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Terra, Avalanche and Osmosis lead the L1 recovery while Bitcoin LUNA, AVAX and OSMO have outperformed most altcoins, hinting that a DeFi revival could be in store. The layer-one (L1) ecosystem has received increased attention in recent months as users search for new investment opportunities in the Cosmos (ATOM), Fantom (FTM) and NEAR. Following January's market sell-off, where Bitcoin (BTC) price dropped to bottom below $34,000, much of the L1 field has struggled to regain its momentum. According to data from Delphi Digital, since the BTC bottom on Jan. 24, the only L1 to experience a notable gain in price include Terra (LUNA), Avalanche (AVAX) and Ethereum (ETH). Terra ecosystem growth The price growth seen in LUNA was in large part due to the announcement from the Luna Foundation Guard that it had raised $1 billion to form a Bitcoin reserve for the ecosystem’s Terra USD (UST) stablecoin. Terra also saw the launch of its second lockdrop event and the Mars Protocol helped drive demand for LUNA token. The $1 billion in reserves for UST was also a boon for Anchor Protocol (ANC), the Terra-based platform that is the main avenue for minting UST through pledging LUNA or Ether. Anchor also got an added boost to its price after announcing that developers are in the process of integrating AVAX as a collateral option for creating UST. Data from Cointelegraph Markets Pro and TradingView shows that since hitting a low of $1.18 on Jan. 28, the price of ANC has catapulted 268% to hit a daily high at $4.35 on March 2 where it was halted at a major resistance level. Aside from its integration with Anchor, Avalanche has had several notable developments that have helped drive its growth since late January, including an integration with Wirex and the announcement that DeFi Kingdoms will launch on the Avalanche network. According to Delphi Digital, based on its recent price performance, “AVAX seems to move with a higher correlation to BTC relative to other L1s.” Related: Which layer-one protocols will outperform in 2022? | Tune in now to The Market Report Osmosis and the Cosmos ecosystem Data from Delphi Digital shows that Osmosis, a decentralized exchange in the Cosmos ecosystem, has “outperformed other major peers over the last few months by a substantial margin.” The strength shown by OSMO is in part due to the success of Cosmos, which had a strong close to 2021 as its “thesis of interoperable app-chains has finally started to come to fruition in recent months. Osmosis is now the largest decentralized exchange in the Cosmos ecosystem and supports 37 separate IBC chains with $1.75 billion in total value locked according to data from Defi Llama. Osmosis also got a boost to its price and trading volume following the release of interchain and superfluid staking on March 1, which allows liquidity providers (LP) on the Osmosis DEX to also earn staking rewards for the assets they have provided liquidity for, making this the first time users can do both staking and LP at the same time.
BITSTAMP:BTCUSD
by monicaagrizzi9
Impermanent loss challenges the claim DEFI Investors are often lured to DeFi by the four-digit APYs on offer, but in many instances, impermanent loss actually siphons away any potential profits investors might have accrued. Impermanent loss is one of the most recognized risks that investors have to contend with when providing liquidity to an automated market maker (AMM) in the decentralized finance (DeFi) sector. Although it is not an actual loss incurred from the liquidity provider’s (LP) position — rather an opportunity cost that occurs when compared with simply buying and holding the same assets — the possibility of getting less value back at withdrawal is enough to keep many investors away from DeFi. Impermanent loss is driven by the volatility between the two assets in the equal-ratio pool — the more one asset moves up or down relative to the other asset, the more impermanent loss is incurred. Providing liquidity to stablecoins, or simply avoiding volatile asset pairs, is an easy way to reduce impermanent loss. However, the yields from these strategies might not be as attractive. So, the question is: Are there ways to participate in a high-yield LP pool and at the same time reduce as much impermanent loss as possible? Fortunately for retail investors, the answer is yes, as new innovations continue to solve the existing problems in the DeFi world, providing many ways for traders to avoid impermanent loss. Uneven liquidity pools help reduce impermanent loss When talking about impermanent loss, people often refer to the traditional 50%/50% equal-ratio two-asset pool — i.e., investors have to provide liquidity to two assets at the same value. As DeFi protocols evolve, uneven liquidity pools have come into the picture to help reduce impermanent loss. As shown in the graph below, the downside magnitude from an equal-ratio pool is much larger than an uneven pool. Given the same relative price change — e.g., Ether (ETH) increases or decreases by 10% relative to USD Coin (USDC) — the more uneven the ratio of the two assets, the less the impermanent loss. DeFi protocols such as Balancer have made uneven liquidity pools available since as early as the beginning of 2021. Investors can explore a variety of uneven pools to seek out the best option. Multi-asset liquidity pools are a step forward In addition to uneven liquidity pools, multi-asset liquidity pools can also help reduce impermanent loss. By simply adding more assets to the pool, the diversification effects come into play. For example, given the same price movement in Wrapped Bitcoin (WBTC), the USDC-WBTC-USDT equal-ratio tri-pool has a lower impermanent loss than the USDC-WBTC equal-ratio pool, as shown below. Similar to the two-asset liquidity pool, the more correlated the assets are in the multi-asset pool, the more the impermanent loss, and vice versa. The 3D graphs below display the impermanent loss in a tri-pool given different levels of the price change of Token 1 and Token 2 relative to the stablecoin, assuming one stablecoin is in the pool. When the relative price change of Token 1 to the stablecoin (294%) is very close to the relative