In This Issue
- I share my thoughts on the state of the market, CPI data is in, risk management, an Aave stablecoin, NFTs & Mt Gox.
- Sam has a report for you on Avalanche NFTs.
Dear Wealth Mastery Subscribers,
I am aware that the crypto markets have pretty much rekt most of our portfolios, but this isn’t the time to leave the market!
In fact, this is the optimal time to learn, build and seize the abundance of opportunities coming our way each day!
Don’t wait on it though… This offer is going to expire in 7 days!
Right now, you’re on the free side of the Wealth Mastery Newsletter. By upgrading, you unlock immediate access to:
- Weekly Analysis, Tips, and Insights
- Top Upcoming NFT drops
- Weekly News Updates on Crypto Markets, Coins & Projects & Macro
- Deep Dive Altcoin Report & Weekly Trending Coin Report
- Technical Analysis on Crypto Large Caps & Overall Market
- Token Sales, Airdrops and DeFi Tutorials
- Lark Davis’s Portfolio (updated weekly)
The brand new feature, released last month: The Monthly Crypto Alpha Report!
The Monthly Crypto Alpha Report outlines new projects and the best performing altcoins at that time. In addition, one section is dedicated to my current investment strategies.
The main point of the Crypto Alpha Report is to give you a clear idea of what I’m buying and selling and how I’m approaching the market!
Get yourself the 6 month subscription and get 2 months FREE!
Or go monthly on a 33% discount, for the first 3 months..!
… Up to you!
What’s On My Mind by Lark
The State of the Market
Still not awesome. You probably noticed.
All crypto assets remain in a major downtrend and are not even close to the levels that would be needed to start talking about real reversals. A relief rally still has not come around to ease the pressure on the market.
Bitcoin is now working on closing its 5th weekly candle under the 200 week moving average which is a totally unprecedented event for Bitcoin.
Fear remains the predominant emotion in the markets. These are psychologically the most difficult times for investors. A macro bear market is a tough event to live through. Your crypto is down, your stocks are down, your metals are down, your property is down, and your cash is getting eroded due to inflation.
There is nowhere to hide. Which all sounds grim, but remember, nothing last forever. While markets are in the gutter now, recovery will come, even if it takes a while.
This is why I am not going anywhere. Why I will keep investing. Why I will keep working to make my family’s future the best it can be!
I know it is tempting to throw in the towel during a bear market, but those who stay will be best positioned to profit in the next bull run!
CPI Data Is In And…
9.1% is the new inflation rate out of the USA.
This is higher than was expected, but markets didn’t freak out too much which is good. Seems that a lot of this was priced in already.
That being said 9.1% is NUTS!
A lot of people are however starting to speculate that inflation has topped.
The reason why the numbers for June were so bad is that commodity prices soared to local highs during that month.
Only in the last days of June did prices start to cool, and they have now been cool for all of July. Leading many to speculate that we will see inflation come down when we get numbers for July in mid-August.
That being said, just because inflation may have peaked and may come down does not mean that it is going to fall back down super quickly.
High inflation could be around for a while.
The next big market moving event on our calendar, earnings season for corporations, which starts next week.
Risk Management Is Still A Thing
I know that might sound crazy, but now is NOT THE TIME to blow up your portfolio.
Anyone involved in crypto has taken big losses. It hurts. It can drive some investors a bit crazy even, and before you know it, the mistakes start to compound.
The urge to gamble harder and make it all back creeps into your mind. But now, more than ever, is the time to remember and focus on risk management!
Here are some ideas to consider for yourself.
- Your portfolio. What are your long term holds? You know, coins you are actually ready to hold until 2030. For me the list is pretty damn short. This is also why coins like Bitcoin and Ethereum make up the majority of my portfolio. What are your short term holds and what losses are you ready to accept on these? Is there a stop loss number in your mind where you will exit? What is your plan to take profits? Are they realistic in the current market?
- Position sizing remains key relative to risk. I rarely enter a new altcoin with more than a single percent of my total portfolio. My average trade is like 0.1% of my entire portfolio size. Not losing money is kind of an obsession, and controlling position sizing is KEY to that.
- Right now basically everything in crypto has been devastated. BUT, that once again does not mean that you need to risk the farm on some super low cap altcoin. We are actually at a time now when simply buying and holding top 50 coins, even top 10 coins, will return big profits during the next bull run. Remember the further down you go in market cap, often the higher the risk. Many coins in the top 50 are still going to be here in a few years. Many coins with market caps under, for example, 10 million will not be here.
