The Digital Assets Newsletter: Week 4
- ateekberg
- Feb 1, 2022
- 7 min read
Too Long Didn't Read Summary
Market update: The cryptocurrency market has been experiencing a crazy ride up and down(Mostly down) during the past week. Overall pursuit of safe assets and liquidity among investors has pushed down the prices of all assets that can be regarded as risky, thus explaining the Correction in the cryptocurrency market. Meanwhile, the NFT market (and/or frenzy) continues to thrive with big players such as Meta (Instagram & Facebook) and Walmart starting to create plans for different kinds of NFT- integration. Finally, the topic of adopting Bitcoin as a legal tender is becoming hot. However, it is indeed a polarized question. Read more below! Concept of the week - NFTs - what is it really about? NFTs are digital properties in their essence. More specifically, a NFT is essentially a token which proves the ownership of a digital good,which really has not been possible before in this new digital world. NFT as a concept matters because it enables the shift from the age of information to the age of value to occur, which in turn economically empower people on a global level. Not only is it something philosophically beautiful to be able to both create and acquire digital property, it also provides endless opportunities with regards to providing utility for people owning these digital assets. In short, NFTs simply empower individuals, on a global level, to create, buy, sell, own and use digital assets. Read more below and stay updated for more learning sessions where we discover the world of NFTs! Investor Joe Updates: Learn about what investor Joe has invested into this week and why.
Are You New to This Space? Don't Worry! As we have gained a lot of new subscribers we would like to welcome you all to the DAS newsletter! We provide a market update, a concept of the week and finally a portfolio update from Investor Joe. Since this newsletter may contain slightly complex topics and you may be new to the world of digital assets, we would like to invite you to look into our website where we have created a learning section for you to gain a better understanding of this fascinating ecosystem. Hope you enjoy reading!
We are not advocators we are educators
This Week's Market Update
Micro View: Wow! If you haven't learned about the meaning of Volatility or even heard about the term before, aggressive up and down(mostly down) movements in the cryptocurrency market has been the real practical teacher. Starting off the week with BTC at approximately 42 000 $, the whole cryptomarket experienced a severe sell-off during this week, with BTC plunging under 34 000 $ before bouncing back to a level of 37 000 $. Ethereum was even more damaged while smaller alt coins in general were down the most(Which often is the case when the market experiences a correction). Macro View:
As stated under the Micro View, a real correction occurred during the past week. The main reason for the correction was a severe and aggressive sell-off of all different kinds of assets that people perceive as risky, which caused dramatic movements in the stock market, which in its turn was spread like a virus to the cryptocurrency market.The increased fear and thus motivation to dispose high-risk assets itself, can mainly be described by a combination of the current geopolitical crisis with Russia together with fear of increased interest rates due to higher inflation expectations worldwide.
Meanwhile, while the cryptocurrency market has been characterized by FUD(Fear, Uncertainty and Doubt) lately, the frenzy in the NFT-space continues. Big players are starting to really take this seriously, probably because they are realizing the potential of this market and ultimately the cost of NOT adapting in a constructive way. For instance, Walmart has recently filed several trademark applications related to NFTs, which indicates that they will soon create their own projects using this technology (Web3 Founders Welcome Walmart and Its NFTs to the Metaverse - Decrypt).
Moreover, NFT features are on their way to enter our social media platforms, such as Instagram and Facebook, in a truly integrated way (Web3 Founders Welcome Walmart and Its NFTs to the Metaverse - Decrypt).
Different perspectives on the topic of adopting Bitcoin as a Legal Tender are arising.
On the one hand, The IMF(International Monetary Fund) recently warned the president of El Salvador (Yes, El Salvador has Bitcoin as a legal tender), stating that Bitcoin as a legal tender poses a severe threat to the financial stability and integrity in the country, which in its turn could make it hard for El Salvador to loan from IMF in the future(IMF urges El Salvador to remove Bitcoin as legal tender). On the other hand, Fidelity Investment research department recently came up with the opposite conclusion, using the concept of game theory to explain how NOT adopting Bitcoin as a legal tender today is a too big cost for the future even if the country doesn´t believe in its benefits, since the assumption is that other countries will start following El Salvador´s path(Fidelity: Countries That Secure Some Bitcoin Today Will Be Better Off Than Their Peers). /Viktor Svensson
Concept of the Week: NFTs - What is it really about?
