Just HODL! Bitcoin and Ethereum outperform ‘lower risk’ crypto index funds

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Cointelegraph 23 July, 2021 - 07:05pm 72 views

Does spacex own Bitcoin?

The billionaire chief executive said he also owns ethereum and dogecoin, other cryptocurrencies, though those holdings are worth less than his bitcoin stake. ... Appeared in the July 22, 2021, print edition as 'Musk, SpaceX Own Bitcoin.' The Wall Street JournalTesla CEO Elon Musk Says He Personally Owns Bitcoin—and So Does SpaceX

Data from Delphi Digital shows holding BTC and ETH was more profitable than investing in weighted average market cap crypto and DeFi index funds.

Since 2018, this trend has extended to the crypto sector and products like the Bitwise 10 Large Cap Crypto Index (BITX) tracks the total return of Bitcoin (BTC), Ether (ETH), Cardano (ADA), Bitcoin Cash (BCH), Litecoin (LTC), Solana (SOL), Chainlink (LINK), Polygon (MATIC), Stellar (XLM) and Uniswap (UNI).

The ability to access multiple top projects through one weighted average market cap index sounds like a great way to spread out risk and gain exposure to a wider range of assets, but do these products offer investors a better return in terms of profit and protection against volatility when compared to the top-ranking cryptocurrencies?

Delphi Digital took a closer look at the performance of the Bitwise 10 and compared it to the performance of Bitcoin following the December 2018 market bottom. The results show that investing in BTC was a more profitable strategy even though BITX was slightly less volatile.

According to the report, “indices aren’t meant to outperform individual assets, they’re meant to be lower-risk portfolios compared to holding an individual asset,” so it’s not surprising to see BTC outperform BITX on a purely cost basis.

The index did offer less downside risk to investors as the market sold-off in May but the difference was “trivial” as “BTC’s max drawdown was 53% and Bitwise’s was 50%.”

Overall, the benefits of investing in an index versus Bitcoin are not that great because the volatile nature of the crypto market and frequent large drawdowns often have a larger effect on altcoins.

Decentralized finance (DeFi) has been one of the hottest crypto sectors in 2021 led by decentralized exchanges like Uniswap (UNI) and SushiSwap (SUSHI) and lending platforms like AAVE and Compound (COMP).

The DeFi Pulse Index (DPI) aims to tap into this rapid growth and the DPI token has allocations to 14 of the top DeFi tokens, including UNI, SUSHI, AAVE, COMP, Maker (MKR), Synthetic (SNX) and Yearn.finance (YFI).

When comparing the performance of DPI to Ether since the inception of the index, Ether significantly outperformed in terms of profitability and volatility, as evidenced by a 57% drawdown on Ether versus 65% for DPI.

While this is an “imperfect comparison” according to Delphi Digital due to the fact that “the risk and volatility of DeFi tokens are higher than Ether’s,” it still highlights the point that the traditional benefits seen from indices are not mirrored by crypto-based baskets.

For the time being, Bitcoin and Ether have proven to be two of the lower-risk cryptocurrency plays available when compared to crypto index funds that offer exposure to a larger number of assets.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Read full article at Cointelegraph

Ethereum, Litecoin, and Ripple’s XRP – Daily Tech Analysis – July 23rd, 2021

Yahoo Finance 23 July, 2021 - 11:10pm

After a mixed start to the day, Ethereum fell to a mid-day intraday low $1,948.68 before making a move.

Steering clear of the first major support level at $1,823, Ethereum rallied to a late afternoon intraday high $2,046.74.

Falling short of the first major resistance level at $2,102, however, Ethereum fell back to sub-$2,000 levels before ending the day at $2,000 levels.

At the time of writing, Ethereum was up by 0.10% to $2,026.79. A mixed start to the day saw Ethereum rise to an early morning high $2,032.00 before falling to a low $2,014.94.

Ethereum left the major support and resistance levels untested early on.

Ethereum would need to avoid the $2,007 pivot to bring the first major resistance level at $2,065 into play.

Support from the broader market would be needed, however, for Ethereum to breakout from Thursday’s high $2,046.74.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

In the event of a broad-based crypto rally, Ethereum could resistance at $2,150 before any pullback. The second major resistance level sits at $2,105.

A fall the $2,007 pivot would bring the first major support level at $1,967 into play.

Barring an extended sell-off, however, Ethereum should steer clear of sub-$1,900 levels. The second major support level at $1,909 should limit the downside.

Litecoin rose by 2.44% on Thursday Following a 9.66% rally on Wednesday, Litecoin ended the day at $120.74.

A bearish start to the day saw Litecoin fall to an early morning intraday low $115.63 before making a move.

Steering clear of the first major resistance level at $109, Litecoin rallied to a late afternoon intraday high $122.10.

Coming within range of the first major resistance level at $123, Litecoin fell back to sub-$120 before ending the day at $120 levels.

At the time of writing, Litecoin was down by 0.60% to $120.02. A mixed start to the day saw Litecoin rise to an early morning high $121.01 before falling to a low $119.65.

Litecoin left the major support and resistance levels untested early on.

Litecoin would need to avoid the $120 pivot to bring the first major resistance level at $123 into play.

Support from the broader market would be needed, however, for Litecoin to break out from Wednesday’s high $122.10.

Barring an extended crypto rally, the first major resistance level and resistance at $125 would likely cap any upside.

In the event of an extended breakout, Litecoin could test resistance at $130. The second major resistance level sits at $126.

A fall through the $120 pivot would bring the first major support level at $117 into play.

Barring another extended sell-off, however, Litecoin should steer clear of sub-$110 levels. The second major support level at $113 should limit the downside.

