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Saturday, January 29, 2022

Bitcoin, Ethereum, The Graph, Update

Hey everybody welcome in happy Saturday morning, let’s see what’s going on in the market and we’ll give you a quick update but a whole bunch of weird observations which I’ll share with you all so, let’s just as usual, jump in math money and freedom. And, of course, this is entertainment, thank god i have this. I don’t have to click my little clicker, so let’s uh jump in and try finding exactly. What’s going on so good news out of china, this guy um, the assistant director of the international Chinese money institute, said if bitcoin goes up, we’re all going to die. So that’s wonderful, uh, the that comes out of china.

These days is ridiculous. Anyway, a little bit of sad news, uh out of turkey, the financial system just collapsed, but a couple of key points to note here is, first of all the Erdogan omics, the president’s economics extremely low interest rates, a lot of money, printing, very high inflation. Well, everything just collapsed, so uh the currency just fell another 54. So far this year and real inflation rates are about 21. Remember the you.

s about a third of that, in fact, if you take into account the real inflation rate, it’ll be more like 15 or more so it just shows you exactly what can happen when monetary policy gets out of control, I’m going to work on something For early next week, just to give everybody a state of the unions to where we are with monetary policy, interest rates, inflation, tapering and what it all means for the whole world and you guys uh next one. Let’s talk about bitcoin, we have been flat for 14 and a half days hovering around this 47 000 mark, and for this to be so stable and so concentrated at this level. It tells me something weird is going on now. The week we had. Obviously it was a bit of a reef relief rally after the federal reserve’s policy decision, cryptocurrencies uh after that got hammered along with stocks, because the new omicron variant is ripping through the world at a very fast pace and uh.

Short-Term volatility has come to define, obviously crypto trading, but year-end tax positioning may be playing a role, so I’ll talk a bit more about that as well as we get in, but right now the most important thing to look at this chart is. We are hovering at that 200-day moving average, which is an important level to hold now pure multiple you’ve heard me talk about this before it indicates that we aren’t even half done yet. So i know it can be very frustrating time for everybody out there. It’s like where’s, the rally et cetera. Why are we so stagnant?

But the fact that we are stagnant is actually a very good sign. Now the fuel multiple looks at bitcoin mining and indicates when miners are heavy in profit and likely to sell, and this has topped the top of the last two cycles and right now. Miners are not interested in selling the world has changed and there’s so little supply. Speaking of supply, the drainage continues, the exchange net position indicates that exchanges are not holding large amounts of bitcoin. Currently at all.

This suggests that institutions, organizations retailers are buying and holding bitcoin again. There is no sign here that whales etc are moving crypto to exchange to dump it and that’s a very, very important thing. In fact, they continue to accumulate. Now, let’s talk about a tether and there’s a huge spike of tether on exchanges. It’S risen 22.

over the last couple of months and this supply converts to about 10 billion dollars, and this typically indicates that these this tether amount is kind of there sitting on the sideline, ready to pounce and buy bitcoin or crypto so again, very, very bullish. Sign from sentiment there and uh, let’s talk a little bit about the key ratio of Ethereum to bitcoin. We, for the first time that i know of we just went outside the Bollinger band now, despite the issues with Ethereum. Many believe that the risk reward ratio of all crypto assets at the moment, Ethereum is the safest and per this chart, even assuming that bitcoin stays at 50k Ethereum could easily hit my bull run, target which is out to march of next year of 8 900, and That will be at about a 0.15 ratio now remember when we look at Ethereum and that red line at the top of that chart indicates where we could potentially go based on historic ratios.

Now d5 is on, fire. Nfts are on fire, dowse are on fire. They all have huge addressable markets and they’re still extremely early in their adoption, and ethereum is the 800 pound gorilla. The broad scale of ethereum network could capture a lot of this as we go forward into the whole decentralized web 3.0 value in future, and also remember the eip1559 and proof of stake will continue to drain exchange reserves of ethereum as we go forward.

So this is very bullish, but there’s a twist now, unlike bitcoin, moving off exchanges, ethereum is moving on to exchanges which could indicate some cell pressure and a big thank you to sanjay for sending me this article now over the past few days, we’re seeing a large Spikes in ethereum supply and exchanges, and that means there could be a little bit of dumpage and it looks like the seller – is using every price pump to exit their positions where possible, especially if they missed a chance to do it previously. So it’s like a kind of a lockstep thing. You can see that when you look at the charts and some of the weird behavior that ethereum has right now it takes a run. At 4500, gets sold, comes back under 4 000 Another run to 4500, it gets sold comes back, so we might see more of that now. Let’S talk about some weird thing that did happen.

The second largest ethereum whale actually converted some of their assets to buy matic and the graph – and this was extremely substantial, buys. I think uh four million and three million respectively or 4.8 million of um polygon and three three or four million of the graph. Now they must see something in these assets that i don’t. For example, you guys know i’m a very big fan of polygon, but the graph never uh, not so much.

