Offramp from L2
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Major General Zaw Min Tun said rolling out a digital currency would “help improve financial activities in Myanmar.”
The National Football League (NFL) has announced the American football organization plans to give fans virtual commemorative tickets in the form of non-fungible tokens (NFTs) for the upcoming Super Bowl LVI in Los Angeles. The NFL has partnered with Ticketmaster to issue the commemorative NFT tickets allowing fans to hold “a digital keepsake from their […]
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Despite the recent downfall of the crypto market, the projection of Bitcoin (BTC) to cross the $100k threshold remains seen as a matter of time. Back in December, Bloomberg Intelligence indicated that the anticipated mark would happen eventually “due to the economic basics of increasing demand vs. decreasing supply,” and new data shed some light on that idea. Bitcoin Vs. Crude Oil In a new Bloomberg Intelligence report, data shows trends that could favor Bitcoin and Ethereum prices. The report noted that “Representing advancing technology, Bitcoin is gaining traction as a benchmark global digital asset, while oil is being replaced by decarbonization and electrification.” Lack of supply elasticity is an attribute shared by Bitcoin and Ethereum that “sets them apart from commodities”. For commodities, “rising prices thwart demand and increase supply”, but the top cryptocurrencies might tell a different story. “Increasing Bitcoin and Ethereum demand, and adoption vs. diminishing supply, should follow the basic rule of economics and raise prices.” In the following chart, Bloomberg shows a juxtaposition of the decreasing BTC and ETH supply along with the excess of crude oil and liquid-fuel production compared to consumption heading toward 13% in 2023, noting that the U.S. “has been a top headwind for commodity prices”. Related Reading | Why The Bitcoin At $100K Discourse Remains Strong Despite Market Crashes Mainstream Adoption Experts think that BTC “is well on its way to becoming global digital collateral”, while its revolution in the “digitalization of finance” is in its early days. Future mainstream adoption will lead to increased demand for bitcoin. The report predicts that the future developments in the macroeconomics and politics of the U.S. –dollar dominance, jobs, votes, taxes, and the aim to oppose China’s policies and find leverage against them– will lead U.S. policymakers into creating proper regulations for cryptocurrencies and ETFs. Beyond El Salvador adopting BTC as legal tender, the proximity of the U.S. midterm elections has evidenced the American senators and politicians’ race to follow along. In Wyoming, Arizona, and Texas politicians are pushing to turn the digital coin into a legal tender, pointing at Bitcoin as a new defining factor to get well positioned in the polls. A wider acceptance of bitcoin is expected to happen with more regulatory clarity because fear and misinformation could diminish, thus more investors would jump in meaning mainstream adoption. The report also notes that this greater mainstream adoption of Bitcoin is looking unstoppable, which would likely benefit its price. “The launch of U.S. futures-based exchange-traded funds in 2021 appears as a baby step by regulators that we think culminates with ETFs tracking actual cryptos via broad indexes.” Bloomberg data shows that “Rising demand, adoption and depth of Bitcoin should leave few options for volatility but to decline.” For this reason, they think it’s going through a “price-discovery stage”. The following chart shows “the upward trajectory of Bitcoin futures open interest vs. the downward slope in the crypto’s volatility vs. the stock market”, noting that Bitcoin’s 260-day volatility is 3x of the Nasdaq 100, which contrasts its volatility during the launch of futures in 2017, which was closer to 8x. Regarding the Federal Reserve’s tightening measures, Bloomberg experts had previously predicted that “Bitcoin will face initial headwinds if the stock market drops, but to the extent that declining equity prices pressure bond yields and incentivize more central-bank liquidity, the crypto may come out a primary beneficiary.” Related Reading | Bitcoin Leverage Ratio Suggests More Decline May Be Coming
Ethereum has experienced a market pullback following bitcoin recently. Although the market remains in a downtrend, the digital asset has been holding up quite nicely. Ethereum has been trending above $2,800, almost 50% down from its all-time high. But a model suggests that three is a 4x movement in the near future of the digital asset. Let’s take a look at this model. Ethereum To 4X? In a recent Twitter thread, a crypto investor known as Shaan Puri lays out the model that could drive Ethereum to four times its current price. It starts out by stating that the digital asset is currently undervalued by up to 4 times meaning that they expect the price to be much higher than it currently is. Related Reading | TA: Ethereum Recovers Losses, Why Bulls Face Major Challenge Pointing to a basis laid out by Ryan Allis, another crypto investor, Puri explains how the former’s model puts ETH at $10K. Instead of just going through “hopes and dreams” or the usual wider adoption argument, it uses three key attributes to put the cryptocurrency at such a high price. ETH recovers above $2,800 | Source: ETHUSD on TradingView.com The first of these is the revenue generated by the asset. As with many crypto projects, sending the tokens incur a fee on the part of the sender. This fee is then paid to the miner for providing the computational power required to confirm these transactions. Puri points out that in January alone, generated revenue from transaction fees was $1.3 billion, which are then split into the base and tip fee. With the implementation of the EIP-1559 last year, the ethereum fee burn was implemented. With time, more ETH is being burned than is being created, thus turning the digital asset deflationary. Google “ETH watch the burn” There's a great website that shows you how much ETH supply is being reduced everyday. Last 24hrs, $36M worth of ETH was burned. Long term, this is why ETH believers created the term “ultra sound money” bc ETH supply goes down over time pic.twitter.com/yzQ21KuWtD — Shaan Puri (@ShaanVP) February 2, 2022 The second point was valuing companies that have cash flow. Something which the created of this model understands well, given that they went to business school. It follows up with a picture that explains ethereum’s discounted cash flow valuation and how it ties into this model. ETH discounted cash flow valuation | Source: Twitter Last but not least, the assumptions behind the model, which are “the model assumes a 25% annual growth rate and a 35x P/E ratio (the average of the SP500.” Puri explains that the high gas fees are a cause for concern for both devs and users, which leads to two major risks; all transactions moving to L2s to manage transaction fees or another smart contracts platform winning out in the end. Related Reading | Bitcoin On-Chain Demands Suggests That The Market Has Reached Its Bottom Basically, given that ethereum possesses real cash flow, it can be used in the fundamental analysis of the asset, Puri added. But a bigger point is – we've heard for years that crypto is: “Rat poison” “It’s just speculation”“Not an investment. No fundamental value” From value investors like Warren Buffet That's wrong now. ETH now has real cashflows to use in fundamental analysis. — Shaan Puri (@ShaanVP) February 2, 2022 Featured image from NullTX, chart from TradingView.com
The International Olympics Committee sells NFT pins, Team Great Britain offers NFT-based fan engagement and the “Chinese Banksy” protests.
We all know that there's such a thing as a bear market, but where is it? I don't see it, that's because it's a myth from the days of old and we're men of science and reason now. You see, we're in a new age in the crypto world, it's called the bull summer, basically…
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