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Bitcoin Market Journal

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HEALTH, WEALTH, AND HAPPINESS

April 28, 2022

"The difference between rich and poor is becoming more extreme, and as income inequality widens the wealth gap in major nations, education, health and social mobility are all threatened."

- Helene D. Gayle

Whale Reads



Whale Reads

Worthy news for aspiring whales


State of Ethereum (Bankless): Excellent deep dive on the year-over-year Q1 2022 metrics for Ethereum. This is a good way to look at Ethereum's long-term fundamentals ahead of "The Merge," the Ethereum upgrade planned for later this year.


Investor takeaway: The most significant numbers are:

  • Daily Active Addresses are up slightly (4%), which is our most important metric, as it reflects actual users;
  • Network Revenue increased 46% (to $2.4 billion), showing Ethereum is making money;
  • Stablecoin Supply grew 188% to $122 billion, showing Ethereum is the platform of choice for stablecoins.


If we haven't made it clear by now, Ethereum is also the blockchain platform of choice for the majority of developers and users. These metrics show that it continues to grow.

Your Money is Growing



Your Money is Growing

Truth, in numbers


Smart investors also look at the inflation rate of Ethereum, since the more ETH that's produced, the smaller your slice of the pie (just like U.S. dollars). Here's a look at ETH inflation over time:

ether-supply-growth-042822.png

Source: Etherscan


Investor takeaway: Ideally we want the curve to grow as flat as possible, so our ETH holdings are not diluted with new tokens. With the upgrade, this curve may even begin to trend downward, becoming deflationary instead of inflationary.


Imagine owning a portion of the world's most successful blockchain platform, then further imagine that your ownership portion gets bigger instead of smaller. These are all positive potential outcomes for long-term Ether investors.

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The Big Picture

with Evamarie Augustine


Hi Everyone,


recession is defined as two consecutive quarters of negative GDP growth. According to Investopedia, GDP, which stands for gross domestic product, is "the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period." 


GDP is often regarded as a leading indicator of a country's economic health. So what does a negative figure mean? The last recession occurred in 2020 following the pandemic, where GDP fell 5.0% in Q1 2020 and 31.4% in Q2 before quickly recovering.


For Q1 2022, U.S. GDP contracted. Analysts who took part in a Dow Jones poll were expecting a 1.0% increase, but the economy actually shrank during the period by 1.4%. This differs from Q1 2021, when GDP rose 6.3%. However, that data reflected the massive amount of government stimulus used to combat COVID-19. 


What’s surprising is how markets are reacting. Despite the ominous print, traders seem to be shrugging off the news, as equities and bitcoin were trading up for the majority of the day.


This is likely because the drop in the headline GDP number was primarily due to reduced government spending, shrinking inventories and the rising U.S. trade deficit.


But other indicators—including nonresidential investment and consumer spending—continued to show healthy growth in Q1.


In fact, demand from both businesses and consumers continued to grow at a healthy clip—something that the Federal Reserve will continue to monitor as it tries to control inflation that sits at multidecade highs.

Institutional crypto adoption widens 


While bitcoin’s price has not kept up with equity markets this year, the coin is on a record pace for adoption, including two major announcements just this week. 


As reported yesterday by many sources, bitcoin was adopted as an official currency for the Central African Republic. And on Tuesday, Fidelity Investments announced that it would allow eligible individuals to allocate a portion of their 401(k) to bitcoin through a Digital Assets Account.


This announcement could be a significant boon to bitcoin. According to the industry group representing regulated investment funds, the Investment Company Institute, or ICI, the 401(k) market encompassed $7.3 trillion in assets at the end of Q3 2021 for approximately 60 million active participants.


Fidelity is the largest retirement plan provider in the United States, so this announcement opened up the ability for a wide range of investors to purchase bitcoin through their retirement plans. 

 

Fidelity currently provides 401(k) services to approximately 34,000 plans, and not surprisingly, MicroStrategy has signed up to be the first employer to offer the option to its employees. 


While regulatory matters will continue to influence crypto, bitcoin's increasing institutional adoption and use cases look to provide tailwinds for the digital currency in 2022.

I appreciate all your likes, follows and comments! As always, thank you for reading. 


Make it a great day! 

Evamarie Augustine

Market Analyst

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