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 the field. This letter is not investment advice, but merely the sharing of my personal point of view.
News
Visa is promoting the adoption of crypto assets by merchants and banks. The company has now launched its crypto-asset advisory services. These new services are dedicated to financial institutions, individuals, and other businesses. With the launch of these advisory services, the company is no longer content to simply issue optimistic forecasts for crypto-assets, but is also contributing to their realization by helping other organizations take the decisive step toward crypto adoption.
Swiss bank BBVA is adding Ether (ETH) to its cryptocurrency custody and trading service following strong demand from clients wishing to diversify. The bank wants to continue developing its digital asset portfolio in the coming months. From now on, it will offer Bitcoin (BTC) as well as Ether (ETH) trading to its clients. Banks are moving timidly toward digital assets; those that successfully navigate this shift may be the winners of tomorrow.
Nike enters the metaverse by acquiring RTFKT, a start-up specializing in the creation of virtual sneakers in the form of non-fungible tokens (NFTs). These are unique digital tokens that are impossible to copy. You have to ask yourself the question: why buy virtual sneakers? Quite simply to acquire an image and visibility in the metaverses, which are bringing together more and more users. For example, large companies (like Nike) pay a lot of money for a few seconds of visibility on TF1 when they are just two-dimensional images of a pair of shoes.
The government of Zimbabwe is considering adopting cryptocurrencies as legal tender. El Salvador gave ideas to many other nations, notably those hit by high inflation. Zimbabwe is one of those countries. In 2009, the country had issued a 100 trillion Zimbabwean dollar banknote which at the time represented 30 US dollars. This banknote shows the limits of fiat currencies (a fiat currency is a currency decreed by a state which entrusts its management to a central bank). Zimbabwe is eyeing Bitcoin, which has shown its appeal in recent months as a bulwark against inflation. It remains to be seen what conclusions the government will draw from this first phase of consultation.
The milestone of 90 % in bitcoins in circulation was recently reached. Referring to the data published by the Blockchain.com website, we can see that more than 18.89 million bitcoins have been mined out of the 21 million that will eventually exist. Bitcoin, a bulwark against inflation? For its defenders, the main appeal of Bitcoin is precisely its limited supply. Unlike fiat currency, more cannot be produced.
Below is a chart showing the number of bitcoins issued by the network. 21 million is the maximum and this number cannot be changed.
Number of bitcoins issued by the network.
Technical & Fundamental Analysis
Bitcoin price over the past year in US dollars.
At the time of writing, the price of Bitcoin is 47,000 $ (on 12/15/21).
The price correction has intensified in recent days. This does not call into question the fundamental price growth and the long-term bull market. As you can see above, BTC went from 30,000 $ to 69,000 $ in 4 months, so it is normal for the price of BTC to seek to re-test these new support zones at 43,000 $. This price correction pushes back our expectations of surpassing 70,000 $ by a few months, perhaps to the second quarter of 2022.
- Long-term cycle: Despite the recent price drop, there is no sign of a bear market. Structurally, we are still in a long-term bull region. Long-term holders have still been heavily accumulating discounted BTC in recent weeks.
- Medium-term cycle: We are thinking about a resumption of classes in the weeks of December with a consolidation of prices for several weeks. We are thinking about a return of prices towards the old records during the first half of the year 2022.
- Short-term cycle: The number of HODLers (long-term bitcoin holders) has increased. They bought the dip over the past few weeks. According to the Supply Shock valuation model on the bitcoin blockchain, BTC is currently trading at a discount of 6,000 $. We believe we are close to a bottom for this correction.
While the price has pulled back from the highs of a month ago, the net flow of coins moving to HODLers remains in the bullish territory. The heatmap below shows that it has softened over the past month, but there has not yet been enough selling to warrant a deeper bearish phase. We are monitoring this area closely, but for now, there are no signs of a bear market. We remain bullish in the long term.
Long-term buy/sell chart. Green = buy, red = sell.
We always notice that Ethereum's (ETH) fundamentals are strengthening day by day. We believe that ETH could outperform BTC over the coming weeks as it is still undervalued.
Furthermore, the long-term trend of BTC relative to ETH indicates a higher upside potential for ETH.
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.
