RCIF II - Five bullet Friday - Issue # 20

     I have been travelling this week along the coast of Oregon. I did not have much time to catch up with markets. Crypto market sentiment now is at an all-time low.

1. I am excited to see the developments happening in El Salvador. The president of El Salvador, announced that they are adding close to 30,000 users per day on their lightning app, Strike. They have also announced that their central bank will own $150 million worth bitcoin on their balance sheet as a starting point. This will ignite a competition amongst the nation states.

2. Michael Bury is a fund manager with an extraordinary track record of predicting the previous financial crisis in 2008. He has warned that recently we are in a much bigger bubble than in 2008. He also pointed out similarities to the Weimar republic of 1920s in Germany causing hyperinflation. Just posting his opinions has triggered the SEC to pay a visit to him. I have known some partners in the fund, who invested in some pre-ipo companies in the stock market and have lost a lot to many scams. But the SEC is busy going after publishing opinions.

3. Based on some proprietary indicators that I have been watching, bitcoin is selling at a price 1 standard deviation away from the model predicted price. Only 15% of the time bitcoin is sold at such a big discount to its stock-to-flow predicted price. 

4. Ethereum has undergone a huge transformation with the passing of EIP-1559. This will make ethereum more sound than bitcoin by steadily reducing supply. This is expected to be implemented in a matter of 2 months, which will transform the ecosystem. Ethereum migrating to proof-of-stake from proof-of-work consensus mechanism is going to reduce its energy consumption by 99%.

It is a massive game changer around the corner.

5. OHM has recently announced a partnership with Frax and started holding FRAX tokens in its treasury. We currently have close to $18 DAI to support the price of one OHM. So this treasury will continue to grow as it is almost impossible for the price to get below $1. There was a good article from messari on OHM, which is well worth your time.

When the general market sentiment is this low, it has been a great time to enter the market. Crypto markets go through the bear market cycles faster than regular stock markets. The fundamentals of all the crypto markets are getting stronger by the day. In a year from now, we would look at our present time as a good opportunity as it was in March 2020.

Have a wonderful weekend!

Sam Ikkurty