🏛 History Repeats: Investment Strategies for Our Time

We are currently at a pivotal moment in the economy, transitioning from one global period to another. While the exact future remains uncertain, the history of the economy helps to illuminate current trends and provide possible development strategies.

❗️2 Types of Economic Periods

Remember, there are 2 types of economic periods:

💼 Local Periods: Authorities suppress depositors' savings to finance military and other government expenditures, leading to inflation.

🌐 Global Periods: Finances are deregulated, stimulating international trade, leading to deflation.

⏳ Historical Context

According to Pax Americana, from the 1930s to the present, we can observe an alternation between local and global periods:

— 1933 to 1980: Rising local cycle, characterized by a post-war economy, financial repression, and industrial growth in the US.

— 1980 to 2008: Global hegemony cycle, characterized by financial market deregulation, globalization, and monetary conservatism.

— 2008 to present: Local cycle of the Middle Kingdom, accompanied by quantitative easing, inflation, and geopolitical instability.

It is easy to trace the most characteristic strategies for local and global cycles.

📈 Investment Strategies:

In periods of local inflation:

Own gold and bitcoin, avoid stocks and bonds that may lose value due to inflation.

In periods of global deflation:

Own stocks that can benefit from economic activity growth, and avoid gold and bonds.

✅ Universal Strategies:

➡️ If you believe in the system but not in those who manage it: Invest in alternative assets like bitcoin and gold.

➡️ If you believe in the system and those who manage it: Invest in government bonds.

➡️ If you do not believe in either the system or those who manage it: Invest in bitcoin and gold, which do not depend on government decisions.

📉 Key Takeaways...

Investors must be ready to adapt to changing conditions, taking into account historical experience and current trends.

Meanwhile, holding bitcoin and other cryptocurrencies can be one way to preserve wealth in the face of increasing inflation and financial repression. Despite current volatility, the long-term prospects for bitcoin remain positive.

Investors should consider global factors and historical cycles when making investment decisions because...

history, though not exactly, tends to repeat itself.

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🇨🇳🪙 Have Chinese Authorities Sold 190,000 Bitcoins?

Recently, the question has resurfaced in cryptocurrency circles: have the Chinese authorities sold the 190,000 bitcoins confiscated from the operators of the PlusToken Ponzi scheme?

In November 2020, Chinese authorities seized 194,775 bitcoins from PlusToken, one of the largest cryptocurrency pyramid schemes. These bitcoins, along with other crypto assets, were handed over to the state treasury.

But what happened to these assets next? Let's delve into the facts.

⚡️Court Decision and Subsequent Actions

On November 26, 2020, the final court document for the PlusToken case was published.

Here are the key points:

1️⃣ Part of the platform’s digital currency was seized from the defendants Chen Bo, Ding Zanqing, and Peng Yixuan.

2️⃣ It was confirmed that Chen Bo applied to the Yancheng Public Security Bureau for permission to legally sell the seized cryptocurrencies through Beijing Zhifan Technology Co., Ltd. The proceeds from the sale were used for restitution.

3️⃣ All seized digital assets were legally processed, and the proceeds were turned over to the state treasury.

🧐 Where Did the Bitcoins Go?

According to the document, the police confirmed that the PlusToken platform held 310,000 bitcoins, 9.17 million ethers, and over 51 million EOS. Of these, 190,000 bitcoins, 830,000 ethers, and 27.24 million EOS were seized.

But what happened to them?

According to well-known traders and analysts, a significant portion of these assets was sold between late 2019 and mid-2020, when the price of bitcoin fluctuated between $7,000 and $12,000.

This is corroborated by the phrase in the court document:

the funds and proceeds were legally confiscated and turned over to the state treasury.

📊 What Does This Mean for the Market?

If indeed a large portion of the seized bitcoins was sold, it could have significantly impacted the price of bitcoin during that period.

However, the question remains: how many of these bitcoins are still in the hands of Chinese authorities?

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😀At What Cost Does a Meme Coin Maintain a $50M Market Cap?

The founder of the market-making company Gotbit has shed light on the mysterious world of meme coins.

It turns out that to maintain a $50M market cap for a meme coin on the Base network, an injection of $200K per hour is necessary! This is assuming that the team and insiders are not actively dumping the token.

