Issue #32
Week 16 2021

ETH NON-STOP!

Ethereumโ€™s price recently broke above $2,600 on April 22nd, a new all time high. At the same time ETH is showing evermore technical and fundamental signs of decoupling from BTC...

ETH-BTC-2600

ETH up From 2.30% of a BTC to 4.44% of a BTC in 2021...

Data from Glassnode suggests that the number of active ETH addresses has been steadily rising for all of 2021. However, between April the 15th and 21st there was a particularly massive increase of 183,704 active ETH wallets as the ETH price reached new all time highs. In fact, the number of active ETH wallets also reached an all time high of over 770,000! Further, the Ethereum network settled $1.5 trillion in transactions during the first quarter of 2021. This amount exceeds the last 7 quarters combined, another all time high. If this rate were to continue we could see Ethereum settle $6 trillion per quarter by the end of 2021! Thatโ€™s not all there is to be excited about either...

Over $53 billion is now locked in DeFi. Ethereum smart contracts in particular are far exceeding the now obvious limitations of centralized finance. DEXs, DOAs, decentralized services operating 24/7/365, providing unprecedented accessibility to an assortment of cutting edge, individual empowering financial instruments. Perhaps whatโ€™s most exciting of all is that the space is still so young! Donโ€™t go thinking DeFi will be the only show on Ethereum...

NFT sales on Ethereum far outweigh anything seen on any other blockchain and will very likely continue to do so for the foreseeable future, and beyond! Digital artists all over the world are being empowered to create, showcase, and distribute their work and gain the attention of wider audiences than ever previously imaginable thanks to this amazing decentralized network. Not to mention the continued mainstream, everyday attention coming from real-world crossover events like the ongoing community driven SaveArtSpace CryptoPunk โ€˜Pixelatedโ€™ event, or the groundbreaking Christieโ€™s Beeple โ€˜Everydaysโ€™ auction and their upcoming CryptoPunks auction!

Everything seems to be going so incredibly well for Ethereum! The only matter left to debate seems to be the ongoing struggles with high and inconsistent gas fees. A matter being addressed specifically through the migration from a proof-of-work to a proof-of-stake blockchain network. This past November Ethereum enabled staking for Ethereum 2.0, and there are now over 3.9 million ETH staked in the ETH 2.0 contract, nearly $8 billion at todays ETH price. Ethereum is by far the most developed smart contract blockchain network, and the staking for Ethereum 2.0 is only expected to accelerate. This seems likely, especially with recent news of Coinbase enabling Ethereum 2.0 staking for users who joined their waitlist, allowing qualified holders of Ethereum on Coinbase to earn 6% APR in rewards for their staked ETH. Conveniently, there is no minimum ETH balance requirement for staking Ethereum on Coinbase, and users can elect to stake either a portion or all of their Coinbase ETH holdings.

The EIP-1559, the improvement proposal intended to reduce the supply of Ethereum and help improve fee stability, is now tentatively scheduled for July 14th. EIP-1559 will burn transaction fees instead of paying them directly to miners. Totalling over $8 billion now, transaction fees account for about 3 - 4% of Ethereumโ€™s total supply!

Bitcoinโ€™s recent dip dropped itโ€™s dominance rate down to just under 50%, itโ€™s lowest level since August 2018, while altcoins, ETH in particular  has fared exceptionally well. In fact over the past several months altcoin prices have been steadily diverging above Bitcoin. ETH actually hit itโ€™s new all time high 10 days after Bitcoin, with the BTC price down 20% from itโ€™s recent all time high. With all of the excitement surrounding Ethereum Is it unreasonable to expect this is a trend we might see continue well into the future?

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RUGCHAIN

Who's really making money on Binance Smart Chain? There seems to be a problem with the Binance Smart Chain. More and more rug pulls are being created there every day. It has become a daily occurrence for project developers to drain the liquidity of a project leaving gamblers in a state of disarray.

This infection of scam projects we see in BSC seems to be mainly driven by gas fees and exchange fees. As the price of gas has gone up for ETH, fewer rug pulls are occurring on the Ethereum blockchain. Most of these scammers appeared to have migrated to other side chains where fees are lower. 

The interesting thing about these rug pulls is that they are made on a more centralized blockchain than the Ethereum blockchain. On BSC, Binance has more control over what funds enter and exit the blockchain. This means theyโ€™re more likely to shut down wallets of scammers. 


A potentially massive rug pull to come out this week is Safemoon. 