- Use leverage with caution. One big thing that will wipe out traders and investors during a bear market is revenge trading and using too much leverage. This is both on chain leverage with multiple tiers of lending and on exchange trading leverage. Leverage can be a great tool. But keep leverage low, and keep position sizing low on leveraged positions.
- Walk away from the screen. Sometimes the biggest risk to your portfolio is YOU! Panic, fear, anger, depression, and trading while drunk can all wreck you quickly. Sometimes just buying, holding, and chilling is key. Dial down the daily noise from social media and be patient.
- Diversify. Crypto is awesome, but far from the only game in town. I know that many of your are crypto only investors, but other markets can really help to protect your gains and diversify your income. Stocks. Metals. Property. Fixed Term Bank Lending. Collectibles. Investing in a business that you run. The key here is to not rely on your wealth and income from crypto only.
Aave is the second biggest defi protocol in terms of total value locked and operates across many key chains including Ethereum, Polygon, Avalanche, and Ethereum layer twos like Arbitrum among others.
The reason I wanted to highlight Aave is that they have announced a new stablecoin called GHO which will function in a similar fashion to Maker’s DAI stablecoin.
Part of me thinks that the market REALLY doesn’t need another damn stablecoin.
The other part of me thinks that this is a big potential bullish catalyst on one of the most used and most trusted defi applications in the industry.
It would also make holding Aave a more lucrative long-term bet as 100% of the interest payments from the GHO stablecoin would go to holders of AAVE.
NFT volume is down 94% since the start of the year.
Does that mean now is the time to ignore NFTs since everyone else is? Unlikely.
Now is probably the time to really be paying attention. And I have evidence that smart investors have been.
The floor price of Crypto Punks have gone from 48 to 78 ETH in a month. Smart money is buying blue-chip NFTs.
NFTs are a hot mess, no doubt.
So many cash grab scams it is insane. So many over valued collections.
BUT, NFTs are not going anywhere. Quite the opposite.
Also worth noting is the surge in volume of Solana NFTs, which while still much less than Ethereum NFT sales, is still a trend worth noting.
My bear market NFT plan remains the same, watch for bargains on blue chips!
Mt Gox Bitcoin
In case you are not familiar, Mt Gox was the first big Bitcoin exchange back in the day.
It’s run as top dog was cut short though in 2014 when it was revealed that huge hacks had happened and that the company did not have their customers Bitcoin.
Later they found 200,000 Bitcoin.
Since 2014 legal proceedings have been taking place, but it now seems that things are coming to an end and that those who have been waiting in limbo may finally receive back a portion of their lost Bitcoin, starting as soon as August.
The trustee, currently 137,000 Bitcoin, is worth around 3 billion dollars. Which has led to fears that there will be a big sell off!
But how likely is this to actually happen?
Well, first off, 3 billion sounds like a lot, and previous Mt. Gox sales coincided with the previous all time high and subsequent bear market as this chart shows.
But there are a few factors that make me doubt this theory.
1 – Not everyone is going to sell. A lot of these people are OGs who have been holding BTC for almost 10 years. They are not forced or desperate sellers.
2 – A lot of people’s claims were actually bought by funds who probably are less interested in market dumping. So even if the funds do sell to realize profits it will more likely be done slowly. To be clear, hedge funds are out to make money and sales will happen, but I just think it could be more orderly
3 – 3 billion dollars is A LOT of money. But how significant is it really in the current market? Well, compared to 2017 we are doing more than 5X the daily trading volume for Bitcoin, which is significant in terms of general market demand.
4 – Also, consider that the crypto market absorbed massive sell offs recently. Luna Foundation market sold 80,000 BTC during a general market panic and caused the price to drop from $40,000 to $30,000. There is considerably more Mt. Gox BTC than this so the threat of a mega dump is real. BUT, not everyone will get their Bitcoin at the same time, and many may not sell.
So while many are fearing a doomsday scenario from this, I think the reality is much less grim. Yes, there may be a sell-off, but it is likely to be much less severe than people expect, in my opinion. I could of course be wrong… The real issue for the crypto markets continues to be the macro scene.
Avalanche NFTs by Sam
When it comes to NFTs, Avalanche (with its native token AVAX) has had its own community growing for some time, and despite the bear market there has been plenty of development around marketplaces and tools, projects minting new collections, and an optimistic mood.
This is not to say that user activity didn’t drop when the markets crashed, but it now appears to have leveled off at the bottom and even started picking up a little, while creators themselves have kept on working.
