Crypto Weekly Wrap: Sept 6 - 12

A nation-state buys the dip

What can we say, other than what an eventful week it has been? At the start of the week, BTC was hovering around 53k - its highest in months - and ETH was hovering around $4k, also its highest in months. El Salvador was about to make history by becoming the first nation-state to adopt BTC as legal tender. And then in a flash, the market crashes. BTC plunged some 18% in a matter of minutes, while most altcoins followed (one exception was Solana). Ironically, this happened on what should have been one of the most bullish days in crypto history - the day El Salvador made BTC their official currency (7 September). Many analysts have attributed the “flash crash” - which is common in crypto - to either a healthy (and normal) correction or over-leveraged bullish positions. Soon after the crash, El Salvador’s President said his government snatched up 150 BTC during the depths of the selloff. That’s right, a nation-state bought the dip.

For those who have been in crypto since 2017 or earlier will forever remember (and likely be scarred from) the dark crypto winter that began in early 2018 and lasted well into 2020. Many altcoins lost over 90% of their value from all time highs in 2017 or early 2018. Thus, whenever the market crashes or goes into a long correction, many tend to question (and fear) whether another crypto winter is upon us. However, this concern fails to take into account one major point: the crypto market is vastly different today than it was during the last bull run. The market has matured, institutional and retail adoption has been immense, major companies have been putting cash reserves into BTC, and DeFi is revolutionizing the financial sector. To put it simply: in the last crypto cycle a nation-state never bought the dip. The next “crypto winter” will likely be a mild seasonal downtrend.

Below is a selection of crypto stories that made headlines over the past week, followed by the coins that we have been eyeing or buying over the week. But first, our disclaimer needs to be noted: the information provided here, as well as on our website (coinpad.io), does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the content as such. Investing in cryptocurrency is risky; do your own research and invest at your own risk!

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Let’s start with some analysis on Tuesday’s flash crash:

And more on El Salvador adopting Bitcoin as legal tender, starting with this one on the likely impact it will have on financial dinosaur Western Union (this company is quickly going the way of Blockbuster Video): El Salvador’s new bitcoin wallets could cost Western Union and similar companies $400 million a year

Sorry, we couldn’t help that.

In last week’s wrap we talked about the unsustainability of Ethereum’s high gas fees and how it will inevitably result in a declining marketshare of the world’s second biggest crypto. Here’s a good feature on the topic: and how it is benefiting a number of altcoins: Altcoin Roundup: High Ethereum fees kick-start a liquidity migration to layer-1 platforms

Finally, here are some coin-specific article’s starting with Algorand (ALGO), which nearly doubled this week.

Cardano (ADA) will launch a major upgrade to its network at around 21:45 UTC September 12 to usher in smart contracts (we will discuss its outcome in our next weekly wrap). Smart contracts can be used for decentralized finance (DeFi), non-fungible tokens (NFTs), and other types of decentralized applications (dapps) and will surely spur an explosion of activity on the network

Coinpad’s plays

Flash crashes are a good time to remind us of one strategy that is often overlooked or forgotten in crypto investing: always keep a good stash of stablecoin in your wallet so you have the funds readily accessible to quickly buy when the market drops.

In fact, stablecoins can be a valuable part of one’s portfolio as there are numerous trusted platforms where you can deposit stablecoins such as USDC or USDT and earn interest at rates that are unfathomable in the traditional finance sector. Two examples of platforms that we use are Blockfi and Celsius. Both platforms offer interest rates of over 8% APY on stablecoins, while Celsius offers 6.3% APY on Bitoin deposits. Celsius also has a generous referral program where both you and your referral will receive $50 in BTC once the referral signs up and makes a first deposit of over $400 (and keeps it deposited for at least 30 days). So if anyone wants to sign up to Celsius, earn generous interest and get $50 worth of free BTC, please use our referral code: 18785571e8

This week we decided to get our feet wet in a booming new sector combining crypto, DeFi and gaming, GameFi. In short, we believe that blockchain gaming is about to explode and this sector is an excellent diversification play as we expect the best gaming tokens will be less tied to the overall market (gamers will be buying these tokens for utility purposes whether BTC is booming or crashing). That is at the core of our investment thesis. As this article reports, Crypto games are now disrupting the traditional gaming market by allowing players to earn while playing, thereby rewarding their time and effort. Gaming, blockchain and crypto - all driven by tech - seem a natural fit. And this is a huge industry - and an industry that should not have any reservations about moving into blockchain and cryptocurrency (unlike banks and the traditional finance sector that view this as a threat).

We are closely researching the sector and are putting together a basket of tokens that we will put into our portfolio this coming week. Here are some of the ones we are looking at, while in next week’s wrap we will provide more details on our GameFi basket.

  • The Sandbox (SAND): A blockchain-based videogame where players can build and trade NFT-based digital assets such as virtual land.

  • GameFi (GAFI): An all-encompassing hub for game finance servicing blockchain gamers, investors, and traders that includes a launchpad exclusively for games. (This project also has a serious name advantage.)

  • Sensorium (SENSO): A platform building a digital metaverse bringing people together through high-quality virtual entertainment. (Not to judge a book by its cover, but Sensorium’s website is one of the coolest we have come across in the crypto space.)

  • Illuvium (ILV): An open-world RPG adventure game built on the Ethereum Blockchain. (If GameFi has the best name, Illuvium has the best slogan: “Fight for ETH.”)

That’s all for this week folks. If you found our information helpful and you have not already subscribed to our site, please head over to coinpad.io (registration is free) and / or follow us on Twitter @coinpadhome.