AB updates are for informational purposes only. Do not construe any of the following as investment, financial, or other advice. You make your own decisions.
The AB Moonletter🚀 is a culmination of research & insights from the diverse capacity of the AB Team. Ultimately our focus & mission is financial freedom. JAN'24🎉🎆 includes:
Sections:
Historical Bitcoin Win - Ethereum Up Next?
Starknet - An Enthusiastic Overview
Coinbase x Glassnode - 2024 Report Highlights
***new section*** Our Portfolio: Recent Buys & Watchlist
1. Historical Bitcoin Win - Ethereum Up Next?
Perhaps the biggest win in the entire 15 year history of the cryptocurrency and blockchain industry…the Bitcoin ETF has just passed. (Woohoo!)
Since bitcoin’s inception, and much more intensely over the past 6 months, crypto traders have been actively speculating on the effects of a major Bitcoin ETF.
This task has proven challenging, as it’s an unprecedented situation: valuing the launch of a traditional financial product for a decentralized fixed supply digital asset.
Accurately pricing in the Bitcoin ETF might be nearly impossible due to uncertainty about the greater impact of investment flows.
Short-term, some analysts believe investment flows in initial weeks could significantly affect Bitcoin’s value, given the scarcity of available Bitcoin. Long-term, this is undeniably a massive W for the entire crypto industry, and will lead to significant long-term inflows to bitcoin & the greater crypto market.
In previous months we’ve observed Bitcoin’s price surge from ~$30K to ~$45K, potentially heavily based on ETF rumors. Now upon actual news of ETF launch, we see only small upwards volatility from ~$43K to ~$48K.
Interestingly, market volume has shifted focus towards Ethereum, which had been trailing behind the macro market in recent months.
Following the ETF announcement, ETH and many Ethereum ecosystem tokens have been significantly outperforming. The potential rationale behind this shift, besides high quality development, is the anticipation that Ethereum’s ETF might be next.
To add even more positivity, Ethereum is looking forward to events like DenCun update and the Eigenlayer airdrops scheduled for this year. These are major narratives further bolstering the argument for ETH’s potential as dominant blockchain platform and investment position.
Despite Solana’s dominant narrative in 2023 (shouts out longtime AB friend & Solana Labs founder Ben Sparango), which overshadowed Ethereum last year, there’s a growing sentiment that Ethereum might reclaim the spotlight.
We happen to think ETH will dominate 2024….which is why the AB Fund portfolio is currently ~57% ETH. But hey… what do we know!
Author: Digital Douk, AB Rocket Pilot
2. Starknet - An Enthusiastic Overview
What is Starknet you may ask? Well, a zero knowledge rollup layer 2 on Ethereum of course! (deeply explained…)
Starkware is the software company behind Starknet. Their earlier technology is what is used to run Immutable and DYDX (starkex), and elements that have already been open-sourced including Starknet Prover, Cairo 1.0, Papyrus Full Node, and the new StarkNet Sequencer.
In short, Starknet uses STARK proofs and a specialized smart contract enabled language called Cairo to operate as a virtual machine secured by Ethereum mainnet.
What’s so special about Starknet? That’s a great question!
When compared to other rollups like Optimism or Arbitrum, Starknet is different because it is based on math-based zero knowledge proofs instead of optimistic proofs relying on third parties to submit if something onchain isn’t correct. Bottom line, zk rollups rely on math, whereas optimistic rollups rely more on people and incentives.
What’s cool about Starknet? Besides sweet alien-math…. Starknet is purpose built for account abstraction and better user experiences, whether that be for gaming applications, DeFi, or something entirely new.
Basically, this means better user experience, like less clicks & fees on your phone or metamask pop-up to do something you intend to do onchain. Unfortunately starknet is not sub-penny fees on every transaction… yet.
Does Starknet have a token? Yes and no. 🧐
Starknet’s token, STRK (0xca14007eff0db1f8135f4c25b34de49ab0d42766) is deployed on Ethereum, as we can see here on etherscan.
Although the token has been deployed for awhile now, it has not been distributed to the general public yet - only to early investors, team members and other interested parties. The community is unsure whether or not there will be an ‘airdrop’ per say, but its public knowledge there will be some form of gas rebates for early users and other incentives for developers and users going forward.
