Crypto Corner Newsletter
Written on 3 May 2021
So Many Reasons To Be Bullish on Crypto
With April behind us and the second quarter of 2021 entering its mid-term, I want to take a look at the overall state of crypto and give you my reasons for being super-bullish on the whole market for the coming month(s).
First, I want to point out that we closed April with a minor negative this year: -1.70%.
This was slightly unexpected for me as we have only epxerienced two years with negative ROI on Bitcoin in the month of April for the past 10 years. That was back in 2014 and 2015 when we were in a bear market. Since then, April has been rather favourable for Bitcoin and the whole crypto market in general.
This year, April presented some challenges for the main cryptocurrency, taking it upwards by 10% to print a new ATH at almost $65k but finding a strong resistance around this price level and subsequently falling by 27% to $47k at which point the buyers stepped in and we have been recovering from this drop since.
As Bitcoin was consolidating between support and resistance for the most part of April, we saw the Altseason gain pace and with that, Bitcoin's dominance was weakened further, dropping to below 50% for the first time in a while - we are currently at 47.4% - a level that has not been revisited since 2018 and we've only been there three times in Bitcoin's history.
Right now there are plenty of altcoins that are outperforming Bitcoin. This is very common for Altseason and it's to be expected in times when bitcoin is mostly moving sideways.
The overall market is in a strong bull cycle and there are many indicators that the whole crypto market will continue to grow in the coming months.
Bitcoin mining revenue hit All-time high figures throught March and April - 1.7 billion USD on average.
According to available data, 14.51% of the April revenue came from transaction fees - some $247 million. This figure represents the highest fee-to-revenue ratio since early 2018.
The good news is that China's long-running dominance of the mining space is fading, a process underpinned by growing investment in North America and high demand for hardware outside of China.
This is really good news as it means that mining is becoming more decentralized as time goes by - a very important factor for the future of Bitcoin.g
There are more bullish news that I want to mention here too.
Coinbase now allows customers in the U.S. to buy cryptocurrencies using PayPal. This is better than just usng your Paypal account directly because with Coinbase you can at least send your Bitcoin (and other crypto) to another wallet and truly be the owner of your crypto. Paypal doesn't allow this and is only good for buying and selling crypto within its platform. But the fact is, that Paypal's involvement in crypto is definitely bringing more mainstream exposure to crypto and it's beneficial nevertheless.
In April the trading volumes on crypto exchanges hit a new all-time high. As noted by The Block, the exchanges saw a collective $1.58 trillion in spot trade volume last month. This is a 49% increase compared to March's $1.06 trillion.
Crypto exchange Binance is launching its own marketplace for creating and trading non-fungible tokens (NFTs). This is scheduled for launch in June and as you know, NFTs are the ongoing trend in crypto and beyond crypto in fact, so with Binance getting in this space, things will only get bigger. This is bullish not only for BNB and Binance as a company, but the whole crypto space in my opinion.
Ethereum Gas Prices Are Already Falling.
One of the biggest hurdles for the Ethereum network and its users is gas prices. The fees for transactions have been steadily rising on the force of rising demand and the fact miners are allowed to prioritize higher-paying users over others. The gas price for a transaction hit a high last year and held those levels well into 2021 but that situation is already changing. The price of gas spiked shortly after the Berlin hard fork but has since fallen to the lowest levels in nearly a year.
Ethereum and Bitcoin tend to track each other with Ethereum leading the way and over the past year we've seen Ethereum outperform Bitcoin by a high margin. As I am writing this, we already broke the $3000 price range and we are currently in price discovery. With this, the marketcap of Ethereum is now bigger than that of BOA (Bank Of America) and the overall marketcap of all crypto currencies just surpassed that of Apple ($2.15 Billion).
I feel that Ethereum could reach $4k in no time, based on recent performance.
In fact, Ethereum has gained 338% since the start of this year.
In comparison, Bitcoin has gained 115% since the start of 2021.
If we look into the other altcoins, we will find mind-blowing statistics - altcoins like Doge and CAKE (the token of decentralized exchange Pancake Swap) have gained more than 8000% in the first quarter of this year, while NKN and MATIC are sitting at around 4000%, exchange tokens like BEST (Bitpanda), KCS (Kucoin), UNI (Uniswap) and BNB (Binance) are well-above the 1000% mark and these are just a handful of examples of altcoins outperforming Bitcoin in this bull run. This is going to continue throughout the rest of the year in my opinion.
And let's not forget XRP - the Ripple token that took a deep dive last year as the US Securities Commission (SEC) filed a court case in attempt to classify it as a security. In April we found that the judge in this case is sharing somewhat positive sentiment about XRP and all odds are in favour of Ripple, making XRP an appeling investment once again.
And this is not all. There are even more news about upcoming crypto-related ventures in the mainstream that will catapult the whole market upwards.
Visa is apparently moving into crypto in a 'very big way', according to Visa's CEO Al Kelly.
U.S. Bank, the fifth-largest bank in the U.S. in terms of deposits, is finalizing cryptocurrency custody services. At the same time, JPMorgan is preparing to offer an actively managed bitcoin fund according to reports.
Institutional investors keep buying every dip and as I reported earlier in my Crypto Corner podcast, the biggest BTC wallets (holding over 10 000 BTC) have accumulated (collectively) more than 90 000 Bitcoin during the dip two weeks ago - possibly the most bullish statistic. If Big Money is buying, so should we.
With that said, I'm wrapping up today's newsletter. Make sure you catch my upcoming episodes of Crypto Corner, where we will discuss my top altcoin picks for April and where are they today, plus my top picks for May and June.
As always, trade carefully and stay profitable.