Weekly Digest Chung’s Picks of the Week (1/2)

Bitcoin and Ethereum failed to meet expectations in 2021, but they look set to play the role of risk-off assets.

Major Catalysts

Bitcoin ($BTC) and Ethereum ($ETH) did not perform up to expectations in 2021 but there are tell-tale signs that 2022 will be a game-changer. A few major catalysts will likely spark the second leg of the bull cycle, they are: –

Positive crypto regulations globally

Another country adopts El Salvador’s Bitcoin move

The US launches spot Exchange Traded Funds (ETFs) for $BTC and $ETH

Major adoption of crypto assets as a medium of exchange

These catalysts have been unfolding in 2021 and will likely take place. These catalysts are major changes that will have profound and lasting effects, hence resistance from certain quarters is expected. Jurisdictions that choose to ignore crypto will not stand to gain from this booming industry. 

Source: $BTC was trading below $30,000 at the start of 2021 but is now worth $47,000 
Source: $ETH started 2021 below $1000 but rose steadily to sit at $3,700 in a year

The bull market appears to be still intact if a wider time frame is taken. It would be extremely unlikely for Bitcoin to chart the exponential growth it did in the previous cycle. Volatility is reduced when there is more institutional support. 

But, one thing is quite certain, it will trend upwards as liquidity dries up in exchanges. Bitcoin and Ethereum are starting to be regarded as risk-off assets, fitting the narrative as a store of value. 

Myths about crypto are being dispelled. This comes with better understanding and proper dissemination of information. It is unfortunate that even regulators indulge in spreading falsehood about cryptos. Progressive states such as Singapore and United Arab Emirates (UAE) will likely benefit from their crypto-friendly approach. 

Source: Diffusion of Innovation Theory by Everett Rogers if applied to crypto assets seems to suggest that the best is yet to come

Weekly Recap

Popular Decentralized Exchange (DEX) on the Binance Smart Chain (BSC), PancakeSwap ($CAKE) trading battle claims went awry

Binance receives good news from Canada and Bahrain on its license applications.  

DeRace ($DERC) launches its much-awaited Beta version. 

Figment, a web 3.0 firm secures a $110 million funding with backing from Binance Lab and Binance.US

Injective Labs updates its mainnet for a protocol overhaul. 

PancakeSwap passes a proposal to redistribute rewards from underperforming farms.

Ontario Securities Commission maintains that Binance is not authorized to offer its services to persons or organizations within the province. 

BSC.News’s horse is named Moonshot by way of a community vote. 

Tranchess becomes a BSC validator post the launch of the protocol’s Binance Coin (BNB) fund.

Binance lists its distribution of the $1 billion growth fund in 2022.

Market Sentiment

Source: The market still remains fearful and cautious 

The market volatility was caused by a thin order book on exchanges as most traders are on holiday. 

There are no massive sell downs and many traders are increasing their leveraged longs. This is a bullish indicator. 

The upside looks more promising than the downside. 

Some institutions with unlocked funds for Q1 of 2022 will likely start their shopping spree in the crypto market. 

Source: Bitcoin ($BTC) seems to be finding its support on a descending line

Microstrategy continues to increase its Bitcoin stash. 

Source: The biggest Bitcoin bull, Microstrategy is making consistently buying up Bitcoins regardless of the market sentiment 
Source: On-chain analyst Tech Dev thinks that the market has not changed

Coins to Watch

Long term prospects: Ethereum ($ETH), Terra ($LUNA), Avalanche ($AVAX), Cosmos ($ATOM), Solana ($SOL)

Metaverse theme: The SandBox ($SAND), Decentraland ($MANA), Render Token ($RNDR), DeRace ($DERC

Good risk to reward ratio: $XRP

GameFi theme: Thetan Arena ($THG)

Risky Investment

  • Jade Protocol ($JADE) suffered a massive sell down recently. 

This fork of $OHM garnered attention with its massive 7-figure Annualized Percentage Yield (APY).

It has recently unveiled its new strategy to create a $1,000 price floor. 

In a YouTube post, the team claims that they were running a Fear, Uncertainty, and Doubt (FUD) campaign on its own project.

This certainly raises a red flag for a few reasons: –

Legitimate projects focus on building its project and creating value, not by testing the loyalty of their community

Jade Protocol’s social media is full of positive comments from its cheerleaders despite making an unpopular move

Its $30 million airdrop campaign did little to prevent its price from sliding further

Lessons Learned in 2021

2021 was a financially rewarding year. It could have been an extraordinary year if some basic investment wisdom were practiced. Here are some reminders to self: – 

Making that epic gain of 100x or more is like fairy tale endings, it gives helps us dream but is very unlikely to happen. 

It is easier to spot gems that give 2x or 3x returns and then move on to the next project. Exponential growth comes with exponential risks. 

Timing the market is a really bad investment strategy.

Taking profit is always a good practice. The market will always go on sale periodically. 

Never listen to influencers with click baits. 

Technical analysis only serves as a guide. The projects’ fundamentals are key. 

Huge long leveraged positions often result in massive sell downs. 

Price prediction models must not be taken as infallible. 

Source: BSC News

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