DAILY CONQUEST #119

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Overview

• How bad is crypto’s current drawdown when compared to the past?
• Markets: Various altcoins fly; BTC/ETH remain quiet.
• Fidelity to launch commission-free crypto trading.
• Japan to study DAOs for possible integration in government/economy.

Good morning Fam,

The crypto and stock market have seen their fair share of drawdowns over the years. So how bad is this one in comparison?

Crypto’s major drawdowns have been cyclical because of the industry’s tie with Bitcoin’s halving. It’s no wonder since Bitcoin, at its basic level, is a mathematical equation where the issuance supply for miners gets slashed by 50% every four years.

So, while doing research, I found this chart from @ecoinmetrics that can help us compare past drawdowns to the one the market is currently experiencing.

Source: Twitter, ecoinmetrics

This year’s Bitcoin and Ethereum drawdown of 77% and 82% remain one of the worst on record, only topped by the last two bear market bottoms, which exceeded a drop of 80% for BTC and 84% for ETH. Interestingly, it’s been the second longest drawdown for Ethereum in terms of duration.

Whether the two assets have reached their bottom in this cycle is still to be determined. Although, history shows us both metrics are at extremes. Although, we must consider that Bitcoin grew during one of the most extended stock market rallies in history, which lasted over ten years. BTC has yet to be challenged by a major recession like the one we are facing now.

In this instance, a significant decoupling from stocks could add considerable recognition for Bitcoin and crypto as viable assets on the world stage.

The stock market, on the contrary, experienced more significant drawdowns eight times in its history, which spans more than 100 years. With all the macro headwinds, including the worst inflation in over forty years, the markets have failed to see much relief lately, raising concerns that the drawdown has more room to go. History shows that the potential exists.

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BTC/USDT 1D

Amid stock market struggles, Bitcoin price action remained mild while various altcoins listed below, experienced strong rallies. BTC price tested and rejected the $20k support level (yellow) for a third time in the past seven days. BTC completed the daily candle up +0.25% to $20,201.

High-resolution chart.

Fidelity’s crypto push. Investment giant Fidelity, with $9.9 trillion assets under management (AUM), is launching a commission-free crypto trading product for retail investors with a 1% spread on price. The firm opened a waiting list for clients early yesterday morning.

Japan to explore DAOs. The Digital Ministry of Japan looks to create a decentralized autonomous organization (DAO) to expand its understanding of the governance structure and to learn of its limitations. The move furthers Japan’s exploration into integrating Web3 technology into its government and economy. A DAO is a digital governance structure often used with decentralized platforms, where holders of a project’s token become voters in its governance.

News Tidbits:

• Zero Hash launches operations in Brazil.
• Circle puts reserves into a BlackRock fund.
• Canada to launch a consultation on crypto, stablecoins, and CBDCs.
• ImmutableX to unlock $66m in IMX tokens.
• Is Do Kwon hiding out illegally in Europe?
• Golden Sach to unveil crypto-based data service.
• Aave proposal to deploy on zkSync 2.0.
• Coinbase earnings disappoint.

NFT & metaverse update 🐵

• Kraken exchange launches 70 NFTs collections on a new “gasless” marketplace.

My five cents….

It’s been a unique and exciting week in the middle of the crypto bear market.

First off, crypto appears to be showing signs of decoupling from US equities which continue to struggle in the face of the Fed’s balance sheet unwind. Furthermore, there were several significant announcements, such as Instagram’s NFT push, Meta’s integration of Arweave, and Twitter’s Binance/crypto-related speculation. And let us remember the reemergence of Dogecoin, up 104% in two weeks. All were covered in yesterday’s issue.

All seems good for now, but the new Core Price Inflation (CPI) number comes out next Thursday, and the Fed has mentioned that it’s the primary metric they use to track inflation. As a result, markets could experience fireworks if it exceeds or misses expectations.

Stay tuned, stay positive, and as they say, there’s never a dull moment in crypto!

Enjoy your weekend!

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