A weekly newsletter on actionable digital asset market insights and practical observations with a smidgen of greentea 🍵 insights
🎥🔥 My Youtube Content 🎥🔥
📖 Book of the Month 📖
This month, I am re-reading The Fourth Turning by William Strauss and Neil Howe. If you have not read or listened to the audiobook (free link below). I cannot recommend it enough. In my opinion, this is one of the most important books of the last 20 years. I know it sounds hyperbolic, but give it a read or listen and judge for yourself!
Listen to The Fourth Turning For Free with Audible. Link
💭✍🏼 Food For Thought 💭 ✍🏼
Putin’s attack triples Ukrainian crypto exchange’s trading volume - Link
The article is interesting because it shows the behavioral finance aspect of a world where Bitcoin exists as it trades at a 7% premium.
$3 Million in BTC Donated to Ukraine focused charity from a single wallet - Link
💸 Companies and Deals I am Watching Closely 💸
1. Jambo, a company building a super app in Africa, raised $7.5 million from Delphi, Coinbase and Three Arrows Capital - Link
2. Amber Group, a cryptocurrency trading platform, raised $200 million from Temasek, Pantera, Sequoia China and others - Link
3. ICE (parent co. of the NYSE) has made a strategic investment in Tzero's security token platform - Link
📖 Quote of the Week 📖:
"When people talk listen completely. Don't be thinking what you're going to say. Most people never listen.” Across the River and into the Trees, 1967
📰 This Weeks Most Interesting Digital Asset News 📰:
- Thai Stock Exchange plans to connect crypto with its digital asset platform - Link
2. FTX to launch FTX Gaming - Link
3. Mexico to made Bitcoin Legal Tender - Link
4. El Salvador Has $500M in Commitments for its Bitcoin Bond - Link
5. Solana, Pantera Capital, NBA Owners Invest in NFT Fantasy Basketball Game - Link
📈 Top 10 Market Movements by Market Cap over the last 7 days 📉:
Bitcoin: Total Miner Revenue - All Miners
I have updated this chart from last week and you can see that miner revenue continues is general trend downward. As I noted last week this is likely to continue to put selling pressure on Bitcoin's price. One point I want to call out, we have never seen a world with a major western power war and Bitcoin / Crypto generally being widely adopted and available. Buckle up.
Bitcoin Mean Hash Rate:
Updated from last week, you can see the hash rate is remaining relatively stable within a range so far this year.
This metric shows the the average estimated number of hashes per second produced by the miners in the network. Recall the "hashrate" is a measure of how fast miners can process the Bitcoin Proof of Work algorithm. With hash rates going up it means there was more miners on the network. More miners on the network means more competition and this means that it becomes harder for miners to profitability mine Bitcoin. This is metric feeds into the total miner revenue chart above because as Bitcoin's price moves higher the the block reward component of miner revenue also increases. To recap miner revenue = miner fees + block reward (i.e. the value of Bitcoin mined). Thus, as the price of Bitcoin's goes down that component of miner total revenue drops as well. Coupled with the fact that there is more hash power on the network as a result of miners build out and some going public and /or raising money to buy more asics you have profitability slowing, prices falling and miner's under pressure to sell their Bitcoin to raise cash to fund operations versus taking on debt to fund operations at this point in the business cycle.
Bitcoin: Price OHLC
As you can see Bitcoin is still chopping around on chain compared to last week and generally downward. If you have read my newsletter since December 2021 when I turned generally bearish (go back and reach those editions on the website) because of all the broader macro related factors. I suspect we have months ahead of range bound activity until some of the major macro economic factors turn and governments generally pivot back to QE = money printing = currency debasement = Bitcoin price "should" move up in a hurry. Miles to go before we sleep...
Bitcoin: Exchange Net Transfer Volume from/to Exchanges - All Exchanges
Updated for this week, we can see that some Bitcoin has moved on to exchanges but on chain data is not "driving the bus" at this time. I will retire this chart after this week until I see meaningful updates.
Ethereum: Net Transfer Volume from/to Exchanges - All Exchanges
I have updated the chart for this week. The main call out on this chart is that ETH stuck in the same bearish cycle as Bitcoin. Not the end of the world of course if you have an investment time horizon versus a "speculation" time horizon. The time will come when the data shifts but until then I will keep observing and waiting.
Total Value Locked (USD) in DeFI
DeFI TVL has inflected downward noticeably again this week from $72+ Billion last week. As a reminder TVL means "Total Value Locked". This refers to people taking ETH based tokens or other tokens and "locking" them in DeFI protocols to lend, generate yields and otherwise earn excess returns. The elephant in the room remains the specter of the US Fed hiking rates in dramatic fashion (see prior weeks letters on this topic as I have been saying since late last year). The more I am reading on the policy dynamics that central banks face the more I am convinced they are likely to break something on their road to "fixing" the situation. I say this because the have to play a perfect game (pick your sport) and still get lucky for this to be a benign policy tightening and that is not the highest probability outcome by a Ukrainian kilometer.
Products I Personally Use and Support
Green Tea Tidbits:
The scientific name for green tea is Camellia Sinensis.
This Newsletter does not provide, and no portion of this content purports to be, individualized or specific investment advice and I do not provide investment advice. All information provided herein is general in nature and is made without regard to individual levels of sophistication or investment experience, investment preferences, objectives or risk parameters and without regard to the suitability of the content for individuals or entities who may access it.
No information provided herein, should be construed as an offer to sell, or a solicitation of an offer to buy any security or investment vehicle, nor should it be construed as tailored or specific to you, or any reader or consumer thereof. You understand and agree that the content does not constitute specific recommendations of any particular investment, security, portfolio, transaction or strategy, nor does it recommend any specific course of action is suitable for any specific person or entity or group of persons or entities.
The content herein is based upon information from sources believed to be reliable and I am not responsible for errors, inaccuracies or omissions of information; nor is it responsible for the accuracy or authenticity of the information upon which I rely. For informational purposes only. Do your own research.
Some products or services on this newsletter may have affiliate links. This means that I may earn a commission if you click through the link and make a purchase and/or subscribe. I will only provide links to products or services that I genuinely like, use and support.