The development of the NFT (non-fungible token) marketplace has taken the world by storm. By the end of 2021, Bloomberg estimates the global NFT marketplace is worth more than $40 billion and the market is currently demonstrating few signs of slowing down. Even with the occasional fluctuations of the adjacent cryptocurrency market (like Ethereum), NFTs continue to demonstrate their value to consumers, companies, and—perhaps most interestingly—celebrities alike.

As the world continues to become more digital—and a growing portion of our interactions and transactions take place entirely online—NFTs will continue to become more valuable. But for NFTs to move from the periphery of the general public and become as “mainstream” as, say, an autographed baseball or photo with a movie star, they will need to have advocates who have high visibility.

Luckily, this visibility is already growing—fast. Celebrities, many of whom have platforms with tens or even hundreds of millions of followers, have helped push NFTs into the public spotlight. In this article, we will discuss why NFTs are so conducive to celebrity branding and will also take a look at some of the most interesting celeb NFT launches to date.

Why Are Celebrities So Interested in NFTs?

As long as there have been celebrities, there has been an interest in celebrity interactions and merchandise—in fact, a recent archeology venture in Austria revealed evidence of gladiator merchandise from the era of Ancient Rome. Celebrities have the unique capacity to reach a wide audience and, naturally, people will be interested in both them and items that are in some way connected to them.

As time has gone on, celebrity merchandising has become even more important. Over the course of his career, Michael Jordan—arguably the greatest basketball player of all time—earned about $94 million total through his NBA contracts. Jordan, however, would eventually become a billionaire, largely due to his incredible ability to brand and market himself. Other celebrities have taken note and even if they do not have the star power and name recognition of Jordan, they know that personal branding can often be the clearest path to wealth.

And the development of NFTs, undoubtedly, has opened an entirely new door to this sort of branding. The NFT marketplace makes it possible for things that were once intangible—like a celebrity interaction—to become tangible and it also makes it possible for items—such as a single image—to be given to an exclusive owner.

We are only a short way into the NFT era, but celebrities of all kinds are beginning to find ways to create non-fungible value in this exciting and dynamic marketplace:

Celebrity NFT Launches

Tony Hawk

Legendary skateboarder Tony Hawk is known for taking big risks and often doing things that no boarder has ever done before—naturally, he saw the NFT marketplace as the perfect fit for him. Recently, Tony announced plans to auction off his “last-ever 540-degree ollie”, a signature trick that he admits he is no longer comfortable doing. Through the use of an NFT, the winner of the auction will have the exclusive right to the footage, as verified by the blockchain.

Kings of Leon

Nashville rock band Kings of Leon recently made headlines for becoming the first-ever group to send an NFT into space. The group’s song “Time in Disguise” was minted into an NFT, auctioned to the public, and loaded onto an iPhone that was then sent into space via a SpaceX flight. The entire project was able to draw a significant amount of attention to the band, the NFT marketplace, to SpaceX, and—perhaps of all—was able to raise money for St. Jude Children’s Research Hospital.

Steve Aoki

Steve Aoki, an extremely popular DJ, has always been admired by fans for his epic beat drops—so dropping an NFT is something that came entirely naturally for Steve, an outspoken believer in the power of NFTs and digital assets, in general. After teaming up with renowned visual artist Antonio Tudisco, the pair was able to earn more than $4.3 million. Aoki—an avid collector—has recently said he is interested in other NFT projects, as well, recently describing the marketplace as “an opportunity to finally merge art, collectible culture, and music in a way I’ve never been able to realize before.”

Grimes

Grimes—an artist and musician who is known for pushing boundaries and thinking outside the box—has one of the most successful celebrity NFT launches to date. After partnering with her brother, fellow creative Mac Boucher, she issued a series of NFT-minted digital works of art that were dubbed “War Nymphs.” The digital art series, mostly consisting of babies flying through space with weapons and other objects, was eventually able to garnish more than $6 million.

Quentin Tarantino

Known for some of the most critically-acclaimed films of the past few decades, Quentin Tarantino knows how to capture an audience. His handwritten screenplay for the “Royale with Cheese” scene—one of the most iconic scenes in the classic film Pulp Fiction—was minted into an NFT and auctioned to his fans. According to the NFT launch, “Alongside the screenplay, is a recording of Quentin Tarantino revealing details only available to the owner.” Despite some possible copyright challenges, the piece has been described as “a piece of cinema history.”

Jack Dorsey

Jack Dorsey, the billionaire founder of Twitter and Block (formerly known as Square), was able to generate an incredible $2.9 million by auctioning off his first tweet (the first tweet) in March 2021. Though the content of the Tweet itself—“just setting up my twttr”—is not particularly exciting, it is undoubtedly an important piece of internet history that has now been turned into a tangible (and valuable) collectible.

