The crypto market was up for the month of August. At the end of the month, Bitcoin is trading well above its 200-day moving average which is a bullish sign from a technical perspective. Market structure continued with risk assets doing well in the current environment. The Fed’s massive liquidity and backdrop is still protecting asset prices. Other investment themes within the crypto market are gaining traction with DeFi (Decentralized Finance) in the lead. The biggest event of the month was at the end when bitcoin surpassed the $11,775 level, which had been a past level of resistance. …


The crypto market was up for the month of August. At the end of the month, Bitcoin is trading well above its 200-day moving average which is a bullish sign from a technical perspective. Market structure continued with risk assets doing well in the current environment. The Fed’s massive liquidity and backdrop is still protecting asset prices. Other investment themes within the crypto market are gaining traction with DeFi (Decentralized Finance) in the lead. The biggest event of the month was at the end when bitcoin surpassed the $11,775 level, which had been a past level of resistance. …


There are many valuation models for Bitcoin. Some are based on fundamentals like much of the work done by Chris Burniske in his book, Cryptoassets. Many models are outlined in CoinMetrics work starting, here. I think relating to Bitcoin as a network and measuring the network’s usage and utility is key. However, a savvy investor cannot overlook the data from this price regression model. It’s called the Stock to Flow Model for Bitcoin.

(My interpretation of work done by Plan B’s Stock-to-Flow Model, public use graph).

The Stock-to-Flow (S2F) Ratio is a model that models scarcity value. Now, just because something is scarce doesn’t mean it will hold value over time. Platinum is 30 times rarer than gold, but is it 30 times more expensive? No. It’s not even higher than gold right now. Why? …


Here’s what should we be thinking about going in to 2020. There are several factors affecting the emergence of Bitcoin as sound money. In January, we’ve started off 2020 with Bitcoin trading as a safe-haven asset, more correlated to gold and oil than risk-on assets like the stock market. Moving throughout the year, it will be important to track when Bitcoin is trading like a risk-on asset and when it’s trading like a safe-haven, or risk-off asset.

Crypto and Looking Ahead

The crypto markets have tail winds, which is great for investors. Here are a list of factors:

  1. Fundamentals of the Bitcoin Halvening Event in May of…


Image for post
Image for post

Introduction

Last year, I wrote an article, Crypto Asset Fundamental Analysis — 7 Indicators & Ratios to Watch, about how to use fundamental analysis in the evaluation of crypto assets. We want to look at network usage to derive relative value based on that utility. Over time, we as the crypto investor community need to build a framework that shows outside investors how to think about fundamental valuation for crypto assets. I’ve added a couple more metrics to the framework that now uses 5 indicators and 4 ratios to give a window into the fundamentals of the crypto markets. …


Image for post
Image for post

Introduction

Last year, I wrote an article, Crypto Asset Fundamental Analysis — 7 Indicators & Ratios to Watch, about how to use fundamental analysis in the evaluation of crypto assets. We want to look at network usage to derive relative value based on that utility. Over time, we as the crypto investor community need to build a framework that shows outside investors how to think about fundamental valuation for crypto assets. I’ve added a couple more metrics to the framework that now uses 5 indicators and 4 ratios to give a window into the fundamentals of the crypto markets. …


Image for post
Image for post

Disclaimer: I am an active manager of a crypto fund.

There is a lot going on in the crypto markets, as always. In early 2019, we’re still in a crypto winter, the longest crypto winter ever, actually. Many thought that though the speculative side of investing is in a bear market there is a lot of building going on and the industry is still growing. Or, they mention the private investment or venture investing is still quite active. …


Image for post
Image for post

Disclaimer: I am an active manager of a crypto fund.

There is a lot going on in the crypto markets, as always. In early 2019, we’re still in a crypto winter, the longest crypto winter ever, actually. Many thought that though the speculative side of investing is in a bear market there is a lot of building going on and the industry is still growing. Or, they mention the private investment or venture investing is still quite active. …


Image for post
Image for post

Disclaimer: I am an active manager of a crypto fund.

There is a lot going on in the crypto markets, as always. In early 2019, we’re still in a crypto winter, the longest crypto winter ever, actually. Many thought that though the speculative side of investing is in a bear market there is a lot of building going on and the industry is still growing. Or, they mention the private investment or venture investing is still quite active. …


Image for post
Image for post
Photo by David Shares on Unsplash

There’s been a big debate going on in the crypto markets about how to classify cryptoassets and which regulatory body does it fall under. Are cryptoassets securities and therefore governed by the SEC or are they commodities and therefore regulated by the CFTC? In 2017, many in the market started to declare the idea of a utility token and distinguishing it from a security token. Broadly speaking, a security token represents a tokenized version of a financial security. You can think of real estate or equities that are tokenized assets being a security token. Thus, a utility token is a token used to power a blockchain network. Many protocol coins and tokens use a utility token to transact on their network. …

About

Jake Ryan

CIO at Tradecraft Capital & Author of book from Wiley, Crypto Asset Investing in the Age of Autonomy

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store