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- 🥜 Demand shock, supply shock
🥜 Demand shock, supply shock
PLUS: Big Ethereum News
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What we’ve cooked up for you today…
🛠️ Huge Ethereum upgrade is live
🤑 Trillions are coming for Bitcoin
📈 Still a long way to go
💰 And more…
MARKET WATCH ⚖️
Prices as at 6:35am ET
Only the top 20 coins measured by market cap feature in this section
HUGE ETHEREUM UPGRADE IS LIVE 🛠️
BREAKING: Ethereum Dencun upgrade goes live on Ethereum mainnet
The highly anticipated Dencun upgrade has finally arrived on the Ethereum mainnet.
This upgrade focused on dramatically reducing transaction fees for Layer 2’s such as Polygon & Arbitrum.
Unfortunately, Ethereum base fees are likely to remain quite high…
Here’s a table braking down some of the fee reductions users of Layer 2’s can expect:
Although this upgrade doesn’t directly reduce Ethereum mainnet fees, it’s a step in the right direction.
Hannes Graah, builder of crypto wallet Zeal, had this to say in an interview with Blockworks:
“The Dencun upgrade brings us closer to a future where fees are an afterthought, not a dealbreaker… Just as we generally don’t worry about the cost of traditional domestic bank transfers, Web3 users should be able to transact without worrying about fees.”
The price of Ethereum has remained largely unchanged as a result of the upgrade.
Whilst Layer 2’s Optimism, Arbitrum & StarkNet have all increased by ~3% at the time of writing.
Make no mistake - this is huge for mainstream adoption.
CEO of Coinbase, Brian Armstrong had this to say:
“Reducing transaction fees and confirmation times on Layer 2 will open up so many more use cases for crypto. We're finally getting scalability,”
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TRILLIONS ARE COMING FOR BITCOIN 🤑
The launch of the Bitcoin ETFs has unleashed demand for Bitcoin like we’ve never seen before.
Anthony “Pomp” Pompliano appeared on Fox Business explaining the impact that the upcoming halving will have.
It all comes down to simple supply and demand dynamics.
Here’s how Pomp explained it:
“If demand stays constant and supply gets cut in half, obviously the price has to adjust to accommodate everyone. That’s what happened back here in 2020. Bitcoin was trading at about $8,000, we had a supply that was cut in half and then obviously price runs.”
Look how insane the price action has been for the last three halvings…
But this times a tad different.
This time, the ETFs are here.
And the amount of demand they’ve already bought in has been ridiculous.
“Right now, there is the equivalent of 9,000 - 10,000 Bitcoin per day in demand. So already we’re at 10x more demand than supply… So once we go through this halving, if demand stays the same, we may be at 20 or 25x more demand than what the network is producing every single day.”
20x to 25x more demand than what the network is producing every day would be nuts.
That’s assuming that demand stays the same.
But here’s the thing.
Demand has actually been going up…
And it’s likely going to continue going up as Major Wirehouses have not yet approved the ETFs on their platforms.
“I think that Bitcoin is now going to become a standard asset that’s put in every portfolio… That’s going to lead to billions of dollars in the short term and likely going to be trillions of dollars over the long run going into this asset.”
No matter what way you look at it, the price has no choice but to go up.
Exciting times ahead. 😎
STILL A LONG WAY TO GO 📈
Time for a check in on the MVRV Z-Score.
This metric compares the market value to the realized value.
Market Value (Market cap): current price of Bitcoin multiplied by the circulating supply
Realized Value: the value of all coins at the price they were last moved
A market top (red zone) is categorised by market value being significantly higher than the realized value.
A market bottom (green zone) is categorised by market value being significantly lower than the realized value. (also the best time to scoop up cheap Bitcoin)
This metric provides a nice visual on where we currently are in the cycle.
From the chart above, you can see that MVRV has been rallying recently.
Currently it’s at 3.10 😱
But what exactly does this mean?
Well MVRV is in-between the green and red zones, and trending upwards.
Which indicates that this rally still has a long-way to go before the market is overheated.
But the coolest thing about this metric is that historically it has picked price highs to within 2 weeks.
So we’ll be checking in on this metric every 2 weeks to see how far through the bull cycle we are. 🐂
CRACKING CRYPTO 🥜
Ethereum Dencun upgrade day triggers surge in layer 2 protocol token value. Ethereum's impending Dencun upgrade propels layer 2 networks, incuding Arbitrum, Polygon, and Optimism token surge.
Bitcoin price nails new $73.6K all-time high as ETFs eat away at supply. BTC price sees fresh all-time highs ahead of the Wall Street open as Bitcoin ETFs celebrate more than $1 billion in daily inflows.
MicroStrategy announces another senior notes offering to buy more bitcoin. MicroStrategy is not done buying up bitcoin — or, rather, offering convertible senior notes to do so.
WHAT WE’RE READING 📚
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CAN YOU CRACK THIS NUT? ✍️
Select your answer below and you’ll be redirected to the results page. (answer explanation can be found after “Meme Corner”)
When is the next Bitcoin halving scheduled to take place? |
MEME CORNER 😂
Because what would the crypto world be without its share of memes?
Trivia Answer: B) April 2024 🥳
The next halving is scheduled to take place next month, April 2024.
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DISCLAIMER: The content of this newsletter is not financial advice. This newsletter is strictly educational and is not investment advice. Please be careful and do your own research.
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