Hello everyone,
The purpose of this letter is to inform you about the current situation of the crypto-asset market, as well as recent news in this field. This letter is not investment advice, but merely a sharing of my personal point of view.
News
ADAN (Association pour le Développement des Actifs Numériques) recently unveiled an unprecedented study on the current state of the crypto sector in France. As this sector develops rapidly, it is essential that our public decision-makers and companies grasp the challenge of establishing France as the future crypto stronghold.
This study confirms the need to act now and swiftly in France in order not to miss the crypto sector challenge as we missed the internet challenge in the 2000s. You can download this study on the ADAN website. right here. There is a long version and a summary.
A few numbers to summarize the study for you:
-> 8 % French people have already invested in crypto, compared to 6,7 % of French people who own stocks directly (according to the AMF). It is estimated that there will be 12 % of French crypto investors by the end of the year.
-> 30 % of French people are considering investing in crypto, compared to 37 % of French people who are interested in acquiring stocks.
-> 77 % French people have heard of crypto
-> 46,7 % did not invest because they do not know enough about how cryptos work.
–> More 1,129 direct employeess in the crypto sector (lower bound with the 29 largest companies in the sector surveyed). The projection for January 2023 is approximately 2500 Jobs.
The crypto market is experiencing strong growth nationally and globally
The year 2021 saw the crypto market exceed the €2 trillion market capitalization mark for the first time, placing it ahead of the capitalization of silver (precious metal) (€1.135 trillion).
This capitalization represents the total value of cryptocurrencies in circulation, but does not count the value generated by companies that produce services in this industry nor all the indirect value produced by the sectors that revolve around it.
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Uber will accept Bitcoin sooner or later – The shocking statement from Uber's CEO. The CEO admits that the subject is becoming increasingly serious internally. Discussions about adopting crypto are almost daily within the company.
«As this mechanism evolves toward a less costly and more environmentally responsible model, I think you will see us look even more closely at crypto. And if what you want to get me to say is «Will Uber accept crypto in the future? Yes, absolutely, eventually.» Uber CEO Khosrowshahi.
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Toulouse: A new campus will open in May 2022 to train digital experts. This new campus will open its doors on May 16, 2022, to address the talent shortage in the digital sector. Specializations will be introduced for virtual and augmented reality and for blockchain topics.
Various
We are thrilled to announce that Crypto Assets Management is now the owner of digital land in The Sandbox Metaverse! You can join us at coordinates (-95, -192).
Our land is located near plots belonging to Binance, BlackPool, and eToro. Other companies have also chosen to enter this metaverse; you may know Adidas, Atari, Warner Music Group, Carrefour, The Walking Dead, Snoop Dogg, Gemini, Galaxy Interactive, CoinMarketCap, and many others.
What is a metaverse? It is a digital world in which Internet users can communicate with each other on a global platform via a unique avatar of their own. These sets of virtual spaces allow you to spend time with friends, work, play, learn, shop, attend sporting or musical events, create, and much more.
Blockchain technology and the birth of crypto-assets were the missing link in building a true Metaverse. We will soon be publishing an article on this subject.
The Sandbox is a decentralized metaverse based on the Ethereum blockchain, which enables peer-to-peer value exchange with an ERC-20 digital token (a token based on the Ethereum blockchain) but also allows the holding and ownership of digital objects thanks to the ERC-721 format (NFTs). An entire economy is being created in this metaverse, and unlike a simple video game, this economy is connected to the tangible world we know. Indeed, the value of the token circulating within The Sandbox economy is very real and transferable to our world, unlike the currency of a fictional game confined within it.
New jobs are emerging in this type of metaverse: landowners who make up the metaverse can rent out their land, builders/architects construct game elements, creators of objects, equipment, and art, as well as creators of activities, experiences, and adventures within the game.
You can click here to discover some videos and better understand what this metaverse looks like.
It can be hard to imagine this new digital world. But if we think about it for a few minutes. Before the 2000s, individuals would never have suspected the image of the world we currently live in and to what extent, in 2022, digital technology would be completely anchored in our societies, to what extent we would be dependent on it on a daily basis. Yet, it actually happened, and we cannot change these trends.
Fundamental Analysis
Here is the price of Bitcoin over the last two years in dollars.
At the time of writing, the price of Bitcoin is 44,100 $ (on 02/16/22).
The recent bounce we had 3 weeks ago was the result of an extreme undervaluation of fundamentals. As stated during our previous letter (No. 9), the price relative to «hodlers» and speculative fundamentals was at an extreme of overselling.
Unlike past bear phases, the last 3 months of downward price action were initiated by selling pressure in the futures markets: likely due to institutional investors holding onto their BTC while shorting futures contracts.
We notice that the market is evolving, notably with more and more derivatives, as there are more and more professionals and institutions entering the space. This is good news for the large amount of capital flowing into the crypto-asset economy, but our on-chain analyses are somewhat altered as a result, because we do not have as precise an overview as before when investment activities were solely on the Bitcoin blockchain. We will therefore try to better take into account derivatives, which now have an increasingly significant impact on prices.
We are no longer at maximum oversold levels relative to fundamental on-chain supply and demand. During the 14 days that Bitcoin traded below 40,000$, there was heavy buying by whales (very large wallets).
- Long-term cycle: In terms of the broader macro cycle, we are on a countdown to the next bull phase. The coins held by large investors are steadily increasing. The more these types of investors hold, the closer we get to a bull phase.
- Medium-term cycle (3 months): Chain selling has eased, futures continue to sell off. We expect continued sideways price action transitioning into an accumulation phase before the bull phase can occur.
- Short-term cycle (1 month): Chain supply and demand is no longer oversold, which means we are not sure prices will rebound strongly in the short term. Short-term investors have sold heavily in recent months, meaning further selling pressure is unlikely.
In the chart below, we can see that the coins held by short-term holders (3 to 6 months) are in a bottom zone (at their lowest). We can therefore assume that the investors who intend to sell have already sold. Thus, the risk of a further sharp decline has been largely mitigated.
This indicates to us that we are close to a macro bottom (a long-term low). We are more likely to move sideways with a gentle recovery.
As indicated in our previous letters, we still believe that there will be an outperformance of ETH (Ethereum) over BTC (Bitcoin) in the future. This has been true over the previous months.
If you have any questions, comments, or would like to know more about our service, please feel free to contact us: crypto.assets.manage@gmail.com
— Warning —
This is not investment advice, no one can predict the future.
You are solely responsible for your own investment decisions.
We are not responsible for any losses resulting from a decision made based on the information in this letter.
