There were many projections for ETH…
Last year saw people throw around 10k, 20k or more. However, ever since 2022 came around, many of those lofty projections appear to have fallen by the wayside and in a big way. Now, many are just wondering whether it can once again reclaim its all-time high.
Well, that depends on a number of factors. Factors that are central to Ethereum’s progress this year and beyond.
And this is exactly what I will be exploring in my video today. I will be doing a much-needed 2022 update of Ethereum and its potential. I will also be looking at this through the lens of ETH 2.0 and that all important proof of stake merge.
The truth is that this could be closer than many of us think and the implications of it for the entire ecosystem cannot be overstated. I will also be examining one central reason why ETH could become the darling of institutions.
Of course, there are also going to be some challenges that could derail that. Challenges that I clearly elucidate in the video.
So, if you hold ETH (or are considering picking it up), then you can’t afford to miss this video!
📊 Main Portfolio 📊
Speaking of ETH, I bought some more of it as well as some BTC. This was done with some USDC that I have moved over from my lending accounts. The remaining USDC was converted to UST in order to be kept as dry powder for other altcoins.
I decided to buy this dip mainly because the current market is irrational and being driven by factors unrelated to cryptocurrency (see below). It’s in these times that you have to make a judgement call on fundamental value.
The reason that I am holding dry powder in UST is because of it being decentralised. On top of that, it has been able to hold that $1 peg exceptionally well over the recent dip. I have an updated video coming on Terra so you will want to keep an eye out for that.
My portfolio currently sits at:
ETH 28.28% | BTC 22.63% | SOL 11.15% | DOT 10.13% | ATOM 7.46% | FTM 5.39% | HNT 2.67% | MATIC 2.29% | ADA 2.19% | RUNE 1.64% | USDC 1.33% | AR 1.03% | INJ 1.01% | UST 0.99% | LINK 0.87% | YGG 0.72% | XDEFI 0.24%
🖼 NFT Portfolio 🖼
MAYC 94.40% | Meebit 5.60%
📈 Thoughts on Market 📈
Can you hear that? That is the sound of millions of paper hands capitulating as whales buy up their BTC and ETH. Don’t believe me? Check on-chain. The BTC balance on exchanges is dropping in tandem with the price as people HODL. Even the Bitcoin miners are accumulating BTC. That can only mean one thing: it’s not over, at least not yet.
With that out of the way, what the hell is going on?
I’ll start by saying that this crash isn’t being caused by something crypto specific. Asset markets are crashing across the board, and because crypto is still (unfortunately) quite correlated with the stock market, anything that happens there will eventually affect the crypto market. Following a bloody Friday, many market analysts are saying the stock market crash will only accelerate.
Again, the question is why?
Besides fears over the Federal Reserve increasing interest rates, the answer seems to be China. Property developers in the country have started to implode, and this has driven the Chinese central bank to lower interest rates in an attempt to prop domestic markets back up. This is a pretty big deal because China had previously stated that they would do nothing of the sort.
“But what does it mean?” you might ask.
I suppose it depends on who you ask. Some are saying that this is only the beginning of the “everything bubble” or “superbubble” bursting, meaning there are many more down days (and possibly weeks) ahead. With the weakness we’re seeing in the economy, be it due to supply chain issues or people opting out of the workforce, it’s very possible that this is what’s coming.
On the other extreme, you have the likes of Ark Invest’s Cathie Wood doubling down and insisting that the pain we’re seeing is only temporary. This is primarily because the supply chain issues that are holding the economy back are being caused by the pandemic (or more accurately, pandemic restrictions), and it looks like some countries are starting to ease off.
And then you have folks like me who are more in the middle of the road. While I do think that we’re in for a bit more pain in both the crypto market and the stock market, the weekly chart for BTC suggests that it may be high time to accumulate. The fundamentals are also strong, with companies planning to pile billions of dollars into crypto projects this year.
In my mind, the only thing to worry about with crypto is central bank digital currencies, and it looks like the Federal Reserve is the latest central bank to officially throw their hat in the ring.
🔚 Fed CBDC overview 🔚
Last Thursday, the Federal Reserve finally revealed the whitepaper for its digital dollar. As far as I can tell, Federal Reserve chairman Jerome Powell first announced that the Fed would be releasing a digital dollar whitepaper in May last year. This means it’s been in the works for quite some time, and I find it interesting that Jerome dragged his feet on publishing it… I digress.
The first thing about the paper that caught my eye was one of the 6 preconditions the Federal Reserve notes for the issuance of a CBDC, specifically the second one which states “[a digital dollar] must yield [benefits to consumers] more effectively than alternative methods”. In my mind, this is a not so subtle reference to stablecoins, which could end up becoming “synthetic CBDCs”.
Another thing that stuck out to me was the focus around privacy, something that was picked up by various crypto news outlets as well. As you can imagine, a digital currency controlled by the government is at odds with privacy, and there are some very justified concerns to be had about that, as well as a CBDC’s impacts on financial stability which the Fed also acknowledges.
Even so, my research so far suggests that there has been extreme pressure on the Federal Reserve to develop a digital dollar. This is primarily because almost every other central bank is rushing to develop their own CBDC, namely China. Having a CBDC basically means that these countries will no longer be dependent on the US dollar, which is bad news for the United States.