 An Increasingly Digital Future

The world of digital collectibles is rapidly expanding—and the celebrity promotion of NFTs is, without a doubt, playing a critical role in this expansion. These are just a few examples of how celebrities have used NFTs to help promote their brand and generate significant amounts of money.

And it’s not just celebrities who are getting in on the fun—brands of all kinds are discovering the benefits of using NFTs every day.

 

 

The marketing world is rapidly changing. Over the past few years, we have seen brands of all kinds—all across the world—adopt the use of non-fungible tokens (NFTs). Through the strategic use of NFTs, brands can significantly increase their brand value, reach a wider audience, and move closer to achieving their long-term goals.

A non-fungible token is a digital asset that, by definition, has an exclusive owner. We have recently seen many NFTs sell for millions of dollars, or even more—as a result, both business-facing and consumer-facing brands are looking for ways to enter into the lucrative NFT marketplace.

If your brand is currently interested in entering the competitive world of NFTs, you might be looking for some creative ways to get started. Though you will certainly want to develop a brand-specific campaign of your own, consider drawing inspiration from these successful NFT campaigns:

Coca-Cola

Coca-Cola­—generally considered the most recognizable brand in the world—recently made a splash in the NFT community with the introduction of brand-specific collectibles. The company created four unique collectibles, made accessible through the OpenSea platform. According to Coca-Cola, “We are excited to share our first NFTs with the metaverse, where new friendships are being forged in new ways in new worlds, and to support our longstanding friend and partner, Special Olympics International. Each NFT was created to celebrate elements that are core to the Coca-Cola brand, reinterpreted for a virtual world in new and exciting ways.”

Barbie

Barbie, created by toy and game manufacturer Mattel, recently collaborated with leading fashion brand Balmain to create a collaborative NFT debut. According to Mattel’s president and COO, “It’s a milestone, it’s the first NFT presentation that the Barbie brand has ever made.” Balmain’s CMO, Txampi Diz, expanded further, stating “I believe it (NFTs) is going to completely change the fashion industry, and it will have the same impact as when social media first started or when the internet first launched.” While this is not the first collaboration between a fashion brand and a toy manufacturer, it is the first that took place within the NFT community. Unsurprisingly, both brands are extremely excited and are hoping to collaborate in the future.

The National Basketball Association (NBA)

The NBA has consistently sought to expand its brand value by increasing connections with fans and by commodifying components of the game—naturally, the NBA’s push into the NFT space seemed to be the perfect fit. So far, the NBA has introduced several different types of NFTs, including lucrative “Top Shot” cards that allow fans to own their favorite moments of games. And the market is proving itself to be incredibly lucrative. Recently, a Ja Morant (Memphis Grizzlies) dunk sold for $475,000.

Asics

Asics, one of the leading brands for running shoes and related athletic equipment, launched a “Sunrise Red NFT Collection” designed to be a “celebration of sport and a first step in building a future where digital goods inspire physical activity.” In 2021, at the cost of 0.20 to 0.25 ETH, Asics offered a limited collection of digital merchandise with the hope of inspiring further engagement. Due to low supply and high demand, the company was able to generate nearly $1 million in sales.

Gucci

As one of the world’s most prestigious fashion brands, Gucci’s recent push into the world of NFTs has taken the digital world by storm. The project, dubbed Suppergucci, was described by the company as “A groundbreaking collaboration between Gucci and Superplastic, SUPERGUCCI is a three-part series of ultra-limited NFTs co-created by Gucci’s Creative Director Alessandro Michele and synthetic artists Janky & Guggimon.” Like the Gucci brand itself, the NFT series focused on boldness and exclusivity in order to generate hype.

Adidas

Through a collaboration with the Bored Ape Yacht Club, PUNKS Comic, and gmoney—all major players within this dynamic space—Adidas’s NFT debut was able to quickly sell out. Through the collaboration with these already-established NFT movers, Adidas was able to create a series of iconic digital avatars, donning Adidas (or ‘Adidas-like’) sports apparel. The movement helped increase brand exposure, increase product demand, and further establish Adidas as a forward-thinking global brand.

Mercedes-Benz

Mercedes-Benz, one of the world’s most recognizable car brands, recently collaborated with five artists from the Art2People collective to “interpret the G-Class in their own style.” The exclusive NFTs were a hit—each offered a totally unique interpretation of the car brand and was quickly sold to the wider public. Mercedes is one of many car brands to recently make a push into this space. McLaren, KIA, and several others have also recently leveraged NFTs to increase the total value of their brands.

Why Does This Matter?

It’s clear that many of the world’s leading brands are making a push into the NFT space. But why, exactly, does this matter?

