Monday, February 21, 2021
Your Weekly Update On All Things Crypto
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OVERVIEW
MACRO NEWS
Happy $1 Trillion Day!
Last Friday, Bitcoin's market cap topped $1 trillion dollars for the first time in history, trading over $54K per coin. In doing so, it became the eighth asset in history to boast a thirteen-digit market cap. Bitcoin has not only earned its status in the rarified air of the "1 Trillion Club", but it also did so quicker than any asset in history. It took Bitcoin just 12 years to grow from an obscure academic whitepaper to a $1 trillion global, decentralized network. In contrast, to make the $1 trillion club, it took Google 22 years, Amazon 27 years, Microsoft 45 years, and gold... well it took gold a few thousands of years... but who's counting?

How Did We Get Here?
The $1 trillion milestone followed 12 months of extreme upward volatility for Bitcoin, with its capitalization increasing by more than 10x since the “Black Thursday” crash in March of 2020. Since the carnage of the COVID-induced sell-off, we have seen nothing but bullish price action for Bitcoin as opportunistic buyers gobbled up the dip and recovered the entire 60% selloff in less than two months. Institutional buyers witnessed Bitcoin's incredible resilience first hand, as the "cyber hornets" pushed the price back to pre-COVID levels and finally decided to jump in. Microstrategy initiated the tidal wave of institutional adoption by converting 100% of their balance sheet into Bitcoin. Gradually, then suddenly, a slew of corporations started purchasing Bitcoin, with notable mentions going out to Square, PayPal, Mass Mutual, and Tesla. During this wholesale change in perspective, the narrative around Bitcoin also changed. In less than one year, holding Bitcoin went from being a "career risk" to a staple in any balanced portfolio.

What this means for Cryptocurrency
This landmark valuation is an incredible achievement for the cryptocurrency space. It validates the asset class and solidifies the notion that cryptocurrency is a revolution that cannot be ignored. Bitcoin is the "gateway drug" of the cryptocurrency industry. Now that it's been normalized by the mainstream culture, it will become easier and easier for investors to get their fix on the rest of the blockchain-based project's building in the space.

The revolution has just begun, but a trillion-dollar valuation only throws fuel on the fire. We are a movement that can no longer be ignored, and in a world full of conflict and despair, it feels good to be able to point to cryptocurrency as a sign of hope. Cheers to such an amazing achievement.. no matter how long you have been with us, or how deep you are in the game... we're happy to have you here. We look forward to celebrating the $2 tillion mark with you sometime soon.
TOP STORIES
Protocol Wars: The Race to Proof-of-Stake Supremecy
In 2009, Bitcoin changed the world by introducing the world to the concept of blockchain and cryptocurrency. Six years later, in 2015, Ethereum took blockchain to the next level by introducing the world to smart contracts. A smart contract is a protocol that automatically executes if the conditions of the agreement are met. This added functionality, along with a built-in coding language called Solidity, created a "Cambrian explosion" of new companies building applications on this decentralized smart contract platform.

Both Bitcoin (a first-generation cryptocurrency) and Ethereum (a second-generation cryptocurrency) disrupted the world in their own way and paved the way for the new protocols and dApps that followed. However, one of the downfalls of being the 1st, is that others get the advantage of learning from your mistakes and improving on your inventions. One such innovation is a move away from the energy-intensive Proof-of-Work consensus algorithm, and the adoption of the greener, more scalable Proof-of-Stake consensus algorithm.

Two clear leaders in the third-generation, proof-of-stake, smart-contract race are Polkadot and Cardano. Both are lead by ex-founders of Ethereum Gavin Wood, and Charles Hoskinson respectively. They are also neck and neck in market cap, ranking at 3 and 4 respectively, behind only Bitcoin and Ethereum. Polkadot and Cardano both offer extreme improvements in the fields of scalability, cost, interoperability, and energy efficiency. They are also both racing to launch decentralized applications on their platform within the next month.

Not to be outdone, Ethereum is also working on a complete protocol rebuild called Eth 2.0. This will migrate their entire network from a proof-of-work model to proof-of-stake. With that said, the final development is still more than a year away from completion and every day that passes without Eth 2.0 is another opportunity for developers to switch to Polkadot and Cardano.

While this epic showdown does not need to play out as a "winner take all" scenario, it will surely be an all-out battle for the market share of the decentralized world in the years to come.
ACQUISITIONS & FUNDING
Async Art Raises + $2M in Seed Round
Last week, the 'new art movement', Async Art, closed a $2M plus seed round led by Lemniscap, with additional participation from Galaxy interactive, Signum Growth Capital, Semantic, Placeholder, and others. The company will use the funds to expand its team and scale the platform, with the onboarding of new users and creation of displays as the primary focus.

