Bitcoin News
Ways to approach crypto investing in 2023
2022 was brutal for cryptocurrency and nonfungible token (NFT) investors. Bitcoin (BTC) hit its yearly low on Nov. 21, almost exactly a year after it reached its all-time high price of $69,044. After such a tumultuous year, how should crypto investors plan for 2023?
Firstly, this space has critical risks worth considering before investing.
Macroeconomic risks
Investors must recognize the macro and systemic risks impacting the crypto industry as 2023 draws near. The war in Ukraine has led to an energy crisis caused by sanctions on Russian energy. The United States Federal Reserve’s monetary policy response to inflation continues to unsettle markets. The crypto contagion from recent bankruptcies continues injecting volatility into the market, with increasing regulatory pressure and miner capitulation likely to continue into the new year.
Ukraine war, inflation and rising interest rates
The economic fallout from the war in Ukraine has impacted the global economy. Russia is one of the largest energy sources in the world — particularly for Europe — and sanctions on Russian energy have led to a crisis in several European countries, with prices skyrocketing and supplies dwindling.
Economic shutdown policies implemented by governments in response to the COVID-19 pandemic — accompanied by massive expansions in the money supply — have led to soaring inflation in the United States, Europe and around the world.
Central banks have tried to address inflation by increasing interest rates, putting downward pressure on equity markets and crypto prices throughout 2022. A possible escalation of the war in Ukraine, with stubbornly high inflation and interest rates, could bring more pain for investors in 2023.
The Crypto Contagion
The contagion effect caused by the collapse of Terra in May still haunts the crypto markets. The failure of FTX in November saw Bitcoin hit another new cycle bottom. The ripples caused by these major events haven’t settled yet.
Many firms have declared bankruptcy, and as they look to pay back creditors, they may liquidate their crypto assets, which could trigger fresh sell-offs in the crypto market. Investors should be mindful of this as they enter the new year.
Regulatory pressures
Crypto regulations have been coming to the U.S. for some time. The dramatic events of 2022 have only increased the probability that regulations will advance in 2023.
Regulatory clarity could help the crypto space in the long run by attracting institutional capital. However, centralized protocols, stablecoins and centralized exchanges would likely experience a disruptive period in the short term. If a popular stablecoin like Tether (USDT) or USD Coin (USDC) comes under regulatory scrutiny, that could cause market turbulence.
Miner Capitulation
If Bitcoin prices continue to fall, pressure on miners will increase. Bitcoin mining is a capital-intensive business, and falling prices make it unsustainable for these businesses to function. As a result, miners are forced to sell Bitcoin to cover costs, putting downward pressure on the price.
Miner capitulation is a feature of previous bear markets and can mark the low point of the bear phase.
Aside from these risks, the crypto market never fails to throw in some surprises like Terra and FTX. It is good to keep that in mind when thinking about investing.
Smart investing in 2023
This section is not pumping cryptocurrencies or projects. It offers a general strategy for smart investment that could mitigate risk and limit losses.
Cash is king, as some say. It helps to keep cash reserves in a bear market, as it is hard to predict a black swan event. These events could be great sniping opportunities to buy some discounted cryptocurrencies and NFTs.
Allocate a percentage of your portfolio to blue-chip cryptocurrencies
Investing is about capital preservation. Investing in blue-chip cryptocurrencies like Bitcoin and Ether (ETH) is a smart move.
Layer-1 and layer-2 blockchains
The next step toward investing in riskier assets is researching layer-1 and layer-2 blockchains, excluding Bitcoin and Ethereum. It might be worth spreading exposure across blockchains that have survived at least one bear market and then looking at new blockchains that sound promising.
Some layer 1s worth mentioning are Solana, Avalanche, Polkadot, Cardano and Aptos. Some layer 2s are Polygon, Arbitrum and Immutable. Before making an investment decision, research and understand the pros and cons of each project. Read white papers, assess roadmaps, and explore the community.
Investing in layer-1 or layer-2 blockchains is generally a lower risk than investing in an application. For example, investing in Ethereum is lower risk than investing in an Ethereum-based decentralized finance (DeFi) application like Uniswap. This is because Ethereum has thousands of decentralized apps and its price is resilient to the failure of one application. However, if Uniswap fails, investors in the application will lose their money.
This is a general risk management point rather than a criticism of Uniswap.
When choosing layer-1 and layer-2 blockchains, it’s wise to have a backup investment option for every primary option. For example, if someone is bullish on Solana, they might want to hedge themselves by investing a smaller amount in the so-called “Solana-killer” Aptos.
In short, Aptos is to Solana what Solana was to Ethereum one cycle previous. Such shadow investments will help build a robust and balanced portfolio.
Airdrops
It is hard to forget the Ethereum Name Service (ENS) and ApeCoin (APE) airdrops in the last cycle and, more recently, the Aptos (APT) airdrop. The Web3 space is filled with new, often credible projects. Projects need an army of people to test their products. Investors can get involved in projects early to be eligible for an airdrop when they have a token launch.
