FG Cheat Sheet 120921
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Hal and Boomer discuss their short-term outlook on crypto and broader markets, and Hal laments being blocked by Will Clemente (one of his personal heroes) on Twitter.
CHEAT SHEET
What We Are Watching
We further breakdown our case for these cryptos here : What We Are Watching
Are you buying these tokens? Did you read our guide on how to buy them on Sushiswap and Uniswap? Got questions? Leave them in the comments.
The Decentralized Reserve Currency
Crypto News
An intriguing collaboration has happened in DeFi using Keep3r, Olympus bonding, and Magic Internet Money to provide fixed forex
BadgerDAO has released a post-mortem detailing an exploit that affected users of the Badger protocol
Brazil considering zero tax on renewable Bitcoin mining
Trezor Suite and Firmware Updates December 2021 - support added for Bitcoin Taproot upgrade
Visa Now Offering Crypto Consultation Services to Clients
Bitcoin’s Hashrate has recovered from China’s crackdown on mining in May nearing all time highs
Speculation mounts over Polygon’s major announcement at the up and coming zk Summit
The Ethereum network will be undergoing a scheduled upgrade at block number 13,773,000, which is predicted to occur on Wednesday, December 8, 2021.
ETH DOMINANCE OUTLOOK
The above chart shows ETH Dominance, which is ETH’s market capitalization divided by the total crypto market cap.
From the peak of speculation in the 2017-2018 crypto bull market ETH Dominance was in a falling trend. Much of the dominance was lost to BTC, but many other altcoins were fighting for importance with ETH trying to steal the number 2 spot. Cryptos like LTC (litecoin), XRP (ripple), ETC (ethereum classic), BCH (Bitcoin cash) were all competing for marketcap in the years when crypto was still finding its identity and product market fit.
Many feel ETH is now the “other legit” crypto besides BTC and even think the ETH marketcap could outgrow BTC. However, looking at the lows in dominance in 2020 the crypto market participants had different ideas about ETH. The ETH dominance reached a low near 7%. Many investors had lost confidence in ETH, or maybe they didn’t understand its purpose.
We now know several factors that played a major role in bringing ETH out of the doldrums and securing it’s number two spot. A key factor in ETH’s success has been the inclusion of ETH in major investment vehicles such as CME futures, Grayscale investments, Paypal. ETH’s proof of work mining (that is now being faded out) allowed BTC miners to earn extra money mining ETH (ETC, LTC, BCH are also probably still around for this reason too).
Then in the summer of 2020 a major breakthrough happened with the rise of DeFi. ETH finally had a purpose many investors could understand and most importantly people started using it. AAM’s like Uniswap and Sushiswap emerged allowing users to spend gas (paid in ETH) to swap assets in a decentralized way.
In 2021 the rise in popularity of NFTs gave ETH another use case : buying and selling art on chain. OpenSea saw mass adoption with many new users showing up everyday to mint new NFTs which requires gas. So many NFTs were (and still are) being minted that OpenSea became the number one spender of gas on the Ethereum network.
The horde of ETH competitors such as SOL, ADA, ATOM, LUNA, AVAX has thus far not stopped ETH’s dominance to rising to highs not seen since 2017-2018. The dominance is not sitting near 22% and appears to be rising.
What’s next in the chapter of Ethereum dominance? Promises of ETH2.0 to alleviate users of high fees could see an explosion of even more applications built on ETH. Or will the competition beat them to the chase? Are the applications really why ETH is dominant since they can be so easily copy and pasted onto other chains? Are the major investment vehicles the reason ETH is dominant? Would a SOL ETF steal the thunder from the rising star?
Possible Course of Action
Today’s article is commentary on macrotrends. Please read the article from Tuesday for actionable insights on the current state of ETH.
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