CryptoAM: Bitcoin City, (Academic) Institutional Money, and Twitch

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Wow! Why does the market look like the Windows XP background? I don’t know, but I’m not complaining. I had a good time at BlockchainNW yesterday. There are a lot of funds investing in crypto right now, and the one key thing they all had in common was their emphasis on due diligence. Obvious right? But it never hurts to hammer it home. DYOR (Sidenote: It’s funny how you can tell at these conferences who the twitter influencers are, who the venture capitalists are, and who the moms with an unnatural interest in blockchain are).

Looks like my relentless. BNB. shilling. is working. CryptoAM moves markets!

3 things you need to know:

One: The World’s first Bitcoin city is in… Slovenia? That’s right kids. Slovenia’s largest mall, already know as BTC City, will move forward to accept cryptocurrencies at all businesses contained within the mall. The mall, which is over five million square feet, is using a POS system designed by fintech startup Eligma. Okay, so it’s not a city, but it’s the size of a few small towns.

  • “The first of its kind in the world to provide its visitors, consumers and business partners with an ecosystem that will develop and integrate advanced technologies based on state-of-the-art approaches (blockchain, AI, VR, AR, Machine Learning and the world of cryptocurrencies).”

  • Learning Opportunity: An ecosystem in which customers are encouraged to pay with cryptocurrencies can yield some valuable data. Which cryptos have the fastest confirmation time, the easiest to use wallet, or the best price stability? Which cryptos will be best for retailers to keep track of what was sold when and for how much?

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Two: US universities investing in crypto hedge funds. According to Capital Fund Law Group, some universities within the United States have begun to invest in cryptocurrencies through hedge funds. In addition to investing in human capital by offering blockchain courses, many universities also manage massive endowments, often in the range of billions. It comes as no surprise that some of these institutions are seeking cryptocurrency as a potential asset class to invest in. After all, it has been ten years since Bitcoin was released.

  • Why this is important: If you’re wondering when the institutional investors will come, the answer is, they’re already here, albeit in small numbers. It will only grow from this point forward. Let’s pretend we’re in 2038 looking back on today. In the grand scheme of things, I would bet a few bitcoin that today will end up being a good time to invest, even though you might be down 50% since January. The real question is, what should you invest in?

  • Loans: What’s a better investment, $250k on a undergraduate degree, just so the university can take it and 10x it? Or 10x your $250k and skip college altogether? (This is a joke. Do not do this)

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Three: You can now tip Twitch streamers with crypto. Using an integrated service called “Streamlabs,” Twitch streamers can now accept cryptocurrency donations to their Coinbase account. Of course that means that the streamers are limited to receiving the assets listed on Coinbase, being BTC, BCH, ETH, and LTC.

  • More money? No problem: Many twitch streamers make hundreds of thousands of dollars a year. A large portion of that revenue comes from an ongoing stream of donations that reward the donors with shoutouts and in-chat emotes, among other goodies. I predict that allowing cryptocurrency donations will increase the number and size of tips received by streamers. It is well known within behavioral economics that coupons/discounts/tokens/vouchers incentivize consumers to spend more and decrease the hedonic tax that comes along with spending money.

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Also in the news:

What I’m reading today:

Rebalancing your portfolio, you’re doing it wrong.

Willy Woo, a well respected figure in the twitter and crypto sphere, thinks rebalancing your portfolio should not be done to reduce your exposure to a single token. He borrows logic from VC investors, arguing that only a few projects achieve success, and even fewer achieve major success (Google, Facebook, Bitcoin). It makes no sense to sell Uber at the Series B round when you got in at Series A (I don’t know if that’s even possible). VC investors go long twenty projects and hope that one will be a home run success. Home run successes and home run gains won’t be achieved if you are constantly rebalancing your portfolio to reduce the percentage you have invested in an asset following periods of price appreciation.

  • Remember, rebalancing does not equal reducing risk, especially if you are rebalancing by exchanging a portion of one of your assets for a newer, unproven token.

  • If your portfolio is composed 70% of a s**t coin, because for whatever reason, you were able to get in before a pump, by all means, distribute those gains among more stable tokens.

Around the corner:

Market Outlook:

Waiting...waiting…we’re still trading in the 7.2k-7.8k zone.

Some good news: Since bottoming out at 7.0k we are posting higher lows on the trend upwards. I’d be inclined to say we will revisit 7.8k soon. Personally, I have a long @ 7.58k. I’m looking for a clean break of 7.8k. If we reject, I’ll close it early. Stop loss at 7.4k, the previous low.

Some bad news: Looking at the 4h now. Breakdowns of these candles are pretty regular…and are known to the trading community as “bart formations” because of their uncanny resemblance to Bart Simpson. So, be careful out there and don’t use high leverage (>25x) no matter what Arthur Hayes says.

Some other news: We got feedback from one adventurous person that we should start offering more analysis on different coins. We didn’t want to make this section too long, but if enough of you want that — let us know here!

Fear and Greed: This week we’re seeing really low “speculation” in the market and very high “safe haven demand”. I interpret this to mean that people are parking their money in safe bets. A lot of people will flee alts to large caps depending on preference, so I am seeing BTC/BNB/ETH over perform alts until BTC breaks up or down and begins to trade sideways again.

Here’s a reminder of what these criteria mean

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