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Health, Wealth, and Happiness

January 22, 2024

“In investing, what is comfortable is rarely profitable.”

-Robert Arnott

Howdy, investors!

Layer-2 solutions: wouldn't one be enough? To answer our own question, we dug into the layer-2 ecosystem to find out just how many layer-2 solutions are enough.

Pantera Capital lays out why fundamental investing is the future for digital tokens.

Blockworks suggests market inefficiencies may have given us an opportunity in the bitcoin miner stocks. See what you think.

Investors have been withdrawing from the Grayscale ETF at a massive scale, with outflows topping $2.2 billion in a week. Congrats to those of you who bought when we told you about the opportunity!

Read on to explore more!

Investor’s Guide to Layer-2s

by Matthew Du

Key Takeaways:

A Layer-2 (L2) protocol is a secondary framework built on top of an existing, more secure blockchain network to make it more accessible.

They enhance transaction efficiency by offloading the process from the main chain and have close similarities to the SWIFT messaging network in TradFi.

Investors can invest in the tokens of these Layer-2 projects, which they can hold or stake to identify the long-term winners.

While we may often think of blockchain as a singular technology, it is actually layers of technology working together.

Layers aren’t ideal. Once we start getting to higher levels, we are, in most cases, compensating for a lack of scalability with the underlying chain. They’re a hack.

In this guide, we’ll explain what Layer-2s are and how investors can think about the ultimate winners of the Layer-2 race so you can invest in today’s tokens that are most likely to win in the long term.

Read the Full Article Here >>

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Blockchain Book Club: "Going Infinite" by Michael Lewis

Join us this Wednesday, January 24 at 6:30 PM EST to discuss Going Infinite, the exciting new book by Michael Lewis (The Big Short, Moneyball, Liar's Poker).

In Going Infinite, Michael Lewis found himself in a strange and lucky position: writing a book about Sam Bankman-Fried amid the FTX meltdown. He had a front-row seat into precisely what went down.

If you've read Michael Lewis's books, you know he has a knack for taking complex financial concepts and making them understandable and fun to read.

Going Infinite is also a fun and easy read where you learn about SBF's secretive history at Jane Street Capital, his romantic affair with Caroline Ellison, and how he made his money.

Our book groups are friendly, informal discussion groups on Zoom. We encourage you to bring your best thoughts and discussion topics -- or listen in!

Premium members:Register to attend online and reserve your spot.

Not yet a Premium member? Sign up here and join the discussion!

Must Read

Today's most important stories for crypto investors.

Emerging Catalysts in Crypto (Pantera Capital)

The author (Pantera's Cosmo Jiang) likens the current stage of the digital asset space to key moments in the history of equities, suggesting a future where tokens could replace traditional equity for businesses. Overall, this piece underscores the importance of digital scarcity in enabling digital property rights, highlighting opportunities for investors in this digital space.

Thursday Methodical Mailbag (Blockworks)

The recent introduction of bitcoin spot ETFs triggered high trading volumes but didn't significantly boost bitcoin's price, instead leading to a sell-off. This suggests bitcoin is aligning with conventional market behaviors.

However, the disproportionate drop in bitcoin miner stocks compared to bitcoin's price dip indicates persisting market inefficiencies, hinting at potential investment opportunity in buying mining stocks.

Grayscale is Sending Bitcoin to Coinbase in $500 Million Clips - Here's Why (Decrypt)

Grayscale's recent conversion of its Bitcoin Trust (GBTC) into an ETF has led to massive sell-offs, with investors withdrawing over $2.2 billion in just five days.

The situation has raised concerns for bitcoin's market price. However, this can also be seen as a short-term readjustment for long-term HODLers like us.

Long-Term Wealth

$1K invested at today's market prices

This asset	invested 5 years ago	is now worth
Bitcoin (BTC)	$1,000	$6,410
Ethereum (ETH)	$1,000	$5,503
Uniswap (UNI)*	$1,000	$1,080
BNB Chain (BNB)	$1,000	$22,808

Note: The future may look different from the past. Please invest carefully.

* As UNI is less than five years old, we calculate from the launch date (Sep 2020).

ICYMI