Bitcoin, huh? It has been a nice little 6 weeks or so in the crypto market. Bitcoin has continued its steady but bouncy ride upwards, going from a local low of 48k on Feb 28th to its current price of just under 60k. It's up 15% the past month and 82% the past 3 months. It broke through 60k and hit an all time high of 61.2kish on March 13th before bottoming back out at 51k on March 23, and then groggily making its way from there to 58.3k at the time of this post.
The total crypto market capitalization right now is $1.94 trillion, and the BTC market cap alone is sitting at a nice and comfy $1.11 trillion. The BTC market cap settling in over 1 trillion is a real good sign. Ethereum's market cap is $237 billion. After that is Binance Coin at $51.6 billion, Tether (which is a stablecoin always pegged at 1 USD) at $42 billion, then Polkadot at $40.5 billion to round out the top 5 coins right now. Just under that is Cardano, and Chainlink is 10th with a $12.8 billion market cap. (A point I'd like to make here, by the way, is that too much emphasis is put on a coins' price. The real metric you want to measure is market cap. What a coins current price is is irrelevant when comparing to other coins or the market as a whole.)
The 'BTC market cap dominance' is something I like to keep an eye on. It's currently just under 60% and has been slowly trending down since mid 2019 when it 69%. ETH market dominance is at 12.4% which is about average, albeit slowly climbing since end of 2018. I think market cap dominance is obviously a good metric to look at to see how BTC and any other coin is doing compared to the whole of the crypto market. Last post I was worried about an alt-coin surpassing BTC and becoming the go-to crypto currency. I'm a little less worried about that now since BTC has such a huge lead over anything else. The closest competitor in market cap is ETH but ETH and BTC can co-exist. I have been and will be buying ETH anyway so that doesn't really scare me. And the BTC dominance falling doesn't necessarily scare me either. There are currently 9108 crypto currencies listed on coinmarketcap.com and that number is constantly growing. So BTC can slowly lose its market cap dominance yet still be in first place by a mile. I suppose that is the real question though, isn't it? Where will the BTC market cap dominance sort of 'settle in'? 50-40% feels about right. If it fell through 40% I might start to get worried.
With the markets being open 24/7 and the crazy volatility and maybe even the futuristic feel of it all, it seems like time speeds up in the crypto markets. A week feels like a month and a month feels like 6 months. And for a while it seemed every night at around 2-4 AM the price would fall off a cliff before slowly rebounding during the day. Everyday waking up and checking the price can be a wild ride. When you look back at charts it all seems so obvious and easy but being in it every day is a different story. I learned my lesson pretty early on trying to 'time' the market and sell tops and buy dips. I actually made a really nice little excel sheet that tracks everything I do with crypto. I'm up about 10% on my total investment on BTC and 15% on ETH (ethereum) but I own about 10x more BTC than ETH. My average entry on BTC is 51.6k and for ETH it's 1750. I've 'lost' money by selling BTC but have done better with ETH trading-wise and am up just on trading. I also have tiny bits of Chainlink and Cardano.
I think I got all of the n00b mistakes out of my system early on and feel great about how things are going. I got a little crazy when BTC and ETH were really pumping in the beginning and made every mistake possible. I made a couple BTC and ETH buys at literal tippy tops and made some BTC sells that look absolutely horrible in hindsight. I also FOMO'd my way into Cardano at its all time high and managed to pay a bunch of fees for the privilege. It was for a tiny amount though and I just look at it as the price of an education. The alt-coin market is crazy and honestly probably best to just avoid. I waited on a nice little dip on Chainlink and got in at 25.23 but I don't think I'll do much more alt-coin dabbling in the future. A little piece of advice I heard was that you should own at least one full bitcoin before you get into alt-coins and I think that'll largely be my strategy from here on out, except for adding in around 20-30% ETH.
Speaking of Ethereum, what in gods name is Ethereum? Well if you thought Bitcoin was hard to understand, take a dive into ethereum. I'm not going to go deep into ETH and what it is and what it does. I'm far from an expert and you can learn plenty for free online. But the broad strokes are that ETH is a smart contract platform and its network is 'proof of stake' instead of the btc-used 'proof of work' (or at least ETH is turning into a proof of stake network.) Proof of stake uses up less energy than proof of work, and the energy consumption problem is becoming one of bitcoin's biggest issues. There is no real 'coin' though with ethereum and what you own when you buy ethereum is honestly a little murky. You're basically buying a piece of the ETH network. There are 115 million "eth's" in circulation right now, but there isn't a max supply. That was one of my biggest pluses with bitcoin and that worries me about ETH. Another cool thing about ethereum is that it is actually able to host other crypto currencies. This has been the most common use of its platform so far (Link is on the ETH network).
