Market Commentary
September 1st 2021
Taking Bitcoin as “the market”, the outlook remains bullish. While traditionally September tends to be a flat month ahead of the most bullish Q4 period of a four year cycle, market dynamics may be different from the last ‘Bull-Q4’ of 2017, due to both macro global events, as well as the advent of such large Institutional Players in the Crypto space.
Deep on-chain analysis showed Bitcoin to be slightly over-valued in mid August, with an actual value being nearer $44k rather than it’s then price of $48k. With huge volumes of accumulation from Whales and Institutional Investors since then, that price has now corrected to where we are ($47,100 at the time of writing).
PoW and PoS (Proof of Word and Proof of Stake)
The evolution of this tech space is, as usual, moving at a great pace. Our own area of specialisation, DeFi and the projects and platforms that support it, is at the forefront of these innovations.
Much is rightly being made of developments on major chains such as Ethereum and Cardano as they try to solve scaling issues. Because of our deep understanding of this area, we have heavily hedged positions on projects that have already addressed these scaling solutions such as Solana [SOL] and Terra Luna [LUNA] to give just two examples.
Further to these platforms that service the DeFi sector, are the Layer 2 solutions that we have presented before. Again we have coverage of the best technologies in this vitally important sector.
Non Fungible Tokens - NFT’s
The creation of blockchain technology has led to two separate revolutions that are under way. One is a monetary revolution and the other is a technology revolution. While these two revolutions share a similar technology (Blockchain), they are very different in nature.
The former created and led by Bitcoin, and now seen in the Defi and CeFi spaces. The latter covering all other aspects of life and business covered by the Tech Sector, and this includes NFT’s. This sector is the beginning of a new revolution essentially in the IP (Intellectual Property) category. While the current craze for massively over-inflated prices being paid for newly minted NFT’s with their unique and protected IP JPEG images, the underlying technology has very broad applications going forwards. We are taking close interest in the market makers of this space and have a number of new coins under coverage.