Crypto Clarity #2
Every Tuesday I bring you the latest news and resources from the world of Crypto. My goal is to provide updates on the space, while making it accessible to everyone, regardless of experience level.
Happy New Year! If you are invested in any market it is safe to assume that you are looking forward to a better year for your portfolio than what 2022 brought.
My timeline has been flooded with 2023 predictions and while I won’t touch on my personal outlook on the markets too much, I did want to share a few brief thoughts on the year ahead and my biggest takeaways from the last:
2022 Reflections:
No one is able to consistently time the bottom or top: Trying to do so has caused me more harm than good (both in lost profits and lost sleep).
Prices can always go lower, always have cash on the sidelines for opportunities: Historical pricing and performance has proven to be a terrible indicator. In troubled times, cash is king.
Take profits & stick to your plan: It is essential to enter every investment with an exit plan, and to stick to that exit plan. Making a good return does not mean anything if you never realize the profits.
One of the frameworks I use for investing is to sell half if it doubles and keep the rest on the table for continued upside:
This allows you to remove your “initial investment” and eliminate risk. Great for your bank account and mental health.
This strategy will also allow you to maintain exposure and potential upside if the investment continues to perform well.
It is essential to have an exit plan in case things don’t play out as expected. No one has a 100% success rate in investing.
New industries are susceptible to bad actors: The unfortunate truth is that the lack of regulation, large amount of money and barrier of adoption of this sector make it prone to attracting those without the best intentions. It is also unfortunate that these are often the stories that make headlines and reflect on the industry.
“We do not learn from experience, we learn from reflecting on experience” - John Dewey
Weekly Price Performance:
Top Stories:
Worst Year for US Stocks and Bonds Since 1932 - Coin Telegraph
No one was safe in 2022
BMW to Implement Blockchain for its Loyalty Program
Phase 1: Implement blockchain to enhance internal efficiency and transparency, modernize their financial infrastructure and increase their trust with customers
Phase 2: Launch a loyalty program for their customers on the blockchain, providing an enhanced experience in ways not possible before Web 3.0
Mango Markets Attacker Arrested, Charged with Market Manipulation and Commodities Fraud
Here is a great breakdown of how the attack happened:
China to Launch its First Regulated NFT Marketplace:
China continues to bounce back and forth on their Crypto stance
Top Solana NFT Projects Jump Ship to Polygon & Ethereum
Adding to a devastating year for the once deemed “Ethereum Killer”
Thread / Read(s) of the Week:
Very valuable insight from one of my favorite accounts to follow on Twitter - I can relate to each of this biases first hand.
Visual of the Week:
This Week Ahead:
Sam Bankman-Fried returns to court
FOMC Meeting Minutes: Detailed notes from the last Federal Open Market Committee, offering insight into stance on monetary policy
Unemployment Rate: Released Friday
NFP (Non-Farm Payrolls): Employment indicator (that excludes farm, government and non-profit workers)
Quarterly Corporate Earnings Begin: Here is the calendar
The Year Ahead:
Loose predictions to be taken extremely lightly:
Crypto will continue to track the stock market and macroeconomic conditions for the foreseeable future (as it did throughout 2022)
The damage from the FTX fallout has not been fully realized, and the contagion may not be over:
Although FTX’s troubles came to light in November, they had been treading water internally since June when the market crash crumbled some of their leveraged positions and their trading arm was forced to borrow funds from their own exchange (client funds, which should have been backed 1:1 and separate)
There are likely other entities whose direct exposure to FTX or lack of internal risk management will appear over the next few months
I hope this brings more clarity around regulation in 2023
We may go lower, but I think both the macro environment and crypto market will be in a better place at the end of 2023:
If we go lower, I think the main factors could be:
Disappointing corporate earnings + recession fear
Forced selling by large entities (mentioned above) in a low-demand environment
Continued inflation concerns and strength of the Dollar
Decentralization + blockchain solutions entering industries other than digital applications and Finance
Reader Corner: Q&A / Feedback from our Audience:
Leave your feedback / questions / comments below - Or reply to this email!