Cryptogram - 24MAR2023

Bitcoin at 1 million? đź‘€ đź‘€

March 24, 2023

24 March 2023

The newsletter is put together by Giottus Crypto Platform and The News Minute’s Brand Studio. You can read all the previous issues of Cryptogram

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Hello!Bulls are feeling the momentum and it makes us all feel great. All of this week the ecosystem has been talking about Balaji Srinivasan’s bet that BTC will hit a million in 90 days. It has also sparked a debate on hyperinflation in the US. But we need to remain cautious – don’t fall for euphoric narratives. Read the signs, proceed carefully. More on this on our main piece below today. 

Before that, top 5 stories of this issue: 

1

Arbitrum’s coin ARB is now live! It was airdropped earlier in the week. You can trade

.

2

The SEC is coming after more crypto companies and brand ambassadors.

.

SEC’s job in the crypto ecosystem looks like… 

Meanwhile, US President Biden blasted the crypto ecosystem in his

. 

3

Looking forward to Bitcoin NFTs? Magic Eden has

a marketplace for Bitcoin Ordinals.

4

Microsoft is

a crypto wallet on Edge browser. 

5

 WEEKLY MACROS

Total crypto market cap - $1.23 trillion -

 8% 

Bitcoin market cap - $542.95 billion -

14% 

The dollar index (DXY) - 102.7 -

1.3% 

Bitcoin Dominance - 44.61% -

 3.9%

Crypto Fear and Greed Index

- 61 - The market is greed and rightly so because of US Fed's expected interest rate hike and fund influx (in billions of dollars) into crypto market from Arbitrum airdrop.

 WEEKLY PRICE TRACKER

Price movements from last Friday

BTC Watch

 10% as market expected a rate cut with US Fed raising only by 25bps sending positive signals across the globe.

ETH Watch

 6% with BTC's price action providing the much needed catalyst for ETH and support from bulls post $1,800 price point.

Altcoins Watch

XRP

:

 17% which was riddled by SEC lawsuit enjoyed moderate gains with likely signs of winning the case.

ARB

:

 88% as airdropped users rushed to CEX/DEX's to sell their lot creating massive selling pressure in the market. However it is expected to bounce once the airdrop wallet claims crosses 80% of the total eligible wallets.

MASK

: 

 50% as MASK network gets listed on Coinmarketcap and also gets a $360,000 allocation from Arbitrum airdrop for their support to Arbitrum as part of the multi-chain wallet.

 WHAT'S HOT

  Coins to watch out for

Arbitrum (ARB)

- is a layer-2 solution designed to scale Ethereum. It lowers network congestion and transaction fees from Ethereum’s mainnet. $ARB is Arbitrum's new token, which was being airdropped to eligible community members yesterday. At time of launch, it was trading at as high as $10 on few exchanges. With strong ecosystem building on it, it is likely to reap benefits who hold it on the long run. $ARB is currently at $1.4

Polygon (MATIC)

- is widely known layer-2 solution for Ethereum and has partnered with many web2 giants and crypto protocols like ImmutableX that's likely to add value to it's price in the long run. And with the launch of zkEVM on March 27th along with a livestream from ETH cofounder Vitalik Buterin, it's worthwhile to keep an eye on. $MATIC is currently trading at $1.13

Project to watch out for

zkSync

- is an EVM-compatible ZK Rollup being built by Matter Labs, powered by our zkEVM. zkEVM is a virtual machine that executes smart contracts in a way that is compatible with zero-knowledge-proof computation. It's mainnet has been launched and a token is expected to come out too at some point in the future. With $ARB creating lots of buzz, zkSync's token (if it comes out) is likely to make waves given the amount of dapps building on top of it.

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 THE HOT TAKE

BTC reclaims $28K: Bull market signs start… but recession may deter it

Bitcoin has shown considerable strength even as global stock markets remain impacted by recent banking failures in the US. The declaration of a US recession can, however, spoil the party in a big way. Investors need to await for the right confirmation of market trend before going all-in.

Today, we track key trends that show positive to neutral outlook for Bitcoin enthusiasts. 

US Fed raises interest rates but is softening

The US Fed earlier gave indications that future interest rate hikes can go higher this year in order to fight inflation. Having increased interest rates by 25 bps in the current round, the Fed’s messaging is leaning towards some softening in the next three months i.e. stop interest rate hikes and eventually lower rates in second half of the year. This will happen provided US macro data doesn’t suggest an impending recession. 

Bitcoin is becoming an hedge against traditional banking cracks

Even as the S&P 500 and other major stock indices shed 2-3% this week on US Fed interest rate hike, Bitcoin (BTC) has recovered well to reach its best level since June 2022. This month, BTC has gained 22% overall compared to a 0.5% loss in the S&P 500 index. As long as the market is hopeful and has good liquidity, BTC seems to be detaching itself away from S&P 500 sentiments. This is good in the long run.

Bitcoin dominance is now testing 48-50%

BTC dominance (as a share of crypto market cap) is now above 47% and heading for 50% - a level not seen since June 2022. Altcoins, including Ethereum, has bled against BTC in recent weeks. This consolidation usually marks the final phase of a bear market in crypto. Once BTC dominance hits 55-60%, the altcoin market would have bottomed and be geared up for next bull run.

Bitcoin Dominance Chart

Though, a recession may have a strong negative response

As much as investors choose BTC to redirect their investments, it is likely that a declared recession may drain cash out the ecosystem – marking declines in all risky assets including crypto. 

S&P 500 in the US fell close to 37% during the last 2008 recession year. So far, this bear market it has only been a 20% decline (2022 data). Dow Jones Real Estate index fell 43% in 2008 compared to a 22% decline this bear market. Essentially, there is more room to fall for all risk assets. If a US recession is not declared this year, the market may consolidate near current prices before heading for a bigger rally.

The sentiment is mixed right now as markets are dependent on the softening of macro conditions. The recent Bitcoin price appreciation should only be treated as a mid-bear market rally and not the return of bull market yet till we have a confirmation of the trend.

Investors need to remain patient and stick to the following:

  • Do your own research (DYOR) and keep yourself updated with industry developments

  • Limit exposure to small cap coins and deploy the majority of capital to Bitcoin and Ethereum

  • Do not hold all your eggs in one basket. Spread your risk across assets (dollar, stocks, gold, crypto etc) to lessen the impact of a strong downturn 

  • Be patient enough to HODL and follow a disciplined investment pattern such as cost averaging

  • Store and trade your cryptos only in recognised crypto exchanges and wallets. 

That’s it for this issue, see you next week.

If you have any questions or feedback for us, write to us at [email protected]. You can check out the previous issues here.

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