DeFi projects on Ethereum used airdrops extensively in the previous cycle. There are no reasons to think that won’t be the case this time. 2023 promises to be a year with many new projects being tested.
History rhymes
Many exponential gain patterns emerged in the previous cycle. Watch out for similar themes in this cycle. ENS domains were a big hit in the last cycle. As decentralized name services become more popular, it might be worth watching projects developing their own.
DeFi had an excellent run in the last cycle. GameFi and metaverse tokens also performed well. DeFi and GameFi could grow to be the next big thing in the next few years.
SocialFi has taken off in the last few months, with several promising projects emerging. This could be another ENS-like opportunity for the next cycle.
Memecoins had some luck in the last cycle, and Dogecoin (DOGE) remains an interesting project with Elon Musk’s backing. But exercise caution before investing in memecoins.
Follow the smart money
This rule of thumb doesn’t always work, but it can with the right amount of due diligence. It is worth keeping an eye on the investment choices of venture capital funds like a16z, Sequoia Capital, Solana Ventures, Coinbase Ventures and others.
They don’t always make the right choices, but their portfolios would be an excellent place to start and refine down to a few good investment candidates. However, investing in new names that are application-tier projects is generally smarter after the crypto market has bottomed and recovered in anticipation of the next bull run.
There is no secret sauce to making millions in the crypto space. The general approach should be to buy low and sell high. Therefore, 2023 is not a bad time to start, as market prices are low.
Furthermore, the time spent in the market is better than the timing of entering the market. The longer investors stay in the market and follow the ground rules as often as possible, the higher their returns will be. Despite market cycles and volatility, crypto and NFTs are generally linear markets, and a diligent investment strategy should help generate positive returns.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Source: https://cointelegraph.com/news/time-in-the-market-ways-to-approach-crypto-investing-in-2023
Bitcoin News
Nomura Group Unveils Bitcoin Fund Catering to Institutional Investors
Nomura Digital Assets, a subsidiary of Japan’s leading financial institution, Nomura Group, has ventured into the world of digital assets with the launch of a Bitcoin fund. This strategic move is designed to streamline access to digital assets for major investors, responding to the escalating demand for cryptocurrency investments. It marks Nomura’s maiden foray into providing investment solutions tailored to the digital asset arena.
In a press release dated September 19, Laser Digital Asset Management, the digital asset management arm of Nomura, proudly introduced the Bitcoin Adoption Fund, a specialized offering aimed squarely at institutional investors. This fund underscores the growing breadth of cryptocurrency adoption in Japan.
Facilitating Bitcoin Uptake
The Laser Digital Bitcoin Adoption Fund offers institutional investors an attractive proposition, blending cost-efficiency with robust security measures. In a bid to safeguard the fund’s holdings, Laser has enlisted the services of Komainu, a custody solution established in 2018, which is subject to regulatory oversight and jointly formed by Nomura, Ledger, and Coinshares.
Fiona King, the head of Laser Digital Asset Management, emphasized the fund’s meticulous management and compliance standards. Notably, the fund operates as a segregated portfolio within the mutual fund entity, Laser Digital Funds SPC.
Nomura Holdings foresees that its crypto-focused division, Laser Digital, will begin turning a profit within the next two years. This projection is a response to the surging demand for Bitcoin and other cryptocurrencies, pitting Nomura against established traditional heavyweights such as JPMorgan and Goldman Sachs.
While Laser Digital already offers Bitcoin derivatives to its institutional clientele, the prolonged bear market has impacted the company’s growth trajectory. Due to the recent downturn in cryptocurrency values, Nomura has cautioned that it might take longer than initially anticipated for Laser Digital to achieve profitability.
Bitcoin News
Bitcoin Surges to $32,500 in China: Here’s Why
The cryptocurrency market has witnessed a remarkable surge in the price of Bitcoin, and according to a renowned cryptocurrency analyst, this increase has a fundamental reason: Chinese buying. In a recent YouTube video, the CryptoBanter analyst dissected the factors behind this Bitcoin surge, which comes after a series of significant declines in August. In this report, we will delve into how Chinese buying has propelled the price of Bitcoin and how other factors, such as the depreciation of the Chinese yuan and its correlation with the U.S. Dollar Index (DXY), have influenced this exciting development in the cryptocurrency market.
The Flight from the Chinese Yuan: Bitcoin and Gold as Havens
One of the key factors behind Bitcoin’s recent surge is the increasing flight of Chinese consumers from their national currency. The Chinese currency has experienced depreciation in its value, leading many Chinese individuals to seek refuge in Bitcoin and gold. Economic uncertainty in China, exacerbated by crises in the stock market and the real estate market, has further eroded confidence in the Chinese yuan. As a result, Bitcoin and gold have become safe-haven assets for Chinese investors.
