This newsletter is sponsored by PHEMEX, the only exchange that I use to trade crypto with leverage. Sign up with the link above and get some free Bitcoin. I really encourage you to check them out - you know that I never endorse a product that I do not use!Ethereum Is Poised For A Big Year2020 was the Bitcoin show. Its parabolic price move coupled with growing institutional interest has thrust the currency to the center stage for retail and institutional investors. Waiting in the wings is the only real competitor - Ethereum. Traders, investors, and community members have all pointed out that the most certain coin to follow the price action of Bitcoin will be Ethereum, but why are they so sure? What do they know about Ethereum? This segment is going to take a deeper look into Ethereum fundamentals and clarify why I am so bullish on the asset this year.There is no easier place to start in the exploration of Ethereum than the growing mountain of evidence supporting institutional interest. Just recently, Grayscale’s managing director said, “over the course of 2020 we are seeing a new group of investors who are Ethereum first and in some cases Ethereum only.” And “there’s a growing conviction around Ethereum as an asset class.” From Grayscale’s most recent Q4 report, Bitcoin saw an average weekly investment of $33.6 million and Ethereum was a close second at $26.3 million. Institutions accounted for 93% of capital inflows for Q4, 2020. Grayscale isn’t the whole story here though, as other major hedge funds are publicly showing interest, including One River Digital Asset Management - they are planning to invest 1 billion dollars in Bitcoin and Ethereum. The institutional story for Ethereum isn’t complete without mentioning the coming arrival of Ethereum Futures on CME, which leads to my next point.Until now, Bitcoin has been the only option for betting on the future price of crypto on a legacy platform. That is about to change - the CME group is offering Ethereum contracts starting on February 8th. Each contract will represent 50 Ethereum, meaning at the current value, the contract is over $50,000. Institutions with broker accounts on CME will be the one's buying contracts, not your average leveraged retail trader. This will provide institutions an additional tool to hedge their positions, and better manage their portfolio. This news will not only bring new utility to Ethereum investing but also a lot of publicity in the legacy financial world. Seasoned crypto investors may remember that when Bitcoin futures went live on CME, it was almost the exact cycle top. This time with Ethereum, the product is launching well before the peak retail euphoria, at a much earlier stage in the bull cycle. This should be an excellent primer for the price when institutions begin to use the product. Assuming the CME Ethereum futures launch as planned, we will also be able to expect Ethereum options later this year. Depending on the time of release for this product, it may be the signal of an imminent cycle price top that investors are searching for.The next driver behind Ethereum is its transition from proof of work to proof of stake in the form of Ethereum 2.0. Currently, the developer team is working on finishing phase 0 and transitioning to phase 1. The tech behind the transition is complicated, but the benefits investors need to understand are simple. Ethereum 2.0 will be quicker to use, cheaper to transact, and hold locked coins in the proof of stake mechanism. As of most recent reports, a total of 2,497,026 Ethereum has been sent to the deposit contract. Totaling over 2% of the total supply, this number will remain locked and continue to grow over the coming months to ensure the stability of the upgrade, providing staking rewards to those who deposited. This is an advantage that Ethereum holds over Bitcoin - the ability to lock up some of its supply, effectively taking a portion of the total supply off the market. Then there is DeFi. Almost every new hot altcoin has been made on the Ethereum blockchain, which then uses Ethereum’s smart contract technology to lock up more Ethereum. The DeFi space has grown exponentially, posting a 4,240% gain in total value locked in 2020. Of the coins locked in DeFi, 6.6 million Ethereum are locked, which represents almost 6% of the circulating supply. Added to the Ethereum locked up in the deposit contract, 8% of the total Ethereum supply is off the market. I wouldn’t be surprised to see up to 15% of the supply off the market in 2021. Plus, even as other coins try to compete with Ethereum, over 95% of the market is using Ethereum’s services rather than competing protocols. Bitcoin might be the king when it comes to storing value, but Ethereum is the king of creating value. No other platform has come close... yet.A few macro trends are favoring Ethereum in 2021. The SEC is clearly ramping up its efforts to shut down questionable projects particularly those that could be deemed securities. They already targeted XRP, the 4th largest cryptocurrency. Why does this matter? In the eyes of the SEC, Bitcoin and Ethereum are the only coins deemed not a security other than stablecoins. As the regulatory hammer drops, a lot of money will flow from at risk projects to the safe havens - Bitcoin and Ethereum . Furthermore, since only Ethereum and Bitcoin hold this legal status, institutions will solely look to these two assets to invest in rather than the broader market.New regulation is allowing banks to issue stable coins that have almost all been created on the Ethereum blockchain. Every transaction requires a small amount of the ETH called gas. This gas is burned and taken off the market reducing the total supply forever.Finally, from a technical perspective, Ethereum is yet to breach it's all time high from 2018, which came after Bitcoin surged and fell. We have already seen Bitcoin more than double it's all time high. If Ethereum simply achieves this, the upside potential is far greater than most coins.If there is any coin likely to follow the price action of Bitcoin, surpass all-time highs, and have an explosive 2021, the fundamentals are strongly behind Ethereum.In This Issue:Bitcoin Thoughts And AnalysisAltcoin ChartsRose Blumkin - The American DreamElrond Gold Is Now On Voyager!DOT Momentarily Flips XRP Market CapPakistan Is MiningMy Recommended Platforms And Tools
The Wolf Den #157 - The Case For Ethereum in 2021
