One thing I learned (but am not surprised by) this weekend is that crypto Investing by millennials is here to stay.
“Spectrem group conducted a survey of millennium investors with assets in excess of $1 million and found that 83% of them had made crypto investments in their lifetime and that 53% of respondents hold 50% or more of their portfolio in the digital asset market.”
The president of Spectrem Group, George Walper, went further after the results came in, “I’m not sure the wealth management industry has recognized that they need to think of these as completely different generations. Most firms were hoping to ignore it. But millennial millionaires are not going to just grow out of crypto.”
Welcome Back to the Weekend Round-Up!
Did I catch your eye with the above stat? That’s ok it caught mine when I read about it. It’s not surprising though. After being in the space for a little under two years now one thing I’ve learned is that so much happens in crypto behind the scenes. You’re right George, this isn’t some phase the next generations of innovators and investors are going through. They aren’t going to wake up one day and say, “It’s been fun but time to get serious about these things.” It’s important to realize that the investment for these generations is not just the dollars they are putting into coins on Coinbase or Uniswap; they are investing their lives and careers in building the systems that will carry them and future generations to wealth and happiness. Crypto isn’t going anywhere but I do think it is going to take a little longer than people anticipate.
It has been amazing to see the shift in the advisor community regarding crypto assets. Young and old, new and experienced, we have seen every kind of advisor open their minds to how crypto can lead to new possibilities for their clients and their business. However, we still have a long way to go. If you haven’t done this yet, let 2022 be the year you get educated on the next generations that will be inheriting the wealth and what they care about. You will show families that you truly mean it when you say you care about them and future generations. The newer generations care about crypto and crypto will impact their wealth more as time goes on, not less. If you don’t do this, then you already know what is going to happen. Trust is built well before the time comes when the accounts change names and titles.
I hope the opening of this round-up lights a fire and helps you realize how much value there is to unlock by simply getting educated.
This week’s round-up covers:
- SEC delays more Bitcoin spot ETFs
- Polkadot hits a milestone
- Polygon has a big weekend
- DeFi and Stablecoin Regulation Coming
- NFT Art & Collectibles/Metaverse Adoption
- Learning Opportunities:
– Replay – Crypto SMA’s: The Easy Onramp for Advisors
– 2022 Digital Asset Outlook by The Block Research
Weekend ETH Prices
Weekend BTC Prices
ETH Wednesday at 5pm: $3,883
ETH Weekend Low: $3,786
ETH Weekend High: $4,011
ETH Price as of posting: $3,918
Performance YTD: +434.29%
BTC Wednesday at 5pm: $46,921
BTC Weekend Low: $45,677
BTC Weekend High: $48,012
BTC Price as of posting: $46,843
Performance YTD: +58.45%
Bitcoin Spot ETF Update
From Aislinn Keely at The Block, “The Securities and Exchange Commission (SEC) has punted on two more spot bitcoin exchange-traded fund (ETF) proposals. Two extension orders hit the docket Friday for NYSE Arca’s proposed rule changes — one for the Bitwise Bitcoin ETP Trust proposal and another for the Grayscale Bitcoin Trust proposal.”
The next dates to look out for are February 1st and 6th, 2022 for these two applications, but could go as far as June or July, which we think the SEC will surely go to. Both Vaneck and WisdomTree’s spot ETFs were denied this year.
If 2021 was the futures ETF, could 2022 be the year for the spot ETF? Personally, I think it’s a low probability.
Polkadot Parachains Are Going Live!
As reported by Ian Allison of Coindesk, “Polkadot, an underlying framework for connecting various blockchains, has launched its first set of parachains, individual networks running in parallel to create a harmonized, interoperable ecosystem. Some five years in development, the milestone follows the completion of the first five parachain auctions, a system of crowd loans amassing large amounts of DOT, the native token of Polkadot, gathered from each blockchain’s respective community. The first five parachains going live – Acala, Moonbeam, Parallel Finance, Astar, and Clover – are focused on a variety of topics from decentralized finance (DeFi), to investments and loans.”
Some of you still may be wrapping your head around the technology of one blockchain and wondering what the heck a parachain is. See below for both a technical explanation from Polkadot as well as a summation from Akash Takyar of LeewayHertz with a little easier language to read. “There is so much buzz around Parachains because, by design, they share the Polkadot’s cross-chain composability and interoperability. Because of this, they can send or receive any type of data or asset with other Parachains. Thereby, Parachains are capable of supporting a host of new use cases and applications. Besides, they also share and benefit from the security, scalability, and governance of Polkadot.”