As such, digital dollar proponents argue that it’s imperative for the Federal Reserve to release a digital dollar so that the USD remains the world’s reserve currency. Not surprisingly, some of these proponents are on the Federal Reserve board of governors, but what’s interesting is that not everyone at the Federal Reserve is on board with the idea of a digital dollar.
While the adjustment of the Federal Reserve board’s composition is probably not going to influence what they do about interest rates and inflation, it’s very likely that it will influence what they do about the digital dollar. Consider for a moment that 3 of those 7 seats have yet to be filled, though the nominees were recently announced by US President Joe Biden.
If you’re wondering what this means for the prospect of a digital dollar, you’ll have to stay tuned for my video later this week to find out!
🔭 Some Perspective 🔭
There is no doubt that the past week has been a really rough one in the crypto markets. For some of you, this may be your first time experiencing a severe market rout. I know this because in December last year, I pushed this poll that asked you guys how long you had been in crypto.
As you can see from the results, over 50% of you folks got into crypto last year. A year when crypto markets rallied to all time highs on the back of unprecedented and sustained Fed stimulus. If that was all you knew, then it’s completely understandable that you may be worried about the current dip.
I am here to tell you: Don’t be!
As some of you may know, we launched the Coin Bureau back in 2017. This was also a time when crypto markets were going crazy and everyone was making a lot of money in high flying ICOs. By the end of the year I was incredibly chuffed with the performance in my portfolio. I thought that the good times would continue rolling in 2018.
However, that was not the case…
As January came around, the markets suffered a sustained fall. All those hot ICOs went bust and ETH & BTC were in a tailspin. I was incredibly worried not only because my wealth was dramatically reduced but also because I had gone full time into crypto. My future was inextricably tied to the crypto markets.
It was at this time that I decided to talk to a friend of mine who had been in Bitcoin since 2013. He recanted all these stories about how crazy those early days were and how some of his compatriots had parted with thousands of BTC. Partly this was because they couldn’t handle the volatility and the other part was because they didn’t believe in the long term potential.
So, it was with that in mind that I decided to hodl on. Work continued as we built the Coin Bureau. The more research that we did for videos, the more confident I became about inevitable mass adoption and an eventual reversal. Whether that was going to happen in 2, 3 or 5 years, I knew it was an industry I wanted to be a part of. That resolve is what kept us working through the Bear market and it was that undying belief that allowed me to reap the gains of the hard work in 2020 & 2021.
Am I saying we are in the same period now?
No. I don’t think that this recent dip is the bear market. Crypto is no longer the market it once was and there is too much institutional interest for it to fall by the wayside for 2-3 years. Those that actively lobbied against crypto in 2017-2019 are now embracing it with open arms. Regulators that once dismissed crypto as a meme are scrambling to craft laws in order to contain it. Central Banks that once laughed off the notion of decentralised money are now developing their own CBDCs.
The point is, times have changed. But, there will always be market cycles. And with these market cycles come as new investors who have to deal with the inevitable periods of uncertainty.
So, if you are relatively new to the markets and feeling uneasy, I hope that my experience and perspective helps you the way my friend’s did in 2017. It’s never nice to see your investment depreciate in value but it’s only ever a loss if you sell at a loss. As long as you have not over extended yourself and you have invested prudently, short to medium term price action should not perturb you.
Diamonds are formed with centuries of extreme pressure. The longer and stronger the pressure, the larger and more beautiful the stones. That’s why I think the “diamond hands” analogy is a lot more than a meme.
Keep calm, and hodl on!
🔥 Deals of The Week 🔥
It’s been a bit of a hairy week. Be it in the crypto markets or the broader stock markets. Yes, many crypto fans are fearful, however, others might be feeling kind of greedy with the discounts on crypto available today.
But what if you want to take advantage of those sales? Well, you’ll need a top-notch fiat to crypto onramp solution. Personally, I use the Swissborg app to do that.
The app supports over 30 cryptocurrencies and 16 fiat currencies including some pretty exotic ones like the Polish Zloty and the South African Rand. So, that means that you are unlikely to be hit with those annoying foreign exchange fees.
The app supports crypto dabblers from almost every country outside of the US. Also, withdrawals on Swissborg can be lightning fast too – I’ve had funds hit my bank account within minutes.
Swissborg also provides a super simple way to stake cryptocurrencies, with interest rates as high as 24%! So, if you are interested in earning crypto interest then you’ll want to check that out too!
Even better, if you deposit €50 or more then you’ll get up to €100 FREE!
👉 Sign up to Swissborg & Get Up To €100 Free
🔮 Video Pipeline 🔮
- Are We in a Bear Market?
- Top Crypto Tax Tools For 2022!
- The Flippening: What you need to know!
- Enjin Update: Where is ENJ Headed?
- Avalanche Update: Is there still potential?
- Mining Senate hearing: Cause for concern?
- Federal Reserve’s digital dollar whitepaper
🏆 What’s New At CoinBureau.com This Week? 🏆
That’s all for this week’s newsletter. However, the entire Coin Bureau team would like to thank you for your continued support during these stormy markets. Crypto die-hards like you are the reason why the Team and I will continue producing top-notch educational content – whatever happens in the market.
Thanks for allowing all the team at Coin Bureau HQ pursue our passion to help educate the world about crypto.
Guy your crypto guy