19 minute read
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Crypto Weekly
As the Fed normalizes interest rate policy, Bitcoin could drop to $10,000 by 2023. Three macro factors influence
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Bitcoin's price, according to the firm. "We see Bitcoin trading within a broad trading range, bounded by year-to-date intraday levels, with a greater downside risk," Stifel said.
Due to three macro headwinds affecting Bitcoin, its price may plummet 76% from current levels to $10,000 by 2023. Prices of Bitcoin are affected by the global money supply, the 10-Year U.S. Treasury yield, and the equity risk premium of the S&P 500. A tightening of the Federal Reserve, including an increase in interest rates and a reduction in the balance sheet, could have a negative impact on Bitcoin.
“In 2022, we expect Bitcoin to trade in a broad trading range bounded by yearto-date intraday trading levels with greater downside risk in 2023 if the Fed continues to normalize its policy in a standard two-year tightening cycle,” Bannister said. Here are the three macro factors Bannister is monitoring to gauge what may be in store for the price of Bitcoin going forward.
1. The role of Bitcoin in global money supply.
"Both the S&P 500 and Bitcoin move with global money translated into dollars, Bitcoin just moves more... If the dollar strengthens then global M2 money growth slows, which could tighten U.S. financial conditions. If U.S. financial conditions tighten, a highpowered speculative asset like Bitcoin would likely fall significantly," Bannister said.
2. "Bitcoin as a function of the real 10-year yield, gold price and oil price."
"If 10-year real (after-inflation) TIPS U.S. Treasury yield... rises due to Fed tightening... it restrains Bitcoin upside, and if the rising 10Y TIPS yield pulls gold lower, that also pressures Bitcoin. If Bitcoin divided by gold falls to the low end of its range (Fed tightens) Bitcoin could drop to $10,000 by 2023," Bannister said.
3. "Bitcoin as a function of how far the Fed can go before cracking stocks."
"We believe the 10Y real yield rises no more than 80 basis points in 2022, the first year of a 2-year Fed tightening cycle, but then the S&P 500 (and Bitcoin) break down in 2023 as the Fed keeps going; this is part of 'equity risk premium.' Bitcoin likes a lower equity risk premium, so watch if Fed exit raises equity risk premium (bearish Bitcoin) or lowers equity risk premium (bullish)," Bannister said.
A drop to the $10,000 target would represent a total drawdown of 86%. The value of Bitcoin is already 39% below its record high in November, and a drop to the $10,000 target would represent a total drawdown of 86%. A
decline like this is not unusual for Bitcoin, since the extremely volatile and speculative asset fell 83% from its prior high of about $20,000 in 2018.
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Crypto Weekly
Don't be fooled by these cryptocurrency scams!
Cryptocurrencies are becoming increasingly popular, with many people all over the world being introduced to this fascinating new technology and financial system daily. According to Crypto.com, more than 300 million individuals now use cryptocurrencies, and this number is exponentially increasing by the minute. A large portion of those interested in cryptocurrency have little knowledge, making them easy prey for scammers. While it is nearly impossible to prevent all cryptocurrency fraud due to the anonymous nature of crypto, you can still recognize potential fraud by their general traits. Please familiarize yourself with the following scams and how to avoid them.
Cloned Project Scams
This scam involves cloning a generic cryptocurrency, setting up a quick website, creating a temporary community, and promoting the project to gain attention. Typically, the scammers make their intentions clear within a few hours of launching their scam coin as they cash out all of the liquidity or have a back door plan to take investors' money for a quick profit, leaving hundreds or thousands of investors with worthless coins. There is no doubt that it is the most elaborate scam, combining all the skills of a con artist into the perfect scam. Scams targeting rug pulls, and ICOs can be pretty difficult to detect; therefore, researching a project before investing is very important. They rarely update their Telegram, create minimal effort on the website, and make false promises.
AI Scams
“We offer a robust artificial intelligence program built to outperform Warren Buffett's investment strategy. Send us an amount in BTC and system will return you ten times investment in just a couple of hours." Poor grammar, syntax, and an instant request for your crypto are all red flags. Scammers ask you to invest money for higher returns without taking any financial risks. Risk is inherent in every investment; anyone claiming otherwise is a fraud. Next, the scammer will provide you with their crypto address and ask that you send a screenshot of the transaction. As soon as they receive the screenshot, they block the 'investor' and move on to scam another victim.