NFTs are the future of marketing—and we are sitting at the forefront of a new frontier. In the 1940s, the boldest brands of the era (like Bulova Watches) began investing in television commercials. At the time, those moves seemed beyond the mainstream, but eventually, TV commercials became a dominant form of advertising. In the 1990s, the boldest brands began investing in online advertising—that too eventually became a standard component of marketing. Today, the online ad market is worth about $400 billion per year. Now, we’ve reached a new era—for now, it is risk-tolerant brands that are making their way into the NFT marketplace. But, by tomorrow, these sorts of campaigns will become an essential component of every brand’s broader marketing strategy.

What Does it Mean to be Blockchain Agnostic? And Why Does it Matter?

So, you’ve decided it’s time for your enterprise to join the exciting digital asset community.

In doing so, you’ll be able to generate significant levels of revenue, reinforce your brand, and move closer to achieving your long-term goals.

However, even once you have made the decision to enter the digital asset space, there are many different decisions that you will need to make. For example, if you are planning on launching a project that involves the use of non-fungible tokens (NFTs), you are going to need to choose a blockchain to work with—and with each passing day, more and more blockchains are offering themselves to the broader public.

How do you know which blockchain to choose? And if, for whatever reason, you needed to make a change in the future, will your enterprise be in a position where you can actually do so?

Below, we will talk about the importance of being “blockchain agnostic” within the broader digital asset community.

 

What is the Blockchain? How Does it Work?

The blockchain, broadly speaking, is a digital database that is shared across multiple nodes within a decentralized network. The blockchain is an accessible ledger that can be used to securely store a variety of types of information, including the ownership and distribution of digital assets. Most blockchains can be categorized as either public (there is no centralized authority) or private (the blockchain is controlled by a single source or group)—and some blockchains are hybrids that are somewhere in between.

Ultimately, the blockchain is what makes it possible for people to know who owns what within the digital asset world. Do you currently own any cryptocurrency? How many kinds of cryptocurrency do you own and how much of each are currently within your possession? Through the use of the blockchain, these questions can be easily answered, without dispute.

The blockchain can be used for both fungible (interchangeable) currencies, like Bitcoin, or non-fungible digital assets, categorized as NFTs. Blockchain technology actually dates back as far as 1991, but it was not until the emergence of Bitcoin (2009) that this technology was fully put to use.

Currently, Ethereum is the most popular blockchain in circulation (NOTE: Bitcoin is not a blockchain itself, though it does utilize blockchain technology). However, there are many different blockchains available to choose from, and you should explore your options before making any final decisions.

What Does it Mean to be Blockchain Agnostic?

There are countless reasons an enterprise might choose to use one blockchain over another: the need to decrease operating costs, increase accessibility, reduce energy consumption, or offer customized solutions might all affect your final decision.

This is especially important as the attributes of both public and private blockchains change over time. Blockchains with low transaction fees today can become prohibitive in the future as fees rise. Blockchains with high uptime today, may suffer from availability and reliability issues in the future.

For a project to be blockchain agnostic means that it is not structurally or otherwise tied to any particular blockchain (such as Ethereum). In other words, the project is ‘block-chain neutral’ and can potentially migrate from one blockchain to another, as needed.

Brands should be concerned with the blockchain they choose to execute an NFT project, the risk of using the “wrong” blockchain could bleed into reputational risk that could negatively affect the brand.

What Are the Benefits of Being Blockchain Agnostic?

Sasco Digital Assets is a blockchain agnostic firm that is committed to helping its clients develop sustainable, dynamic digital asset strategies. Rather than being tied to a single blockchain—something that has become common within the digital asset world—Sasco’s solutions make it possible for firms to find a blockchain that works for them and make changes as needed.

The future of digital assets is constantly evolving—and the next stage of this evolution, Web3, is developing even faster than anticipated. But what we do know will be important in the future is flexibility. By working with a blockchain agnostic partner and remaining flexible enough to pursue new opportunities, your enterprise can take full advantage of these new opportunities for growth.

A non-fungible token is a unique and non-interchangeable unit of data stored on a digital ledger or blockchain. NFTs can be associated with easily reproducible, digital items such as images and videos – but can also be linked to physical goods. NFTs use blockchain technology to give the item public proof of ownership.

The item itself is not the NFT.  The NFT is a token on the blockchain that works like a one-of-a-kind certificate of authenticity.

What is the blockchain and why does it matter to me?

The blockchain is a public record or ledger that is copied across many computers across the globe.  This decentralization feature makes the blockchain incredibly secure because there is no single point of failure.

You may have heard of some of these blockchains –Ethereum, Solana, and even Bitcoin will soon support NFTs.

This is important for owners of any unique item because we now have a neutral, public, and tamper-proof system for confirming rightful ownership and origin.

But there’s so much more.

