About 2 weeks ago, the Fed held its December FOMC meeting. This was one of the most anticipated meetings of the year as it would provide guidance about how the Fed would shape monetary policy in 2021.
As was widely expected, the Fed said that they would be doubling the rate of their taper. This would therefore move the timeline forward for the end of the program and the beginning of the rate hiking cycle. At least half of the Fed officials think that we will see at least 3 rate hikes next year.
Now, there are many that think this could lead to an end of this stock market rally. However, the main question is what impact will it have on the crypto markets?
After all, one of the most striking themes that we have seen over the past 2 years is that Bitcoin has almost moved in lockstep with the equity markets. If there is a crash that many are expecting, is Bitcoin likely to follow?
That is exactly what I explore in my video today. I take a look at what the interest rate increases mean and how they are likely to play out for the markets.
You can watch that right here.
📊 Main Portfolio 📊
Quite a few changes this week. Firstly, as mentioned in my Telegram channel a few days ago, I have added YGG (Yield Guild Games). I explained why I picked it up in the aforementioned post but it’s mainly because I am bullish on Play-To-Earn gaming guilds especially those in regions like South East Asia. I used some of my free USDC to pick this up.
Then I decided to use the remaining USDC as well as some PAXG in order to buy some more MATIC. I have become increasingly bullish on Polygon of late and you can find out why by my video a few weeks back.
While we are on the topic of my portfolio, you guys may be interested in the video I did on Friday. It takes you through the evolution of my portfolio over the year and my strategy for 2021
ETH 28.91% | BTC 20.76% | SOL 12.96% | DOT 9.33% | ATOM 4.94% | FTM 3.85% | HNT 2.98% | PAXG 2.82% | MATIC 2.75% | RUNE 2.13% | ADA 1.95% | UST 1.80% | INJ 1.35% | AR 1.29% | YGG 1.10% | LINK 0.84% | XDEFI 0.22%
🖼 NFT Portfolio 🖼
Given that I am investing in more NFT assets, I am going to track this as a separate portfolio from the main one. The % share of the portfolio for these NFTs will be based on the floor price of the collection.
In terms of additions to the portfolio this week, I have finally decided to pick up a Meebit. You can see exactly which one I bought and my rationale behind it in my Telegram post here. I have also bought SPACE NFTs in the Big Time Gaming ecosystem but these will only be added once they are unlocked.
Current portfolio is:
MAYC 83.50% | Meebit 16.50%
📈 Thoughts on Market 📈
Are you surprised that the market is up this week? If you are, that might be because you didn’t watch last week’s crypto review until the end. I noticed that there was a bullish divergence between BTC price and RSI on the daily, a divergence that looks almost identical to the one we saw in late September before a massive rally. I said this suggested a recovery was imminent. Here we are!
It’s not just the technicals either. The balance of BTC on exchanges continued to drop even as prices did, which means that people are buying the dip and HODLing, not selling. However, it looks like this trend is starting to reverse. We will know for sure in the next week or two. If BTC does start flowing back into exchanges, it could be a sign that we’re approaching the final peak.
Another indicator I’ve been paying attention to is Bitcoin dominance which has been holding steady (for the most part). I take it as a sign that the market still isn’t 100% sure whether it’s headed higher or lower. Note that as we approach the top, we will see Bitcoin dominance drop like a rock when everyone rotates into altcoins for massive gains.
In terms of what will cause this final rally, I’ve mentioned many times that I think it will be the approval of a spot Bitcoin ETF. This is because the approval of the CME Bitcoin futures in 2017 market the top of the bull market for BTC. In the month or so that followed, altcoins went ballistic before the entire crypto market collapsed.
What’s interesting is that the SEC had rejected almost every Bitcoin spot ETF that was on the table except for those submitted by Grayscale and Bitwise. The fact the SEC didn’t reject these with all the others suggests one of them might just be approved. The SEC has delayed their decision on these two spot Bitcoin ETF applications to early February.
Assuming the SEC does approve a Bitcoin spot ETF at that time, here’s what I think will happen. First, BTC will hit its final high for this bull market. Second, money will move into altcoins for a month, creating all time highs for many of them as well. Then, the Federal Reserve will raise interest rates in March leading to a predictable fall in “risk on” assets. More on that in my video for today
🖼 The Great Web3 Debate 🖼
If you guys have been keeping up with Crypto Twitter recently, you will have heard about the spat that Jack Dorsey was getting into with many in the Web3 community. More specifically, he took aim at the VCs funding these projects in this tweet. Jack has the view that Venture Capitalists and their Limited Partners “own” the space.
The Tweet was a grenade on CT that blew up and started a strong discussion around Web3, Bitcoin and VCs role in crypto. It even led to Mark Andreessen (founder of a16z) blocking Jack.
So, what do I think about this debate? Well, I see what he’s getting at, but I don’t agree.
Firstly, Web3 platforms are built on a decentralised blockchain. Although VCs may hold tokens in the same platform / protocol, they do not own the platform itself. They cannot censure or restrict use of the platform. Unlike with Web2 companies, they don’t control API endpoints which external developers are given permission to use. Smart contracts on a blockchain are permissionless and anyone can use it. The amount of open source development that can proliferate in Web3 cannot be underestimated.
