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| Coinbase Keeps Innovating (Coinbase): Regular readers will know we're bullish on Coinbase, the leading U.S. crypto exchange and one of the few crypto companies you can buy as a traditional stock.
Despite the market rout, Coinbase continues to innovate in a way that is unthinkable for legacy banks:
1) First, they announced that Coinbase Paywould be open for developers to integrate into Web3 apps. If you've attended our Hands-On Workshops, you know the hassle of using Coinbase to purchase crypto, then transferring it to your MetaMask wallet to use Web3. This gets rid of the transfer step, allowing Coinbase to keep users within their ecosystem, even while they access Web3 apps.
2) Next, the company announced that Coinbase Wallet users can swap tokens on multiple blockchains, like Avalanche and Binance Smart Chain. This allows users to swap at lower fees than Ethereum, while allowing Coinbase to eat into market share of competitors like Binance.
Investor takeaway: As the traditional and crypto economies further combine, we believe Coinbase will begin eating the market share of legacy banks. Because Coinbase is built from the ground up as a crypto platform -- a tech stack -- the legacy banks really don't stand a chance.
Best of all for crypto value hunters, COIN stock is now trading at an all-time low. |
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| Investor takeaway: Coinbase is the gold standard among U.S. crypto exchanges, with user-friendly products, relentless innovation, and a track record of trust. (Inc. Magazine named it Company of the Year.)
Just over a year ago, investors were falling over themselves trying to get into Coinbase's IPO at $342 per share. Today, their stock price is 80% off.
Value hunters, take note! It's still the same company. (Or maybe, even better.) |
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Hi everyone,
When I was young, I always wanted to travel more. I am certainly getting that wish granted by working in crypto. One of the benefits of working in this industry is that you can work from an office or from home, and you can be a digital nomad if you want.
Last week I was on the road at Permissionless, and today I am writing this column from Montreal, Canada, a few hours north of the U.S. border.
The only thing I can't seem to travel out of is the bear market. Bitcoin briefly dropped under $29,000 yesterday and as of this writing is in the high $29,000's. Let's face it, bear markets suck!
While I haven't verified its complete scientific accuracy, the "Crypto Fear & Greed Index," which measures the sentiment of the bitcoin market, is a useful tool and provides a pretty good idea of how friendly or spicy crypto Twitter conversations are going to be. |
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| Fear and greed
The aforementioned index is almost as low as it can go, at 11! It's not much better for the Ethereum Fear and Greed Index, which was latest at 24.
If you have only been looking at the markets for the past six months, you would have a good reason to feel spicy.
Bitcoin is down more than 50% from its all-time high. The exact amount depends on what source you use, but I like to keep it simple. The day ending figure on CoinMarketCap for Nov. 7 was over $67,500.
Ether is down over 58% from the same day, when it peaked at over $4,800 on CoinMarketCap.
Diving deeper into a more speculative part of the market, Gala Games' GALA token hit an ATH of over $0.71 at the peak of the Mark Zuckerberg-inspired crypto gaming pump on Nov. 27. It's currently sitting about 88% down from this all-time high at around $0.08. |
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| While there is no specific agreed-upon definition of a bear market in crypto, our current market sure feels like it. A common bear market definition in the world of stocks is a drop of 20% or more. By the way, the Nasdaq 100 has been in a bear market since March and the S&P 500 is now in bear market range.
Based on the data I provided in this column, it's apparent to me that we are in a bear market and crypto traders are fearful.
What are the institutional players doing? |
| Be greedy when others are fearful
While this phrase has become almost cliché to some, it's not for VC giant Andreessen Horowitz, also known as A16Z. The company just announced a $4.5 billion fund to invest in crypto, calling into Crypto Fund 4. Its full announcement is here.
One of the most important statements is:
"We are excited about developments in web3 games, DeFi, decentralized social media, self-sovereign identity, layer 1 and layer 2 infrastructure, bridges, DAOs & governance, NFT communities, privacy, creator monetization, regenerative finance, new applications of ZK proofs, decentralized content & story creation, and many other areas."
In this column, I am taking a particular interest in Web 3.0 gaming. If you follow the hyperlink in "web3 games," you will notice it goes to a podcast episode entitled "‘Play-to-Earn’ Gaming and How Work is Evolving in Web3." In the podcast, A16Z General Partner Arianna Simpson explains why she is bullish on crypto gaming.
A16Z has allocated $600 million of its fund for crypto gaming. In fact, the company is so excited that its' Twitter account even posted a hype video. |
| Investor's take
It goes without saying that one should not borrow to invest. If someone does that, they do not understand what investing is and how it fits into a winning personal finance strategy.
That being said, investors would be smart to consider a few points.
1. Asset prices are lower in bear markets.
2. Asset prices are higher in bull markets.
3. Markets go in cycles. Bull and bear markets follow each other.
4. Compared to lump-sum investing, dollar-cost averaging investing lowers financial risk. It also lowers the personal unhappiness caused by a poor investment. For a deeper dive on this subject, you can read this research piece that I wrote in April.
5. Based on existing and past data, it is extremely likely that bitcoin will continue to succeed as an investment.
6. Based on existing and past data, it is very likely that Ether will continue to succeed as an investment.
7. Based on existing and past data, it is likely that crypto gaming projects will disrupt the traditional gaming sectors, and investments in these projects, while considered very risky, have the potential of producing excellent returns. Two ecosystems that I have been following and investors should look into this bear market are SAND and GALA. |
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| Sincerely,
Alexandre Lores Opportunity Analyst |
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