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November 24, 2021
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EllioTrades Daily Roundups

November 24, 2021

The Markets Are at a Pivotal Point – Waiting For the Next Big Catalyst

Oliver Grah
Nov 24, 2021
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November 24, 2021
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Introduction

Since the “mini bear market” of this summer, the cryptocurrency markets have certainly become more interesting than before. While Bitcoin used to dictate each and every move of the markets, now, we see subsectors within the crypto space do their own thing: Meme tokens, L1s, and especially gaming and metaverse projects are the best examples of increasingly uncorrelated behavior and decoupling from Bitcoin.

Does that mean that projects fitting these narratives will go up only? Of course not, but instead of just following Bitcoin’s lead, these subsectors have their own market cycles whose understanding is critical to every crypto investor’s success!

Is the Metaverse Narrative Overheating?

  • Metaverse and gaming projects have really been on a tear in the last few weeks! 🔥 Many projects in this niche have experienced double-digit gains on almost a daily basis and today, 6 out of the top 10 performers are from the gaming and metaverse category… This is certainly a strong validation of the metaverse trend and shows how big this space will become in the future.

  • Is now an opportune time to jump into metaverse projects? While there is certainly tremendous potential for long-term growth, In the short- to mid-term we have to ask ourselves: How near are all of these projects to fulfilling their visions? The reality is that many projects are still months and years away from reaching their goals and building fully functional metaverse and gaming experiences. There are some notable exceptions though like the Sandbox which is very close to revealing a fully functional gaming metaverse…

  • Overall, with metaverse FOMO being rampant right now, it might be wise to take a step back, evaluate projects on an individual basis and take some profits if you feel like valuations and fundamentals have diverged somewhat – at least in the short term. Just betting on projects with the term “metaverse” on their roadmap might soon not be a viable investing thesis anymore – a reality check will come sooner or later.

  • Play-to-earn projects like Axie Infinity in particular follow their own adoption and economic cycles. Here is an interesting visualization:

Twitter avatar for @M6intern
M6 Intern @M6intern
Play 2 earn boom and bust cycle
Image
1:21 AM ∙ Nov 24, 2021
11Likes1Retweet

NFT Bridging – an Increasingly Important Subject

  • The NFT market has shown us in the last few months that despite cheaper alternatives and the fact that a big part of the NFT community is being priced out, “blue-chip” NFTs still mostly live on Ethereum’s L1. While more and more gaming projects and emerging NFT projects are choosing to deploy on cheaper chains like Solana, BSC, and Polygon, or L2s like Immutable X, so far, liquidity fragmentation has been an issue that made it hard to accurately value NFTs that are not on Ethereum.

  • Hence, there is no doubt that just like bridges are playing a huge role in the “fungible” token space, bridging will also be of vital importance in the NFT space which is increasingly becoming multi-chain! Thanks to bridges, NFT projects can both leverage Ethereum as a core settlement layer and alternative L1s and L2s for daily transactions and gaming activity. All chains will need an NFT bridge but at this point, it is hard to pinpoint the winners of this category. It's time to be on the lookout.

Twitter avatar for @ImmutableApesX
Immutable Apes X @ImmutableApesX
Watershed moment for the @Immutable community. Our team created a free tool that lets you bridge your IMX NFTs from L2 to L1 and back again with ease. imxtools.io Once mint is complete @ImmutableApesX will be the first IMX collection also traded on @opensea
imxtools.ioIMX ToolsUtility site in collaboration with Immutable Apes X developers for the ImmutableX community
12:07 AM ∙ Nov 23, 2021
1,300Likes506Retweets

Inflation Is Everywhere – Act Accordingly

  • Inflation has been the central topic of conversation in financial markets this year. While assets across the board have been benefitting tremendously from the massively increased money supply, everyday people are getting the short end of the stick, having to witness how inflation is eating away at their savings and spending power in real-time.