Maybe you have been following the explosion of interest in this phenomenon called ´´NFT´´. Or maybe you have no idea where I am going with this text. Either way, the only thing you really need to know is that this is not a joke or something that will be here on earth for a limited time. NFT as a phenome non and its underlying implications is here to stay and will disrupt society in many respects. Let's try to explore and understand this area further! What is a NFT? Well, by googling its pure definition you will find out that NFT stands for ´´Non-Fungible Token´´. However, this may make you even more confused than you were before. What does it actually mean? Ultimately, It is a digital asset. Or more profoundly explained, it is digital property, like a digital validated certificate, stored on a Blockchain, which ensures that there is only one original, rightful, owner of that property, or asset if you want. That is, a token which proves the ownership of a digital good, which really has not been possible before the emergence of NFTs. Could that work as an overall, more broad, explanation? Well, maybe as an abstract concept, which you may or may not understand. But how about its relation to reality, to real life application and utility? Well, now it becomes interesting and also, hopefully, more intuitive, because here is the truth: The only limit to what could be constructed as a NFT is your imagination, more or less. As long as it is something digital, you can in theory turn it into this unique kind of token and thus into a digital asset. In practice, this could be digital art, a music clip, a twitter-post or just a collection with the purpose to create a coherent community where the owners of these NFTs are provided with real life and/or metaverse Utility. Why is this relevant? The concept of NFTs is revolutionizing this digital world. Why? Well, the simple, broader, explanation is that this innovation enables a shift on the internet from the age of information to the age of value. That is, through NFTs, people who think that what they have created online is being demanded in the market can actually be paid for that value creation in a fair, distributed, decentralized and effective way. Not only once, but every time the token is being sold (Due to royalties, just like for artists in the physical world). At the same time, people who want to buy these digital assets (or digital property you want) now have that opportunity, no matter if the motive is speculation, collection, flexing, becoming a part of a community and/or receiving utilities. NFTs simply empower individuals, on a global level, to create, buy, sell, own and use digital assets. How to think about NFTs? You may argue that the current frenzy movements on the NFT market is a strong indication of a bubble. Well, it all comes down to how you define a bubble. If the argument is that NFT prices will drop at some point, maybe substantially, due to excess supply and overall greed, like the Internet-bubble burst year 1999, that may or may not be the case. However, NFTs as a concept and its importance, is not going anywhere. In an increasingly digitized world, people will continue to pursue ownership and construct digital property, just as people do today in the physical world. Rational or not, but really, the root reasons for buying NFTs are not different from the motives to buy physical properties of different kinds such as cars, paintings, collectibles, scarce commodities, land and so forth. I hope that this text has helped you to grasp the concept of a NFT and why it matters to you, the society and the world. Although this is far from sufficient and is only the tip of the iceberg, hopefully you are now equipped with a basic, fundamental, understanding of this area of digital assets. This journey has just begun and we look forward to continuing exploring this fascinating ecosystem of NFTs together with you. Thank you for reading. /Viktor Svensson
Investor Joe Portfolio Updates
For this section we encourage you to click the links in order to learn and understand the investment reasoning and how Investor Joe works.
Who is Joe? We explain everything here.
Previous positions remain unchanged. This week Joe continues his DCA strategy with 100$ split as:
The Quick Take: With this week's bloodbath it has allowed Joe to pick up both BTC and ETH at their lowest points yet for Joe! An example of why ‘DCAing’ can be more effective than lump sum investing. However with the continued uncertainty, Joe will not go for any smaller alt coins this week.
Portfolio Value and Holdings:
⚠️ DISCLAIMER ⚠️ This is not financial advice, and is purely for educational purposes only, always DYOR! ____________ Written by: Erik Gunnarsson Questions? Reach me at hey@erikgunnarsson.com
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DISCLOSURE: SOME DIGITAL ASSETS SOCIETY MEMBERS ARE INVESTED IN CERTAIN TOKENS AND COINS WHICH MAY HAVE BEEN SPOKEN ABOUT ABOVE. THESE STATEMENTS ARE INTENDED TO DISCLOSE ANY CONFLICT OF INTEREST AND SHOULD NOT BE MISCONSTRUED AS A RECOMMENDATION TO PURCHASE ANY COIN OR TOKEN. THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND YOU SHOULD NOT MAKE DECISIONS BASED SOLELY ON IT. THIS IS NOT INVESTMENT ADVICE.
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