How Not to Play the Game 📈

All Things Flooz newsletter is for innovators, creators and traders.

22 Jan

Stay in the Know 🎯

  • Bull Run or Bull Trap ⁉️

  • Gemini vs Genesis ⏳

  • Follow our BAYC NFT #7683 🦍

Something we say often at Flooz is that a week in crypto can feel like a year. And as we wrap up this third week of 2023, it’s starting to feel more like a decade.

Bull Run or Bull Trap ⁉️

A quick market wrap – BTC, the world’s largest cryptocurrency by market capitalisation, rose 21.7% from Jan. 11 to Jan. 18, taking it back above a key resistance point, BTC went on to gain 10.4% across last week and is currently sitting at US$ 22.911, ETH gained 18% in that same timeframe of BTC beating resistance, and is currently changing hands at US$1.633, with a neat 6.61% gain in the past 7 days.

With BTC reaching back above the US$20K mark, the world’s benchmark cryptocurrency has returned to its price level from before the Nov. 11 collapse (a world-historic moment) of the FTX cryptocurrency exchange. 

Let's keep it real, BTC and ETH are rallying because of the bullish momentum in traditional markets. BTC, along with most crypto assets, are still heavily correlated and priced like tech stocks, and we have seen most of these also increase in the last few weeks too, but often crypto prices move at an exaggerated rate. 

Solana’s native token was the week’s biggest gainer among the 10 largest non-stablecoin cryptocurrencies, up 30.89% on the weekly chart, currently trading at US$25.

The global crypto market cap exceeded US$1 trillion on Jan. 15, for the first time since Nov. 8, according to CoinGecko data. Bitcoin’s US$442 billion market cap currently accounts for 39.86% while Ether makes up 18.5% of the total market cap.

What's behind the numbers 📊

While the data was not entirely rosy, given the continued inflationary pressures in sticky categories, you better believe Wall Street MBAs did the mental gymnastics to get bullish! As highlighted by the WSJ:

Source: WSJ

Core inflation, the preferred inflationary metric of many policy makers and market participants, already strips out the volatile components of commodities pricing in the measurement. Supercore inflation estimates are Wall Street’s attempt to rationalize the increasingly complicated inflation story.

Inflation metrics for many core goods categories have turned deflationary, due to normalizing supply chains and moderating demand for goods (a direct impact of contractionary monetary policy), while inflation in service-based buckets remains high, partially a result of a stubbornly tight jobs market and upwards wage pressures.

Roger Hallam, global head of rates at Vanguard (another good old ETF Portfolio Manager) notes that, “the goods and the shelter print will get less relative focus compared to what’s happening on the services side of things,” over the course of the next year. Additionally, Hallam sees market participants placing greater emphasis on employment figures, more on that via WSJ here. 

Okay, so thinks are looking mixed but promising — what should you do about it though?

Stay cautiously bullish 🧐

Here's a special editors note. 

You never want to be the clown who stays in crypto throughout the bear market and misses the rally. But you really don’t want to be the fool that FOMOs into $22.9k BTC or $1633 ETH at their local tops, then get liquidated on the way to the actual bottom.

– Inflation is on the mend– Employment remains strong– Everyone else seems to be buying

Cautious optimism is the key, however...

Remember crypto tanking post-FTX? Perhaps, check the optimism you have in this present moment. Those fund redemptions that were going to take place? Just ask yourself if there is a chance that they are occurring right now…

If I have learned one lesson throughout my time in crypto that has repeatedly burned me, it’s that price action on weekends (especially three day weekends) is often scam price action. Bitcoin’s largest dumps since August were all preceded by Friday pumps that carried over into the weekend (see indications of purple boxes below). 

Subsequent trading action took BTC to new cycle lows every time.

As the market makers head home for the weekend and TradFi markets close for the weekend, liquidity decreases. This increases volatility and makes price more susceptible to extraordinary swings. Abnormally high trading volume can easily push price to the extreme in both directions.

Keep in mind that while BTC spot markets may be difficult for an individual or small group to manipulate, low-float alt-coins are certainly not immune to such behaviour.

As your token goes up in value, you can borrow more against it! Hypothetically, if you are a decently capitalised VC that just got hit with redemptions and holds a lot of low-float coins, say a collateral-tier bluechip DeFi project like Lido, you could borrow against their increasing values, long your coin in a low-liquidity market, and attract rotatooors who will pump your coin alongside you.

While VCs bag dumping will depress market prices, attracting fresh blood and renewed attention to their shitcoins enables them to exit at much more favorable prices. Remember anon: VCs play games! Don’t let them steamroll you on their way out the door!

