Hey everybody another bumpy day on the market, but we’ve been here before we’re not at these levels in a couple of days now at least 10 or 12 days, since we were back at these levels, but anyway uh we did break through the 47k. But hopefully we should bounce up from there. But i just want to talk about why it’s important to look at the year in review and the lessons learned from everything that we’ve seen and why it’s important to have discipline when it comes to investing in crypto or otherwise you can get very wrecked. So, let’s jump in entertainment, as you know, math money and freedom, and let’s talk about how the world is changing so fast before i jump in this is a slide. I had way back in 2019 remember two years ago: well, look at the list!
These were the top projects, the top ecosystems and crypto names like eos, stellar, tron, new neo, quantum waves omni. Where have they all gone? They were there but they’re way down the list. That’S lesson number one things change very fast in this space. You need to have your tap dancing shoes on all the time.
So, let’s talk about the year review, real quick can be summarized in four simple little words: q1 tesla q2, china, q3 el salvador, q4 metaverse. It’S like three of them are places, but basically you can summarize everything up real quick, obviously, q1 tesla bought 1.5 billion dollars. A bitcoin bitcoin went from 35 000, all the way up to crazy levels, real fast uh, but the most important one. We all know china, with the mining ban disrupted.
The whole network had a lot of people nervous for a while and brought a big cascade. Downfall. Q3 was probably the most interesting um bitcoin maxis had a reason to celebrate. You know: we’ve always spoken about a sovereign country, making it legal tender, but it actually happened – and this was announced at the may conference by president naib kelly. He announced he plans to do this uh sometime later that year and it’s in september 2021 bitcoin has made legal tender and q4 was the quarter of the metaverse gaming, facebook, changing his name, etc, etc.
That’S the year, it’s gone fast! That’S when i started this channel too, and i lived through all of this and more, but let’s talk about why this is important. First of all, i don’t want this to be disappointing or alarming to anybody, but i’m going to say something that might upset some people. First of all, the crypto market cap, as i measured it about 25 minutes ago, has done an exact 3x of where it was january of this year. That means, if you were a hamster or a chimpanzee, throwing darts and you picked random kryptos.
Your bag should have 3xed by now, so you invest ten thousand dollars. You should have thirty thousand hundred thousand three hundred thousand etc etc. So this is the scary thing, but there’s more to it than that um. As you know, it’s been a crazy year. Many things have exploded and gone up like that, but you have to pick the right horses.
If you do, you make incredible returns if you’re sitting on losers, you’re, not so again that market cap went from 740 billion to 2.34 trillion today, as 3x all across the board. But there were black big black holes that sucked everything in i’ll talk more about black holes and wormholes and stuff like that as well later, so it’s also been an emotional rollercoaster for many of you out there. Let’S look at the fear and greed index. This is kind of if we looked at it now, it’d be down around 20 and that’s typically a time to buy, there’s direct correlation between the fear being extremely high, uh down low, as as indicated by those red rings and low bitcoin prices.
So it has also been we’ve had some euphoric times when things are crazy bullish, so for many out there this can be very depressing, especially if they’re in the wrong names or they get in late and they’re. Holding on to things. It can be very alarming, but again, if you’re just moving large amounts of money around things like bitcoin, yes highly volatile, but it just goes up all the time and the supply is so scarce. I’Ll talk more about supply later too as well, but remember this is the key message when fear is high. That is the time to buy.
I don’t know if this thing is lesson number three. So far, we’ll try put more together now good news as well. Spot volume on bitcoin has stabilized, which has been very interesting. Normally there used to be times back in the day: 2017 2018 2019, where volume would just dry up completely and that’s not good for any asset. Now 2021 did start with massive sport volume, as the crypto market was in the middle of a retail driven rally.
But now retail has left the scene and guess who’s buying all the bitcoin, yep big high net worth individuals, institutions etc. Now the spot volume stayed high during spring decreased in summer and now it’s considerably a higher plateau than we saw back in 2020 2019 and the aggregate spot volume in 2021 was four times higher than 2020. That means there’s demand. So let’s talk about all coins, so we began the year. Bitcoin dominance was up bumping up against 70 percent.