Async Art is built on the blockchain and is a platform for for creating and trading non-fungible tokens (NFTs), specifically digital paintings. This programmable art allows creators to “deconstruct their work into 'Layers' and endow them with abilities.” The company generated over $1 million in art sales during it's first year of operations, and launched a smart TV app to display digital art. Async was also featured in Christie's, a major auction house. 

The NFT market saw historic growth last year. Transaction volume tripled, having gone from $62M in 2019 to over $250M in 2020. More recently, NFTs have been a hot topic in both the mainstream media and Hollywood. Celebrities and business tycoons, as well as beloved brands, are monetizing on this movement. Logan Paul, a famous Youtuber, released a series of NFTs in collaboration with Bondly Finance. Business tycoon, Mark Cuban, is selling tokenized tweets. The NBA teamed up with Dapper Labs to sell 'moments' on NBA Top Shot.

"The NFT space is thriving right now. Digital creators can monetize their works like never before, and investors can diversify into scarce NFT assets," says Lisa Liang, the co-founder of Async Art. A representative from the led investor, Lemniscap, told the media "By enabling the shared ownership of art pieces and dynamic influence over their appearance, Async Art is turning the existing concept of art on its head and is paving the way for a whole new category of programmable media."

Have you copped a NFT yet?
TECHNICAL ANALYSIS
Historically, Bitcoin is Not a Fan of March
While Bitcoin's run to $1 trillion has been monumental, we also appreciate how fast we were able to get here. We have seen roughly 5x in Bitcoin's price in the past 7 months. No matter how revolutionary the asset, this parabolic run does feel a bit overextended. While we still feel this bull run is far from over, we do acknowledge there will be shake-outs along the way. So, to quantify our thesis, we went back and looked at the price history of Bitcoin in March for the past 7 years... this is what we found (from peak to low in March).

March 2014: -40%
March 2015: -30%
March 2016: -14%
March 2017: -34%
March 2018: -45%
March 2019: +12% (Outlier)
March 2020: -58% (Black Swan - Covid)
March 2021: ?

Historically, March has not been friendly to Bitcoin. After such a parabolic run upwards, the same correction looks possible in 2021 as well. It is important to remember that the market doesn't only go up. With that said, we believe, if there is a dip, that it will be bought up quickly by institutions who have been waiting patiently with their checkbooks in hand.

View the chart here.
Alt-Coins: It's A Party Until It's Not...
The Alt-coin market has been on fire for all of 2021, gaining more than +10% market dominance over Bitcoin. This is largely due to the fact that Bitcoin has been on a tear also. But what happens when the music stops? If Bitcoin has a correction, will alt-coins follow suit or will they continue their move upwards? Well, we can't predict the future, but we can learn from history. Typically when Bitcoin corrects, alt-coins tend to fall faster than the king coin. However, as the Bitcoin price starts to recover back to its recent highs, the alt-coin market will appreciate quicker.
The Alt-coin market is directly impacted by the price of Bitcoin. Your investment decision into alt-coins should follow your thesis on the price movement of Bitcoin. Remember: Always do your own research when investing. This is just our analysis... this should not be considered financial advice.

View the chart here.
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TRADES OF THE WEEK
Crypto.com (CRO)
Crypto.com is an industry leader in driving the adoption of cryptocurrency. Their all-in-one platform allows users to buy, sell and pay with crypto. Their investing portal allows users to earn interest on their crypto, and their cash-back metal cards allow users to spend their crypto anywhere Visa cards are accepted. While much of the alt-coin market has already experienced significant gains vs Bitcoin, the Crypto.com native token, CRO, has yet to make its rally back to its recent highs. CRO is still sitting roughly 85% down from its relative high vs Bitcoin, but as retail users continue to flood into the cryptocurrency ecosystem, we believe the need and the utility of the CRO token will increase.

View the chart here.
Aave (AAVE)
AAVE, formerly known as Ether Lend (LEND) is one of the leading lending protocols in DeFi. It is widely considered one of the "Blue Chip" protocols in DeFi. Avve protocol exploded last year, growing over 3,700% in 2020 alone. There is currently over $5.7 billion in value locked on the Aave protocol, 2nd only to Maker DAO. AAVE has had a meteoric rise since 2020 but is currently 50% down from its all-time high vs. Bitcoin. The 50% retracement also falls directly on its previous all-time high in August of 2020. If we see this horizontal line from support then we could be looking at a healthy recovery for Aave in the near future.



View the chart here.
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We at CryptoWeekly are not Financial Advisors. None of the content or opinions expressed in this newsletter should be considered financial advice. We highly recommend that you do your own research before investing in any project within or outside the cryptocurrency space.