This week in crypto. July 19-25: The State of Crypto Investment, NFT prodigy and more...
The state of crypto investment
Investment decisions are very personal, but on a greater scale they can tell a lot about the general mood and the future trends. With fiat currencies losing their value by the day and Central Banks not willing to stop money-printing machines, now is a good time for observation.
Traditional investment tools
Traditional investment tools, like stocks or mutual funds, remain most popular. However, as revealed in the recent Gallup survey, Bitcoin is gaining ground: 6% of American investors (adults with over $10k in stocks, bonds and funds) now have BTC in their portfolio, compared to only 2% in 2018. Unsurprisingly, among investors aged under 50 this number is much higher (13%) than among those over 50 (3%). Moreover, the perception of Bitcoin has changed as well: less people consider it “very risky” than before.
An increasing number of Americans now wish to add crypto to their retirement plans. Custodians of IRA (self-directed Individual Retirement Account) and providers of 401(k) (employer-sponsored retirement plan) now add crypto to their portfolios.
On a higher level retail demand is answered by investment funds like Rothschild Investment Corp, which increased its Bitcoin holdings by almost 300% in Q2 comparing to the previous quarter, or Edge Wealth Management (44% increase), both investing indirectly through Grayscale Bitcoin Trust. Grayscale crypto trusts are now also being offered to retail clients of JPMorgan, despite its CEO still being a crypto sceptic.
Mining attracts institutional investments as well, with New Jersey’s Common Pension Fund investing $3.66 M in Riot Blockchain and $3.39 M in Marathon Digital miners, both listed on Nasdaq. Mainstream investors now can also access a green mining ETF launched by Viridi on NYSE.
Real estate and art
Other investment choices, such as real estate and art, cannot be replaced by crypto. However, they can be considerably improved by it: tokenizing an asset makes it more accessible and liquid. A good example was recently given by Swiss crypto bank Sygnum and art investment firm Artemundi, who tokenized a Picasso painting “Fillette au béret”. Worth 4M CHF, the painting’s ownership rights were split into 4000 tokens, allowing people to invest as little as 5k CHF and then trade as little as 1k CHF. Secondary market is indeed easy for tokenized assets: all tokens are tradeable on SygnEx, Sygnum’s crypto trading platform.
While crypto is not yet ready to supplant traditional investments, it is growing fast. It is also the future: millennials are nearly 10 times more likely to own cryptocurrency than boomers, and the state of investment 10 years from now can be so radically different.
Art and NFT
Crypto might really be the solution to the wealth accumulation problem faced by the “poor generation” – the millennials, and the following one – the gen Zers. And it can kick in really early.
12-year-old Benyamin Ahmed from London suburb sold out his Weird Whales NFT series in only 9 hours, making himself 80 ETH, the equivalent of $190k. The collection of 3350 NFTs is now being sold at OpenSea marketplace.
Benyamin is very young, but he’s not an exception. 13-year-old Gajesh Naik from Goa coded a DeFi protocol on Polygon, Ethereum’s layer-2. His PolyGaj is a DeFI and NFT platform that is now managing over $1M in crypto.
Benyamin and Gajesh learned to code at 6 and 8 years respectively – and it paid off. What do they do with their crypto wealth? Obviously, they HODL.
Markets
Bitcoin
The most impressive Bitcoin price changes often happen on Sunday night, and this yesterday just proved the trend. Progressively rising from under $30k, Bitcoin raced to $39800 on Sunday night, for a total of 25% weekly increase.
Among possible reasons for such an increase there can be Elon Musk saying on The B-Word conference on Wednesday that Tesla is likely to resume accepting Bitcoin for cars, since it becomes clear now that its mining is largely using renewable energy sources. Yesterday’s rally may be a consequence of numerous technical indicators pointing to a surge, or the rumour that Amazon could start accepting crypto by the end of the year.
Ethereum
Ethereum followed suit with a 30% increase, bouncing off $1800 and ending at $2360, drawing a clear price channel. It remains to be seen if Ethereum can break it and rally further.
Quote of the week
"I might pump, but I don't dump. I definitely do not believe in getting the price high and selling. I would like to see Bitcoin succeed",
Elon Musk, Tesla’s Technoking, on personally HODLing Bitcoin