Craig.eth – Flooz Partnerships Manager by day and classified investor at night. 

What's your take 🙋‍♂️

If you’ve read all of this and are still intending on playing the markets right now. 

  • Avoid leverage

  • Don’t marry your bags

  • Hit the big red button at the first sign of increasing unemployment

  • Exercise a healthy dose of skepticism towards anyone shilling their bags

If you can do these four things and stay cautiously bullish, you’ll (hopefully) have enough ammo for wherever the market goes!

Don’t ape. Don’t FOMO. As always, DYOR. 

We can all agree 💆‍♂️

General news is great to stay informed, but crypto news hits a little different. 

Gemini and Genesis Battle It Out 🤺

We're not too keen on centralised exchanges, so let's watch them fight it out. 

On the proverbial docket last week: a public and ugly fight emerging between Gemini, a crypto exchange that's owned by the Winklevoss twins, and a company called Genesis, which was one of the biggest crypto lenders in the world.

Genesis has filed for bankruptcy after suffering multiple body blows during the bear market. As well as nursing heavy losses following the collapse of Three Arrows Capital and FTX, it owes $900 million to 340,000 Gemini Earn customers.

Estimates suggest Genesis has 100,000 creditors — and the 50 biggest are owed $3.5 billion. Gemini's co-founder Cameron Winklevoss says the Chapter 11 proceedings are a "crucial step" in recovering funds for his customers. He once again claimed that Digital Currency Group's CEO, Barry Silbert, has refused to offer creditors a fair deal — and threatened to file a lawsuit imminently. Welcoming the involvement of a court, he added: "Sunlight is the best disinfectant." 

Curious for more on this topic, check out this article from Decrypt. 

Sewer Pass 🎟 to the moon? 

Bored Ape Yacht Club’s Sewer Pass NFTs Nets Over $26 Million – the NFT massed 12,680 ETH in trading volume at the time of writing, according to data from OpenSea. 

The new skill-based game from Yuga Labs quickly aroused the public’s interest, as the initial Sewer Pass NFT mint promptly sold out in a couple of hours. Indeed, the initial mint grossed over $6 million in sales. Afterward, Bored Ape Yacht Club creators disclosed that the NFT Sewer Pass collection is still up for grabs on OpenSea. This way, crypto enthusiasts who are not holding a BAYC or MAYC NFT still have the opportunity to play the Dookey Dash blockchain game.

Follow along as we enter the sewers with our $425.278 BAYC investment 🎲

NFT Serves as Key to Unlock the Game 🔓

Firstly, the NFT Sewer Passes are tiered into four layers, these are determined by the NFTs a crypto enthusiast holds. For instance, if a BAYC or MAYC NFT holder also has an NFT from the Bored Ape Kennel Club NFT collection, they automatically qualify for the highest tier Sewer Pass NFT, which can be used in-game starting today. Based on our holdings, we secured Tier–3 🔥

Secondly, NFT enthusiasts and Web3 gamers can play Dookey Dash until February 8th, when the high scores will count towards all of the “Chapter 1” activities on the Otherside by Yuga Labs. At press time, the Tier 1 Sewer Pass NFT has a floor price of 1.635 ETH on OpenSea. This converts to $2,479.79 for the cheapest Sewer Pass NFT available on the secondary market. 

On the other hand, the Tier 4 Sewer Pass NFT for Dookey Dash costs at least 5.25 ETH, which equals a whopping $7962.62. As blockchain gaming enthusiasts are aping into the new skill-based game, it is no surprise that the freshly-launched Sewer Pass NFT collection has already exceeded 8,000 Ethereum in total sales, marking another smash hit for Yuga Labs in the NFT market.

Yuga Labs demonstrates a clear stance on NFT creator royalties 😤

Sewer Pass NFT by Yuga Labs is unavailable on some popular NFT marketplaces like NFTX and LooksRare. This way, Yuga Labs demonstrates a clear stance on NFT creator royalties. Yuga Labs used specific conditions on the new smart contract, including blacklisting all addresses that don’t support NFT artist royalty enforcement.

A short statement we found from their team reads as follows → “We’ve always been a creative-first company, and we believe that creator royalties must be protected. The Sewer Pass free claim will only be traded on platforms respecting creator royalties". 

Why should you care? Yuga Labs is one of the most established Web3 companies in the current crypto space. The firm was last valued at $4 BN and is currently building an interoperable Metaverse ecosystem, that we are patiently waiting for. 

NFA – when the BAYC collection moves, it pulls the rest of the NFT market along, we see this as a positive and informing trend forward for the entire NFT space, including our very own #Gen–F NFT collection 📈

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.