Now it has hits this for about 40, all the time bitcoin dominance, and that shows you what has grown, and that is everything other than bitcoin called the altcoins. So is extremely positive and also most important thing to note, as well is not only identifying the sectors but playing in the right level of those sectors for maximum gains. This is probably lesson number four or five at this stage here. If you look at the analysis from arcane research, it shows you that the average performance of layer, one tokens in the mid cap size – were the ones that crushed it in 2021, with an average of 830 gain. Think about that, if you are just holding big bags of ethereum you’ll do well, but if you’re holding a mid cap, let layer one platform boom and the right ones.
The results are 10x. 20X. 25X. What ethereum got so that’s kind of the key message as well. Here pick the right places that are going to bump notice, not small caps, mid caps and not anything else, layer ones, that’s where all the money was made in 2021.
Now, what i do is i like to have extreme discipline and depth in certain select areas. Now there is no categorization that i like in crypto, so of course i blaze my own trail. I build my own. This is how i view the world l1s and l2s. I call them scps smart contract platforms, but there’s a difference between l1 and l2.
We’Ll talk about those in a minute and then we have d5 d5 includes things that some people would include in l1 or even in utility. I call it d5 and i’ll show you what those are as well. Then you have the utility tokens. These are tokens given by exchanges, think voyager, think binance think crypto.com think celsius.
These are what i call utility tokens and then fifth is the metaverse, which is a whole bunch of games and nfts and other types of situations. That’S kind of my five big categories and to be successful in this game. It’S very very important to go deep into one area and my chosen area is l once dotted line to l2s with a little dabble in d5 and that’s kind of my world. Now, if you are a gaming expert, you might be very interested in metaverse again, you can make a lot of money there. If you can pick the right names, utility tokens too um, so that’s kind of the way i categorize the world.
Now, if you have a better categorization, please share below and a comment. The other important thing to note and you’ve heard me say this many times before is 95 of crypto will not yield value. What that means is they will eventually go to zero over time. Remember slide four two years ago, where the heck are those players? Now that’s exactly what’s going to happen if you’re holding a bag of something – and it’s not performing think about flicking it and moving on to something that is performing and remember everything changes all the time in this space very quickly.
So, let’s talk now, let’s jump into the first category in this crypto olympics, the l ones, aka smart contract platforms – you guys know them. If you listen to this channel, you know how i love them. So this has been the year of the layer, one all the market cap growth, all that 700 billion to 2.3 trillion. Most of that money was made up in these black holes.
You got names like solana, harmony, avalanche phantom ethereum. They all crushed it, no matter where it is most of the mid cap. Names really exploded, but uh. That’S the important thing to note l ones, and it was the year of the l1. So the question is: what’s going to happen next and i’m surprised at the very end i’ll share with you guys.
So, let’s talk about the top performing l ones for the year number one is phantom phantom wins the score. Now this analysis is not based on the way i typically value crypto. Obviously i felt solano was the top scp of the year. Um ethereum was joined first and as an l2 scp matic was third, but i do have a little position in phantom and that’s where we are right. Now they had a performance of twelve thousand percent for the year.
Solano was number two with about nine thousand. Four hundred percent and harmony number three is about five thousand three hundred percent avalanche number, four, two thousand seven hundred percent again. These are all outrageous returns down the line with elrond 830 cardano 678 and ethereum 409, or a 5x on your money, which is still stunning. Like i remember it feels like yesterday, i was buying a ton of ethereum under 200 and um look at where we are today. So again, it’s been a crazy crazy year, winner in the l, one category is phantom because of its growth now fastest growing blockchain also happens to be phantom avalanche is number two and salon is number three again, it’s very very important to look at growth, because if You have something early on the cusp of extreme growth.
You can do very well now, let’s jump to the layer, twos layer, twos again, these are things built on top of layer ones and the list of the top layer. Two so far, and you guys again, if you listen to this channel all year, i’ve been screaming about the unseen value of polygon polygon, crushed every other layer, two out there, and i believe they will have a very strong year in 2022 because they are pivoting hard To the zk roll up basis, so if you look at polygon again, top performer 14, 000 return. 14, 000 return in a year next highest layer. Two is a tenth of that return. Fourteen hundred percent and then ciscoin scale, omg, network, hermes, etcetera hermes, is actually acquired by polygon and that’ll be rolled into their solution again performance, not so good for ones down the line, but that’s an example.
Everybody. Another key lesson to take away is be on the right horse. Sometimes there is a complete category winner, think of amazon and retail. Think of google and search think of tesla in evs there’s only one kind of category winner, so you have to be able to identify them early and spend an inordinate amount of time. Identifying them don’t go, look for look-alikes or copycats you’ll, never make it there.
