Crypto from an Analyst’s Perspective – Part 3 – “We’ve crossed the Rubicon”

Good Morning Everyone –

For those of you who don't know me – I work at a large financial firm that not only deals with investment research, but provides financial software to financial institutions across the country. Our main products are literally the backbone of banking in the country. I myself provide research and recommendations to our C-level. I say this not to brag, but to give legitimacy to the insights I like to share with this community! With that, here are some wonderful happenings in the financial world when it comes to crypto:

#1) Research that my firm has done and that we have backed up with outside research shows that Crypto has officially broke into the top 10 most important topics of 2022 for community FIs . Why is this important? Because community banks are not JPM or Morgan Stanley. Community FIs are the regional banks and credit unions that serve the everyday person. This means we are seeing grassroots demand all over the country (US) and that demand is being noticed by a group of people that are normally hesitant to change due to the time/money cost that smaller institutions have trouble shouldering at times. Most of the demand is simply for buy/hold/sell capabilities and will most likely only start with BTC and maybe ETH, but, hey, it's a start right? To me, this is huge because it will increase the liquidity in the crypto market and the number of eyes watching crypto as a whole. Ideally, this leads to less volatility and more analysis done on coins, which helps sniff out shitcoins and rugpulls.

#2) If you do ANYTHING to educate yourself, read this: https://messari.io/pdf/messari-report-crypto-theses-for-2022.pdf Messari is a very well-respected crypto analysis firm. This 165 page document should be your holy text for 2022. They talk about everything – potential regulation, trends they see coming, their favorite coins, etc. And it covers every topic you could think of DeFi, Web 3.0, Staking, NFTs, American/European regulation, literally everything. I respect this firm a lot and engorge myself on their research whenever I can. You should always try to be more informed than the average investor and this is a great start.

#3) Regulation is LOOMING. Everyone and their mother started trading crypto for the first time in 2020, which means 2021 will be the first year that potentially millions of people report crypto assets on their taxes for the first time. This will absolutely grab the attention of Congress, the IRS, and the SEC, who will not wait to pounce in any way they can. In a less sinister view, we have seen an abnormally high number of hacks the last 12 months, along with rugpulls/shitcoins that are targeting people with more money than sense (Look up the whole Squid Game Coins debacle, great example of this). A lot of advocacy groups and even crypto exchanges understand that if people keep getting burned this fast, it will hurt mainstream adoption and legitimacy of crypto, so they are calling on Congress to do something. In a similar vein, the Fed actually finally released their report on a US Digital Dollar here – https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf. While only 40 pages, it is incredibly dry (trust me, I had to read the whole thing). In essence, the Fed has not taken a stance on whether a Digital Dollar makes sense yet, but lays out the pros and cons and mentions it will take a lot of coordination in the government to do it right, laying the foundation for a US CBDC, but also a lot more regulation.

I think I'll stop here. I could literally go on for hours about this. Please let me know if this interests you and I can post more! In my line of work, I do research and give recommendations to all size of investment banks, community banks, private equity, and have even been fortunate enough to speak directly with the Fed a few times. I figure I can use this to help inform and expand a community I love!

Also, because I ALWAYS get this question, here are my holdings, in no particular order (In fact, I am going to do them out of order on purpose to avoid giving any special weight to a single coin).

Disclaimer: I hold more types of coins than the average person because I like to have small stakes in any coin I research, because it helps me follow their price action and any news:

BTC, ETH, ETH2, DOT, MATIC, SOL, GRT, LINK, ADA, ALGO, CGLD, BAT, CTSI, XLM, ATOM, AVAX, REN, FET, XTZ, CHZ, OGN, ASM, UNI, ACH, JASMY

Other coins of interest: LUNA, Helium