We believe the future is multi-chain and interoperable. 2021 saw the coming out of silo layer 1’s and ecosystems other than Ethereum and Bitcoin networks. 2022 we believe is these ecosystems perfecting their differentiated tech. 2023 and beyond could be when the chains and ecosystems have flexibility and maneuverability between them.
Polygon making moves…
As reported by Arijit Sarkar of Cointelegraph, “As Polygon strives to maintain a competitive position against the Ethereum ecosystem, the community announced a $200 million initiative with Seven Seven Six, a venture capital firm owned by Reddit co-founder Alexis Ohanian. The initiative will focus on supporting and hosting gaming applications and social media platforms built on Polygon’s infrastructure. Polygon explosive growth this year was supported by the launch of over 3,000 decentralized on-chain applications and other protocol launches and cross-chain migrations.”
Not only that, the Uniswap community approved the governance proposal to deploy Uniswap v3 contracts over the Polygon blockchain with a 99.3% approval consensus. This is beneficial for Polygon’s user growth, savings for users, more activity, which leads to higher revenue and market capture. The same also goes for Uniswap as they will now operate with the second strongest DeFi ecosystem.
Financial Stability Oversight Council Report
As reported by Nikhilesh De and Danny Nelson of Coindesk, “The annual report published Friday highlights concerns regulators have involving stablecoins and the broader cryptocurrency market. The possibility that some stablecoins might not be fully backed, or are unable to maintain a peg to the dollar or other currency, were two key issues mentioned in the report. The reserves of these stablecoins, however, may not be subject to rigorous audits and the quality and quantity of collateral may not, in some cases, correspond to the issuer’s claims. Likewise, stablecoins that maintain their value through algorithmic mechanisms are potentially subject to failure due to market pressures, operational failures, and other risks,” the report said.
Ending the report on a positive note though, “The development of digital assets and the use of associated distributed ledger technology may present the opportunity to promote innovation and further modernization of financial infrastructure … [but proper regulation is] critically important.”
We believe that 2022 is going to be the year of regulation. We know it has been coming and it’s more likely we will see meaningful regulation as by the end of 2022 decision-makers and groups will have had the time to get educated up. Hopefully, they all read Bitcoin and the American Dream: The New Monetary Technology Transcending Our Political Divide, a book written by 8 authors who made a Kickstarter campaign to demystify the ecosystem for the regulators. Those authors? Jimmy Song, Annaliese Wiederspahn, Gary Leland, Pete Rizzo, Amanda Cavaleri, CJ Wilson, Charlene Fadirepo and Lamar Wilson. From Arijit Sarkar of Cointelegraph, “As per the schedule, the manuscript for the Bitcoin book has been drafted and will be finalized by the end of 2021. By January, the authors intend to have the audiobook and paperback available for sale, which will be supported by a “book launch event in Washington DC to promote this book.”
There will likely be a pain in the markets but it’s necessary if it means we get smart and thoughtful regulation. This will spur the next phase of adoption.
Adidas drops first NFT Collection
As reported by MK Manoylov of The Block, “The German sportswear brand Adidas Originals earned 5,924 ETH, or $23.5 million, from its collaborative “Into the Metaverse” drop with Bored Ape Yacht Club (BAYC), the non-fungible token (NFT) collector money and the crypto-focused media group PUNKS Comic.”
Adidas joins Nike, along with other big brands who rely on social signaling for their sales, engaging in NFT’s and the Metaverse. Rolex, BMW, and others like them all have consumer bases who buy their products to signal to the world something. It’s all going digital with Web 3.0 and the metaverse. Sure, some of the assets may be in a bubble, but Web 3 and the metaverse are the next iteration of creator economy and social influencers. These traditional companies need to evolve and adapt because this is where their consumer bases will be to signaling in the future.
2021 was the emergence of NFT technology as art and collectibles. 2022 and beyond will be NFT tech use cases expanding beyond art and collectibles. NFTs will become the default mechanism for the verification and authentication of any asset. One of the first industries adopting is Real Estate.
Goldman Sachs released a report on this earlier in the week which you can read below.
Happy Holidays! Whichever way you celebrate the season, we hope you and your families share in lots of love, laughter, and good food 😊 Be sure to tell everyone you love them!
– Marc Nichols