Web3 allows all of those participants to share in the growth and adoption of the protocol by owning the native tokens. Through Decentralised Governance, these holders are also able to shape the future and development of the platform. This is something that is the antithesis of Web2. Moreover, when you own a private key to your wallet, you have complete control over the funds on said protocol. Only you own it.
Having said all of this, there are grains of truth to Jack’s statement. There is a lot of VC money in these Web3 companies. They get seed stage access to the tokens and this means that they control a lot of the tokens. They are also able to participate in those governance votes which means that they could have an outsized influence on decisions. I have also seen a number of other questionable proposals getting voted through on other platforms.
Moreover, there is the concern among many that these VCs use retail investors as “Exit Liquidity” and dump their seed stage tokens on the downstream investors. This has happened on a number of projects in the past.
Of course, that is why projects should opt for strict vesting schedules. Those that ensure that the early stage investors cannot just dump tokens on the market. This is why I always look at these vesting schedules when doing research on a vid. From the conversations we have had with project teams more recently, the last investor that they want is someone that is looking to dump on unlocks. They know that an investor must bring more than money.
Moreover, it doesn’t really benefit the VC to dump either. Think about it from the perspective of long term wealth generation. If they dump their tokens and crash the price, the project is likely to die. The potential upside over the longer term is destroyed in that simple action. They are better served when they hold and vote in ways that prolong the value and use cases of the protocol in question.
In my view, the real barrier here for the more equitable distribution of wealth in Web3 is securities laws. When these projects are raising seed funding, they are not allowed to go to retail lest they get hit with an SEC fine. Hence, they are “forced” to raise from these “accredited” investors who happen to be the VCs and HNWs.
It would be interesting to see how the space would evolve should these laws be re-evaluated…
One more thing that I will add though, is that perhaps the reason Jack has this view about VCs is because he knows them very well. Twitter raised funding from them as they grew and maybe the reason that he is stating this, is because of that experience. He even tweeted as much. It would be fascinating to know more about the role they played in shaping Twitter as it is today 🤔
🔚 End Game of Crypto Investing 🔚
If you watched my recent video about Messari’s cryptocurrency predictions for 2022, you’ll remember the last section of the report was basically life advice from Messari founder and CEO Ryan Selkis. This section was packed with links to other insightful posts that I didn’t have the time to talk about in the video, and I want to talk about a couple of them here.
There’s a concept called ‘The Tail End’ which was coined by author Tim Urban in a 2015 blog post. The TLDR is that there is a high likelihood that you are on the tail end of most of the relationships in your life, especially if you’re close to my age. Put simply, you have already spent most of the time with your friends and family as a percentage of the total time you had together.
The takeaway is that you should do your best to cherish the limited time you have left, and this ties into another concept Ryan mentioned in the Messari report. In a 2019 podcast with Tim Ferris, East Rock Capital co-founder Graham Duncan coined the term ‘time billionaire’ when he realised that a million seconds is 11 days and a billion seconds is slightly over 31 years.
The takeaway here is that although many of us aren’t billionaires in money terms, we are billionaires in time terms, and time is much more valuable than money. After all, what’s the point in having money if you don’t have the time to spend it? And what’s the point in having time if you have nobody to share that time with?
This is the part of the wealth equation that we tend to forget about when it comes to crypto investing. It’s not about the money. It’s about the time. And it’s not even about the time. It’s about the time you spend with the people that matter to you.
I reckon this is the real endgame of crypto investing: buying the time you need to make the most of the tail end of your relationships.
🔥 Deals of The Week 🔥
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To grab that deal all you need to do is…
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Want more details about Kucoin? Well, you are going to want to watch my ULTIMATE Kucoin guide!
☃️ Stay Warm With My Hot Crypto Merch! Winter is here for those living in the northern hemisphere. Fortunately for you, there is no excuse to feel that winter chill as you can wrap up in crypto style with some of my top of the line hoodies and sweaters. To grab those you’ll want to head to my merch store!
But what have I got on the shelves over there?
Also, all sales go towards supporting the channel and help the Coin Bureau team produce that content you love. So, thanks in advance to those that choose to support us 🙏
🔮 Video Pipeline 🔮
- Crypto tracking companies: What you need to know!
- Best Crypto Gifts for 2022
- Immutable X (IMX): Can it Scale L2 NFTs?
- Kucoin Vs Binance: Which is best?
- My crypto predictions for 2022
- Top Crypto Security Tips
- Chainlink update: Is there still potential?
- Crypto consensus mechanisms explained!
🏆 What’s New At CoinBureau.com This Week? 🏆
✅ Top 7 Solana Wallets: A Home for your SOL Tokens
✅ Top 9 Projects In The Solana Ecosystem: Huge Potential!
✅ Unstoppable Domains for ALL your Crypto Domain Needs
✅ TradeSanta Review: Merry Trading or Mischievous Bots
That’s about all I have time for this newsletter and it is sadly the last one I will be sending this year!
The whole Coin Bureau team would like to thank you for all your support over 2021! It has honestly blown us away and we wake up every morning excited to work hard and bring you the best crypto content we can.
That ethos is certainly going to be built upon in 2022 and we will continue to do what we can and what it takes to bring FREE top quality crypto education to everyone that wants to dive down the crypto rabbit hole.
Happy New Year to you all!
Guy your crypto guy