price change of Token 2 (291%), the impermanent loss is also low (-4%). When the relative price change of Token 1 to stablecoin (483%) is very different and far away from the relative price change of Token 2 to stablecoin (8%), the impermanent loss becomes noticeably larger (-50%). Single-sided liquidity pools are the best option Although the uneven liquidity pool and multi-asset pool both help reduce impermanent loss from the LP position, they do not eliminate it completely. If investors do not want to worry about impermanent loss at all, there are also other DeFi protocols that allow investors to provide only one side of the liquidity through a single-sided liquidity pool. One might wonder where the risk of impermanent loss is transferred if investors do not bear the risk. One solution provided by Tokemak is to use the protocol’s native token, TOKE, to absorb this risk. Investors only need to supply liquidity such as Ether to one side, and TOKE holders will provide TOKE on the other side to pair up with Ether to create the ETH-TOKE pool. Any impermanent loss caused by the price movements in Ether relative to TOKE will be absorbed by the TOKE holder. In return, TOKE holders take all swap fees from the LP pool. Since TOKE holders also have the power to vote for the next five pools the liquidity will be directed to, they also get bribed by protocols who want them to vote for their liquidity pools. In the end, TOKE holders bear the impermanent loss from the pool and are compensated by the swap fees and bribe rewards in TOKE. Another solution is to separate risks into different tranches so that risk-averse investors are protected from impermanent loss and that risk-seeking investors who bear the risk will be compensated with a high-yield product. Protocols such as Ondo offer a senior fixed tranche where impermanent loss is mitigated and a variable tranche where impermanent loss is absorbed but higher yields are offered. Automated LP manager can reduce investors’ headaches If all of the above seems too complicated, investors can still stick to the most common 50%/50% equal-ratio pool and use an automated LP manager to actively manage and dynamically rebalance the LP position. This is especially useful in Uniswap v3, where investors need to specify a range to which they want to provide concentrated liquidity. Automated LP managers conduct rebalancing strategies to help investors maximize LP fees and minimize impermanent loss by charging a management fee. There are two main strategies: passive rebalancing and active rebalancing. The difference is that the active rebalancing method swaps tokens to achieve the amount required at the time of rebalancing, whereas passive rebalancing does not and only swaps gradually when the pre-set price of the token is hit (similar to a limit order). In a volatile market where prices are constantly moving sideways, a passive rebalancing strategy works well because it doesn’t need to rebalance frequently and pay large amounts of swap fees. But in a trending market where price continues to move in one direction, active rebalancing works better because the passive rebalancing strategy could miss the boat and sit outside the LP range for a long time and fail to collect any LP fees. To choose the right automated LP manager, investors need to find the one that suits their risk appetite. There are passive rebalancing strategies such as Charm Finance that aim to earn a stable return by using a wide LP range to reduce impermanent loss. There are also passive managers such as Visor Finance that use a very narrow LP range to earn high LP fees, but are also exposed to more potential impermanent loss. Investors need to select automated LP managers based on not only their risk appetite but also their long-term investment goals. Although traditional equal-ratio LP profits could be eroded by impermanent loss when the underlying tokens move in very different directions, there are alternative products and strategies available for investors to reduce or completely avoid impermanent loss. Investors just need to find the right trade-off between risk and return to find the best-suited LP strategy.
BITSTAMP:BTCUSD
by monicaagrizzi9
What is the Algorand blockchain.Algorand's PPoS consensus algorithm distinguishes it from other blockchain networks that help solve blockchain trilemma. What is Algorand? Algorand is a blockchain network created in 2017 by Silvio Micali, an MIT professor who won the Turing Award for his work in cryptography. Algorand is a decentralized permissionless blockchain protocol that anyone can use to develop applications and transfer value. The Algorand protocol is powered by a novel consensus algorithm that enables fast, secure and scalable transactions. Algorand addresses the common issues that most older blockchains have, specifically concerning scalability and consensus. The blockchain uses Pure proof-of-stake (PPoS), a consensus protocol that selects validators at random according to the weight of their stake in ALGO coins. What is Algorand trying to solve? The Algorand protocol is designed to solve three of the biggest problems most blockchains face: security, scalability and decentralization. Dubbed as the “blockchain trilemma,” the Algorand network claims to address the following three major issues. Security The Algorand protocol is secure against malicious attacks, making it ideal for transacting, holding high-value assets and building secure enterprise applications. It maintains security on both network and consensus protocol levels and protects individual users’ accounts. Scalability The Algorand protocol can handle a large number of transactions per second, making it a more scalable solution than Bitcoin or Ethereum. Algorand’s consensus protocol does away with the need for computational power used in Bitcoin to solve cryptographic problems. Instead, the protocol’s computation cost per user is only used to generate and verify signatures, as well as operations requiring simple counting. According to Algorand, it can “scale to millions of users and sustain a high transaction rate without incurring significant cost to participating users.” Decentralization Algorand is entirely decentralized with no central