However, the big thing right now with ETH is the fact that all the NFT (non-fungible tokens (fungible means tradable)) stuff is going on the ETH network. You can't talk about ethereum without talking about NFT's. NFT's are a huge thing going right now. If you don't know, it's basically like baseball cards but online. And instead of just baseball cards it's all kinds of stuff. Meme's, tweets, art, music...they all can be NFT's. Some of the stuff going on right now in the NFT market though is absolutely insane and honestly makes me a little nervous that we're at a top. A meme of a defeated Donald Trump sold for almost $70 million!A meme you can just, like, have for yourself, online... for free. I also saw Kings Of Leon released their whole new album as an NFT with NFT artwork. I went into the auction to check it out and everything was going for insane prices. People are even paying the huge fees that ETH is charging right now too to make these transactions. The NFT thing feels preposterous to me to be totally honest, but you really can't argue with the numbers. The amount of money going into NFT's is mind boggling. People love owning little things and anyone around my age can remember the hype of baseball cards when we were young. The biggest problem with memorabilia has always been the same; fakes. Some estimates say that 80% of all memorabilia is fake. NFT's solve this problem. Maybe even with 3D printers, people can make physical copies of their stuff, too. I'm just trying to keep an eye on everything, really, and am staying away from any hard and fast rules. You gotta keep your head on a swivel around here. This space is fast, it's bizarre, it's constantly changing and evolving and it sure is fun being a small little part of it. It really is an interesting time to be alive.
But anyway, back to ethereum. Its' price action has been frustrating since everyone seems to think ETH is way over due for a major breakthrough. And I have to agree somewhat. The BTC/ETH valuation seems out of whack to me. I don't see how BTC can be almost 5 times worth more than ethereum (in market cap). It leads me to think that either BTC is overvalued or ETH is undervalued (or both).
The negatives with ETH right now seem to be A) its network is clogged, slow and costly B) it's had some technical issues C) the miners 'show of force' threat D) it has a lot of competitors.
The first point doesn't bother me at all really. It's like saying a bar is going to go out of business because it's too busy. The reason the network is slow and expensive is because everyone is using it. Now, the networks ability to deal with the increased traffic may be a problem in the future, but right now this isn't something I worry about too much.
The technical issues centered around the fact that the ETH network was released probably too early and it came with glitches. The basic idea was we'll release it and fix as we go. This got them first mover advantage but it does have its drawbacks obviously. There is supposed to be some new fork or a 2.0 platform coming out, so we'll see about that.
The miners show of force threat was basically ETH miners trying to band together and get control of 51% of the ETH network just to show that they could. This was in response to ETH miner rewards being decreased (to deal with the high fees). This was big news when it came out a few weeks ago but it seems to be a non issue now. I haven't heard or read anything about it in weeks and it was always dubious as to whether that was even possible.
Cardano is currently ETH biggest competitor. Actually, the guy who started Cardano initially was a co-founder of ETH and split off to make Cardano. I think if you're going to buy a large position of ETH, it wouldn't be crazy to buy some Cardano as a hedge (which was my thinking). I don't know enough about it to write anything, but I'll be watching Cardano closely.
(Small disclaimer about everything I just wrote: I do not understand ethereum nearly as much as I do bitcoin and some of this stuff may not be 100% correct. If you have any corrections, feel free to comment).
It feels like ETH has been moving sideways forever but it's actually up 26% the past month, which is largely fueled by its 21.8% growth this past week. It finally broke though 2k, topped out at 2139 and has been falling a little bit since, currently at 2050. If its falls through 2k and back to 1850ish I'm going to be really confused, but I'll probably be buying.
Also in my last post I mentioned how youtube has been a great source for learning about crypto and I mentioned 'BitBoy' as my favorite guy to watch. He still is the best to watch for a general overview of the crypto world, but his trading advice and tutorials can be ignored. He's a little bit salesman-y so you really just gotta use him for news. Don't follow his (or anyones, really) trading advice. People complain that he and others are a little click baity with the 'O face thumbnails' and ridiculous price predictions. But he and others have addressed this and I can't say I disagree. They don't want look absurd in their thumbnails and call for a million dollar bitcoin, but it's the only thing that works! People don't click on boring thumbnails. So don't judge a youtuber by his thumbnails.
The best guy on crypto-youtube though is "ben crowen". Just search him and you'll see what I mean. I like bitboy for all around market news and ben crowen for market analysis. I also watch 'crypto zombie' who is almost like bitboy and ben combined. One of my biggest strengths in sports betting was always knowing who was smart about what and learning as much as possible from them, and right now all that stuff is mostly going on at youtube.
That's about it for now. Haven't been doing much betting but I plan on getting back into hockey props soon. My model is great but as always I don't have many places to play, and the model takes forever to use. NBA was going ok until I had one horrible week and just sort of lost interest. You really need to be following the leagues if you want to bet props night in and out and popping in a couple days a week isn't cutting it. With players being out of the lineup all the time with covid it's especially tough, and I haven't found a good way to incorporate the fact that NHL teams are virtually playing the same opponent every night. At the very least, I'll be betting hockey props in the playoffs (and may even give out some picks!), which are always super high ROI. As far as the lack of posting, if you are a reader of this blog I really do appreciate it. I always plan on writing more but one or two a month seems to be the norm. I'll never just abandon it though, and if I ever do decide to stop I'll make a post. So bookmark me and check back at least once a month and you should see something new. Until next time!