The Wolf Den #157 - The Case For Ethereum in…
The Wolf Den #157 - The Case For Ethereum in 2021
This newsletter is sponsored by PHEMEX, the only exchange that I use to trade crypto with leverage. Sign up with the link above and get some free Bitcoin. I really encourage you to check them out - you know that I never endorse a product that I do not use!Ethereum Is Poised For A Big Year2020 was the Bitcoin show. Its parabolic price move coupled with growing institutional interest has thrust the currency to the center stage for retail and institutional investors. Waiting in the wings is the only real competitor - Ethereum. Traders, investors, and community members have all pointed out that the most certain coin to follow the price action of Bitcoin will be Ethereum, but why are they so sure? What do they know about Ethereum? This segment is going to take a deeper look into Ethereum fundamentals and clarify why I am so bullish on the asset this year.There is no easier place to start in the exploration of Ethereum than the growing mountain of evidence supporting institutional interest. Just recently, Grayscale’s managing director said, “over the course of 2020 we are seeing a new group of investors who are Ethereum first and in some cases Ethereum only.” And “there’s a growing conviction around Ethereum as an asset class.” From Grayscale’s most recent Q4 report, Bitcoin saw an average weekly investment of $33.6 million and Ethereum was a close second at $26.3 million. Institutions accounted for 93% of capital inflows for Q4, 2020. Grayscale isn’t the whole story here though, as other major hedge funds are publicly showing interest, including One River Digital Asset Management - they are planning to invest 1 billion dollars in Bitcoin and Ethereum. The institutional story for Ethereum isn’t complete without mentioning the coming arrival of Ethereum Futures on CME, which leads to my next point.Until now, Bitcoin has been the only option for betting on the future price of crypto on a legacy platform. That is about to change - the CME group is offering Ethereum contracts starting on February 8th. Each contract will represent 50 Ethereum, meaning at the current value, the contract is over $50,000. Institutions with broker accounts on CME will be the one's buying contracts, not your average leveraged retail trader. This will provide institutions an additional tool to hedge their positions, and better manage their portfolio. This news will not only bring new utility to Ethereum investing but also a lot of publicity in the legacy financial world. Seasoned crypto investors may remember that when Bitcoin futures went live on CME, it was almost the exact cycle top. This time with Ethereum, the product is launching well before the peak retail euphoria, at a much earlier stage in the bull cycle. This should be an excellent primer for the price when institutions begin to use the product. Assuming the CME Ethereum futures launch as planned, we will also be able to expect Ethereum options later this year. Depending on the time of release for this product, it may be the signal of an imminent cycle price top that investors are searching for.The next driver behind Ethereum is its transition from proof of work to proof of stake in the form of Ethereum 2.0. Currently, the developer team is working on finishing phase 0 and transitioning to phase 1. The tech behind the transition is complicated, but the benefits investors need to understand are simple. Ethereum 2.0 will be quicker to use, cheaper to transact, and hold locked coins in the proof of stake mechanism. As of most recent reports, a total of 2,497,026 Ethereum has been sent to the deposit contract. Totaling over 2% of the total supply, this number will remain locked and continue to grow over the coming months to ensure the stability of the upgrade, providing staking rewards to those who deposited. This is an advantage that Ethereum holds over Bitcoin - the ability to lock up some of its supply, effectively taking a portion of the total supply off the market. Then there is DeFi. Almost every new hot altcoin has been made on the Ethereum blockchain, which then uses Ethereum’s smart contract technology to lock up more Ethereum. The DeFi space has grown exponentially, posting a 4,240% gain in total value locked in 2020. Of the coins locked in DeFi, 6.6 million Ethereum are locked, which represents almost 6% of the circulating supply. Added to the Ethereum locked up in the deposit contract, 8% of the total Ethereum supply is off the market. I wouldn’t be surprised to see up to 15% of the supply off the market in 2021. Plus, even as other coins try to compete with Ethereum, over 95% of the market is using Ethereum’s services rather than competing protocols. Bitcoin might be the king when it comes to storing value, but Ethereum is the king of creating value. No other platform has come close... yet.A few macro trends are favoring Ethereum in 2021. The SEC is clearly ramping up its efforts to shut down questionable projects particularly those that could be deemed securities. They already targeted XRP, the 4th largest cryptocurrency. Why does this matter? In the eyes of the SEC, Bitcoin and Ethereum are the only coins deemed not a security other than stablecoins. As the regulatory hammer drops, a lot of money will flow from at risk projects to the safe havens - Bitcoin and Ethereum . Furthermore, since only Ethereum and Bitcoin hold this legal status, institutions will solely look to these two assets to invest in rather than the broader market.New regulation is allowing banks to issue stable coins that have almost all been created on the Ethereum blockchain. Every transaction requires a small amount of the ETH called gas. This gas is burned and taken off the market reducing the total supply forever.Finally, from a technical perspective, Ethereum is yet to breach it's all time high from 2018, which came after Bitcoin surged and fell. We have already seen Bitcoin more than double it's all time high. If Ethereum simply achieves this, the upside potential is far greater than most coins.If there is any coin likely to follow the price action of Bitcoin, surpass all-time highs, and have an explosive 2021, the fundamentals are strongly behind Ethereum.In This Issue:Bitcoin Thoughts And AnalysisAltcoin ChartsRose Blumkin - The American DreamElrond Gold Is Now On Voyager!DOT Momentarily Flips XRP Market CapPakistan Is MiningMy Recommended Platforms And Tools