On April 20, DEFI white knights, WARONRUGS, gave a scam advisory on Safemoon because its owner owned more than 50% of the liquidity. Just before this advisory went out, SAFEMOON surged by more than 1155% in 5 days. A day after their advisory, WARONRUGS gave an update saying 54% of the liquidity was locked up, but there was still a threat that some of the tokens are still in the deployerโ€™s wallet. Which was later sold off.

Many crypto influencers have been skeptical of this skyrocketing token calling it anything from a pyramid scheme to a soon-to-be rug pull. But that hasnโ€™t stopped TikTokers and low-level investors from pumping the token even more. The growth of the coin and the fact that itโ€™s on BSC makes it seem like a very skeptical project. But, who knows, this might be the next Doge just based on its social media influence and growing adoption.

So why do these rugs keep on happening on BSC? Why do people keep on getting in on these rugs? 


Countless scam projects are being made and funded every day. Many of these scam projects are supported by investors searching for the next big project. It looks like people would rather gamble a small amount of money in hopes they could get out before the rug pull than burn a larger amount of money on ETH gas and trading fees. People arenโ€™t dumb; itโ€™s just more convenient to trade on a place with lower fees. This is why there are so many new scam projects created on the BSC.

But out of all of this, these rug pulls might bring up a bigger question about the ETH blockchain. Will high gas fees stall the growth of the ETH blockchain as smaller investors are discouraged by them? Will ETH only be a place for whales and crypto OGs until ETH 2.0?

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MLB LowShot

This week the Major League Baseball and Topps trading cards released a series of NFT trading cards, and it was rough. The project was first announced by Topps back on April 12th. After the success of NBA TopShot, it was inevitable for the MLB and Topps to enter the NFT market, but the execution by Topps was nothing like TS.

topps-baseball-cards

A rough start: website crashes, credit card declines, price mismatches, and much more. 


The first problem that occurred for the Topps release was the overload of the website. Unlike TS, they didnโ€™t utilize a queue system to mitigate the high traffic. This resulted in an overload of the servers and set back the release time by 30 minutes.

The continued overload of the website also resulted in many problems with the payment system and payment confirmations. Many people were unable to put in their payment information once they selected a pack to purchase. The people who could put their payment info and buy a pack were either getting a price mismatch error or not getting an email confirmation after buying. So, this left many buyers confused about whether or not they actually bought the pack. 

Another complaint that buyers felt was the presentation and interface of the website. Most of the collectibles donโ€™t have any animation and are just pictures on your screen. Topps did not bring any new innovation to the space; it looks like they used their same model of making sports cards and just pasted that into an NFT form.

So far, Topps has released seven packs differing in what you can get. The rarity of each collectible is broken down into seven different rarities. You can get anything from a โ€œCommon Collectibleโ€ which can be a wooden coin, to a โ€œLegendary Exclusive Collectibleโ€ which can be a 1/1 card.
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Card owners can display their collectibles on their wallets. They can also trade, sell, gift, or burn the cards. The burn system is something interesting to look out for. There are events called โ€œBurn to Earn,โ€ where users can burn collectibles for the chance to earn a new collectible. 


There are also three different resell markets set up for this project. The cards can be sold on AtomicHub, NFTHive, or WaxStash. The most significant resale to come out of this project is a Mike Trout Legendary Exclusive for 420,000 WAX ($74,364.39).

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The question is now, how long will this project last?

After the lousy launch and mediocre presentation, itโ€™s hard to imagine this project will have the same success as TS. One issue about this project is that Topps will always compare it to TS, and unless Topps makes significant changes, it will always be TS 'little brother. Another potential issue is the sport of baseball. Outside of America and Asia, baseball is not a popular sport, and even in America, itโ€™s considered a dying sport. So, it seems it would be hard for Topps to grow this project continually. 

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BTC and TAX Spells FUD

The price of BTC fell by ~ 25% over the past week and a half after a handful of potential unfavorable news catalysts emergedโ€ฆ

BTC-FUD-DIP
Normal. Healthy. Overdue.

Currently, Bitcoin is fighting to hold itโ€™s ~$50,000 level as its dominance hits 50% for the first time since 2018. The crypto community has of course speculated as to the possible reasons for this latest โ€œcrashโ€. The currency crisis in Turkey and subsequent cryptocurrency payments ban? Was this latest BTC price drop actually due to a power outage and subsequent reduction in BTC's hashrate? Perhaps most likely of all, the new taxes being proposed on capital gains by the United States President Joe Biden.

