The crypto markets are in the midst of a pretty decent correction.
This is scaring some investors — but I continue to believe that the market will remain in a broader bull market into 2022.
Here are some influential (and very smart) investors who currently think the same:
- Cathie Wood, CEO/Founder of Ark Invest: Cathie is one of the most successful investment fund executives (maybe the most successful?) in the last ten years. She recently told MSNBC that they are seeing a lot of green lights when they analyze the on-chain (eg, network) bitcoin data.
- Raoul Pal, CEO/founder of macro investment firm Real Vision: recently stated that he’s 100% invested in crypto right now & that the current correction is just noise.
- Willy Woo, premier bitcoin data analyst: stated in one tweet that he believes that we are past the point of prolonged bear markets. He is continuing to reiterate that a bull market structure is in place.
Thus, as a follow-up to last week’s newsletter about timing the broader market trends, we view the current correction as a fantastic time to steal some Black Friday deals in crypto.
So, if you have money to invest (“dry powder”), here are six great Black Friday deals in crypto.
FYI — I currently own all of the assets listed below. But, I don’t have much in BTC because its upside in the near-term is probably the most constrained.
#1 – Bitcoin (BTC)
Look, other crypto projects may be stealing the show lately, but bitcoin’s escape velocity is all but guaranteed at this point. What do I mean by this? Well, gov’t officials are growing more and more clear that bitcoin is simply digital property — no bones about it, no security concerns. Nothing. Furthermore, the truth about bitcoin’s energy usage (mining can easily done with energy that would otherwise be wasted/stranded) is also becoming more & more clear. With ESG concerns behind them & another term for Fed Chairman Jerome Powell (who is a professional, money-printing bureaucrat) in front of us… yeah, it’s all quite bullish. Oh yeah — El Salvador also just launched “Bitcoin City.” This city will be funded with bitcoin bonds + 10% local sales tax, mine bitcoin via energy from a neighboring volcano, and boast 0% property, capital gains, income, payroll, municipal taxes. Price is currently down about 15% from its highs in recent weeks.
#2 – Ethereum (ETH)
Raoul Pal think it’s the greatest risk/reward bet in crypto and I’m inclined to agree with him. I think that ETH could double in the next several months as institutions continue to come into the space. It’s also worth noting that ETH is now steady or even deflationary in its token supply. Plus, further updates to the network in 2022 could make it even more deflationary. Meanwhile, adoption & scaling solutions are advancing at a rapid pace. Price is currently down about 10% from its high point in last month.
#3 – Terra (LUNA)
The TLDR of this crypto asset is that buying LUNA is like buying equity in a network that is issuing the fastest growing stablecoin in crypto (Terra’s $UST token, which is pegged to the value of the US dollar). If you hold LUNA, you can get access to dividends in the network (roughly 10% APY right now) + reap the rewards of what amounts to basically an aggressive stock buyback as the network grows. For a complete explanation of LUNA, check out our profile on Terra Money here. Projects are being aggressively released, gov’t regulation is coming from Terra’s competitors, & co-founder Do Kwon believes that the market cap of UST will increase by about 30% by EOY 2021 (this would result in heavy buying pressure for the LUNA token). Do Kwon isn’t one to make claims that don’t happen. LUNA’s price is currently down about 20% from its high several weeks ago.
#4 – Solana (SOL)
The meteoric rise of Solana this past year is one of the biggest stories in crypto. Solana is basically a less decentralized competitor to Ethereum. The network uses a unique proof-of-history consensus mechanism that allows it to operate extremely fast with low network fees. Its supported by superstar founder Anatoly Yakovenko as well as FTX owner/founder Sam Bankman-Fried. There are lots of projects launching on the network & its community of active developers is one of the largest. It is currently around 15% down from recent all-time highs.
#5 – Kadena (KDA)
There are a lot of jokes on Twitter about how so-called “Ethereum killer” protocols always pop-up at this stage in a bull market. But, I actually believe KDA could legitimately be a competitor to Ethereum. Network fees on Ethereum (and other similar crypto projects like Avalanche) are skyrocketing. So, it’s clear that there needs to be a better scaling solution. KDA may have that solution due to its unique architecture; which weaves together multiple blockchains to enhance security while increasing security & transactions per second to nearly 500,000 (for reference, Ethereum only does a few thousand transactions per second right now). The project also boasts a new computer programming language, called PACT, that is far less prone to bugs than Ethereum’s Solidity programming language. Plus, the core team building this protocol is highly experienced in the space. On top of all that, Kadena is becoming unique among crypto projects in its proof-of-work security mechanism; which is less likely to be attacked by gov’t regulators because it functions less like equity (that’s a disgusting simplification….but, yeah, it’ll do). TLDR: I think Kadena could really make a splash over the next several years. Price is currently down about 25-30% from its highs a few weeks ago.
#6 – Secret Network (SCRT)
Truth be told, I love SCRT. It’s the only major crypto network that allows for trusted execution environments that enable private contracts & transactions. If needed for compliant reasons, users can always unlock & view their own transaction history… but the transactions of any given wallet in the network are private by default. This opens the door for many real-world uses currently impossible on public chains like Ethereum (who wants their bank account + transactions to be pseudonymously public?). It also solves a serious front-running issue on other blockchains; where retail investors can be front-run by big players since the transactions are public. Recently, SCRT network enabled an inter-blockchain protocol (IBC) that allows the network to seamlessly interact with other Cosmos-based blockchains (like Terra). Price is currently down about 30% from its highs.
Where can you buy?
The only exchange where you can deposit money from your bank account and buy *all* of the assets listed above is through KuCoin. Use my referral link to signup and you’ll get a little bonus when you create an account.
How much should you buy?
If I was the average person reading this article, I’d probably allocate my funds along these lines:
BTC – 20%
ETH – 25%
LUNA – 30%
SOL – 5% (would be higher but recent price-run combined with large market cap make me more cautious)
SCRT – 10%
KDA – 10%
Do your own research, make your own decisions. Remember, investing in crypto is higher risk than equities. The further you go down that list, the more risk I think you are taking. I do NOT know the future, nor can I guarantee what will happen. But, higher risk also allows for the possibility of higher rewards.
What’s the bear case?
In my view, the best bear case against buying any crypto right now is put forth here by 42Macro founder & investor Darius Dale. He’s a very astute macro investor that, in short, thinks that we could be headed for an economic environment where inflation slows (on a relative basis) and the economy also slows. This could mean that people move away from riskier assets (like crypto). Will this happen? No one knows for sure… but Darius frequently advocates for investing along probability percentages. In such an instance, zero percent exposure to crypto doesn’t make a whole lot of sense.
Have fun shopping and, since things move fast in crypto, I’ll let you be the judge if you want to wait until Friday to buy anything 🙂