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Keep these points in mind:
You can be confident that your funds are secure if you use a reputable wallet and encrypt your passwords. Never send cryptocurrency to third parties with which you are not familiar.
Fraudsters use various methods to tell people about their "automated" or "management by expert" programs. It is common for scammers to contact crypto users via WhatsApp, Telegram, and any other possible channel. As people catch on to their scams, scammers now put more effort into making their websites appear more trustworthy. Scams like this remain essentially the same in that the investor sends cryptocurrency to the scammers' address expecting tenfold returns within 48 hours. Always keep this in mind; if it seems too good to be true, it probably is.
Contest Scams
Congratulations! You won 0.5 BTC in our lucky lotto. Please send 0.012 BTC to verify your address to know where to send your prize. Scammers usually have their social media accounts set up with fake comments to convince their target that they are legitimate and have won a prize. As a result, social media sites are thrown together quickly, looking quite pathetic. Images, comments, and likes are easy to fabricate.
Being new to this space, people may be excited to hear that they have won (a give-away they never signed up for) and send the requested amount of cryptocurrency to the scammer's address in hopes of verifying the address. The scam is now complete while the unknowing victim endlessly waits for their address to be verified and winnings deposited.
Impersonation Scams
Someone reaches out to you claiming to be a team member and asks you to send them some coins. The problem? They are a scammer. They state things like "the developers have selected a few members from the Telegram group chat for an airdrop," and you will need to verify the token address by sending tokens to a provided address. Scam! Additionally, you may be asked to fill out an application because "the system is undergoing an update and they need data about all holders" or for some other made-up reason. The form asks for personal information, such as your email address, password, and private keys. As part of your contribution, you may be requested to forward the form to other investors. When such information is divulged, your security and investment are at risk. This scenario can happen in many ways. Scammers are creative, so it is essential not to be deceived.
Do not share your two-factor authentication (2FA) security codes or passwords with anyone. Fraudsters will pretend to be customer support at a cryptocurrency and try to obtain this information from you. Scammers share text messages and websites that often contain grammar and spelling errors, requesting money early in the conversation.
These requests are an easy way to identify a scam. The cryptocurrency world is new and exciting, but it can be hard to stay on top of all the scams. The anonymous nature promotes a sense of safety in this space, allowing scammers to brainstorm elaborate ways for innocent people to get targeted by their evil intent. There's just no way around eliminating these issues! As readers here of Crypto Weekly: educating yourself about what exactly happens when someone falls victim can go a long way toward helping you avoid being taken advantage of; don't let them trick you into sending your coins or keys.
Crypto Weekly
Mark Zuckerberg Told Meta Employees Focus on Video Because of TikTok's 'Unprecedented Competition,' Report Says
Companies are Piling into China's Efforts to Build a Metaverse as Growth Projections in the Space Reach Trillions of Dollars
Meta's recent quarter included $10 billion in losses in the Metaverse and its first user decline. Its CEO reportedly told staff
Thursday the company faced "unprecedented" competition from
TikTok. He said Meta should focus on its short-form video feature Instagram
Reels to get out of its rut.
During the company's brutal fourthquarter earnings call on Wednesday, CEO Mark Zuckerberg reportedly told employees to focus on the company's endgame: video. A company-wide meeting was held Thursday, according to Bloomberg. According to an attendee not authorized to speak about the call, the company faced "unprecedented levels of competition" from TikTok.
ON WEDNESDAY, Facebook CEO Mark Zuckerberg announced that Meta would focus on Instagram Reels, a feature similar to TikTok. Bloomberg reported that Zuckerberg appeared red-eyed and told staff he might tear up during the meeting, not because of the topics discussed but because he'd scratched his eye.
Facebook's user base shrank for the first time in its history in the fourth quarter. Daily active users dropped by approximately 1 million from the previous quarter. In 2021, the company also lost a $10 billion investment in the Metaverse, according to its earnings call on Wednesday. Meta's market value fell by nearly $240 billion on Thursday, the most significant one-day decline in U.S. stock history. Zuckerberg's net worth fell by roughly $30 billion.
Meta did not immediately respond to a request for comment.
Reports said Wednesday that a state-backed group in China has added more companies to its committee focused on developing the Metaverse. State-owned China Mobile started the committee that's working on creating standards and discussing technology projects for the emerging industry. The committee's membership of companies and individuals has increased to 112. China is extending its push to put its stamp on the development of the online virtual world known as the Metaverse, enlisting more companies to work on related technological and industry projects, according to reports Wednesday. According to Reuters, the China Mobile Communication Association's Metaverse Industry Committee has added 17 new companies to its roster, and three of them are publicly listed in local markets, citing a notice on the committee's website. The move boosts the committee's membership of companies and individuals to 112.