Let’S look at why um? First of all, we’ll look at the chart. Year-To-Date return for the graph is zero. That’S not very good, and the other thing that you guys have to be aware of is we use our quant model to identify if something is good, bad or different and all year everybody said: look at the graph look at the graph and yeah it did spike And then it came right back down to earth because it is a very poor, compendium, score and uh glad to see the model works yet again, but that score of 4.2 means it’s in the bottom 42 of the top 300 cryptos based on regulatory risk, tokenomics inflation.

All that type of stuff, so let’s look at what polygon did in the same time frame while the graph was flat as zero returned polygon, 18, 000 return so good times all around for anybody who holds matic and it’s taking another run so we’ll see what happens. It’D be interesting to see. Maybe there could be a spike in the graph after all, after this big move but uh if they have so much money, they’re investing in one winner, maybe there’s something to the graph so i’ll see what i can undig and find out as well. Now another good news as well from woo blockchain uniswap, will be deployed on matic over the next few days. Woohoo.

We hinted at this uh in my video. Should i sell uniswap a few days ago – and here we are it’s actually happening, which is great and now, let’s talk about another thing that could be putting a lid on the market as to why everything is kind of so flat, so starting in 2022, the irs May shut down the long-time tax loophole that allows cryptocurrency investors to harvest their losses, to offset their tax burden, and a lot of you asked me to dig more into exactly what this could mean. So i’ll give you an example here this is icp, it’s a fantastic name. No, that’s going to be sarcasm. Of course you know, i hate it.

It’S down 96.5. Over the last. Let me see how many days that is a hundred and whatever six months or whatever it is. I don’t even look at it that much, but i thought it’d be interesting to show exactly what it could mean for tax loss harvesting.

So here’s an example: you buy a hundred tokens at 632 bucks, which was the price not too long ago, six months ago, or less cost sixty three thousand two hundred dollars your return to date. Your date is minus. Ninety six point: four: seven percent: that minuses should be on the next line. Now the tax loss you can harvest from selling. This now is 60 call it 61 000, and that means from your 63 000 investment.

You will get 2 000 back, but you can sell this. Take the loss, apply it against your gains or plow the two thousand dollars back into icp and hope that it’ll return. Of course it’s not going to again tokenomics also suck so other tax loss. Examples of. What’S going on, this is a cool thing as well uh.

This is from ruggedheart.eth and it’s a way of harvesting tax law, so you can send your worthless nfts to taxlessharvest Edh, so you can realize your losses for the 2021 tax year um. So it’s just another way of taking it. If you do need to offset some gains, but then again, if your nft is worth nothing, it might come back, so you don’t necessarily want to burn it or send it away so, especially for nothing, but take that as just an illustration as we go forward. So let’s talk a little about the motley fool: yes, they came out with an article and they said uh three hours ago, better buy shiba, inu or solana in a showdown.

Like i mean you know, i sometimes i get a little bit frustrated with traditional finance journals and everything else like fortune magazine and motley fool, but this was just one of the dumbest things i’ve ever seen and their summary of their article like first of all, why Would they compare to assets like this makes? No sense, one is a stupid meme coin, which is losing everybody, a ton of money and the other one is going to revolutionize the world, but anyway, their net net take. Was investors willing to take on risk in pursuit of short-term capital gains might still be able to score wins with the sheep token i mean people should just go sue these guys for saying such you know fooling people to think there’s money to be made, and she You know it’s just you know how many hundreds of thousands of millions of people read their journal and take action. They didn’t talk about solana, building functionality um, but i mean it was just a weird weird line anyway. Let’S look at the sheep chart.

Oh it’s down. 66 in 50 days: okay, uh – is it going to rebound? I don’t know, but a lot of people are hurting now the other cool news is the holiday season is coming in, and people are beginning to give the gift to crypto. I spoke about this. I tweeted this, i think, uh last year, this time last year and uh, i spoke about giving the gift of crypto for hat for valentine’s as well on february 14th, but according to a blockfi survey, and they said one in ten americans are planning to give some Type of cryptocurrency as a holiday gift this season, people want to make money, they don’t want another pair of socks or a sweater or something they may never use like a scented candle, but uh they’d much prefer a couple of tokens so anyway, that was from abc, Which i thought was very interesting and with that, let’s see hope you, like the content, very quick one today, some interesting things going on in the market market stagnant bitcoin still hovering around that 47k mark, but some of the other things were kind of cool and uh.

We have some names luna on fire, uh silica, moving chainman coming alive, a little bit and a few other good names too. So hang tight everybody! It’S going to be probably another bumpy weekend um, but i do believe we could have a little surprise on sunday anyway. I’Ll talk to you tomorrow for q, a thanks all

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