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- 🥜 Pain is good
🥜 Pain is good
PLUS: ARK Invest & 21Shares Ethereum ETF
GM and welcome to The Crypto Nutshell! 🫶 🥜
The crypto newsletter that's more adventurous than setting out on a quest with a band of dwarves to reclaim a mountain... ⛰️🧝
Today, we’ll discuss:
Ethereum ETF on the horizon? 🌏
Why pain = good? 😈
Glassnode & ARK Invest new on-chain metrics ⛓️
And more…
MARKET WATCH ⚖️
Only the top 20 coins measured by market cap feature in this section
All price data as of 7:00am ET
ARK INVEST & 21SHARES JOIN THE RACE🏎️
JUST IN: ARK Invest, 21Shares join queue to offer Ethereum futures ETF 🔮
This co-filing comes just a week after reports emerged that the SEC is likely to greenlight Ethereum futures ETF applications. We covered this briefly last week, checkout the report here.
This isn’t the first time that Ark Invest and 21Shares have partnered up. All the way back in 2021 (damn it’s been that long?) they co-filed for a spot Bitcoin ETF.
We’ve spoken about these Bitcoin ETF’s quite a lot here, but in case you’re new, here’s the story so far.
The SEC knocked back ARK/21Shares first two attempts in March 2022 and in January. Their most recent Bitcoin spot ETF application was filed in April — about two months before $10 trillion firm BlackRock put in its own application.
Now everyone is eagerly awaiting the outcome of these Bitcoin ETF applications…
So ARK Invest and 21Shares co-filing an Ethereum futures ETF is BIG news.
Increased ways for people to invest and get exposure to crypto is always a good thing. On top of this, it also opens the door for a spot Ethereum ETF to be approved down the road… 🏆
EXPERT OF THE DAY 💰
Today’s expert prediction is coming from Mark Yusko. He has an interesting piece of advice for crypto investors.
If you haven’t heard of Yusko, he’s the Founder, CEO and CIO of Morgan Creek Capital. They have over $1 billion under management. 💰
Yusko has decades of experience working with institutions in financial markets. aka - he's a market cycle expert.
In his latest interview, he argued one thing:
Price has nothing to do with an assets value. 🤔
Yusko is a big believer in crypto seasons. We have a crypto summer, winter, spring and autumn. ☀❄🌱🍁
Right now he believes we are at the beginning of a crypto summer, in which prices are grinding upwards with temporary spots of volatility. Prices spiking up or down.
Reflecting on the recent 10% dip - Yusko believes investors should view it as an opportunity. 🧐
Throughout his decades of investment experience, one trend is clear. If you're excited or feel good about making an investment - you’re going to lose money.
It’s the times when you are apprehensive or it’s painful to make an investment when you do well.
“If you're excited about investing - you're doing it wrong. If you feel really good about things - you're doing it wrong. If you make an investment and you feel good about it - you'll probably lose money. If you feel really good about it you're gonna lose a lot of money. If you make an investment and you feel a little sick to your stomach, a little apprehensive - you're probably going to make money. If you feel really sick to your stomach… you make a lot of money.”
Yusko went on to predict that Crypto summer will last up until the April 2024 Bitcoin halving. Then, crypto autumn begins. 🍁
Crypto autumn is characterised by parabolic moves upwards & a huge frenzy surrounding all things crypto. (When all the Uber drivers and barbers start talking about crypto)
It's when everyone is excited to jump into the crypto markets again...
Which by Yusko’s logic is the worst time to enter.
The best time? When no one’s paying attention. When it’s painful.
Like right now. 😉
Nutty’s takeaway: I can personally vouch for Yusko’s piece of advice here. If I look back on my decades worth of investment experience, it was always the times when I was giddy or excited to jump into an investment that it turned out to be a disaster.
My worst investments have all come from a place of FOMO. My best investments have come when there’s blood in the streets. When I feel sick to my stomach before buying something. They have always performed spectacularly. 🔮
TOGETHER WITH LEDGER 🪙
ON CHAIN DATA DIVE 📊
Some BIG news just dropped for on-chain enthusiasts.
Glassnode has teamed up with ARK Invest and developed a new framework to assess Bitcoin’s economic state.
They’ve dubbed it “Cointime Economics” and its based on a new unit of measurement they’ve derived known as the “coinblock” which we will be discussing today. This framework was designed to improve valuation metrics and provide new analytical tools that can measure Bitcoin activity. 🏃♂️
The full report is split into two parts. Part 1 is a broader overview of the framework and part 2 is a deep dive into the math behind each metric. We’ll be breaking down part 1 of the report over the next few days so stay tuned!
Coinblocks can be defined as the number of Bitcoin multiplied by the number of blocks produced during the time those Bitcoin remained idle.
For example: 10 coins held during the time it takes to produce 10 blocks would result in 100 coinblocks.
Coinblocks Created
The Bitcoin Network on average produces one block every 10 minutes. Knowing this we can work out that each coin creates 144 coinblocks per day.
The chart below shows us the total coinblocks created.
Coinblocks Destroyed
Coinblocks destroyed is simply the amount of the time held before moving. When a coin is moved, the coinblocks it has accumulated are “destroyed” and reset to zero. For example if a Bitcoin remained idle for 5 blocks and then moved, 5 coinblocks would be “destroyed”.
Increases in coinblocks destroyed means that long-term holders are selling. Large spikes in this metric have had a strong correlation with the past bull market peaks. Take a look at the chart below.
Spoiler alert: Could this be a great sell indicator? (more on this tomorrow) 🤔
Coinblocks Stored
Coinblocks stored is the difference between total coinblocks created and total coinblocks destroyed. These are the coins that belong to the early adopters and are held at a profit.
On May 7 2023 1.9 Billion coinblocks remained stored in the Bitcoin Network shown in the chart below.
So what does all of this mean? 🤷
The chart below put’s all of these metrics together and we can see in 2017 coinblocks destroyed began to diverge from coinblocks stored. This suggests that more coins were active in the market compared to those that are lost or held for extremely long periods of time.
Today’s approach was a little different to our usual on-chain data dive.
We explored 3 new basic units of measurement and metrics that are expanded upon in more advanced on-chain analysis.
Coinblocks Created, Coinblocks Destroyed and Coinblocks Stored are essential for understanding the on-chain metrics that we will cover in tomorrows edition. Stay tuned!
Let us know your thought’s in the poll at the bottom of this newsletter. 👇️
CRACKING CRYPTO 🥜
TRIVIA TIME ✍️
The "length" of a blockchain is known as its __________
A) Block size
B) Block height
C) Block weight
D) Block girth
Find out the answer at the bottom of this newsletter 😀
MEME CORNER 😂
Because what would the crypto world be without its share of memes?
Trivia Answer: B) Block height 🎉
The current block height of a blockchain is an indication of its current size or time in existence.
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NUTCASE REVIEW OF THE DAY 🔍
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 researc
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