authority or singular locus of control. Transactions are verified by participating nodes in the network and each node has an equal say in decision-making. This makes Algorand a very decentralized system. Everyone on the network also has a chance of being part of the committee of users that approve each block because the selection is both random and confidential. There is no fixed committee and its nodes are run by people from all over the world. How does Algorand work? What sets Algorand apart from other blockchains is its use of PPoS, a consensus algorithm that employs a Byzantine agreement protocol. Should a node be compromised, staked the native token ALGO owned by participants in the network would automatically be protected with unique keys. Bitcoin’s consensus mechanism, proof-of-work (PoW), requires large amounts of energy and computing power to create and validate new blocks. PPoS, on the other hand, allows the creation and validation of new blocks in a faster and more efficient manner. This is done by randomly selecting ALGO holders to validate and approve each block in the chain. A new group, or committee, is selected for each new block. Through the PPoS protocol, only users with large holdings of ALGO can theoretically engage in malicious activities that could potentially compromise other users’ security. However, since the system is based on codependency among participants, malicious activities would also result in a deterioration of their ALGO. Hence, such malicious activity would not be rewarding for any majority holder. Algorand can process 1,000 transactions per second and all transactions will be final and instantaneous. Algorand also has a fixed supply of 10 billion tokens to add an inflation-resistant mechanism to the network. The majority of these tokens are currently locked up and have yet to be distributed. Algorand protocol structure The Algorand protocol is built on three fundamental concepts: Transactions: Transactions are the basic unit of account in the Algorand network. They are used to transfer value and are verified by all participating nodes in the network. Blocks: Blocks are groups of transactions collected into a single unit and verified by the consensus algorithm. Consensus: The consensus algorithm is responsible for verifying blocks and ensuring that they meet the requirements of the Algorand protocol. It also rewards users who participate in its operation. Algorand staking mechanism: Pure proof-of-stake Under Algorand’s PPoS approach, the influence held by a user on the choice of a new block is proportional to the number of tokens they have in the system, also called their stake. Each user has a chance to be chosen with the weight of their proposals and votes being directly related to their stake. Users are selected randomly and secretly for the purpose of proposing blocks and voting on such block proposals. Through this approach, the network’s security is tied to the honesty of the majority of the users in its economy. As long as most of the money is in honest hands, the system will remain secure. This approach is in opposition to other consensus mechanisms like PoW, DPoS or BPoS wherein small groups within the economy are responsible for the whole system’s security. By principle, a small fraction of users can prevent other users from transacting with these approaches. Algorand’s approach makes it virtually impossible for holders with smaller stakes in the system to harm the whole network. Meanwhile, majority holders would also not dare to act maliciously, as such actions will result in the devaluation of their own assets and a reduction in the currency’s purchasing power. Algorand block production under PPoS New blocks are constructed in two phases under Algorand’s PPoS mechanism. During the first phase, a single token is selected at random. The owner of this token is the user in charge of proposing the next block. During the second phase, 1000 tokens are selected randomly out of all the tokens in the system. The owners of these tokens make up the phase-2 committee, and they are in charge of approving the block proposed by the user in phase 1. Related: What is cryptocurrency? A beginner’s guide to digital currency It is possible for a committee member to be chosen more than once. This also means that a member will have more than one vote in the committee when approving the next block. The second phase in Algorand’s block production process was put in place to combat any percentage of bad actors. By choosing 1000 tokens at random, the malicious intentions of these bad actors will be trumped by the majority and act in accordance with the rules for the welfare of the network. Algorand’s native cryptocurrency: ALGO The native currency of the Algorand network is called ALGO. ALGO tokens are used to pay for transaction fees and reward users who participate in the network's consensus process. Transactions with ALGO happen in less than four seconds, regardless of how many transactions you do in a day. Transaction fees are also minimal. Unlike Ethereum, which is notorious for high gas fees, Algo transactions cost very little. How can I buy ALGO cryptocurrency? There are several methods for purchasing ALGO. You may buy it directly from another individual in person or over the internet, as you would with any other cryptocurrency. Alternatively, you may look for a crypto ATM near you that offers ALGO. However, crypto ATM rates can be prohibitive, and there’s no assurance that you’ll be able to locate a counterpart willing to make the trade. The easiest way to buy ALGO is on a cryptocurrency exchange. Some popular exchanges that offer ALGO include Binance, Kraken and Coinbase. You can buy ALGO with a credit or debit card on these exchanges. To do so, you first need to get a crypto wallet to hold the ALGO. Some wallets that support ALGO are Pera Wallet, My Algo, Coinbase and Ledger. Once you’ve set up your wallet, you can now fill your wallet by finding an exchange that supports ALGO. Set up an account on the exchange if you already do not own one and get it verified. Select "Algorand" from the list of assets to begin your trade. Input the fiat amount to buy ALGO coins and preview your purchase before you finally submit.