Looking at Avalanche stats showing the network’s daily active NFT users and NFT transactions, we can see activity peaking from late January to early May, and then crashing with the unfolding crypto chaos that has affected the entire market (and let’s not forget the macro turmoil that is hammering traditional markets too).
We seem to have passed the quietest stage though, and activity has been slowly creeping up again since the middle of June, and through into July.
The JOE Empire
Image credits: Trader Joe
If you’ve used Avalanche for DeFi, then you’ll be familiar with Trader Joe, which is the blockchain’s leading DEX (find out more in this interview). Building on its DeFi success, Trader Joe this year also launched the Joepegs marketplace and launchpad, specializing in AVAX NFTs.
And on top of that, there are the JOE ecosystem’s own NFT collections, first Smol Joes, and then Smol Land. There are 100 Smol Joes and 200 Smol Lands, and both collections were free to mint and have no roadmaps.
It’s unclear exactly where these collections are leading, but it appears they will tie in with plans to expand the JOE brand through an in-development 10,000 item PFP collection.
They’re currently ranked as numbers 1 (Smol Land) and 3 (Smol Joes) by volume on Joepegs, but be careful about buying unofficial derivatives, which will not be supported by the JOE platforms.
There are other players when it comes to AVAX NFT marketplaces, most notably, Kalao and Campfire. It’s also worth looking at what’s available on NFTKEY and NFTrade. These marketplaces both feature AVAX NFTs, along with NFTs on several other blockchains.
You may also want to try out the new Avalanche browser extension wallet, Core. This is a non-custodial wallet with support for NFT assets, and which can bridge ERC-20 tokens, and also allows many native Avalanche tokens to be swapped directly using ParaSwap.
There are several gaming projects being developed on Avalanche, which fall into the Play and Earn category.
By the way, the Play to Earn label is falling out of favor, with Play and Earn more common now. A difference is that Play to Earn sounds as if the only purpose is earning, while Play and Earn emphasizes that a project is primarily a game, but has the additional bonus of including crypto earning capacity.
When looking to pick up NFTs with utility, projects building out real products are especially interesting, and gaming is a huge industry that could become an intersection where crypto and NFTs connect with a wider audience.
Image credits: Wildlife Studios
This game is the work of proven mobile gaming developer Wildlife Studios, a foundation that puts it ahead of the majority of NFT projects promising games and metaverses, but that have limited hands-on experience of gaming development.
Castle Crush is a hugely popular, free-to-play game that revolves around battles and strategic planning against a fantasy backdrop, and that has decided to integrate NFTs and an in-game token.
It will be interesting to follow along with how smoothly its shift into web3 progresses, and how NFTs and crypto are utilized by experienced developers who have an in-depth understanding of gaming mechanics.
Image credits: Smashverse
This project stands out through looking great, which is important, but also because it’s taking recognizably popular genres and interests–combat games, wrestling and martial arts–and introducing NFTs and tokens into the equation.
Importantly, the NFT element has clear utility, with tokens representing in-game fighters that owners will be able to customize and trade. This could, potentially, be a project that leads with gameplay, fits into a niche, and incorporates crypto in a meaningful way.
Image credits: RunBlox
Runblox really fits into the Move to Earn category, rather than just straightforward gaming, but is similar in that it’s a project with utility extending beyond crypto, that also includes mechanisms by which to earn in-game tokens.
Essentially, it’s a gamified fitness app that incentivises exercise, utilizes sneaker NFTs and native tokens, and includes features such as creating new sneaker NFTs that are bred from existing ones that you already own.
RunBlox has been created on OpenBlox, an Avalanche-integrated GameFi platform with several more games in development and scheduled for launch towards the end of this year and early 2023.
GameFi (or blockchain gaming) is a new sector that has yet to fully prove itself, and Avalanche is just one part of the wider ecosystem. However, of the projects that are building now, while crypto is fearful, there are some clear candidates for explosive growth when bullishness returns.
If you’ve enjoyed the Newsletter so far, please keep in mind that you can unlock access to the rest of it by upgrading your subscription with a 33% discount for the first 3 months!
Premium members will also get the Monthly Crypto Alpha Report for FREE.
- Market analysis that I don’t usually reveal on social media.
- My investment strategies (what I’m buying and selling)
- Top airdrops of the month to get free $$$
- Top altcoins of the month to invest in
- And top DeFi Protocols to stay safe during the bear market
See you next time!
Lark and the Wealth Mastery Team
TCL Publishing ltd (director Lark Davis, owner of Wealth Mastery) is not providing you individually tailored investment advice. Nor is TCL Publishing registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. TCL Publishing is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.