The Case Against the Bears ... in Tweets
Welcome to yet another edition of CryptoBuzz, where we look back on weeks’ worth of breaking news, trending topics in our Twitter community and more. So, let’s dig right in!
PlanB, also known as @100trillionUSD, is a Dutch institutional investor. He created the Bitcoin stock-to-flow (S2F) model, where he uses scarcity to quantify Bitcoin (BTC, Tech/Adoption Grade “A-”)’s value. His S2F model is not only applicable to Bitcoin but also to gold, silver and other assets.
Recently, however, his stock-to-flow model has run into its biggest challenge yet:
Crypto analyst '#PlanB' said that $BTC/USD is now the furthest away from his stock-to-flow model's estimates in over two years. Could a "return to mean" be in the future? That would represent a move to about $86,000 or more than double the current #BTC price.— Weiss Crypto (@WeissCrypto) July 6, 2021
Your comments on this tweet ranged from “The model will break” to “The model will be invalidated the next month” and “BTC will hit $16k.”
Seeing this bearish vibe echo throughout community wasn’t really surprising as there’s an overwhelming fatigue among the traders as Bitcoin continues to trade sideways. However, we appeal yet again to the community:
Despite today's red day, #Bitcoin is still holding above $32k, and has cemented a solid support at that level. Don't listen to the #FUD of the day - nothing changes for $BTC until a breakdown below $30k. #HODL #BTC— Weiss Crypto (@WeissCrypto) July 8, 2021
While the Bitcoin fear, uncertainty and doubt (FUD) seeps in, clouding the minds and weakening hands of the strongest of the bulls, something quite different — and quite bullish — is on the horizon for the second-largest crypto by market cap ... and we’re not just talking about the upcoming London hard fork.
Yep, you guessed it – it’s Ethereum 2.0, and it’s coming closer and closer:
#Ethereum's London hard fork to launch Aug 4. This is the big one as it implements #EIP1559 which overhauls $ETH's entire fee system. The upgrade was proposed a while back, and we're curious to see what the effect will ultimately be on fees overall.— Weiss Crypto (@WeissCrypto) July 7, 2021
As you probably know, this huge upgrade, which was many years in the making, will convert the Ethereum (ETH, Tech/Adoption Grade “A”) blockchain from a “proof of work” to “proof of stake.” This will create a multichain system and will increase its speed, security and efficiency. The upgrade will also improve the performance of the network and allow for more transactions, keeping it secure and decentralized.
If you think this is exciting and potentially profitable, you’re not the only one: Ethereum Launchpad currently has 187 000 validators, staking 6,161,215 ETH, which is around $13.2 billion U.S. dollars, for the uninitiated.
This not only shows that the ETH isn’t going away but also that it could be replacing the BTC as the leader of the crypto pack, ushering in the “flippening.”
Indeed, the banks know it:
Swiss #crypto bank #Sygnum has launched the #ethereum 2.0 staking service, claiming to be the first bank to offer this service. The first, but likely not the last! #eth2 #ethereum2— Weiss Crypto (@WeissCrypto) July 6, 2021
Celsius’ CEO knows it:
#Celsius CEO Alex Mashinsky suggested that #Ether has already started #flippening #Bitcoin in U.S. dollar terms.— Weiss Crypto (@WeissCrypto) July 6, 2021
We're not aware that flippening in $USD terms was a process. That said...
And we’ve known it for quite some time now:
#ETH has overthrown #BTC in our ratings. Reasons are price performance and a significant increase in usage that exceeds BTC in almost every metric we track, although #Bitcoin continues to lead in terms of liquidity and market dominance. #flippening #Ethereum— Weiss Crypto (@WeissCrypto) August 12, 2020
Aside from the BTC and ETH saga, one other story has started to develop: synthetic assets!
The prevalence of trading synthetic versions of stocks and ETFs has grown on DeFi projects like $MIR and $SNX over the past year. How long before investors actually prefer the this version over the traditional one? What will that do to traditional brokerages? We can only wonder!— Weiss Crypto (@WeissCrypto) July 7, 2021
As is always the case with innovation, it more often than not breeds confusion. That’s the case with synthetic assets. So, in a rather long thread, we wanted to alleviate any issues that might arise from investors not being able to tell synthetic stocks apart from the stock-based tokens.
Here’s just the top of the thread; click through for the full explanation:
1. Synthetic stocks are used in #DeFi and they are not collateralized with real stocks. These tokens are only pegged to the value of real stocks and are (over)collateralized with crypto. No KYC needed, no restrictions to users, no intermediaries.— Weiss Crypto (@WeissCrypto) July 7, 2021
Finally, I’ll end the overview with an appeal to take a look at a great piece by Alex Benfield. It’s bound to provide you with a big-picture overview of what’s really going on in the market today and dispel any FUD you might be experiencing. I’ll end with this quote from the article:
Cryptocurrencies could usher in the greatest transfer of wealth from institutions, corporations and the 1% to the masses, so it is important to be an early adopter of this new technology and currency system. And remember to keep a macro perspective at all times.
Stay safe and trade well,