State-owned China Mobile started the committee last year and is focused on creating standards and discussing technology projects for the emerging industry. In China, the committee is among initiatives that involve government-backed groups and local officials seeking stakes in Metaverse companies, according to the Financial Times. According to the report, a district in Beijing last month established a fund to support Metaverse start-ups and research. Among the major tech companies investing in Metaverse activities are China's Huawei Technologies and Facebook's parent company Meta Platforms. Analysts predict the Metaverse will be a huge growth opportunity, with Goldman Sachs projecting it to become an $8 trillion market.
Crypto Weekly
Music NFTs Could Impact the Music Industry
No exploitation, no royalties, no copyright issues. In terms of creating and distributing their music, musicians around the world face a number of challenges. It is possible for the music industry to be changed for the better with the emergence of music non-fungible tokens (NFTs).
Discover what Music NFTs are, how they work, and how they can empower musicians globally.
How do music NFTs work?
The year 2021 was arguably the year of non-fungible tokens, with multiple uses popping up beyond crypto art and collectibles. One of these uses is music NFTs. NFTs are unique cryptographic tokens recorded on a blockchain that represent digital or physical assets. NFTs cannot be changed or duplicated once they have been created. In addition, NFTs can be coded to pay royalties to the creator, making them an exciting technology for musicians.
A music NFT is a piece of music recorded on a blockchain in the form of a unique non-fungible token that belongs solely to the owner. In contrast to MP3s you download onto your smartphone, music NFTs can be sold on the secondary market and allow musicians to earn royalties.
How do music NFTs work?
When it comes to the music industry, NFTs can take various forms. A song can be represented by an audio or video file, an album cover, a concert ticket, or signed merchandise.
Music NFTs can also be produced or sold using the same principles. Bands and musicians decide what they want to sell to their fans, whether it's an audio file, tickets, or merchandise. Afterwards, they will choose which blockchain to use for minting their NFT, or which platform to use for their music NFT. The music NFT family of platforms
Crypto Weekly
currently includes NFT TONE, Opulous, and OpenSea.
In addition to notifying fans of their NFT drop, they will put them up for sale at whatever price they see fit as soon as they identify the platform they will use. As music NFTs (and all other NFTs) cannot be replicated, they may opt to have a one-time auction for an audio file, where the highest bidder owns the original audio file (but not the copyright). You could also create a limited number of NFTs of the same audio file, say 10,000, and then sell them on an online music NFT marketplace.
When fans purchase the NFT, they own the work of their favorite musicians. Afterward, they can store the music NFTs in their crypto wallets, and if they wish, they can sell them to a higher bidder in the future. While owning and being able to sell the unique NFT, the musician who created it can also earn revenue from resales of the work, which is one of the most powerful ways music NFTs can empower musicians.
The NFT model has already benefited a number of bands and musicians. Over $11.6 million was sold for DJ 3LAU's NFT drop, the Ultraviolet Collection. 33 tokens were included in this drop. The Canadian musician Grimes also sold digital artworks in a collection called WarNymph, which made around $6 million in early 2021.
Musicians can be empowered by NFTs. In addition to providing immediate income, NFTs can empower musicians in other ways.
Royalties earned
From the subsequent sales of their NFTs, musicians who create them will earn income. Musicians will be able to earn more from the sale of their work and from centralized streaming services as a result.
Cutting out middlemen
The main challenge musicians face is that they are often bound by contracts with record labels. Alternatively, most independent musicians make their money through streaming platforms. Through music NFTs, artists can sell directly to their fans and earn from the sale of their music or merchandise.
Creating an active fan base
By creating a space where fans can find unique NFTs related to the artist's works, music NFTs allow musicians to build their fan bases. NFT airdrops, for instance, allow musicians to reach audiences they may not otherwise have been able to reach.
Furthermore, musicians can offer unique fan experiences such as virtual, or in-person, hangouts with their fans. Snoop Dogg accomplished this in his SandBox hangout session and Post Malone sold NFTs so people could play beer pong with him.
Providing opportunities to new artists
In the music NFT scene, there are no barriers to entry because no one holds new musicians back from releasing their music or expects them to fit into a certain 'box' in order to score a record deal. A musician simply needs to mint their music on their platform of choice and market it to their fanbase with music NFTs.
