There’s no news like good news… And that’s what we’ve got for you today in The New Digital World – from Bitcoin (BTC-USD), other major cryptos, and the venture-capital arena. Let’s dive in.
Crypto Markets “Recapture the Flag” of $1 Trillion Market Cap
Remember how last year it was a big deal when cryptocurrencies (collectively) achieved $1 trillion in market cap? Next thing you knew, the crypto market was at $2 trillion… Then back to $1.5 trillion… Then nearly $3 trillion… But the May/June crypto collapse got it back to like $800 billion. (What a ride in 18 months!)
Well, anyway, crypto retook $1 trillion today.
All told, a bunch of major cryptos are up double-digits in the past 7 days:
- Ether (ETH-USD) is +28% and retook the $1,500 level.
- Binance (BNB-USD) is +11%.
- Solana (SOL-USD) is +15%. (Despite having to go to court this fall!)
Bitcoin Back at $22,000, ETH Breaks Out
Above we see how BTC is back at the top of its month-long range (blue line). Meanwhile, ETH – which fell much harder in May and June – has broken sharply above its own recent range (brown line).
Glassnode dived deeper into this move for bitcoin… And after going through 10+ indicators, Glassnode sums up the Week On-Chain by saying: “A common thread amongst almost all metrics explored above, is a trend resembling the majority of bear market lows in the past, albeit lacking a component of duration.”
For example: Bitcoin’s Realized Price (or the cost basis of all BTC in circulation) is now at $22,092. BTC has mostly traded below that for 35 days. Looking at previous crypto crashes: “Time spent below the Realized Price ranges from 7 days in March 2020, to 301 days in 2015.”
Let’s assume this bear market turns out most like, say, 2018-2019. BTC spent 134 days below its Realized Price then. So, we would have something like three months left to go.
Question is: Will we keep “consolidating” between $18,000-$22,000 for bitcoin? Or break below that range? Later in this article, we’ll see why our InvestorPlace crypto experts – Charlie Shrem and Luke Lango – are leaning to $22,000…at least!
Venture Capital: Crypto Projects Raise $9 Billion in 2022 First-Half
Crunchbase – a huge database of startup fundraising from venture capitalists – just reported the Crypto Funding Numbers for the first half of 2022: “about $9.3 billion.”
On one hand: That’s down about 25% “from a record $12.5 billion invested during last year’s first half,” notes Friday’s report.
On the other hand: Given the, ahem, financial difficulties in the crypto markets… “The news isn’t that funding fell this year; it’s that it didn’t fall more,” writes Crunchbase!
I noted in May that I felt like there were still plenty of deals being made – they were just smaller. This was, indeed, reflected in Crunchbase’s report:
“Deal flow increased as 534 deals were announced in H1 this year, compared to only 456 in H1 last year… Clearly, large VC firms still see big opportunities ahead” in crypto, concludes Crunchbase.
As for H2: The size of each venture-capital round seems to be increasing. Last week, I reported six rounds of $50 million–$100 million or more in July to date!
CEO Makes the Case “How Coinbase Wins In This Environment”
“A number of people have asked me how Coinbase wins in this environment, and turns it into an opportunity for growth,” tweeted CEO Brian Armstrong on Thursday. “Here’s my answer.”
If you don’t have time for a whole Twitter thread of corporate-ese… The co-founder gave four reasons why Coinbase (NASDAQ:COIN) will win:
- Coinbase is “well-capitalized.” Indeed, COIN has about $6.5 billion in cash, or roughly $30 per share. (COIN is trading at about $60.)
- “Coinbase is one of the only places where you have one crypto account, and do every sort of crypto activity: trade, stake, pay, borrow, create, etc.”
- “We are the safest and most compliant…people trust us.”
- “Ease of use… People can get the incredible utility of this technology, without having to understand the technical details.”
My take: Those would certainly be good “pros” to a crypto investment in these early days of The New Digital World. But lately, Coinbase has a hard time translating that into usage and revenues…
So, for now, I’d use them as a checklist to see how Coinbase (and competitors) deliver on these four promises.
Next read: Coinbase is expected to report Q2 earnings in three weeks…on or around August 9.
Quote Of The Day:
“Bitcoin’s chart looks really good. All five [breaks below support] have been followed by sharp rallies back above $20,000. We’re looking for BTC to break out in the short-term to $23,000.”
– Luke Lango & Charlie Shrem, Crypto Investor Network
If bitcoin does get to $23,000 – continues Saturday’s update for our Crypto Investor Network – “we’d grow more bullish on our consolidation thesis and may even pivot to thinking that a sustainable rebound is in the cards.”
Besides the indicators I shared from Glassnode above…
There’s another that Luke and Charlie highlight in COIN: the Mayer Multiple. (Basically, how far prices have strayed from their 200-day moving average.)
All of crypto’s Mayer Multiples are below 0.5. So, they’re trading 50% or more below that long-term average!
“This is yet another data point – in addition to all the data points listed above – which underscores that cryptos have reached max pain and are currently going through a bottoming/consolidation process,” write Luke and Charlie:
“In short, we’re pretty confident in saying that the most likely outcome is for crypto prices to continue to stabilize over the next few months.”
“We’re ready to buy on upside breakout signals,” conclude Luke and Charlie in Saturday’s update. Click here to hear how they spot the best buys for their Crypto Investor Network – in which they’ve recently announced their top 5 Strong Buys.
On the date of publication, Ashley Cassell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. To have more news from The New Digital World sent to your inbox, click here to sign up for the newsletter.