Let’s take a quick trip back to the early ’90s.  Think about what the internet was like at that point and try to imagine something like Amazon or modern social media.  That’s where we are with this technological revolution, also known as Web3.  The possibilities are endless, and adoption is happening fast.  There will be an incredible amount of innovation being built on this technology, but there are already some amazing uses that brands need to take advantage of now.

Ownership

The provenance of an item is no longer disputable.  Real-world objects linked to NFTs offer a way to track the lifecycle and journey of the item and verify its authenticity. Louis Vuitton is experimenting with NFTs to solve this problem, along with other brands within the LVMH conglomerate and diamond specialist De Beers.

Experiences and Rewards

Special offers can be “airdropped” into NFTs at will.  Brands can invite certain clients to events through their NFTs or offer perks.  This gives another layer of value to the NFT and the item that the NFT represents.

 

Brand Loyalty

People are living more and more in very specific online communities.  Issuing NFTs are a way to grow and nurture a brand’s community.  NFTs make fans culturally and economically invested in a brand.  Your success is aligned with their success.

What does this look like in the real world?

 A guitar brand can create an NFT that is associated with each guitar.  The guitar maker “airdrops” special offers to the NFT over time.  When that guitar is sold on the secondhand market, the buyer can see that the seller is the rightful owner and that the guitar is authentic.  When the seller transfers the NFT to the buyer, a small fee can be processed automatically and sent back to the manufacturer.

All interfacing with the NFT is done through the guitar company’s website.  NFT owners would create a login to access and trade their NFTs on the website, but the website would be interfacing with the blockchain in the background.  This gives all the security of the blockchain but makes the user experience simple.

Why should brands care now?

We are currently at one of those very rare moments in time when a big change happens all at once.  We believe that, just like the early days of the internet, there is a once-in-a-lifetime opportunity for early adopters to take advantage now.

Our mission at Sasco Digital Assets is to deliver the technical expertise and hands-on development to partner with our clients, invest in their success, and make sure that they are winners in Web3.

 

FAQ

Why are NFTs better than rewards programs?

Blockchains are built for permanence.  An NFT represents ownership that cannot be externally altered in any way.  As a consumer, I want to know that, like the product I buy from you, the NFT is owned by me.  Furthermore, we are just seeing the tip of the iceberg now.  New technologies are being developed every day that are creating new uses for NFTs.

 

What the heck does fungible mean?

Fungible items are mutually interchangeable – like dollar bills.  NFTs are non-fungible.  This means that an NFT is completely unique.

 

How can this be scalable?

For NFT projects that need to reach people on every level of tech literacy, we recommend building a portal on your website. Our developers will work with your team to create this integration.  The user experience will be the same as creating any login profile, but the backend will be interfacing with the blockchain.

What is the easiest way for a brand to try this?

Do a limited run on a specific product.  We can put together a low friction trial that gets your NFTs out there, creates buzz, and does not require much development.  The NFTs can be sold on your website or auctioned on some of the popular sites like OpenSea.

What are the risks?

Being an early adopter of any technology always comes with some risk – but it also comes with amazing rewards.  Brands that try to capitalize on the NFT buzz without delivering real value to their customers will be called out for it.  Brands that have strong communities of customers, and who put those communities first – will be extremely successful.

Are there security risks?

Definitely, but these are risks that can be mitigated with the right partner.  The blockchain is completely secure, but like we see every day, companies are vulnerable to malware and other attacks.  Security is a pillar for our client’s success, and our leadership and development team put it at the highest level of importance.

Over the course of the past year, one of the most remarkable developments within the digital asset space has been the proliferation of non-fungible tokens (NFT). An NFT is a unique digital asset, whose ownership is tracked on a digital ledger. Within any given day, NFT trading accounts for more than $50 million in trading activity, including a record-setting daily trading volume of $350 million, which occurred on August 27.

NFTs, without a doubt, have been generating a lot of buzz. But this asset class includes so much more than novelty memes, digital images, and other tradeable assets—it represents an opportunity for brands around the world to grow and increase engagement with their audience.

In a very short amount of time, the NFT marketplace has gone from being a sort-of unknown realm of possibility to something that now plays a crucial role in many of the world’s biggest brands’ day-to-day operations—comparable to what we have witnessed over the course of the past decade with cryptocurrencies and even the decade before that with social media.

Brands that don’t begin taking advantage of this growing digital asset will soon fall behind their competitors. As was discussed in a recent “NFT Now” podcast, featuring VaynerNFT President Avery Akkineni, there are many big brands that have begun harvesting excitement about NFTs but aren’t quite sure about the best way to begin exploring this ever-changing field.

Some brands are hesitant to begin utilizing NFTs because, due to the fact they have very little familiarity with them, there is a perceived degree of risk. But in reality, the bigger risk is choosing to not begin developing an NFT-based marketing strategy and losing an opportunity to become an industry pioneer.