BITSTAMP:BTCUSD
by monicaagrizzi9
Making the Metaverse the key to a better future instead of a dysThe digitization of humanity via AI and the metaverse is already inevitable, but will it lead us to a decentralized, better world or to a dystopian nightmare? Will the Metaverse(s) change humanity as we know it? Will the Metaverse(s) be the ultimate augmentation of human perception? Will it become an agora for our dreams (and, of course, nightmares), able to transform human perception entirely? Has it already started? To start with the latter question: Yes, the groundwork has already been laid. Sensors from our smartphones, social media, digital devices, and the digital data-driven companies that top the Fortune 500 comprise the new cathedrals, religions and tribal spaces for humanity. These technologies and the onset of the so-called Fourth Industrial Revolution, or 4IR, and the AI-driven Society 5.0 have seen more change in humanity in the last 50 years than in the previous 30,000 combined. And this is just the beginning! In 1974, in a thought experiment, philosopher Robert Nozick visualized a hypothetical machine capable of providing every pleasure and experience imaginable. Nozick asked a provocative question: If given a choice, would we choose the machine over reality? Nozick concluded that we probably wouldn’t choose the machine, arguing it is better to experience the highs and lows of this physical world than to experience the artificial, never-ending high of the simulated. But a lot can change in 50 years. In 1990, 16 years after Nozick and a year after Tim Berners-Lee first conceptualized the World Wide Web, Steve Jobs famlously called the personal computer the “bicycle for the mind,” and we were off to the artificial races. Recoding the human need for stories What would we choose now if presented with a choice between the real, physical finite and the virtual, digital infinite powered by AI? The answer is that we have already chosen. We are all now digital magicians, scientists and subjects in the great ongoing virtual social experiment, interacting and stimulating each other’s brains and bodies with multiple experiences and feelings that are completely indistinguishable from experiences in the “real” physical world. This is happening across Facebook, TikTok, YouTube, rypto-empowering NFTs, Fortnite, Second Life, Decentraland and countless other online and social media platforms. The Metaverse (or metaverses) merely represent the ultimate augmented form of dreaming and the decision that has already been made. As our technologies develop so fast, we are indeed moving toward the digitization of humanity, thanks to AI and the invention of the metaverse — the future looks more like the one in Ernest Cline's Ready Player One, where the digitized reality is enabling us to experience almost everything! Related: Sci-fi or blockchain reality? The ‘Ready Player One’ OASIS can be built While the Metaverse represents the culmination of the last 50 years of technology, it will also invite new and wholly unique ways of thinking and dreaming about humanity's obsession with bigger and bigger stories. That will include new ways of interacting, communicating, and storytelling, marking a new chapter in our social-economic centralized and decentralized 4IR, Web3, Society 5.0 cultural history. Stories have sustained human culture and civilization for several millennia. They teach us to speak, read, write, assimilate civil codes, create Magna Cartas and forge our identities. Through them, we learn about language and psychology, belonging, ownership and the sense of right and wrong. They define the narrative of our lives and our communities, and, by extension, of our circular socio-economic models, financial codes and ethics. Like the verses of Homer or Milton, the Metaverse of today will go down in history as a force that shaped the course of civilization, and an island in the archipelago of the complex human history of epics, comedies and tragedies together with inventions of fire, the wheel, computers, internet and now the Metaverse! Related: The metaverse will bring a further erosion of privacy Just as we have started implementing aspects of the “real world” in the Metaverse, from virtual landmarks to cities’ digital twins, we can also be sure that our experiences will bridge the real and the virtual in the Metaverse, which will reshape our narratives in the physical world, not unlike the way the internet and social media changed not just how we gather information, but also how we perceive that information and fit it into our personal narratives. However, the Metaverse additionally offers us a new chance to reshape those narratives, new ways of dreaming (and having nightmares), augmenting the possibilities and remediating the downsides of the internet’s current model. AI dreaming or a dystopian Pandora Box? The first movers in the Metaverse revolution are and will undoubtedly continue to be the ones that bridge physical and virtual experiences: from creating new cities and new properties, to travel and art, to general experiences, all of which continue expanding and augmenting our society with brand new social media and gaming experiences. At the moment, this is happening on platforms that have significantly large user bases, creator marketplaces, experiences with live digital events, and cutting-edge hardware, and it’s these platforms that are building the basis of this new medium. Web3, AI, blockchain and other decentralized technologies will provide a check on these companies and people behind these platforms that were not present in the earliest days of the internet, ensuring similar mistakes are not made as this foundation is being put in place. We already began transitioning to the Metaverse some time ago via the various interactive experiences that create singular moments on digital, social, and gaming platforms that have been developed over the last 20 years. It is well known that these platforms have commodified the individual via collection of their data and the recording of their activities, exploiting their desires and frustrations both. To solve this problem, we need to create AI digital ethics and be conscious of the risks inherent in augmenting our perception of reality, and the fake narratives that could take root under such circumstances, and adopt self-sovereign identities (SSI), decentralized digital identities that allow for credentials to be presented and verified in digital interactions. Related: Facebook’s centralized metaverse a threat to the decentralized ecosystem? The new metaverses’ AI technology solutions allow us and any users to self-manage and augment our digital identities without depending on third-party providers to store and centrally manage data. But this can also can be radically disruptive if not managed well, and much more revolutionary than anything in the previous 30,000 years of humanity. The use of blockchain technology and NFTs, along with AI tools, VR, and AR — even holograms like in Star Wars — are in their nascent development, but will be vital in scaling the vision of what metaverses are and can be, and we need to imagine and build them collectively, being conscious of their capacity to empower us if built ethically and securely, creating trust. For a metaverse to succeed, we need to make sure that we are all conscious that this is happening now! It is part of all of our life’s present, not in the far-flung future! The Metaverse needs to be built by all of us, with conscience, seamless and trusted, where the citizen — each of us — uses these new tools, like the invention of fire before, to empower themself by owning and evolving with the new metaverse platforms and technologies, not being a slave to them. Therefore, we must be conscious that we need to build and make the Metaverse, the AI platforms for the amplifications of humanity, their very best instead of a dystopian prison! Only in this way will we ensure that the present building of our Metaverse becomes the ultimate set of tools and platforms for helping us to dream bigger and unlock more powerful narratives, rather than trapping us in a prison built from within our own biggest fears and nightmares.