Currently, only a few musicians are exploring the feasibility of music NFTs. Music NFTs provide a significant opportunity for artists to profit from sales due to increasing awareness and adoption by fans.
Crypto Weekly
‘Stupid’ Amounts of Money are Being Invested in Crypto - How Much to Invest if You Want to Test it Out.
Iam a longtime marketer and successful internet entrepreneur. In addition to diversifying your portfolio, avoiding MEME coins, and investing smaller amounts over time, I recommend. You should limit your exposure to cryptocurrency to 5% of your net worth or less.
Cryptocurrencies are all around us. While it has reached the mainstream, it still has a way to go. Crypto is held by less than 0.98% of the world's population. In contrast, there are about 7.9 billion people on the planet and 78 million crypto wallets. Investing in this company may be a once-in-a-lifetime opportunity.
A lot has changed since I first invested in Bitcoin in 2011.
The number of coins and altcoins available for investment has also exploded. There are now more altcoins than Bitcoin will ever have (only 21 million BTC will ever be in circulation).
Almost any coin or token can be invested in. Fancy owning a piece of virtual land in Decentraland? Take a look at MANA. How about investing in Defi (decentralized finance)? Look into SOL or ETH. Web3 is accelerating at warp speed, and there are an infinite number of cryptography applications. In history, there has never been a time when you could get so rich in the middle of the night by simply clicking on your phone.
However, you are probably aware that crypto markets are extremely volatile.
Minutes can make or break a fortune. Scams abound. Recently, SQUID, a token marketed as an invitation to a game based on the Netflix show Squid Games,
Crypto Weekly
was actually a "rug pull," when a token's creator cashes out and disappears. Investors lost over $2 million in this case. What is the best way to invest in crypto?
Despite my enthusiasm for blockchain technology, I think it's too early to invest heavily in cryptocurrencies unless you are a rarity and know what you are doing.
Crypto investing accounts for too much of the net worth of many investors. Every week, I get emails from people who have taken out loans, second mortgages, or leveraged their crypto holdings to buy more crypto. I think this is dumb and dangerous. The risks involved in this investment are too high.
Some will become wealthy, but would you bet your financial future on a coin flip? I believe in taking risks, but they must be calculated risks.
You shouldn't invest more than 5% of your net worth in crypto - and even less if you're just getting started. Invest most of your money in more historically predictable asset classes like stocks, bonds, and real estate.
You can invest more of your net worth as you learn more about crypto, but you must feel comfortable with the risk. Do your crypto holdings keep you awake at night? Could you lose everything in your crypto portfolio? I have, but for most, if so, then you have probably invested too much.
Diversify between traditional and alternative cryptocurrencies.
Humans are incapable of predicting the future. Most coins and tokens will have little or no value within the next few years. In the same way that 90% of investors cannot beat the stock market, it will be difficult to predict the longterm winners of crypto. Diversification is crucial. It is best to have a diversified portfolio of traditional coins and altcoins, not just a few cryptocurrencies.
MEME coins are a dumb investment.
Investing does not involve gambling. Investing in meme coins is gambling at this point, and I do not recommend you do so.
Believe in the founders and projects you invest in.
It's important not to lose sight of the fact that underlying crypto is a decentralized blockchain's exceptionally simple, and beautiful, concept. Over the next few years, this concept will disrupt many industries on the planet.
Don't invest in anything you don't understand, just like any other investment. No matter whether you have a background in technology or computer science to understand some projects, learn about their mission and founders before investing.
Listen to their podcasts, join their Telegram group, read their work, and visit their Reddit page. Not just coins that you have a hunch will double overnight, but in projects and founders that you believe in.
Your investments should be costaveraged.
Dollar-cost averaging your investments over time is similar to traditional stock investing. Rather than investing all of your money at once, you invest smaller amounts over time (weekly, monthly, etc.).
You are able to buy the asset both at a low and high price over time, effectively averaging your cost and protecting you from a big price drop right after you buy.
If you have a bucket of money or want to invest some of your paychecks, consider dollar-cost averaging your investments. Most crypto trading apps have this feature to make it easier to automate.
Remember, investing isn't gambling.
Investing and living at this time is great, but I urge you to be careful and never invest more than you can afford to lose. A new opportunity arises every day, and if you miss one, another is always around the corner. Investing in crypto now puts you in the top 1/10 of 1%, and that's one of the best things about it. It's going to take a long time for everyone to catch up. Be patient.
Robert Stone | Editor