 

The NFT Marketplace: Combining Creativity and Expertise

A quick review of Google Trends reveals that public interest in NFTs has absolutely skyrocketed over the course of the past year. As a new asset class, people—including ordinary, brand-facing consumers—have a strong interest in NFTs and, as reflected by the market, are also willing to make some serious financial commitments.

Big brands know this. Big brands want to take advantage of these new opportunities, just as they would with any other opportunity of such magnitude. Only some, however, have invested in the expertise and resources needed to be successful.

Companies such as Sasco Digital Assets (SDA), among others, have begun fulfilling this natural need for NFT and digital asset expertise, along with supporting services (such as custody solutions). These companies make it possible for brands to identify NFT marketing strategies that are both profitable and feasible, securely execute their plans, and continue generating value for their consumers over time. It is no longer necessary to invest in an in-house NFT and Digital Asset department because the support is readily available.

Of course, the potential value of NFTs isn’t just something that exists in theory—it’s something that has already helped dozens of major brands reach new heights.

 

NFT Marketing Success Stories

“If you had to pat someone on the back for pushing NFTs into the mainstream, it’s the NBA (National Basketball Association)”, claims MethodShop in a recent article. Through the NBA’s “Top Shot” website—a platform where people can purchase NFT video highlights of their favorite basketball players—the NBA was able to successfully cultivate $250 million dollars (including royalties) across more than 100,000 different buyers. Certainly not a small chunk of change.

NBA Topshots logo

Some people invest in these NFTs because they (rightfully) believe they are destined to increase in value. Others invest because they sincerely love their favorite players and want to have the exclusive right to be the owner of their favorite dunk, steal, or three-point shot.

The NBA’s success with NFTs doesn’t stop there—the league has also made a considerable amount of money with NFT trading cards. Other sporting leagues across the US (and elsewhere around the world) have taken note of the NBA’s success and have begun developing comparable strategies of their own.

The NBA is hardly the only major NFT success story. Christie’s Art Auction House—the most prestigious art auction house in the United States—has also begun treating NFTs as a form of digital art that can be bought and sold just as easily as their physical counterparts. Gucci, Coca-Cola, Asics, and other large brands have also generated significant profits and engagements through their innovative use of NFTs.

 

A New Frontier

NFTs have only been a “mainstream” digital asset for about a year, meaning there is not always a complete and perfect playbook available for brands to use. Being willing to take chances and be creative will be absolutely paramount. But with a supportive team of NFT experts, dedication to their clients, and a willingness to explore this new digital frontier, brands across the world can benefit tremendously from these remarkably dynamic digital assets.

Risky practices by China’s second largest real estate developer are leading them to default on their debt. Omar breaks down how this is affecting Bitcoin.

Bitcoin Market Update | Week 33 – August 25, 2021

Last week we identified the makings of a supply crunch that will be playing out in the next few weeks and months, barring any unforeseen market developments.

As of today, the price of Bitcoin continues to range in the 45-50K region as long-term holders and the DCA army continues to accumulate Bitcoin. This accumulation will continue until demand exceeds the supply of Bitcoins up for sale at this price range.

I was expecting to see a momentary dip below $45K, an excellent potential buy-the-dip opportunity with a limit order or two but hopes of discounted Bitcoin were dashed this morning by a $1B purchase from Coinbase early this morning.

As there’s little to no news on the market front, we’ll use this week’s update to explore what we can expect over the next several months. We’ll also reference Bitcoin’s performance at various points in historical market cycles to anticipate upcoming scenarios.

Confidence Strengthens with Infrastructure Bill
Congress passed the $1 Trillion infrastructure bill two weeks ago, and Democrats have votes needed for an additional $3.5 Trillion. In the final moments of the Senate vote, there was debate over the language used in an amendment intended to set new regulatory standards on tax reporting of exchanges. Unfortunately, the amendment included language that was frankly embarrassing to anyone with even a basic knowledge of cryptocurrencies. It mandated that wallet providers and software developers are ‘brokers’ and therefore required to report on taxable events of their end-users.

Efforts by Senators Lummis, Wyden, and Toomey to pass an amendment with more precise regulatory language failed to garner unanimous consent after outgoing Senator Richard Shelby objected. Shelby intended to add $50B to defense spending, which was sure to be met with resistance from the Democratic leadership. Toomey and Cruz rejected Shelby’s request. Ultimately, the Senate passed the bill with problematic regulatory language. Several Senators vowed to re-visit the issue when they return to session in the fall and before any 2021 tax reporting.