BITSTAMP:BTCUSD
by monicaagrizzi9
BTC TA MARCH 5 2022BTC is still looking pretty bearish, altough I do expect it to probably go up to 40-40,5K before dumping again to 35K, yesterday i posted on twitter to take profits near 38,5K and congratulations to those who followed the trade and made profit. If the price gets above 41,5K we will most likely see a 45K retest but this scenario is very unlikely as indicators are all bearish at the moment. For trading this current movement I would wait for price to hit 40-40,5K and short it, but set a stoploss with good risk management as the market can be unpredictable.
Short
by Lightcup
Why Cardano is Sinking TodayWhy would Russia's move have such a big impact on cryptocurrencies? It boils down to risk. When investors believe that their money is at greater risk, they're more likely to shift funds into safer assets. Such "risk-off" scenarios have hurt growth stocks in the past. Now it's happening again, with cryptocurrencies also being pulled down. The only cryptocurrencies that are largely immune to risk-off downswings are stablecoins pegged to fiat currencies. However, Cardano, Chainlink, Cronos, and Polkadot are not stablecoins. Any geopolitical crisis could cause a risk-off market. The current situation is arguably worse because cryptocurrency prices were already slumping. It's important to note, though, that the long-term prospects for Cardano, Chainlink, Cronos, and Polkadot shouldn't change as a result of the Russian invasion of Ukraine. Each of the four cryptocurrencies offers advantages that won't be diminished whatsoever. Cardano launched smart contracts on its network last year, a move that makes it more competitive with Ethereum. Chainlink allows real-world data to be brought into any blockchain. Cronos is the native token of the popular Crypto.com exchange (and until recently was known as Crypto.com Coin). Polkadot provides a great foundation for Web3 apps.
KRAKEN:ADAUSDLong
by pugrathisa
Broad Commodities, not just another cyclical asset- Pierre Debru, Head of Quantitative Research & Multi Asset Solutions, WisdomTree Europe Since the beginning of the covid-19 pandemic, broad commodities have benefitted from a new lease of life. The Bloomberg commodity index is up almost 60%2 from its nadir, and investments, tactical or strategic in nature, are flowing once again to the asset class. However, unrelated to their recent performance, broad commodities can be an additive to a multi-asset portfolio. In our previous blog, we focused on commodities’ diversification superpowers. In this blog, we want to look at the behaviour of commodities across the business cycle. Analyses show that broad commodities, while cyclical, complement other cyclical assets like equities very well across the business cycle: - Broad commodities tend to resist pretty well in the early phase of a recession, a period where equities suffer the most. - They also tend to do well in the late part of an economic expansion when equities usually fail to find their second wind. Commodities benefit from economic expansions Intuitively, it feels like commodities should benefit from a positive economic environment. When the economy grows, it needs base materials to do so. Metals are required to build new homes, new factories, new infrastructure, new cars etc. More energy is consumed to move goods and people around. So overall, there is a logic to commodities behaving like a cyclical asset. To fully assess the relationship of commodities with the business cycle, we turn to the National Bureau of Economic Research (NBER) Business Cycle Dating Committee, which maintains a chronology of US business cycles. The chronology identifies the dates of peaks and troughs that frame economic recessions and expansions. By comparing the performance of different assets in those recession and expansion periods, it is possible to assess their cyclicality. Figure 1 shows that equities have gained on average 0.86% per month in periods of expansion. This is the largest performance among the asset classes tested. They are followed by commodities (+0.80%), high yield bonds (+0.56%) and then corporate bonds (+0.35%). In periods of recession, high yield bonds (+0.15%) and equities (+0.36%) have performed less strongly. On the other side of the spectrum, US Treasuries and corporate bonds performed strongly (0.88% and 0.87%, respectively). Equities, commodities and high yield bonds are cyclical assets, with equities and commodities being the strongest. A surprisingly robust asset in early recessions While logical, this cyclicality may seem difficult to reconcile with the low correlation between commodities and equities, as discussed in Broad Commodities, the portfolio’s super diversifier? Equities are also very cyclical, so how can two cyclical assets be so uncorrelated? On average, in all the months since the 1960s where US equities have lost more than -5%, commodities have lost -0.65%3. In all the months where US equities gained more than 5%, commodities gained 1.13%1. So while commodities are cyclical, i.e. they tend to lose and gain broadly at the same time as equities, the amplitude of such gains is significantly more muted. This supports our decorrelation hypothesis. It appears that while commodities and equities tend to gain during the expansion phase of the business cycle, they may not gain at the same time, i.e. during the same part of the cycle. - They suffer the most from the early recession part of the cycle but rebound the strongest in the later part of that recession. - While they benefit from the expansion part of the cycle, they rise faster in the earlier part of that expansion. On the contrary, commodities: - Tend to hold up well in the early phase of a recession, posting on average a positive performance of 0.54% (vs -1.3% for equities). - Suffer more in the later phase of a recession and trail both equities and high yield bonds. - Perform