Weekly Digest Chung’s Picks of the Week (1/16)

Troubled small nation-states are starting to realize that Bitcoin is self-help and this trend is slowly unfolding.

First Major Catalyst in Play

One of the major catalysts identified in our digest on January 2 is another nation-state realizing that Bitcoin is the solution to a broken monetary policy. Tonga recently announced that it will be following the Bitcoin playbook of El Salvador. If El Salvador survives in 2022 despite warnings by top economists, the Bitcoin narrative will be validated. 

Bitcoin ($BTC) and Ethereum ($ETH) on exchanges are drying up. Many states are starting to recognize that crypto is here to stay and regulation is the way forward. Bitcoin’s on-chain metrics are pointing towards a positive price action but this is not playing out. What is happening? 

There are a few logical possibilities: –

Many institutional players are waiting for the much anticipated regulatory framework from the US lawmakers.

Stablecoin regulation is ‘spooking’ the market. Most major crypto assets are paired against $USDT, $USDC, or $BUSD. 

The pandemic and the ever-changing variants have not been brought down to manageable levels. This gave rise to economic uncertainties, because lockdowns may be implemented.

Many investors are uncomfortable that Bitcoin is no longer following a fixed trend. Bitcoin has decoupled from the 2013 rally and the 2017 rally. The stock-to-flow model by PlanB is no longer a guidepost. 

The US Securities and Exchanges Commission (SEC) appears hostile to crypto-assets and institutional players operating crypto platforms.  

Weekly Recap

Vitalik Buterin, the founder of Ethereum ($ETH) believes that the future of crypto is multi-chain and not cross-chain. 

Jake Chervinsky, Head of Policy at Blockchain Association thinks that a slow crypto market will give regulators time to carve out a proper regulatory framework. 

Proposal for a new token standard in the form of ERC-4626 will innovate Decentralized Finance (DeFi). 

Binance.US’s Chief Executive Officer, Brain Shroder prioritizes low fees, safety, and reliability to its users.  

Bloomberg estimates Changpeng Zhao, Binance’s Chief Executive Officer’s net worth at $96 billion. 

Brain Brooks of BitFury believes that Bitcoin will be short-term bearish. 

Head of US policy in FTX believes that US lawmakers are warming up to crypto. 

Binance’s CEO advises new users to start small and educate themselves along the way. 

DeRace ($DERC) reports key statistics after its beta launch. 

NFT Marketplace announces a subscription mechanism in its bid for fairness and equality to its users. 

Binance Smart Chain (BSC) directs potential projects to investment focus areas for its $1 billion growth fund. 

Tonga makes a Bitcoin move, anticipates that Bitcoin will become legal tender in November. 

India to get its first Bitcoin and Ethereum futures Exchange Traded Funds (ETFs)

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Market Sentiment

The crypto market is finding its equilibrium. 

Bitcoin is holding its support and is still looking for major catalysts for a substantial price movement. 

Some altcoin gems are already making moves despite being in a sluggish market. 

Venture capitalists are pumping money into web3 projects. 

Coins to Watch

Terra ($LUNA) appears to be on an uptrend. Unlike other stablecoins, $UST is an algorithmic stablecoin and the price of $UST is sustained through $LUNA. The more $UST is minted, the more money flows into the Terra ecosystem. 

Fantom ($FTM) is an immediate buy for both short-term and long-term profit.

Binance Coin ($BNB) will be a good long-term hold as projects are incentivized to build on Binance Smart Chain (BSC) through its $1 billion growth fund. $BNB powers the BSC network. 

Cosmos ($ATOM) is an attractive asset because it is interoperable. It is dubbed as the ‘Internet of blockchains’. It is also cheap and fast. The battle for layer-1 will heat up and a small chunk will go to Cosmos giving it a positive price push. 

Protecting Status Quo

The legacy financial system will do whatever it takes to stoke fears to the regular retailers. Moody warned that El Salvador will increase its risk profile by dabbling in Bitcoin. El Salvador has been increasing its Bitcoin holdings by using its reserves. 

In the past, the common rhetoric was the proliferation of illegal activities through cryptocurrencies. This myth has been debunked. The effort to discredit one of the most defining innovations in finance will continue. The right question to ask is whether the current financial system is flawed and whether these flaws exist in crypto?

Source : bsc.news