It’s no surprise that Congress is struggling to understand this new emerging financial system. It’s was also not surprising that not a single senator or congressional leader advocated for punitive legislation that could hurt Bitcoin and other digital assets. Instead, surprising some, Sen. Ted Cruz offered his full-throated support of the crypto industry, exalting the benefits to the American economy and, by extension, the American people.

The key takeaway from last week’s events in Congress is that Bitcoin is entering a new era of acceptance by the US political establishment. Bitcoin’s favorable treatment should serve as a sign of things to come with several issues on the table, including SEC approval of an ETF. It’s not a matter of if but when the SEC approves a Bitcoin ETF.

Congress’s dovish view of Bitcoin is a stark contrast to their treatment of Facebook’s Libra project, which was met with outright hostility when hearings were held in October 2019.

Many crypto investors remain hopeful that Congress will take a thoughtful approach to crypto-focused legislation while the most risk-averse investors will remain on the sideline seeking regulatory clarity.

Current Key Market Indicators
As we continue to progress through this mid-cycle corrective phase, there are two indicators I’m looking at that will inform how the market structure has changed in this 2021 cycle.

LTH/STH Ratio
The mid-cycle correction was put to an end by Long Term Holders (LTHers). LTHers have completed their purchase of the Bitcoins made available after the May 19 liquidation event, these Bitcoins are now off the exchanges making them unavailable to Short Term Holders (STHers) or traders. We saw this pattern play out in 2016 and 2020 before the rapid price appreciation of Bitcoin in 2017 and 2021 and we’re seeing it play out at a much more aggressive pace right now.

Exchange Supply Balances
We’re approaching ATLs (all-time lows) of Bitcoin supply on the major exchanges. As a result, we can expect the price to bid up dramatically as we enter unchartered territory. Price will bid up until short-term holders are shaken out, and long-term holders capitulate.

Bitcoin Dominance
Bitcoin Dominance measures the amount of market capitalization represented by Bitcoin compared to all other altcoins combined. When digital asset investors flee risk, they move into Bitcoin or stablecoins. Whenever Bitcoin Dominance increases, so does the price which induces FOMO which adds fuel to the run-up. This was last seen at the end of the 2017 cycle.

It’s yet to be seen if this cycle is different so we’ll be keeping a close eye on this metric.

Even though we may see altcoins outperforming Bitcoin on shorter timeframes, the trend continues to show that altcoins lose value against Bitcoin. Put another way, an investment in Bitcoin will perform better than altcoin investments for long-term investors.

Conclusion
We’re monitoring several other metrics that strengthen confidence that Bitcoin will trade hands for over $100K at some point in the next several months.

I’m continuing to DCA and take advantage of buying dips. We can expect to see several minor corrections, likely 10-30% between now and the 100K milestone.

Bitcoin Market Update | Week 32 – August 11, 2021


Audio: Listen to this article

The Bitcoin market has shown continued strength over the past week in several on-chain and technical indicators. This leads me to believe we will continue to see a bullish advance into the previously set ATH of $65K within a few weeks. Although I’m typically weary of predicting prices above those once established, the data suggests prices above $100K later in this market cycle, barring any unknown major news or changes to the global macroeconomic environment.

Here are this week’s curated data points:

  • The 200-day SMA has been breached and has been holding above pretty consistently.
  • Bitcoins are selling into demand, not weakness.
  • Those hoping for Bitcoin below $30K are now buying Bitcoin above $40K.
  • Exchange balances are at their lowest levels, not previously seen since the May 19 liquidation event, indicating we’re in the early stages of a supply crunch.
The 200-day Moving Average (MA)

Those who have followed these updates know that I’m not a massive fan of Technical Analysis (TA) for analyzing Bitcoin on timeframes longer than a few days. However, TA, used effectively, may provide some value in the stock markets but only because stock markets are inherently opaque.

I prefer analyzing on-chain data, but some TA metrics are helpful simply because we know that others, particularly technical traders, use TA and make investment decisions on the insights they reveal.

Technical traders use moving averages to identify changes in market trends.  The most popular moving averages are the 50, 100, and 200-day averages – these are three lines on a price chart showing the average price over 50, 100, and 200 days.

Earlier this week, Bitcoin surpassed the 200 Day MA at $45,200 and has continued to sustain above this level since. I should note that every mid-cycle correction in Bitcoin’s history has breached the 200 Day MA on the way down. The current mid-cycle correction found the 200 MA at nearly the halfway point between the high of $65K and $30K.  this is an interesting observation and shows how cleanly the price fell and recovered.

 Bitcoins are Selling into Demand, not Weakness

Spent Output Profit Ratio (SOPR) is a metric that tells us whether a more significant number or lesser number of Bitcoin is selling at a profit. It’s a pretty good indicator of the level of demand in the market. When this metric hits a value of 1, there’s a 1:1 ratio of buyers and sellers. When it’s above 1, there are more buyers than sellers. This metric also reveals clues of the predominant behavior of market participants if we relate it to price action.