better in the second half of the expansion period, contrary to equities that prefer the first half. Commodities are the strongest performers among all the asset classes in that late part of the expansion cycle. So overall, while commodities are a cyclical asset, their behaviour is very decorrelated to equities or high yield bonds. They offer great diversification in early recession and late expansion phases when other cyclical assets (equities, high yield bonds) struggle. Late recoveries are commodities’ best friend Commodities tend to perform the best in late recoveries, with an average performance of 1.25% in this phase. Judging by recent Composite Lead Indicator (CLI) prints4, we are in the latter stages of the current economic expansion. The United States, Japan, Germany and the United Kingdom are nearing economic peak, and in the Euro area, there are signs of moderating growth5. If history is any guide, this could be an environment for commodity outperformance. We also take the view that there are some unique tailwinds behind certain segments of commodities that could propel them for years to come. For example, the energy transition to lower-carbon energy sources will likely be very metal positive (given their use in developing renewable and electrification infrastructure and battery technology). Also, a renewed interest in building infrastructure in the US and Europe could benefit commodity demand. An excellent diversifier and a strong complement to equities across the business cycle are only two of the potential advantages broad commodities could bring to a portfolio. The next item to consider will be whether broad commodities could act as a powerful inflation hedge. Sources 1 Bloomberg, WisdomTree, 27th April 2020 to 7 Dec 2021 2 Bloomberg, WisdomTree, 27th April 2020 to 7 Dec 2021 3 Source: WisdomTree, Bloomberg, S&P. From January 1960 to August 2021. Calculations are based on monthly returns in USD. Broad commodities (Bloomberg commodity total return index) and US Equities (S&P 500 gross total return index) data started in Jan 1960. Historical performance is not an indication of future performance and any investments may go down in value. 4 The OECD system of Composite Leading Indicators (CLIs) is designed to provide early signals of turning points in business cycles: www.oecd.org 5 www.oecd.org This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
CBOT:AW1!
by aneekaguptaWTE
Current Bitcoin DowntrendNot the worse change of trend for Bitcoin. Not surprising after a new all time highs Bitcoin cools off a tad. It's cool to see that most of the price recognition for October has happened at $60,000 - $61,000 serving as the point of control (POC). Since we've hit new all time highs the trend has been pointing down. We've really been flirting trying to hold support at $60,000 but as long as this short term trend is down the $55,000 -$57,000 area will be very important to hold if price continues to decline. We have lost momentum on the stochastic RSI on the daily and have bearishly diverged on our MACD so keep that in mind as a change in trend could come. But as of now the trend is pointing down. We may be on the way to retesting the 0.786 Fibonacci level at $56,200. Price and sentiment are holding up well for Bitcoin still.
COINBASE:BTCUSDLong
by peacefuljustin
NuCypher Squeezing After a dramatic pump NuCypher has pulled back on price and has been moving sideways cooling off really starting to squeeze between a support of $1.08 and a resistance of $1.18. May be forming a new price floor after its pump. Most of the buying and selling after the pump as occurred at $1.44 which is a point of control (POC). NuCypher seems to be holding well "so far" above $1.00. We're still up 285% within the past 2 weeks so keep that in mind. Keep a look out on NuCypher's movement and on your radars.
N
by peacefuljustin
1
Bitcoin Where To Now? $70K Resistance Possible Drop Below $60kCheers to everybody in Bitcoin and in cryptocurrency! Very exciting times to be in this space. It's always great to know that pretty much everybody in Bitcoin is profitable whenever Bitcoin reaches new all time highs! Ideally we want to hold the $60,000 level for Bitcoin but dropping below $60,000 is always a strong possibility. I believe the first real major resistance for Bitcoin will be at $70,000 or in between $75,000 if we continue this uptrend. We're pretty overheated on the daily oscillators indicating a pullback may be upon us. Support levels if we drop below $60,000 I'm looking at support around above $55,000. We're looking bullish on the weekly time frames in my opinion. The fundamentals have gotten much stronger since the Bitcoin ETF which will enable a great amount of money to come into cryptocurrency in the coming months. Specifically into Bitcoin. I believe the next coming months will be very historic once again. Much peace, love, health, and wealth!
COINBASE:BTCUSDLong
by peacefuljustin
Total cryptomarket about to launch Cryptomarket has just recently broken ATH levels and the trend seems to be stronger than ever. The risk for take-win transactions to start is alive but there seem to be no indications in the market for such activity. Traders are transferring money into crypto and "smart-money" sees every day more interest in the market. An example of this is recently launched crypto ETFs. Largest asset manager on earth, BlackRock has taken positions in the crypto market which indicates a positive perspective about crypto, from the company which is managing the largest investment portfolios in existence. If that is not a sign of a bright future, then I don't know what is. This sounds utterly optimistic, which is always bad thinking for an investor, investors should always focus on the down-side risk and hedge potential losses. In the big picture, I think investors should hold crypto-positions but be aware of risks and hedge them accordingly.
