger self about the future. The future that soon held the astounding collapse of entire crypto ecosystems leading to the bankruptcy of Three Arrows Capital, the cratering of bitcoin’s price to under $20,000, and finally the shocking collapse of FTX… and no more Super Bowl ads.

Meanwhile, Kaepernick’s goal to “use AI’s capabilities to give aspiring creators tools” with his new Luna AI harkens back to the original value proposition for NFTs, which allowed digital artists to dream they could break barriers and records like Beeple’s $69 million sale. Even better, they were promised royalties baked into those unchangeable blockchain contracts would help artists earn money on future sales. 2021 was NFT’s peak, with $25 billion changing hands in the market — they even got an SNL skit about them:

But while many might guess the top signal for NFTs was the cringey interchange between Jimmy Fallon and Paris Hilton about their Bored Apes, that was months before April 2022, when laser-eyed Tom Brady bought his Bored Ape and announced that his NFT marketplace, Autograph, inked a partnership with ESPN. Also that same month, royalty payments for NFTs hit a two-year low, as those smart contracts for NFTs turned out to have ways around paying creator royalties that marketplaces exploited. So, given the choice, no one paid royalties – what a shock! The final red flag for NFTs may have been the June 2022 announcement from soccer superstar Cristiano Ronaldo, who announced a four-year deal with Binance to launch NFTs with the company in June, 2022.

None of that went well. Ronaldo is now the subject of a $1 billion class-action lawsuit for his promotions with Binance and Autograph laid off round after round of employees and ultimately pivoted entirely away from NFTs to become, as far as I can tell, just a sports fandom app.

Kaepernick is the first high-profile athlete to get into the AI game, which has seen record inflows from VC investment and big tech capital expenditure spending. But his splashy entrance may be a sign the tide is turning as the cycle turns from pure hype to more people asking when all this investment is going to turn into profit. If crypto has taught us anything, the answer is: it won’t.

Sage D. Young

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Ethereum ETFs notch eight straight days of inflows, longest streak since start of October

And BitMine, the largest ethereum treasury company, acquired 101,627 ethereum tokens last week, worth $234.8 million.

Paper money streaming out from globe on computer screen

Yaël Bizouati-Kennedy

“split personality”

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Analyst says “liquidity conditions, not halvings” are now bitcoin’s primary clock

The breakdown of the four-year cycle removes a key empirical metric that investors relied on.

$290M

Sage D. Young4/20/26

On Saturday, ethereum-based protocol KelpDAO, known for liquid restaking, was exploited for $290 million, the largest hack of 2026 in the decentralized finance ecosystem.

“Preliminary indicators suggest attribution to a highly-sophisticated state actor, likely DPRK’s Lazarus Group,” LayerZero said in its statement explaining the attack. KelpDAO issues rsETH, while LayerZero provides network infrastructure that allows users to move KelpDAO’s rsETH between blockchains.

The configuration of KelpDAO’s exploited application, powered by LayerZero, relied on a single decentralized verifier network (DVN), responsible for verifying the integrity of cross-chain messages.

The industry best practice is for protocols to use a multi-DVN setup to prevent a unilateral point of trust or failure. “A properly hardened configuration would have required consensus across multiple independent DVNs, rendering this attack ineffective even in the event of any single DVN being compromised,” LayerZero stated, essentially placing the blame on the restaking protocol for using a single-DVN setup.

The exploiters executed an RPC-spoofing attack and performed DDoS attacks to manipulate the single DVN instance into confirming transactions “that never in fact took place.” The LayerZero team said, “Operating a single-point-of-failure configuration meant there was no independent verifier to catch and reject a forged message.”

Meanwhile, KelpDAO is preparing to dispute LayerZero’s account and place the blame on the latter, per a CoinDesk report.

Spilling over

The exploit has since impacted the wider crypto landscape.

The attackers successfully drained 116,500 rsETH from KelpDAO’s bridge, allowing them to deposit $249.7 million of the token to DeFi’s largest lending protocols and withdraw $228.2 million worth of different cryptocurrencies, wETH and wstETH, on-chain data from Arkham Intelligence shows.

Aave, the largest lending protocol, has frozen several markets and is now facing a liquidity crunch.

