Tuesday, Mar 22nd 2022

Considering risk in today’s crypto environment

Commentary

What’s happening in crypto lately? And what does it mean for Titan Crypto?

Hey Titans, Gritt here.

It’s been an interesting few weeks for the crypto markets, and we’re continuing to see mixed signals across the board. In Titan Crypto, we’re maintaining our defensive stance, with the majority of the portfolio allocated to BTC and cash.

We will continue to monitor the activity of whales, institutional inflows, and trading activity on exchanges and NFT platforms to dictate when we should be adding risk—in other words, deploying our cash reserve into higher growth altcoins and reducing our BTC position.

We have a long list of altcoins we’re excited to invest in soon, and I am excited to share more when we’ve made trades.

What’s the latest on your Titan Crypto holdings?

Bitcoin ($BTC)

  • Historically, BTC has performed well two weeks after a rate hike, but our on-chain analysis continues to show that recent buyers are smaller in size. This implies that smart money believes there’s more room to the downside in the near-term.

  • Meanwhile, BTC has gained attention in the media as a potential safe haven from sanctions, which further solidifies our thesis that decentralization is key to a store of value.

TLDR: There are bullish and bearish indicators for BTC right now, so we’ll sit tight…for now.

Ethereum ($ETH)

  • On March 15th, ETH completed the Proof-of-Stake merge (“The Merge”) on Kiln testnet.
  • The Merge is expected to go live in June 2022.
  • The move to Proof-of-Stake will usher a 90% reduction in daily ETH emissions to 12,000 Ether from 1,280 Ether, and annual inflation will be slashed to 0.43% from 4.3%.
  • The Merge will also slash energy consumption by more than 99%.

TLDR: The ETH network should get cheaper, faster, and cleaner once this merge fully goes live. Assuming the Merge accomplishes its goal of limiting supply and increasing activity on the Ethereum network, this further solidifies our bullish take on ETH's long-term value.

Avalanche ($AVAX)

  • The Avalanche Summit is happening this week, so we expect some exciting announcements.
  • They recently introduced ‘Avalanche Multiverse’, a $290M incentive program focused on accelerating the adoption and growth of subnets.
  • Avalanche Multiverse is focused on supporting new ecosystems, including blockchain-enabled gaming, DeFi, NFTs and institutional use cases.

TLDR: The Avalanche team continues to invest in real-world use cases that are gaining traction.

Terra ($LUNA)

  • Terra has continued to grow their Total Value Locked (TVL), taking share from the Ethereum ($ETH), Solana ($SOL) and Polygon ($MATIC) ecosystems.
  • TVL is a metric that is used to measure the overall health of the DeFi and yielding market.
  • Terra announced that they will raise $10 billion in BTC and other non-correlated assets to its stablecoin (UST) reserve in an effort to bolster its resilience. They have raised $2.2 billion so far, and have already recently acquired $125M in BTC.
  • Terra’s money making machine, Anchor Protocol, just went interchain by officially launching on Avalanche this past week.

TLDR: Terra is gaining adoption from institutional investors due to the reliability of its stablecoin. LUNA is up 300%+ over the last year, but as the adoption of stablecoins continues to grow, we believe there is even more room for LUNA’s upside.

Solana ($SOL)

  • Wormhole bridge, an application that helps users move ETH to the Solana network, lost $320M in a hack, and Jump Crypto donated the funds to cover losses for users.
  • This wasn’t an act of charity, but an act of necessity given Jump Crypto acquired a Wormhole developer last year and is one of the largest Solana market makers, arbitrageurs, and institutional investors, with billions of dollars worth of capital deployed across Solana’s ecosystem.
  • Magic Eden, a Solana NFT marketplace, raised a sizable Series A.

TLDR: Solana showed its vulnerability to hackers once again and its dependence on outside investors to the ecosystem as a whole.

Chainlink ($LINK)

  • Chainlink plans to launch staking capabilities later this year.
  • This will enable LINK holders to earn rewards, and to secure the network by locking some of their LINK into the protocol.

In the near future, one will be able to earn passive income by staking their LINK. The act of staking, or earning yield by locking up your holdings to secure the network, has surged in importance for crypto projects, and this could be a nice tailwind for LINK through the end of 2022.

Polygon ($MATIC):

  • Polygon committed $1 billion towards a range of Ethereum scaling solutions, primarily Zero Knowledge-based L2 infrastructure. Their L2 rollup products including Hermez, Miden, Zero, Mir and Nightfall are in development and/or hitting testnet.
  • The company is also launching products for developers, including a data availability platform (Polygon Avail) and an SDK toolkit to build independent blockchains (Polygon Edge).

TLDR: Polygon's wide product stack and action packed roadmap has truly evolved Polygon from being just a standalone sidechain into a much more significant role within the Ethereum ecosystem.

Not too much to report on Sushiswap or Polygon, but let us know if you have any questions on those holdings and we’ll follow up.

Gritt Trakulhoon, Titan Crypto Analyst

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