Ripple’s XRP rose by 3.99% on Thursday. Following a 7.90% rally on Wednesday, Ripple’s XRP ended the day at $0.59332.

A mixed start to the day saw Ripple’s XRP fall to an early morning intraday low $0.56139 before making a move.

Steering clear of the first major support level at $0.5317, Ripple’s XRP rallied to a late intraday high $0.60294.

Ripple’s XRP broke through the first major resistance level at $0.5957 before easing back to end the day at sub-$0.594 levels.

At the time of writing, Ripple’s XRP was up by 0.07% to $0.59286. A mixed start to the day saw Ripple’s XRP rise to an early morning high $0.59428 before falling to a low $0.58886.

Ripple’s XRP left the major support and resistance levels untested early on.

Ripple’s XRP will need to avoid the $0.5859 pivot to bring the first major resistance level at $0.6104 into play.

Support from the broader market would be needed, however, for Ripple’s XRP to break out from $0.6050 levels.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

In the event of another breakout, Ripple’s XRP could test resistance at $0.63 before any pullback. The second major resistance level sits at $0.6274.

A fall through the $0.5859 pivot would bring the first major support level at $0.5688 into play.

Barring another extended sell-off, however, Ripple’s XRP should steer clear of sub-$0.55 levels. The second major support level sits at $0.5443.

Please let us know what you think in the comments below.

This article was originally posted on FX Empire

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Ex-fund manager pegs Bitcoin at $2 million by 2031. But that's a $45 trillion market cap

CryptoSlate 23 July, 2021 - 06:03pm

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BTC at $2 million? Surely not, Greg Foss explains how it will happen.

Greg Foss, the Executive Director of Validus Power Corp, which uses flare gas to mine Bitcoin, lays out the case for a $2 million BTC price.

Although sky-high price predictions are nothing new, Foss’s forecast is up there among the highest. Having said that, what is the reasoning behind his prognosis?

Lofty price predictions are part and parcel of the cryptocurrency space.

For example, Gemini’s Winklevoss twins predicted a $500,000 Bitcoin price by 2030. While 2017 saw Wences Casares, a PayPal board member and CEO of Xapo, give a $1,000,000 price by 2027.

However, both of those pale in comparison to Foss’s $2,000,000 price prediction.

Speaking with Anthony Pompliano, in justifying his position, Foss said that he thinks oil and gas will be priced in BTC, rather than dollars, within the next ten years. This will elevate its status to the global reserve asset.

“I think Bitcoin has a chance of becoming the global reserve asset of the world. Why? Because I think oil and natural gas will shortly, and when I say shortly, in the next ten years, become priced in Bitcoin.”

Giving the example of Russia and its oil and gas resources, Foss spoke about the raw deal Russian energy suppliers face by selling in dollars and receiving a devaluing asset in return.

“If you’re Russia, do you want to sell your valuable resources for this thing called U.S dollar, which is a programmed to debase fiat currency, or do you want to hold U.S treasuries which is a fiat contract, which is also programmed to debase?”

He added that Bitcoin, as “digital energy,” poses a better deal. And over time, as more countries come to that realization, there will be a gradual shift where nations want to price energy in Bitcoin.

Previous to this explanation, Foss mentioned that the total value of global assets, which include equities, debt, currency, fine art, gold, etc., are valued at $900 trillion.

In coming to his $2 million BTC price, Foss assumes that Bitcoin could capture 5% of the total global value of assets.

Doing the sums with this line of reasoning puts BTC at a $45 trillion market cap, which gives a price of $2.142 million per token when apportioned across the total supply.

“So what percentage of the reserve asset does it make sense that $900 trillion could capture? Would it be 5%? I think that’s pretty low, but let’s assume it’s 5% of $900 trillion. 5% of 900 trillion is 45 trillion. 45 trillion divided by 21 million Bitcoin, that’s over $2 million a Bitcoin.”

As an “insider” of the oil and gas industry, Foss may be right about the end of the petrodollar. But, from where we currently stand, it’s still a big leap to assume a petrobitcoin would take its place.

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Bitcoin The Most Undervalued Since At Least 2010, According To Stock-to-Flow Model

Fortune 23 July, 2021 - 04:33pm

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Bitcoin (CRYPTO: BTC) is severely undervalued compared to the Bitcoin stock-to-flow (S2F) model, data shows.

What Happened: According to Glassnode, when BTC price dipped under $30,000 on Tuesday, it was only at about 0.27 of the value that it was estimated to have, according to the S2F model.

Such a strong undervaluation cannot be observed anywhere else on Glassnode's charts, and they go as far back as July 2010.

This might be as far as the coin's price has ever been from the estimates.

Widely produced commodities, such as copper, are not considered to be a good store of value because of the new supply, while hard-to-produce commodities such as gold are believed to be a better fit.

This model is simply trying to measure this difference in a more objective and precise way — going as far as to give fair price estimates.

S2F quantifies the scarcity that, according to many, makes Bitcoin valuable, dividing the total global supply by the annual production. Bitcoin was programmed to be artificially scarce, limiting the number of coins to be ever be mined — 21 million — and decreasing their rate of production during events called "halvings."

During those events, Bitcoin production is cut in half, and S2F's Bitcoin value estimates jump sharply upwards as a consequence.

In the chart above, every halving event is symbolized by the Bitcoin’s price indicator becoming blue.

Lastly, the correction phase causes the coin’s price to fall under those very same price expectations.

Furthermore, PlanB himself admitted that his model might become invalidated if any of the fundamentals that seemingly made it true so far change or a bearish scenario realizes — for instance, a widespread ban drastically decreasing demand.

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