Source: Financial Times
Twitter avatar for @SantiagoAuFund
Santiago Capital @SantiagoAuFund
Virtually every revolution in history has happened during high rates of inflation. But don't worry, the governments and central bankers will now be able to peacefully run a multi year financial repression scheme and the people will love them for it...
Obama Sunglasses GIF
9:06 PM ∙ Nov 23, 2021
560Likes66Retweets
  • Even central bank employees are rebelling over inflation eating away at their salaries… 😂

Twitter avatar for @LynAldenContact
Lyn Alden @LynAldenContact
The ECB apparently proposes a raise of 1.3% for its staff while official Euro Area inflation is over 4% and projected to head notably higher. The ECB's staff union is understandably not happy about this, as per Bloomberg reporting:
Twitter avatar for @markets
Bloomberg Markets @markets
A union representing workers at the ECB accuses the institution of not protecting its own staff from inflation https://t.co/FtsjLRqD9R
2:15 PM ∙ Nov 24, 2021
132Likes20Retweets
  • And for those who get the macro/crypto-linked joke, here is another example of the crazy inflation situation the world is facing today 😄

Twitter avatar for @DeItaone
*Walter Bloomberg @DeItaone
TWO REPUBLICAN FEDERAL TRADE COMMISSIONERS ASK WHITE HOUSE FOR ANY “MOUNTING EVIDENCE” OF POTENTIALLY ILLEGAL CONDUCT BEHIND HIGH GAS PRICES -- LETTER
4:16 PM ∙ Nov 23, 2021
383Likes38Retweets
  • We all know that the best way to protect ourselves against raging inflation has been to buy hard assets, particularly cryptocurrencies.

Twitter avatar for @theRealKiyosaki
therealkiyosaki @theRealKiyosaki
Dollar Tree becomes $1.25 Tree. Inflation is a tax on the poor and middle class. Inflation makes the rich richer. Get smart. Get richer. I am buying more gold, silver, Bitcoin, ethereum, rental real estate, and oil. What are you buying?
1:53 AM ∙ Nov 24, 2021
14,606Likes2,369Retweets
  • We have proof that even banks are holding crypto as an inflation hedge.

Twitter avatar for @Blockworks_
Blockworks @Blockworks_
BREAKING: Morgan Stanley's funds bought +2 million shares of Grayscale #Bitcoin Trust in Q3 Credit: @MacroScope17
Image
1:02 PM ∙ Nov 24, 2021
24Likes8Retweets
  • And we already knew that institutional investors are scrambling to get into the crypto space…

Twitter avatar for @CoinDesk
CoinDesk @CoinDesk
Crypto investment firm @PanteraCapital has raised $600 million for its fourth fund, according to @theinformation. Around 75% of the capital came from institutional investors, including endowments. @BrandyBetz reports
trib.alPantera Capital Raises $600M for New Crypto Fund: ReportInstitutional investors contributed about 75% of the capital, according to The Information.
6:53 PM ∙ Nov 23, 2021
565Likes109Retweets
  • Should you go all-in to assets as Robert Kiyosaki suggests? With asset markets reaching bubbly territory and central banks around the world scrambling to get inflation under control (except for the Fed for now), it’s certainly wise to also hedge against a looming Fed intervention, by holding enough cash (or stablecoins) – especially since the consensus is not to do so!

  • Even if you're not speculating on a total market crash, it's wise to have enough cash on the side for a rainy day (or to buy cheap assets). Because the reality is: Nothing in the markets really looks cheap right now… not crypto, not real estate, and certainly not stocks.

Twitter avatar for @CryptoMichNL
Michaël van de Poppe @CryptoMichNL
Atleast the Dollar is bullish!
2:10 PM ∙ Nov 24, 2021
196Likes4Retweets
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12 Comments
MJoe
Nov 24, 2021Liked by Oliver Grah

Thanks again Oliver. Good info. I'm in the Immutable Apes community and they are a great bunch. Can't not see them growing with their creativity.

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lmposter
Nov 24, 2021Liked by Oliver Grah

Concise, succinct, and transformative info...as usual. Thank you for your efforts.

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