On Aave’s v3, the ETH, USDT, and USDC markets, which have a combined reserve size of $10.7 billion, have each reached a 100% utilization rate, as total borrowed equals total supplied. When borrows are maxed, users cannot withdraw their supplied liquidity.

The pseudonymous head of strategy at DeFi lending platform Spark, @MonetSupply, wrote on X, “There has been a ~$300 million increase in borrowing with USDT collateral in just the past day since the rsETH exploit.”

On-chain folks are spooked

The attack comes in the same month that Drift, a solana-based trading venue, suffered from an over $270 million hack. Saturday’s attack also follows worries stemming from Anthropic’s unreleased AI model Mythos, which “is capable of identifying and then exploiting zero-day vulnerabilities in every major operating system.”

Even though the major cryptocurrencies have not seen their prices move substantially in the last 24 hours, crypto participants have been spooked, evident by the capital exiting the decentralized finance ecosystem.

DeFi saw its total value locked decrease by $13 billion over the weekend to $85.64 billion at the time of writing, its lowest point since April last year, data from DefiLlama shows.

“OK — Kelpdao hacker, how much you want? Let’s just talk. With KelpDAO’s help, of course. It’s simply not worth it to sacrifice both Aave and KelpDAO and let them go down over this hack. You can’t spend $300 million anyway,” said Justin Sun, founder of the Tron blockchain, who has been beefing with the President Trump-backed World Liberty team.

Yaël Bizouati-Kennedy

DATS the Question

4/20/26

Strategy overtakes BlackRock in bitcoin holdings as digital treasury landscape weakens

With its latest acquisition of 34,164 bitcoin, Strategy now holds 815,061 bitcoin — about 4% of the total bitcoin supply.

Yaël Bizouati-Kennedy4/17/26

Bitcoin jumps to highest level since February, boosted by optimism over reopening of Strait of Hormuz

Bitcoin finally broke out of the tight range it’s been stuck in for weeks, rising to just below the $78,000 mark, a level not reached since early February, as risk-on sentiment floods back into the market.

The jump comes on the heels of Iran and the US announcing the reopening of the Strait of Hormuz on Friday morning, which sent oil prices down and the stock market higher.

The renewed optimism for a deal with Iran and the end of the Middle East conflict also sent crypto stocks jumping, with Strategy, the largest corporate bitcoin holder, up more than 13% late Friday morning.

Wave Digital Assets’ head of international portfolio management, Rajiv Sawhney, told Sherwood News that it’s all about the Strait of Hormuz. “Markets are interpreting it as a win. It’s a knee-jerk reaction given positioning and expectations. As such, while bitcoin was able to tick higher, the $80K level will be the real barometer we need to cross for me to feel confident that this relief rally has legs,” he said, adding that until then, he’s remaining cautiously optimistic that risk assets can close at these levels.

Nic Puckrin, cofounder of Coin Bureau, told Sherwood that we’re seeing a classic short squeeze as heavy short positions in bitcoin are being liquidated, adding that the next resistance level to watch is $79,000.

“If we get past that and close the week above this level, $90k becomes a real possibility in the medium term. However, if the rally gets rejected at this level, we could remain stuck in the range between $65k and $75k that held bitcoin hostage for months,” Puckrin added.

Underscoring the cautious comeback, Bloomberg reported that from a derivatives market perspective, “traders remain largely defensive.”

“Funding rates for perpetual futures contracts, a key measure of whether leveraged traders are betting on higher or lower prices, were negative. Hefty premiums are also being paid for put options providing downside protections at $60,000 and $50,000, respectively,” Bloomberg reported.

Bitfinex analysts told Sherwood that the liquidation heat map shows dense shorts leverage stacked between $76,000 and $78,000.

“Clearing this range opens a substantial air gap in the unspent realized price distribution up to $82,000,” they said, adding that the next level they are watching is $83,000, a “significant wall at the short-term holder realized price.”

Celebrity founders are a sign that your tech hype bubble might be about to pop

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Spilling over

On-chain folks are spooked

Bitcoin jumps to highest level since February, boosted by optimism over reopening of Strait of Hormuz

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