If this came to pass, it could indeed be the largest tax increase in history and potentially devastating news for wealthy crypto day-traders. To be fair, Peter Brandt did quickly clear the air regarding his bearish BTC tweet, affirming his long-term bullish view.

โ€œWow!!!

This Tweet was NOT intended to portray a long-term bearish opinion of Bitcoin ($BTC continues to be one of my largest holdings), but, as a negative opinion of mega-dollar government programs. I am a Bitcoin bull Libertarian.โ€

Somewhat contrary to what the price drop might suggest, Glassnode data suggests that the rate of BTC withdrawals from exchanges is still accelerating...

Itโ€™s always worth considering just who is doing the majority of the buying or selling that is leading to the most recent price action. You can find some of my favorite BTC charts, metrics and properties here. Selling BTC due to news of potentially unfavorable future taxes wouldnโ€™t make much sense for long term BTC holders. Suddenly rushing to sell an asset they believe in the future of and are primarily accumulating more of would immediately, assuredly create a tax liability, which they are presumably trying to avoid.

BTC-HODL-Waves

A majority of recent selling coming from short term holders?

Dips arenโ€™t just a great time to continue disciplined dollar cost averaging, but also a great time to continue learning! Soon enough the next bear market will come, and it will surely bring with it another great opportunity for creators and communities to focus on collaborating, innovating, and building.

Certainly not to belittle potentially massive tax reform implications, but this tax plan is far from passing, so perhaps itโ€™s the mix of FUD which caused the BTC price drop of ~$16,000 in 10 days. Well, if you follow the Bitcoin stock-to-flow model this might not be anything to panic about at all. The S2F model creator weighed in on the recent price volatility, and PlanB poses that the recent BTC price correction was actually quite welcome after multiple consecutive months of upward action, further suggesting that BTC could be right around the middle of its current bull run, with a stock-to-flow target of ~ $288,000.

PlanB-BTC-S2F-Model
PlanB-BTC-S2F-Model-ATH-Zoom

Itโ€™s a great chart to keep an eye on, though not all are convinced of the S2F model and itโ€™s validity

One might reason for now, that regardless of when the next bear market arrives, with the expectation of unprecedented world reserve currency printing continuing into the foreseeable future, more and more individual and institutional investors are evermore likely to search for sound, inflation-hedging, safe-havens. Where will they turn?

BTC-vs-Gold

โ€˜This chart tracks Gold vs Bitcoin performance from a $1 investment on 6 Oct 2009 when Bitcoin first had a market price.

I humbly dedicate this chart to @PeterSchiff in honor of his tireless promotion of Bitcoin to his audience of gold bugs, we are forever grateful.โ€™

BTC-vs-Gold-Figures
dr-terminus
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The Future Dreams Fundraiser: NFTs for a Good Cause

I am @BrazyBull, the co-creator of the NFT Creative Agency, 0xDigital. Today, April 25th at 3pm EST, we are hosting the Future Dreams Fundraiser on OpenSea. We are working directly with Friends of the Children๏ปฟ, a national non-profit organization that helps underprivileged youth. With the support of 12 amazing crypto artists, we are hoping this fundraiser can show other non-profit orgs that NFTs can be used for a good cause. 

hyrtob

I have been obsessed with NFTs for the past three months. While growing my collection and building new relationships, I realized how amazing the community is. Almost all the artists and collectors are kind-hearted. After seeing how many different use cases there are for NFTs, I realized this space can really change the game for charitable fundraising. Collectors and artists alike seem eager to give back to the community, and an NFT can act as proof that you support a good cause. Not only does it go a long way to helping those in need, but it is also a great addition to any collection or gallery.

After partnering with Friends of the Children, we decided to organize the Future Dreams Fundraiser. Through this fundraiser, we hope to inspire and support underprivileged youth. We will be releasing 8 NFTs created by children in our program showcasing their future dreams. We are also lucky enough to collaborate with 12 amazing artists, who were generous enough to create and donate 1/1 pieces for our fundraiser. We are working with Miss Al Simpson, Dangiuz, Marterium, ge1doot, Blake Jamieson, Fakito, Daniella Attfield, RTFKT Studios, Sean Mick, John Park, Retric Dreams and Daniel Taylor.

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On Sunday, April 25th, at 3pm EST we will start the auctions for all the artists 1/1s. We will also list for sale the 8 limited edition NFTs created by the children. All the works can be found on our OpenSea account. We are so excited for this fundraiser, and hope to be able to partner with more non-profit organizations in the future. If you have any questions, please reach out to us on Twitter @FutureDreamsNFT

brazy
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