CRYPTOCAP:TOTALLong
by Henrythemaestro
GOLD UPDATEGOLD UPDATE $XAUUSD is starting to look interesting here from a higher timeframe perspective. Price has finally found support around $1740 starting to show a deceleration and multiple rejections to the downside. In my opinion its only a matter of time before the price breaks above this corrective downtrend which the market has been in since its last ATH back in **AUG 2020**a break above this trendline will send gold to new highs of around $2200. With the USD index now testing strong resistance and the stock market is finally seeing a well over due correction investors will start flowing cash back to a "safe haven" asset like gold.
OANDA:XAUUSDLong
by ITSCRYPTO1
Uniswap Will Grow: Support & Resistance Everybody's favorite Unicorn in Cryptocurrency. Like most of the other alt-coins we've been hitting major resistance levels before the next major step-up. We formed a short term horizontal channel so we're moving sideways a bit. We'll see how long this holds. Once we break this resistance level of $31.30 we will be grinding towards re-testing all time highs in the weeks or months to come. If we don't hold our support we will most likely being going back down to the $20 levels. There's a lot to be excited about in the next upcoming months for cryptocurrency. We're about to bullishly divergence on the weekly MACD which indicates some more positive momentum will be coming underway. Coins such as Uniswap will perform very well this cycle. It is still king of the Decentralized Exchanges and just recently become the first DEX to provide $1 Billion in fees for liquidity providers. Also I believe the effects of EIP-1559 Ethereum burning will have positive price impacts on Uniswap as time goes on. Uniswap is already a heavily adopted and functioning cryptocurrency with an actual operating product. The adoption and use case can only grow from here. Stay stacking! Much peace, love, health, and wealth!
BITTREX:UNIUSDLong
by peacefuljustin
2
Money Will Permanently Flow Into Cryptocurrency This Decade I've had a simple investors thesis when investing in cryptocurrency since 2017. I've always judged the growth of cryptocurrency by the growth of the market cap. The more money that comes into cryptocurrency the more prices will appreciate (certain cryptocurrencies of course). The more money that comes in the more innovation, use case, public interest, and opportunities grow. When I started heavily investing in cryptocurrency the market cap was only about $180 Billion and I always believed that cryptocurrency would eventually exceed $1 Trillion dollars the more the use case and user base grew. Today we're right at a $2 Trillion market cap and my thesis remains stronger than ever. Cryptocurrency in a whole is easily a $10 trillion global market this decade at a very conservative estimate. In a big macro perspective consider: * The entire global money supply will dramatically increase by 2030 ( M0, M1, M2, M3). * The growth of Crypto ETFs. * Better cryptocurrency regulatory infrastructure. * More countries will adopt Bitcoin as some form of legal tender. We will see this new economic philosophy heavily spread throughout South America first and eventually spread to countries facing severe devalued currencies. * All assets and prices will dramatically increase by 2030 due to infinite money printing policies. * The use case for decentralized finance and digital based economies will expand as the world continues to grow more digital. Most of the worlds money and value is already in digital ledgers. * NFT's will be global cultural digital artifacts stemming from the digital age. Not all NFTs of course. * The generational shift from predominately Baby Boomers to more Millennials will grow by 2030. * Corporations and financial institutions will heavily adopt Bitcoin to hedge against devaluing dollars. * Cryptocurrency is spreading faster than the internet. I believe we will be re-testing market all time highs by the end of this year at $2.5 Trillion. If we continue positive momentum through out the rest of this year Once we hit our Fibonacci level 1, I believe we will have a run up to the 1.618 Fibonacci level over $3 Trillion. There will be another wave of FOMO hitting the market. We are still so early in cryptocurrency we haven't even scratched the surface. More money comes into the space than out of it over time. Happy HODLING. Much peace, love, health, and wealth!
CRYPTOCAP:TOTALLong
by peacefuljustin
2
Bitcoin (BTC) Things Are Getting Spicy $50,000 Incoming!The market euphoria is starting to heat up once again. The market sentiment is changing fast and we are now back to "Greed" on the Fear & Greed Index. Even the main stream media's tone is starting to change once again. I'd even go on to say Bitcoin may now be Elon Musk resistant. China mining crackdowns will also start to become be a narrative that will no longer have a FUD inducing effect on the market. We have strong resistance at $46,784 right at the 0.5 Fibonacci level. Expect a pullback to the $42k Levels or even lower $40k levels. Once we break past this resistance level I do believe Bitcoin will work its way up to retesting $50,000 as long as this positive momentum continues to grow strong. We may possibly be in the next extension of this overall bull trend for Bitcoin and the Crypto market in the coming months. * On the weekly time frame we're starting to approach bullish divergence on the MACD . * The hash rate is growing fast. * Clean Green energy for Bitcoin mining is becoming a positive mainstream media talking point. * A stronger Cryptocurrency influence and advocates will become stronger in Washington D.C. as a result of the botched crypto-infrastructure bill. * Global Multi-Trillion dollar economic rescue packages will continue to expand the global money supply. * NFT's, Ethereum , Gaming Tokens, and DeFi mania will continue to grow. * On the daily timeframe we're currently retesting the 200 Day Moving Average. Much peace, love, health, and wealth!
