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HEALTH, WEALTH, AND HAPPINESS

July 20, 2022

"Most people would assume my business success, and the wealth that comes with it, have brought me happiness. But I know I am successful, wealthy, and connected because I am happy."

- Richard Branson

New Downloadable Report: Q2 Future Winners Results! Here's the difficult truth about how our Future Winners portfolio is doing in the first half of 2022 (full disclosure: not great).

Paid members can download the report, with charts, graphs, and explanations of why we still believe in these four crypto picks.

(If you're not a paid member, become a Blockchain Believer to get instant access to the new report -- and our on-demand research library.)

The "Merge Trade" Has Begun (CoinDesk): Subscribers who jumped on last Friday's column about the ETH/stETH arbitrage play have already been handsomely rewarded.

All eyes are on the upcoming upgrade to Ethereum -- a.k.a. "The Merge" -- and the prices are reflecting it. ETH is up. stETH is up. LDO is up. RPL is up. RETH is up.

Investor takeaway: In plain English, investors are betting that The Merge will happen soon, instead of being delayed indefinitely. That means ETH -- and services like Lido and RocketPool that allow you to stake ETH -- are likely to take off, and they're betting big.

For those who invested quickly: you're welcome.

For everyone else: the arbitrage window has likely closed, but there are still opportunities (see below).

Here's the "stETH discount" since we explained it to you on Friday (click here to re-read Friday's column):

(remember, lower = better)

Investor takeaway: As word about the "stETH discount" got around, more investors jumped on it, driving up the price of Staked Ether, so it's now hard to justify the additional risk.

The good news: it's not too late to buy ETH -- and maybe even a little bit of LDO and RPL.

Shout out to our friend Miami Mayor Francis Suarez and the Miami Bitcoin bull! It's had a rough history since its unveiling of the bull in early April when bitcoin was roughly trading around $43,000.

Here are three reasons why I believe the markets may be reacting positively:

1. Global Unrest

Bitcoin is a viable solution for nations and people in the developing world and those experiencing catastrophe or war.

More fiat currencies have been heading towards zero, thanks in part to unchecked quantitative easing since around 2008, which accelerated in March 2020.

While the US has experienced 9.1% inflation and $4 gallons of gasoline (roughly double in just over a year), that's nothing compared to the misery of emerging nations.

Even for developed nations in Europe, the Euro has dropped to par with the dollar, resulting in jokes from Americans about renaming the word "football" to "soccer." 11 EU nations have over 10% inflation, with Estonia topping the charts at over 20%.

Economic woes have caused social unrest, protests and rioting recently in the following countries:

Sri Lanka

Albania

Argentina

Panama

Kenya

Ghana

Holland

Bitcoin provides hope. That is a reason in itself to buy. And the image below, which appeared in a bitcoin.com news article, highlights this.

2. Eth 2.0 Merge

Now set for September 19, the Ethereum 2.0 merge seems to be moving forward according to plan after many delays. Lido Protocol, where a lot of Eth is staked, many DeFi protocols on Ethereum and even ETC have been having extremely positive weeks. 

Fingers crossed, but I think it's actually happening. 

3. The Contagion Seems to Be Almost Over

Again, another knock on wood here, but it seems like the trend of major crypto companies collapsing has collapsed. Investors seem to be coming to grips with Celsius, 3AC, and other collapses. Bankruptcy proceedings have started for Celsius, the 3AC founders were apprehended in Dubai, and there seems to be a light at the end of the tunnel. At least the carnage appears to be over, if not a resolution for those locked out of their funds.

4. Looking Forward

With the US economy slowing down, and expectations for the Fed rates to combat inflation, I believe market players are starting to price in the end of quantitative tightening, whether that comes in 6 months or a year. I do expect the rate hikes to at least slow down to 0.25, if not stop altogether, by the end of Q4 2022 or sometime in Q1 2023. 

For investors who are looking at bitcoin and ether as 10-20 year investments, we hope that prices stay a bit down for some time so we can accumulate more.

Sincerely,

Alexandre Lores

Market Analyst

Bitcoin Market Journal is a daily newsletter that makes you a better crypto investor. It is created by Evamarie Augustine, Charles Bovaird, Mati Greenspan, John Hargrave, and Alexandre Lores.

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