You got ta get in early to the winners. Okay, let’s talk about defy it’s a section in a sector that i love very much because my background is in financial services. So this one, i want to talk about tara luna for a second, as i say, sometimes i like to blaze my own trail and make my own decisions, but here tara luna was released in 2019 and the terra white paper, which i’ve read, describes it as a Price, stable growth, driven stable that achieves price stability via elastic money supply. Okay, therefore, i see terra not as a smart contract platform, although i can do elements of an scp, but truly it’s more of a d5 play. Therefore, i categorize it as a d5 play, not a layer one.
Now, if we look at the top performers of decentralized finance d5, you can see here: tara luna number one. Thirteen thousand percent loop ring number two thousand percent again. What do you guys see here? The pattern is the same: one winner takes all matic crushed l2s luna, crushed d5 by a huge factor more than 10x compared to matic and the in the previous one. Before we also have other names in there like uniswap and ave, which had a bit of a flat year and then the graph up 76, which is basically one third of what the typical result is for crypto in the year 2021 and then other names olympus, which Is kind of flat for the year, so that’s again the key there.
Everybody is pick the winner and go in hard full conviction. Now i want to talk about some of the other key things that are happening in the world today of crypto. Is this whole interchange capability is happening and it’s very real wormhole already exists now wormhole is operates as a decentralized intermediary oracle network that observes and verifies messages on the chain and relays them to other chains. So this basically means you can now work seamlessly across four chains buying and trading, for example, nfts across binance, ethereum, luna and solana, and that is a key part of the future going forward. So watch the space and again wormhole is configured to work with the top four platforms they’re going after the money follow the money when you play in this game, everybody remember don’t dabble in hopes and dreams.
Fourth, category utility tokens: this one is kind of interesting and there’s a little bit of a twist here in this particular one, this one’s kind of weird. So, according to the data that i pulled from coin market cap, you can see that voyager token wins. But i don’t know anybody that bought voyager token at 12, 13, 14, 15 cents in january, 1st 2021. Therefore, i gave the prize of the winner of this to binance, with a return of about 1300 and full disclosure. I had finance, i sold it during the summer because i got nervous with all the fud and i moved all the money ahead in finance to solana, which proved to be a much faster horse, because i sold salon.
I sold binance at 400 and i bought. I think was 350 or 400 and i used those proceeds to buy savannah and at the time salon was trading in the 20s, so that worked out pretty well, as you can see, finance hasn’t moved that much and that’s the reason you kind of sometimes got to Be disciplined have conviction and get off the names that you are in and if you see smoke, sometimes there’s always fire behind it. So anyway, finances had a great year. Voyager has had a great year, but it all happened at the beginning of the year. So anyway, that’s the lesson there with utility tokens there are others as well.
If you look carefully down the list, you will see names like crypto
Com which exploded recently that’s up 800 for the year text. Token 570, nexo, 300, swipe and celsius is looking low and flat and i’m not sure why that is but again in the full disclosure i don’t own any. Actually. I think i have some voyager tokens, but i think they’re, because i use avoid your account anyhow, we’ll see that’s the utility side of the house now, the next section and the final section is actually a complex section, because it has a lot of moving parts. There’S what we call meta metaverse, so let’s jump in and talk about the metaverse winners so far, so the top metaverse play believe it or not is gala up.
Forty five thousand percent number two is axe. Infinity up. Sixteen thousand percent and number three is just miss. Second spot the sandbox, sixteen thousand thirty eight percent – these are live numbers and crazy, crazy, crazy results. Who could have thought hey this thing’s gon na do 45 000 this year so anyway, that is the metaverse, but there’s a lot more to it.
So, let’s jump in and talk about game of the year, clearly axi infinity now there’s another key term that i wasn’t really aware of um. If you come to me in 2020, i had no idea what p2eu meant, but that’s play to earn, and that was the whole theme of 2021 and that’s the crux behind axi and again they make money by putting games and little monsters battling and breeding in the Game, you can sell monsters, share monsters, breed monsters, etc, and recently i think the game was on ethereum recently migrated to the ronan side chain so again, watch where these big games go make sure you understand the side chains as well, because that has a big impact On where things go in the future um and that just crazy, crazy return, again, 13 000 or whatever now open c another clear winner, these guys made a bunch of the whole nft marketplace and nft marketplace volumes increased 133 times from about 17 million in january to 2 billion in november again non-existence in january to facilitate nearly two and a half billion dollars worth of nft trades and openc is a clear leader in this space and as the marketplace has been staggering, but there’s competition coming as well. So let’s talk about collection winners. It’S kind of an interesting place to dig into if you look at the top collections. Obviously, a number of transactions from owners and buyers.