COINBASE:BTCUSDLong
by peacefuljustin
1
Passive Wealth AccumulationI am going to introduce a controversial topic… investing. This is an important topic considering this is a finance blog. Why is it controversial you may ask? It is controversial because many people do not partake in it, therefore by logical reasoning, it is controversial. The original purpose of my starting this blog was to encourage people to invest. In this article, I am going to dive into the fundamental reasons you are losing out by not investing. The easiest way for me to do this would be to link to sources from reputable individuals like authors, hedge fund founders, billionaires, etc. However, that would be too easy and you could do that on your own. I will base my thesis on three fundamental components; historical returns, inflation opportunity costs, and asset appreciation. So let’s start this deep dive with the S&P 500. If you don’t know what the S&P 500 is it is simply a basket of the 500 largest companies in the US. Let’s talk about some historical events that caused massive sell-offs in an index. I will use approximations of the S&P500 price for simplicity. -Market Crash of 1929 Peak: $30 Trough: $5 Percent: -83% -Market Crash of 1987 Peak: $330 Trough: $220 Percent: -33% -Dotcom Bubble Crash of 2000 Peak: $1500 Trough: $800 Percent: -47% -Financial Crisis of 2008 Peak: $1560 Trough: $670 Percent: -57% -COVID Crash of 2020 Peak: $3350 Trough: $2310 Percent: -31% -July 9, 2021 - $4360 Relative return from 2020 Trough - 89% Relative return from 2008 Trough - 551% Relative return from 2000 Trough - 445% Relative return from 1987 Trough - 1882% Relative return from 1929 Trough - 87,100% Let’s visualize this if your great-grandparents would have invested $100 at the trough of the market crash in the 1920s. That would have bought you 20 shares, which in today’s market is equivalent to $87,100. Alternatively, if they left those same $100 in a deposit box, well you would have $100. Quite the antonym if I do say so myself. The idea of inflation is vague to some people but the reality is that the money in your pocket today will have more practical utility than any time in the future. I can almost guarantee it. The FED (US Central bank) has two mandates, stable prices, and maximum employment. So, as we recover from the COVID induces economic slowdown, the FED used all of its tools to stimulate the economy, including the federal funds rate to 0% (FED loan rate) and quantitative easing (increase the money supply). Essentially, these two tools, while useful, in the short term create drastic inflation as seen in recent Consumer Price Index (CPI) data. Some year-over-year prints have seen as high as 4.2%, almost double the (2%) baseline level. All in all, inflation will persist and inflation is the enemy of savings as it deteriorates its buying power. My third and final point toward my trifecta-investment thesis is that assets appreciate faster than wages growth. Personally, this is the biggest reason I invest. The proof is in the pudding. Think about the richest people on earth, how did they accumulate their wealth? It certainly wasn’t from working a 9-5. They own their respective companies and as the asset grows so does their wealth. In my personal belief, this is the reason for the tremendous wealth inequality we are currently experiencing. While a handful has billions in assets, others live paycheck to paycheck. To put this in perspective, the S&P rises on average 6-8% a year, while wages often increase less than 2% in the same time frame. That’s a 3-4x better return on something completely passive. In essence, work smarter not harder. My best investment advice is and will always be to buy the S&P500. For many years I refrained from using buying the S&P500 because it was always making record new highs. I thought that I will buy it after the next big sell-off, yet every time that sell-off comes I think there will be another leg down essentially a self-defeating prophecy. Interestingly, if you have ever bought the S&P and held you have made money because as of July 9th, 2021 close it made another all-time high. Will it persist? If history is any indication of the future, it will. If nothing else, by investing in the S&P500 you are betting on the prosperity US economy. That is a bet I am willing to make.
TVC:SPXLong
by howdydany
Ethereum a New Evolution Brewing Still Time to Own At Least One!I know people are starting to sleep on cryptocurrency. Not too much heavy buying and not too much heavy selling. The state of the market is in limbo but these times present great opportunities. If you don't own at least one Ethereum now will be the time to seriously consider making it a goal. If you're trying to build wealth in cryptocurrency with the least amount of risk Ethereum is essential to your journey. I have new Fibonacci levels starting from the swing high of $4395 on May 12th to the swing low of $1695 on June 26nd. Ethereum has been trading between $1695 and $2300. I'd say that Ethereum under $2000 is a steal. Of course these prices can all change depending on Bitcoins mood. If Bitcoin drops to the lower 20ks as many people suggest then Ethereum can easily come down below $1,000. So be cautious as the market sentiment is still extremely fearful. However, the upside potential is extremely strong considering the developments taking place within Ethereum . Post EIP-1559 ( Ethereum becomes deflationary), continued DeFi expansion, and the NFT innovation are some of the catalyst that will have a major positive impact on Ethereum . Even Fox news channel and CNN are invested and experimenting in NFTs which is shocking to me. I believe we will have stagnant price action until there's a decisive move in the market to the upside or further downside. We have been moving sideways for some time which can indicate we're in a heavy accumulation phase in the market. Looking at on chain metrics from Santiment the whale supply held by top addresses have been increasing at an alarming rate since May 22nd. Smart money knows wassup. Ethereum is still very undervalued. Cheers much peace, love, health, and wealth as always! Keep building that crypto wealth for you and your family!
COINBASE:ETHUSDLong
by peacefuljustin