SOPR recently printed a clear bounce off the 1:1 ratio, indicating a higher level of investor confidence in future higher prices.

An analysis of historical exchange order book data shows not only that bears that were holding out for sub-30K prices were disappointed; we see signs of capitulation and purchases above 40K.

We’ve not yet seen complete capitulation or sustained periods of FOMO that marks later stage buying behavior.  This tells us that this bull has a long way to run. Nevertheless, sustained prices at these levels and above may lend confidence to investors that maintain a wait-and-see approach.

Early Days of the 2021 Supply Crunch

The 2021 Bull Cycle’s intermission is now over.  It’s time to return to your seats for the second act. I strongly believe this act will be marked by a supply crunch and institutional FOMO that will bring prices above $100K and beyond.

Why am I so confident? It’s simple – Bitcoin is a perfectly scarce asset with an open-dataset.  Furthermore, global monetary policy is continuing to trend towards evermore fiat debasement and government spending. The data shows that we are well positioned for an incredibly bullish period, as long as the inflation hedge narrative persist and demand and volume return.

The unique behavior of a massive contingent of Bitcoin investors who will always buy and never sell at any level sets a strong base of support. These investors are comprised of retail, in capital terms, but also of institutional and corporate treasury capital.

We’re entering unprecedented times in terms of available exchange supply.  The next few weeks and months will be interesting to say the least.

Key Takeaways

The Intermission is Over.  We have front-row seats to one of the most exciting times in Bitcoin history. I’ve never seen a more perfectly structured setup for bullish price action over the next several weeks and months.

The global macroeconomic conditions are particularly fertile, with Central Bank driven monetary inflation continuing as well as other actions like the passage of a $3.5 Trillion infrastructure bill in the United States.

Significant fear, uncertainty and doubt (FUD) has been shaken off, including the China ban, ESG, energy debate, Elon Musk’s tweets and Congress’ fumble over new tax reporting requirements.

Short of a black swan event, the coast is clear for Bitcoin to print prices at and above $100K later between September and end of December 2021. We’ll have a better idea of the market action’s texture, amplitude, and behavior as we approach those price levels.

Bitcoin Market Update | Week of August 2, 2021

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In this week’s update, we’re going to dig a little deeper into understanding how some of Bitcoin’s unique attributes give us a level of predictive power that can’t be found in any other asset or commodity.

Bitcoin’s Predictive Power Explained

One of the things I love most about Bitcoin is its blockchain. The Bitcoin blockchain is an open and auditable ledger of every UTXO (unspent transaction output), transaction, block, and many more pieces of data that represent the permanent record to Bitcoins history. If you’ve ever sent some Bitcoin to someone else, that transaction is permanently stored in the blockchain for eternity.

We can analyze this data to identify patterns and trends that could help us determine how and when to invest in Bitcoin, or sell Bitcoin. Companies like Glassnode and Cryptoquant make analyzing the blockchain easy by providing a user-friendly interface with tools and relatively popular metrics.

If that weren’t enough, there are a few more unique properties of Bitcoin that empower us to understand what’s happening under the hood reasonably accurately:

  • Bitcoin is perfectly scarce, there are currently 18,773,597.75 Bitcoins as of August 1, 2021, @ 9:35 PM EST. There is nothing else that can be audited so easily, precisely, and with unforgeable consensus.
  • In addition to Bitcoin’s perfect scarcity, it also maintains an unalterable supply curve. This means that the rate of new supply will always remain the same. Until sometime in 2024, every mined block ‘releases’ 6.25 BTC to the total supply. There is no way to speed this up or slow it down regardless of the price action. With virtually every other asset and commodity, an increase in the rate of new supply is the natural economic response to a rise in price. As an example, as the price of a barrel of sweet crude oil approaches $100, oil producers are incentivized to produce more oil to meet the demand and take advantage of the recent higher prices. Price begins to decline as supply meets demand and inevitably overtakes it.

 

When illiquid supply is at an all-time high, a supply crunch is incoming

Illiquid supply is defined as the number of Bitcoins that reside in deep cold storage, these are Bitcoins held by long-term holders. They’re not sitting on an exchange to be quickly sold – these Bitcoins being owned by long-term convicted holders are not available to be sold thereby reducing the number of available coins on the market.

A look at the number of illiquid Bitcoins shows us that between April 12 and today, 200K Bitcoins were sold to conviction. The price on April 12 was $59K, compared to today’s $40K. This means long-term holders took advantage of the mid-cycle correction to buy Bitcoin, making these Bitcoins unavailable to new investors. The net effect is a hardened supply of available Bitcoin that is more inelastic to demand, which will result in a rapid increase in Bitcoin price over the coming weeks.