The clear winner again is axi, followed by crypto punks, followed by art blocks and then top shot, but the nba top shot. Merch is actually very expensive and highly transactional too. So a lot of activity, a lot of transactions uh on that particular area. You can see i’m very quickly getting out of my depth talking about nba top shot. I don’t watch basketball, anyhow nft sales by blockchain.
This is another interesting one to look at, so if you consider nft sales as part of the whole d5 etc component number one, the big 800 pound gorilla ethereum. Is there ronin number two thanks to axi. Moving over to the ronin side chain flow number. Three solana number four wax number five polygon number. Six again, the space is changing very fast.
What’S very interesting, is they look at the bottom? It’S like. Oh, let’s try jump into this space and we had seven buyers, no seven sellers, three buyers and fifteen thousand dollars in transactions. So after open c doing like billions, it’s kind of funny to see but uh they tried their best award for our friends at silica. So anyway, uh participation awards.
Another thing just to note a couple of other key lessons here for you all as we go forward how to throw money away. These are the top losers from the top 100 and trust me. When you look at the top 100, over half of them are way off their all-time highs. Right now, but just a couple of names that we always talked about as being crap from day. One always committed always have the same message: uh zcash, internet computer um dash bitcoin cash curve, dow neon eos, filecoin bittorrent.
If you know any of those names they’re all off their all-time highs between 80 and 97.5, which is staggering, remember bitcoin cash is not bitcoin for all those that believe, and at the beginning of the year i had to educate thousands of people to get rid of It so hopefully they did and that’s what happens when you own things, you know hope, is not a strategy own, the pure form of whatever you are in at any time now. This is also the year of the money grab. Meme meme coins is just you know. This is, is the one area in the world where probably myself and charlie munger are on the same page, because we don’t quite get it.
But let’s talk about dogs and memes. If you look at dogecoin and uh shiba inu they’re, both you know obviously heavily manipulated designed to screw retail investors. I don’t care what you say. You know those people say. Oh, i made a million dollars on dogecoin or whatever, but they probably lost it.
Pretty quick. When you look at how quickly the shiba inu thing was forked, with a quadrillion supply, so not long after, i think um elon musk bought bitcoin and it drove bitcoin crazy. He picked up a habit of frequently tweeting about dogecoin, leading to several mind-blowing rallies. It’S incredible! The power this man has and as the original gangster meme coin now, corresponding wall street bets community jumped on gamestop amc, etc.
Just like dogecoin and uh, just just be careful out there. Everybody things like dogecoin, you know, are kind of crazy and blow off tops happen. Money comes in whales, manipulate pump up the price, people see it, they get excited, they jump in price dumps. Look at the charts, it’s very simple! Now it’s very important as well to look at things like inflation and ownership and everything else.
Note 14 people control 70 of the supply of shiba inu and there’s no infinite supply, no max supply. It can just go on forever. Currently, there is 589 735 whatever i i don’t even know how much that is. That’S like 589 million billion. Okay.
Think about that 589 million billion tokens, it’s just stupidity, and if you look at another way of thinking about it, the ship circulating supply, not the maxi bike, because there is no max supply, they’ll print it forever. Just like the fed will print your us dollars or whatever currency you have. The ship circulating is at 589 million billion. Okay, the bitcoin circling is 14 million. Therefore, there’s 42 million times more shiba inu circulating than bitcoin 42 million again infinite supply.
Anybody that buys this type of stuff is just looking to get their head examined so ring the bell. If you want to hear my outlook for 2022 and how best to play it, what to look for what sectors i believe will be hot and how to watch for things that are going on that’s coming real soon now sooner than you think as well. So hope you guys, like the content. Uh please subscribe, remember investing is a tricky game. Don’T let yourself be manipulated.
Okay, pick the right assets get deep in the spaces. Look at my five categories in my crypt olympics pick one you like and just go deep identify the winner and go hard and that’s it. It does take a little bit of homework, but we are here for you as well as we go forward so happy holidays. Hope, everybody’s getting ready for new year’s eve good to see the moderators in the chat, keeping everybody safe. Thank you for all.
You do guys and smash the like on the way out. Thanks everybody, you