Investing

Week in Crypto – March 16, 2021

Topics this week:

  • Bitcoins weekend Rally
  • ETH and Alts are winding up!
  • NFT Investing with Abra

Market recap — Bitcoin’s weekend rally

This past weekend, bitcoin hit a new all-time high reaching over $61,500. The move is another historic milestone — so far 2021 seems like a year of milestones for bitcoin. The price also briefly meant that bitcoin’s market cap hit $1.14 trillion, which means bitcoin is closing the gap with Google’s $1.385 market cap.

Why is this happening? Basic supply and demand is playing out here:

  • Continued institutional investment and interest in bitcoin and crypto from multiple corners of the retail (ie you,) and institutional financial worlds. On Friday, MicroStrategy — the enterprise software company now famous for building a small war chest of bitcoin — announced acquiring another $15 million (or 262 BTC at Friday’s prices more of bitcoin). This flywheel of established financial players entering the market is starting to move faster.
  • The federal government approved and started mailing checks as part of the $1.9 trillion stimulus package that was passed last weekend.
  • Cryptocurrencies were dominating global headlines, including the traditional press, following the $69 million dollar sale of beeple’s artwork at Christie’s. (More this below)

While the weekend bitcoin rally lost steam on Monday, this latest 10% pullback looks like a classic consolidation flag that will ultimately push the markets higher and maintain the current bull trend.  A third 30% correction will likely happen after we hit or approach $70k. The good news is that $50k becomes resistance for that pullback.  Incredibly exciting times. Reminder: we don’t give investment advice and we don’t recommend trying to “time the markets.”  Invest wisely and ask lots of questions!

Big update from ETH land

I just keep getting more bullish on Ethereum. I can’t help myself. Sorry to all of my “well maximalized” Bitcoin friends. You know I’m irresponsibly long Bitcoin just like you but I’m also long Ethereum and wish I had more.

I sense another “alt season” is coming and it’s going to be B.I.G. I’m looking for WAXP, ADA, and some of the other names in NFT and DeFi land to make huge runs. The timing for the upcoming Ethereum news couldn’t be better…

Speaking of which… the Ethereum community is finalizing plans for a big update this summer. Called Ethereum Improvement Proposal (EIP) 1559, the update will impact ETH’s transaction fees or gas prices. Once implemented, EIP 1559 will make setting gas prices way more user-friendly (because they will be auto-generated). Another component is that a portion of the gas prices will be burned, which should ultimately affect ETH’s supply side and make the currency more scarce. 

This upgrade comes at a time when Ethereum is seeing more use as the backend of many interesting De-Fi projects and as the asset of choice for more and more high-profile non-fungible token projects.

 

How to invest in NFTs on Abra:

Non-fungible token (NFTs) continue to rage. Digital collectibles, digital paintings, sports memorabilia, concert tour packages and more are all being “tokenized” as NFTs.

If you’re like me maybe you LOVE art and are in awe of painters, digital artists, EDM DJs, musicians, etc and wish you could do what they do. Personally I have the artistic ability of a raccoon searching the garbage pails for food. You know I was there and what’s left behind is a huge mess. So while it’s awesome that the NFT space represents such a great opportunity for artists to leverage the Internet to monetize and distribute their work what do I do if I don’t know the first thing about picking winners in the art world?

But the companies selling the canvas, the brushes, and the VR goggles, not just the art!

If you want to invest in NFTs you could always just do what I do.  First, I admire the artists and promote their work as much as I can. Second, I invest and trade in the cryptocurrency protocols that are making NFT’s happen. My favorites are Wax (WAXP +286% last 30 days), Ethereum (ETH -2% last 30 days), and Decentraland (MANA + 184% last 30 days). But I’ve also recently dabbled in Tron (TRX -10% last 30 days), and NEO (NEO -4% last 30 days).

You need ETH and stablecoins to invest in NFTs!

Investing in NFTs generally requires Ethereum or some other stablecoin. Abra is the perfect place to manage this. I always keep a ready supply of cash (as USDC or TUSD) in my Abra App that will allow me to quickly move into Ethereum or Bitcoin and make purchases on NFT sites like OpenSea.

Power to the Beeple

Building on the NFT craze, Digital artist, Mike Winkelmann aka Beeple, sold a piece of digital art as a NFT at the renowned art auction house, Christie’s. 

I’m not sure which is more astounding, the fact that Beeple’s work was the third-highest price paid for a piece of art by a living artist, or that the instructions accompanying the auction outline how to make a payment in Ether for the piece. 

While the Beeple sale seemed to be dominating the headlines, there is actually way more going on in the NFT space. Digital art and collectibles is really taking off, with record sales of other digital art only hitting astronomical numbers (check out crypto punks, for example).

It is still early days for NFTs, but they are really interesting from a digital property rights perspective. The ability to own a digital file, whether it is an image, or music, a book, or a blog post will be huge for creators. One potential outcome is the disruption of monopolistic streaming platforms that leave artists with a few cents per stream. Imagine a world where you can buy a movie directly from a filmmaker or production company, watch the movie, and then resell your copy (maybe it’s one of ten, or one of one hundred, or one of thousands and priced accordingly). If the movie becomes popular, maybe you make some money as an early adopter — and maybe the original creator can also make something from the secondary sale because the ownership chain is all verifiable via code. 

For more on the promise of NFTs, I recommend this great post by our friend Chris Dixon at A16Z.

If you want to know why I’m so bullish on WAXP on Abra then this parting shot is for you…. Here’s another way to think about NFTs:

Enjoy your Tuesday. Peace and Love!

Bill

 

Disclaimer: Abra Interest Accounts are issued by Prime Trust a Nevada Chartered Trust Company. Rates for Abra Interest Accounts are subject to change. Digital currencies are not legal tender, are not backed by any government, and Abra Interest Accounts are not subject to FDIC or SIPC insurance protections. Any opinions, news, research, analyses, prices, or other information provided here is a general market commentary and does not constitute investment advice. Abra does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions. Abra will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

Bill Barhydt