26th April 2023 > > Crypto adoption.

tl;dr

Crypto adoption is usually a force for good and warmly welcomed as such. You may be surprised to find out this isn’t always the case.

Market Snap (at time of writing)

Market Wrap

If you suspect that today’s delayed time of publication is simply because I wanted to report BTC regaining the 30-handle, then yes, I concede there might be a nugget of truth in that.

This stunning recovery is in no doubt partly spurred by the 50% drop in the share price of First Republic Bank, reminding us again of the potential for devastation of the legacy financial system caused by the combination of unwarranted QE (quantitative easing) and the ongoing toxicity of lockdown.

Curious Cryptos’ Commentary – Crypto adoption

We love a story about crypto adoption here at CCC Towers, and this one is right up our strasse:

https://blog.bitpanda.com/en/european-first-raiffeisenlandesbank-partners-bitpanda-offer-digital-asset-investment

Raiffeisenlandesbank Niederösterreich-Wien (RLB NÖ-Wien) is one of the many co-operative banks that provide banking services to retail clients in Germany and Austria.

Bitpanda is a crypto and securities online broker offering fractionalised investments. Also head-quartered in Austria, and fully compliant with all securities and cryptos regulations, their offering is based on easy execution with a bespoke custodial service.

The deal is that Bitpanda provides the technology and the custody, whilst RLB markets to its retail client base.

As initiatives like this start to spread throughout the retail banking world – especially in countries like Germany, Austria, and Italy, in which personal investing in stocks and bonds is far more prevalent than here in the UK – millions more people will be able to gain exposure to cryptos.

Crypto adoption is happening right here, right now.

Curious Cryptos’ Commentary – Meme coins

Two recent examples of meme coins appear to have re-ignited interest in this arcane, and largely pointless, arena of crypto activity.

If you are unsure about the definition of a meme coin, I am hesitant to explain more. Far better to live in ignorance, but if you insist …

Meme coins essentially have no added value, are issued in trillions (usually 420 of them) and are marketed using a publicly recognisable theme. It is often the case that 25% or so are given to crypto OG Vitalik Buterin who kindly donates them to charity.

There are countless meme coins, most of which wither and die on launch. Some, for reasons unapparent to me, gain traction with resulting headlines such as “300% gain” or even “3,000% gain”. Stories abound of hundreds of dollars turning into millions.

Well, yes and no.

The winners of a successful meme coin are those who created it, selling into the exit liquidity provided by those attracted by headlines like the ones above. If you can catch one early (before anyone else knows about it) it is possible it will make a decent return. But being an early adopter of ALL meme coins is a time-consuming and expensive business. It is not a model for investors to follow.

Let’s look at the two recent meme coins of note.

…

First up is PEPE (Pepe).

Named after the internet meme Pepe the Frog (you mean you don’t know?) I calculate that trough to peak gains are over 1,300%.

Trading volumes are measured in the tens of millions of dollars but the 2% depth across all exchanges is less than $100k. With a market cap approaching $100mm some wallets appear to own millions of dollars of assets. But the liquidity available cannot support wholesale selling.

I guess being a paper millionaire is better than not being one at all, but it isn’t very useful in any practical sense. Short-term bragging rights is about the best it gets.

…

Our second meme coin is GNLSR (Good Gensler).

Launched just five days ago, the theoretical trough to peak gain is approaching 1,000%. Sporting a market cap of just $3mm, price gains could undoubtedly 10* or more from here.

But the 2% depth is tiny whilst daily trading volumes only just clear $2mm.

…

The CCC is all about crypto adoption, but crypto meme adoption just doesn’t float our boat.