Crypto Retrospective for Year 2023
📊Total Cryptocurrency Market : 1.66T
Bitcoin = $42654 | Ethereum = $2304 | BTC Dominance : 50.1%
Most of the bad actors are flushed out
Sam-Bankman Fried mixed funds between FTX, the cryptocurrency exchange, and his other firm, a crypto trading firm - Almaeda Research, losing billions of customers money playing LONG and SHORT. As per the news, this guy can spend most of his life in prison. The hearing is pending March, 2024.
Bankman-Fried, 31, was arrested last December and tried on allegations of defrauding FTX investors and customers, and Alameda Research's lenders.
The once-prominent crypto exchange CEO pleaded not guilty to all charges, and went to trial at the beginning of October. Federal prosecutors sought to paint him as someone who deliberately set out to steal his customers' funds – around $8 billion – for use in a variety of purchases and investments, including real estate, sports sponsorships and venture investments
The likes of Do Kwon and Alex Mashinsky, good riddance, every bad actors who are gone now is a special feeling for the good one’s who thrived in this ecosystem. Every markets going to have scammers, so people have to extra sceptic when it comes to crypto , since crypto = cash = money.
Liquidity in the markets is back
One thing I observe in crypto markets, it’s so liquid in nature, and has access to all kinds of financial instruments like spot trading, margin trading, future options, this market will always attract trader’s mind. What does a trader bring to the markets? They create markets even if its not there yet, that’s exactly the case for crypto.
Let’s take Solana as an example - it’s market cap is 43 billion, spot exchange volume on Binance is $418 million.
Now, look at its’s Perpetual trading volume - 2 billion.
We have an average 5x more cash flow into margin trading than spot exchanges.
In my opinion, as the liquidity in global markets stay on a rise, money will enter the crypto markets and opportunities will arise. This will not include price movements but also will result in in-flux of capital into the ecosystem.
Top Use-cases will bloom in 2024 - DeFi, NFTs, RWAs
My most bullish crypto project will be a DeFi project run by a DAO- which challenges tradFi banks worth 50 billion +. Some of the DeFi projects topped out at AUM around 5-10 billions, we need to break that threshold.
Currently, total value locked is 52billion, this number should technically increase in spite of being in bull/bear run, because this will show inherent adoption of DeFi by the masses, time will tell.
NFTs in the arts world took a hit but ways of engagement between artists + audience using NFTs will continue to rise. A big challenge in the NFT world is around integration with existing apps to bring millions on the platform + make them comfortable using it.
Real-world assets (RWAs) in blockchain are digital tokens that represent physical and traditional financial assets - such as stocks, bonds, real-estate etc. Real World Assets is a major market which is undergoing rapid development. Converting stocks into token is something which some financial firms are building using blockchain. The potential is to tokenize trillions of assets, the firms which build the best solution here first will come on top! Something to definitely keep an eye on in 2024.
Bitcoin did 165% Year to Date
One of the best performing asset in spite of the Ukraine-Russia war, Israel -Hamas conflict or China bans crypto, the list goes on. Bitcoin did well but some Stocks like NVIDIA, even MicroStrategy and Coinbase had higher returns than Bitcoin. 2024 is here, time to place bets again?
With the second half of bull cycle in sight, eyes on crypto will increase, regulations will come and volatility will be crazy. With more nation states like Argentina, Turkey where inflation rates are over 100%, the currencies will die and normal people will be forced to save cash in multiple ways & the financial sovereignty BTC brings is priceless. The whole point of keeping your money safe, by self-custody is something which Blockchain brings to the financial space and the more people realize this point, the more the asset grows. At the end of the day, these are all investment tools and we should exercise caution and have our risks managed. Timing the markets is not easy but staying vigilant helps.
ABHI’S CRYPTO EXPERIMENT for 2024
Value as of 31st December 2023 - $1000 USDC.
The markets are overheated and I’d rather wait for a while before FOMO’ing so I have allocated my capital into USDC for the time.
We will track the performance of this portfolio in this newsletter and we all can learn from the findings. Let’s learn and have fun!
Cheers
Abhishek