Bitcoin Reaches $32,500 in China
The CryptoBanter analyst reports that the demand for “digital gold” in China has driven Bitcoin’s price to astonishing levels. According to their observations, a single Bitcoin has reached a price of $32,500 in China and was then exchanged for USDT at $33,000. This represents a significant premium compared to the current price of Bitcoin in other markets, which stands at $27,135. This price disparity has created a substantial arbitrage opportunity for investors.
September Breaks the Traditional Bearish Pattern
September is typically a historically bearish month for Bitcoin, but this year has been a notable exception. Despite pessimistic predictions from many analysts, BTC has recorded a 4% increase in its price during this month. The CryptoBanter analyst suggests that this positive performance may foreshadow even greater gains in the future.
Correlation with the U.S. Dollar Index (DXY)
One interesting observation from the analyst is the correlation between the price of Bitcoin and the U.S. Dollar Index (DXY). According to their data, whenever the DXY reaches the level of 105, the price of Bitcoin tends to rise. This could indicate an inverse relationship between the strength of the U.S. dollar and the attractiveness of Bitcoin as an investment asset.
Long-Term Investors Continue to Accumulate
Despite the volatile market conditions, the analyst points out that long-term Bitcoin investors have increased to over 75%. This suggests sustained confidence in the long-term potential of the world’s largest cryptocurrency, even amid price fluctuations.
Bitcoin in the Last 24 Hours
According to CoinMarketCap data, in the last 24 hours, Bitcoin has experienced a 0.79% increase. On the weekly price chart, the leading cryptocurrency has risen by 4.56%. At the time of writing this report, Bitcoin has a market capitalization of $528 billion, solidifying its position as the largest and most robust cryptocurrency network in the world.
In Conclusion…
Chinese buying has proven to be a crucial factor in the recent surge of Bitcoin, challenging the traditionally bearish expectations for September. As the cryptocurrency continues to evolve and attract the attention of investors worldwide, the relationship between Bitcoin and global economic events will remain a topic of interest and discussion within the crypto community.
Bitcoin News
This Analyst Predicts a Bright Bullish Future for Chainlink (LINK)
In an exciting revelation, prominent cryptocurrency analyst Michaël van de Poppe has shared his insightful analysis of Chainlink (LINK), one of the standout cryptocurrencies in today’s market. Van de Poppe, widely recognized in the crypto community, has caused a stir with his bullish predictions for this decentralized oracle network. Let’s delve into the details of his analysis and understand why he foresees a bright future for Chainlink.
Van de Poppe’s Chainlink Analysis
According to Van de Poppe’s analysis, Chainlink has reached its minimum level and is poised for a reevaluation phase that could offer extremely lucrative buying opportunities. His expert view focuses on a specific price range: $6.15 to $6.40. For investors, this range presents itself as a strategic entry point that could result in substantial gains in the near future. Van de Poppe has even set an ambitious price target of $8, suggesting an impressive bullish potential.
Technical Analysis: Bullish Outlook
Chainlink’s technical analysis supports Van de Poppe’s claims. The 4-hour chart for LINK/USD reveals that the altcoin remains above all moving averages, a positive indicator of the current bullish trend. Furthermore, the chart shows that Chainlink is struggling to break above the upper band of its symmetrical triangle pattern, which could mark the beginning of a significant rally.
The MACD indicator also lends support to the idea of a bullish breakthrough, with two consecutive higher highs indicating an upward momentum. Although the RSI remains neutral, it is above the 50 level, suggesting room for further growth in Chainlink’s price.
Key Levels and Resistance
In recent days, bears attempted to push Chainlink’s price below $6.55, but strong buying pressure at this level prevented a significant decline. This demonstrates the strength of buyers in the area. After this attempt at a downward correction, the price returned and reached the supply zone at $6.68. At this point, several double-bottom patterns were observed, a bullish indicator according to technical analysis.
Chainlink’s Potential
The pivotal moment came in the previous 4-hour timeframe when bulls gained momentum by surpassing the resistance at $6.70. This bullish breakthrough led the price to steadily rise, reaching an intraday high of $6.88, which is close to the 200-exponential Moving Average (EMA), a significant technical indicator.
However, as in any financial market, there is always the possibility that bulls may lose their momentum. In that case, we could see a retracement to the main support level at $6.45. If this level fails to hold, a more significant correction to $6.0 is possible, potentially opening the door to a bearish trend.
Conclusion
In summary, Michaël van de Poppe, with his impressive track record of predictions, has put Chainlink on the radar of many investors. His technical analysis supports his bullish outlook and highlights key levels to watch. As this cryptocurrency continues to attract attention in the crypto community, investors will be eager to see if Chainlink lives up to expectations and reaches new highs on its exciting journey towards $8 and beyond. Stay tuned for market updates, as exciting opportunities can arise in the world of cryptocurrencies.
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