Bitcoin Nears 30K as Wall Street Anticipates Critical Fed Decisions
Federal Open Market Committee (FOMC) to meet on January 25th and 26th
Market Movers
The larger coins by market cap were demolished this past week, with Solana taking the biggest hit, and all had very similar trend lines
The highest 7-day gain for any coin on the market was Ethereum Meta (ETHM), which was launched in 2018 but did not gain notoriety until November 2021
ETHM is a token that aims to fix the privacy issues on the Ethereum blockchain by allowing users to convert ETH to ETHM. After converting, users can anonymously send ETHM tokens amongst one another before eventually converting their coins back to ETH
Despite the digital currency's functionality, there appears to be a consensus amongst its previous buyers that it is a fraudulent coin. All of the reviewers of the coin agree that they were only able to convert back to ETH at a loss (via IsThisCoinAScam). Stay away from the ETHM if you are investing in it to make a profit
Table Talk
THE FED IS KILLING CRYPTO
The broader market, not just cryptocurrencies, has been massacred this past week. For instance, the public sentiment for the Nasdaq is currently more bearish than when the Pandemic first started in March (via Market Watch). Many Wall Street institutions and individual investors are selling off their “risk assets,” which to them includes Bitcoin and other cryptocurrencies. Weak. As Warren Buffet once stated, “you should not hold a stock for 10 minutes if you don't intend to hold it for 10 years.”
Here is a graph from Blockware Market Intelligence that shows the price of BTC (in orange) and Nasdaq (in blue). As seen below, BTC’s price movement is highly correlated with the general market sell-off.
Holders and Paper Hands People (a term we just coined) are both anxiously waiting for the Federal Reserve to release statements from their meeting on January 25th and 26th.
NFT Buzz
LARGE CORPORATIONS GETTING NFT FOMO
Twitter implemented a feature this past week where paid users can connect their wallets and authenticate their NFTs through hexagonal profile pictures.
Additionally, although neither Facebook nor Instagram has officially announced how exactly they intend to integrate NFTs into their respective platforms, a report from the Financial Times suggests both enterprises are in the early stages of testing out different implementations. Executives at Meta are reportedly working on features to allow users to more easily display their digital art on their profiles and are even mulling the idea of setting up their own NFT marketplaces to capitalize on the $40B industry.
These reports aren’t that surprising as last December, Instagram head Adam Mosseri announced that the social networking service was, “actively exploring NFTs” (via The Verge).
Mark Zuckerberg has also been relatively vocal in his quest of integrating NFTs into the Metaverse through users’ ability to both showcase their artwork in their respective virtual spaces and the ability to buy/sell/send their digital art in the virtual world. Welcome to 2022.
NELK Makes $23 Million in 10 minutes
Nelk, also known as Nelk boys, is a YouTube Channel and Entertainment company. They have a cult-like following of mostly college/high school age kids and post mainly party clips and prank videos to go along with their multi-million dollar clothing line—Full Send. We’ve watched some of their recent videos for research purposes only.
This past week, they launched their own NFT collection by releasing ten thousand “Full Send MetaCards” for 0.75 ETH each. The collection sold out in less than 10 minutes, netting roughly $23M worth of profit for Nelk (via Dexerto). Here are a couple of stats worth noting from their launch.
They amassed over 120K Discord members in 12 hours
They released the collection 2 days after announcing the project
They did not announce the price of the NFT until the morning of the public sale
The artwork was 5/10, at best
Typically, NFT creators spend months or at least weeks building hype around their project on platforms like Twitter/Discord and spend even more time hammering out the exact utilities that the NFT will grant consumers. However, due to Nelk’s large following, such steps seemed unnecessary. Before the launch, the company had tentatively announced that the NFT will serve as a ticket to future meet-ups, exclusive lounges/parties, and will even have metaverse utilities (amongst other things).