We’re in a particular moment in Bitcoin’s history that represents a fantastic risk-managed entry-point for investors.

As we covered in last week’s update, the 2021 mid-cycle correction failed to violate the 1.618 Fibonacci level at $30K confirming for market technicians (ie, Wall Street) a continuing bull market.

More importantly, we’ve seen an incredible recovery over a 10-day period that drove the price from 30K to 42K, a 25%+ gain.

This begs the question, how did Bitcoin perform after the previous 10-day ‘green candles’?

Let’s first look at the 10-day streak that occurred between Dec. 24, 2020, and Jan 2, 2021:

After gaining 53.82% in 10 days, the price went on to gain an additional 70% in 90 days.

Let’s also take a look at the 10-day streak that occurred between October 6, 2017, and October 15, 2017:

Key Takeaway:

Bitcoin’s simple supply/demand dynamics, coupled with an incredible level of data and transparency provides us with the predictive power of determining where the price will move on mid to longer timeframes – the longer the better.

A supply crunch is on the near horizon, we should see rapid price gains over the next few weeks and months. This moment in time is one of the best risk-managed entry points in Bitcoin’s history as we’ve come out of the mid-cycle correction posting 10 new green candles.

My base case is we’ll see rapid price increases with limited volatility between now and $65K, after surpassing $65K we’ll see an uptick in volume and volatility on the approach to $100,000 at some point in the next 2-4 months.

Bitcoin Market Update | Week of July 26, 2021

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On Sunday night, the market found its direction with a short squeeze that took the price from $35K to $40K. This short squeeze was historic, the largest in Bitcoin’s brief history, and certainly not the last. This event changed the price direction and provided traditional market technicians (i.e., Wall Street) with confirmation of a continuing bull market.

What’s a Short Squeeze?

A short squeeze occurs when a large number of short positions are liquidated, i.e., forced to buy Bitcoin. This forced buying of Bitcoin leads to a rapid increase in price. As the price increases, a cascading effect occurs as more and more short positions become liquidated. It is essentially the opposite of the long squeeze of May 19 that brought the price down from 60K to 30K.

The underlying cause of the volatility leading to these events is two of humankind’s most challenging emotions: fear and greed. The result of short and long squeezes is typically a change in sentiment and

market direction.

Update on the Golden Ratio holding and GBTC Unlocks

It bears noting of the confirmation of two predictions we made that panned out:

The Golden Ratio will hold – this is the 1.618 FIB level, it has never been violated in Bitcoin’s history – and history repeated in this most recent market action.

The high number of ‘GBTC unlocks’ will be a non-event – this was in response to social media influencers predicting bearish market action due to GBTC shares becoming available. Instead, there was a reduction in the discount of GBTC and no appreciable selling of BTC on the spot markets.

What happens next?

If previous short squeezes are any indication, we should see price trending upwards for the next few weeks. At some point, we’ll exceed the ATH of $65K, which will generate new headlines and FOMO. The difference now is much of the supply has been moved from shorter term investors to longer term investors, as we can see from on-chain analysis. With a tighter supply will come even more rapid price appreciation.

Price Predictions

$100K per Bitcoin is very much in play and highly likely to occur before December 31, 2021, if Bitcoin’s market history is any indication. The setup is undoubtedly there; we have an alignment between global economic and geopolitical events, narrative and human action as reflected by on-chain analysis.

If Bitcoin surpasses $100K, I’m expecting to see rapid price appreciation from there, with prices potentially doubling or tripling in a relatively short timeframe, similar to the late-cycle action of 2017.

Within one month in 2017, from mid-November to mid-December, the price nearly quadrupled from $5.5K to 20K after a ~40% capitulation event. We’re seeing a similar on-chain setup this time around; the only difference (aside from greater adoption and market action) is the introduction of two new Bitcoin use-cases that have the potential to make the 2021 cycle’s price action more dramatic.

In 2017, to take advantage of an increase in Bitcoin’s price, investors had to sell and incur a taxable event. Some believe this to be a driver to the end-of-year sell-offs we saw in 2013 and 2017.

Alas, here we are in 2021, and Bitcoin is much more mature and of keen interest to investors worldwide. Moreover, investors can also enjoy the benefits of Bitcoin-denominated high-yield interest accounts and collateralized lending. These products will reduce the number of Bitcoins available to be sold during market downturns and may dampen late-stage market volatility.

That said, we’re a long way away from the end of this cycle. It has certainly been a wild year with too many events to count here. So I’m continuing to keep an eye on the buying and selling trends, identifying the market participants, and monitoring the nature of their custody solution.

Analyzing and synthesizing this mix of hard and anecdotal data has been, above all, the most valuable indicator of future-looking price action on mid to longer timeframes.