Surprising, isn't it?

😀How to Achieve Escape Velocity?

Escape velocity is the critical point after which a meme coin can become organic and rapidly increase in market cap.

📈This fact clearly demonstrates that significant financial injections are needed to achieve escape velocity. This helps create an attractive chart for investors.

Projects that control the token supply can easily manipulate the market.

Take the example of Brett: the team held up to 85% of the supply and boosted the market cap to $1.9B, allowing the token to be listed on major exchanges.

Thus, in such a competitive market, it becomes increasingly difficult to find a meme coin that can organically grow and surpass the billion-dollar mark.

Whether a meme coin can overcome this barrier remains a mystery😀

Satoshi Tweeted🔑

🖥 Cryptocurrency Market 2024: Mid-Year Review

According to CoinMarketCap (CMC) data for the first half of 2024, the global cryptocurrency market capitalization was $2.3 trillion, down 14.5% compared to the second quarter. However, 24-hour trading volume increased to $79.4 billion, a 223% rise compared to the previous quarter.

What else was interesting in the first half of the year?

🟠 Market Sentiment and Bitcoin Dominance

The CMC Cryptocurrency Fear and Greed Index, which measures market sentiment based on the price and trading activity of several large-cap coins, stands at 49 (neutral).

In the second quarter, sentiment shifted towards fear. It hit a particularly low point on July 9, when the fear level reached 28! 🧭

Bitcoin dominance is at 53%, indicating no signs of an altcoin season. Liquidity decreased by 18.5% over the past month.

Market activity in April and May calmed down after the March price spike, showing characteristics of a "bearish phase" within the prevailing bull market.

⌛️Is History Repeating?

Yes, it is repeating:

⚫️ In the early stages of a bull rally, Bitcoin has historically led the market, with its market dominance (BTC) increasing. BTC rose from 38.4% in November 2022 to 54% in this cycle.

⚫️ An increase in stablecoin supply, indicating capital inflows into the crypto markets, signals the start of a bull market. Since the beginning of 2024, the stablecoin supply has grown by 19.8%.

⚫️ A reduction in BTC supply on exchanges was also observed in the 2021 bull cycle as investors moved BTC to cold wallets for long-term storage. This trend continues today.

No, it is not repeating:

⚫️ The current downturn in the bull cycle is less severe than previous cycles, with a maximum drawdown of 18% compared to over 50% in 2021. This could be due to capital flows into BTC ETFs.

⚫️ BTC reached an all-time high of $73,000 before the halving. In all previous cycles, BTC reached ATH only after the halving due to a supply shock.

⚫️ This unprecedented growth was primarily driven by institutional inflows from spot BTC ETFs.

📈 Who is Driving the Market?

Currently, the driving forces of the bull market are crypto enthusiasts and institutional investors. Total institutional inflows exceeded $17.1 billion, with $16.7 billion invested in Bitcoin.

Meanwhile, retail user indicators, such as Google search trends, new YouTube subscribers using cryptocurrency, and App Store rankings, show that most retail users have yet to enter the market.

🕯 Which Sectors are Growing?

89% of sectors experienced a negative change in market capitalization, with more than 30 industries falling by 20-40%.

Only three sectors showed positive growth in the second quarter, highlighting challenging market conditions:

😀 Solana ecosystem: +20 new tokens in Q2
😀 Ethereum ecosystem: +14 new tokens
😀 Derivatives: +5 and stablecoins +4

In the first half of 2024, the cryptocurrency market showed mixed trends:

💬 Capitalization decreased by 14.5%, but 24-hour trading volume increased by 223% 📉

💬 Bitcoin continues to dominate, occupying 53% of the market, while market sentiment shifted from greed to fear 😰

💬 Ecosystems like Solana and Ethereum showed positive growth, despite overall liquidity decline and slowed activity in other sectors 🔼

In upcoming posts, we will continue to analyze key points from CMC 2024 H1. So stay tuned... 📝

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🖥 3 Reports and All About Artificial Intelligence

The topic of Artificial Intelligence (AI) and its impact on the economy continues to attract attention and even generate hype. Well-known analysts are also weighing in. Recently, three significant reports were published: two from Goldman Sachs and one from JPMorgan.