On a recent episode of their Full Send Podcast, the company’s co-owner Kyle Forgeard responded to the “rug pull-ish” criticisms of the project by arguing that the brand/image of Nelk will be tarnished if they do not implement something worthwhile for their holders and promised that owning one of the 10K collection will be either beneficial through its utilities or profitable in an eventual sale. Although, to be fair to Forgeard, the floor price (lowest price on the secondary market for an NFT collection) has been consistently higher than the .75 ETH minting price since the launch.
So far, though, the only thing Full Sending from the project has been the $23M directly into their Ethereum wallets.
DeFi Demographic
DAOS WILL TAKE OVER IN 2022
DAOs are organizations run by code and based on the blockchain. There are two main benefits of DAOs.
1.) They Are Trustless
Rather than having to rely on traditional CEOs, leaders, and managers, all of the decisions of the DAO are voted on and decided upon by its members. Any member of the DAO can create a suggestion, and then the people vote on whether the suggestion should be carried out. All votes, suggestions, and implementations are fully visible on the blockchain and eliminate any lack of transparency that traditional companies may have. Voting power is dictated by owning a “governance token” and your votes can be delegated to other token holders giving an opportunity for future Protocol Politicians.
2.) They Cannot Be Shut Down
Unlike normal companies where the government can technically step in and request information/hypothetically shut down the company, that is nearly impossible for a DAO.
All information is visible on the DAOs public ledger, and the only way it can be shut down is if the majority of the community members vote and agree to do so.
DAOs have exploded in popularity in recent months, with some making the headlines like the ConstitutionDAO in November 2021. The first DeFi DAO to take the crypto community by storm was MakerDAO which provides over-collateralized loans in its USD-pegged stablecoin DAI in exchange for holding your crypto assets. It now sits at number three by market cap. The two largest by market cap are Uniswap, the popular decentralized exchange, and Aave, the lending protocol (via CoinMarketCap).
Tweet of the Week
Our Tweet of the week comes from Forbes’ crypto page
According to Statista.com, a recent study revealed that females make up 48% of NFT owners in the subsample surveyed. These numbers contradict the estimated 90% of bitcoin owners being male.
Whether you value Mark Zuckerberg’s opinion or not, he thinks that NFTs are a “fantastic gateway” for women to break into crypto (via Yahoo).
An example of female influence in space can be seen through the “World of Women” NFT project. Its ten thousand unique pieces are meant to represent the diverse and powerful women of the world. OpenSea has the collection ranked number 10 on its Top NFTs of the past 30 days.
Final Cup
The Fed’s meetings on Jan 25th and 26th will be a significant indicator for current Wall Street decisions and cryptocurrency price movements. The aggregate year-over-year price increase was roughly 7.0% for 2021, its highest rate since 1990 (via Magnify). The Fed will most likely look to counter that through interest rate hikes, but it has yet to be determined how quickly said changes will be implemented.
The environmental mining hearing from the past week yielded no legitimate conclusion about the positive or negative factors that could result from mining. However, lawmakers were educated on the basics of blockchain and how the proof-of-stake system operates. It makes one question if they’re truly qualified to propose legislation on cypto.
The NFT space continues to pop off as companies find ways to stay with the times. Every person with a large following should be at least looking into making an NFT collection to connect with fans/make a ton of money. What is stopping LeBron James from coming out with 10K NFTs of himself for $20 each? Owners get access to a private look into LeBron’s everyday life and get exclusive merch. You know where to find us LeBron.
Think for yourself and never follow the Herd. Public sentiment is that the Fed’s meeting will be very unfavorable, but public sentiment isn’t always correct. Buy while there's blood in the street.
Meme of the Week
(via moonmogul)
Together we will rise.
- Pat + Ari ✌️
Disclaimer: None of this is investment advice, financial advice, or trading advice. CRYPTOPONG does not endorse any of the cryptocurrencies, DeFi applications, or NFT collections mentioned in this article. Perform your own due diligence and/or consult a financial advisor before investing.