Interestingly, the two reports from Goldman Sachs have opposing views, but let's dive into the details...

1️⃣ Report from Goldman Sachs, May 13, 2024:

This report presents a very positive outlook on AI's prospects for the economy. It highlights the significant potential of AI to stimulate economic growth and boost productivity 📈

Key facts include. AI could add up to 7% to global GDP in the next 10 years.
Companies investing in AI may see a productivity increase of 20-30%.

2️⃣ Report from JPMorgan, May 23, 2024:

Here, AI's prospects for the economy are not just significant, they are radiant. The report focuses on investments in the next phase of AI, including hardware, software, and services.

Key facts from the report:

— Recommendations to invest in AI hardware, including chips and servers.
— The AI services market is expected to grow to $500 billion by 2030.

3️⃣ Report from Goldman Sachs, June 25, 2024:

In contrast, this report suggests that AI's prospects for the economy are not so bright and are heavily overrated, which is very interesting given the first report. It assesses the risk of overestimating AI's impact on the economy and the potential costs involved.

Key arguments include:

— Overestimation of AI expectations could lead to market corrections.
— Warning that the costs of AI may exceed expected profits.

👀 Is the Analysis Objective?

Upon examining all three reports, it becomes clear that they are more likely tools for market influence than objective analysis. The differing assessments of AI's prospects may be attempts to manipulate market expectations ❗️

- May 13: Goldman Sachs took the lead in the AI market with a positive report.
- May 23: JPMorgan, not wanting to fall behind, released its report, presenting a very promising outlook for AI.
- June 25: Goldman Sachs changed its stance, issuing a report that no longer viewed AI's prospects as bright.

⚠️ The AI market continues to evolve, and its prospects remain uncertain. However, relying on conflicting reports used to manipulate the market is not advisable.

It remains crucial to conduct your own analysis and consider long-term trends and the real outcomes of AI implementation.

Satoshi Tweeted🔑

🖥 Continuing our dive into the CoinMarketCap (CMC) report on crypto market vibes

In our last post, we covered the cool stuff that happened in the first half of 2024.

Today, we're gonna dig into the current market mood and try to figure out what's popping right now 📣

What's hot in crypto?

1️⃣ Meme coins are on fire

For the first time ever, meme coins are the top dogs in the crypto world, beating out smart contracts, DeFi, and NFTs. Meme coins made up around 23% of page views on CoinMarketCap, racking up over 25 million views in June.

2️⃣ Solana's hype train is rolling

The Solana ecosystem is catching more eyes than Ethereum. Since October 2023, SOL meme coins have been blowing up, with major popularity and price bumps.

🧬 Solana hasn't knocked Ethereum off its throne yet, but the growing buzz shows it's becoming a big player in the crypto game.

3️⃣ AI hype is cooling off

The AI trend is losing steam. After peaking in February, its popularity has dropped, hitting just 6.4% in June.

4️⃣ Crypto is getting back to basics

In the Ethereum world, away from the meme coin craze, the main stories are about real-world assets (RWA) and distributed AI computing.

These trends highlight Ethereum's push to bridge traditional finance with blockchain tech.

💵 The DeFi sector is also going back to its roots, with stablecoins taking the spotlight. Stablecoins offer a safe and predictable way for transactions, savings, and lending.

🌐 What's trending globally?

Analysts have noticed a big shift towards meme coins from more "traditional" cryptos.

They also spotted the market share leaders among meme-token-focused countries:

🇺🇸 USA — 15.54%
🇧🇷 Brazil — 9%
🇮🇳 India — 7.57%
🇮🇩 Indonesia — 6.5%
🇩🇪 Germany — 6.4%
🇷🇺 Russia — 6.2%

Meanwhile, countries like the UK and France are still more into BTC/ETH, DeFi, infrastructure, and institutional markets.

These countries are seeing a drop in the market share of crypto users.

ℹ️ So, what's the deal?

All the data shows that meme coins have snagged the spotlight in the crypto community, Solana is gaining steam, and the AI hype is starting to fizzle out.

Ethereum keeps its eyes on real-world assets and AI, while DeFi is going back to its origins with stablecoins.

In our next post, we'll break down the current state of each sector.

Satoshi tweeted🔑