Will STRK have any use case beyond a governance token? Per the last upgrade to Starknet’s blockchain - v0.13.0, there is now a new transaction type allowing for STRK to be used as a gas fee token on Starknet’s blockchain.
More great educational resources on Starknet/Starkware:
https://starkware.medium.com/
https://www.starknet.io/learn/what-is-starknet
https://ethereum.org/en/layer-2
https://blockworks.co/news/starknet-community-governance-gives-thumbs-up-to-starknet-alpha-upgrade
Author: UEV Guy
3. Coinbase x Glassnode 2024 Report - Key Terms & Insights
If you don’t know… Glassnode is an absolute beast of a market intelligence provider, sharing the best onchain data & metrics available to man. Combining forces with lawful good industry titan Coinbase is…well as a researcher…this report is a big deal.
Coinbase Institutional and Glassnode give investors a rich understanding of how to understand crypto markets in 2024. The report goes on to identify metrics and trends that are important to the biggest institutional investors out there.
The full report shows a great variety of onchain insights for both Bitcoin and Ethereum networks. We strongly suggest checking out the full report but…. if you’re in a rush, we’ve got your back.
We’ve summarized 44 pages of key insights to know as a crypto investor in 2024:
Market Cap (p.4)
Measurement of asset total value
Total market cap of crypto rose more than 108% in 2023
Crypto Dominance (p.5)
Measurement of crypto’s market cap as a percentage of total market cap across all crypto
BTC dominance rose in 2023
Correlations (p.6)
A major thesis in crypto is the non-correlated aspect with traditional markets — meaning that if the equities market is doing poorly, crypto can be doing well.
In 2023, crypto proved to be non-correlated with the equities market
Portfolio diversification (p.7)
It is important to diversify amongst crypto and many other assets. Crypto should be a % of your portfolio, as dominant as 40% in some cases
Stablecoin Circulating Supply (p.8)
Stablecoins are digital currencies that maintain a constant value (many times pegged to money like the US dollar or other fiat currencies)
When evaluating Stablecoins, it is important to assess the amount of reserves that are behind the Stablecoin itself
Bitcoin (p.9)
Bitcoin is the first widely adopted cryptocurrency globally
The Bitcoin network allows secure and seamless peer-to-peer transactions on the internet using blockchain
Bitcoin is decentralized and has a fixed supply
Bitcoin can be exchanged without any third parties like a bank or government
Ethereum (p.26)
Ethereum is an open sourced blockchain used to create decentralized applications using smart contracts
Ethereum was developed by Vitalik Buterin, who published a white paper in 2014 before launching the project in 2015.
Ether (ETH) is Advantage Blockchain Fund’s largest holding (currently 57%)
Cycle performance (p.11)
Crypto has completed four cycles that included bull and bear markets. This chart shows the current cycle we’re in vs. other cycles
Entity-Adjusted NUPL (p.12 / 29)
Net unrealized profit/loss
Difference between unrealized profit and unrealized loss
Shows adjusted economic activity
Supply profitability state (p.13 / 30)
Looking at supply profitability helps show where in the cycle crypto markets are and expected to be.
Bottom Discovery
When the market is not expected to get lower in the late stage of a bear market
Most of the supply is living in loss
Euphoria
Logarithmic growth period in bull cycle, most of the supply is living in profit
Bull/bear transition
Transitioning between Euphoria and Bottom Discovery
Daily active addresses (p.14 / 31)
How many unique addresses were active in the network as a sender or receiver in crypto
Shows user adoption, network health, economic activity, and growth.
Daily active Entities
A single wallet (entity) can have multiple addresses
Will be smaller than the amount of active addresses
Total Supply Held by Long Term Holders (p.15)
This is a metric to show users holding crypto but not actively trading or sending it
Goal is to “HODL”
Annualized 3-month volatility (p.15)
Crypto has become less volatile as market cap has raised over time and the asset has been more mature
Monthly Realized Volatility Bands (p.16)
Volatility Bands (Bollinger Bands) identify potential reversals in the prior one month average
Realized Price and MVRV (p.17 / 34)
MVRV - Market Value to Realized Value
This metric measures the ratio between the spot price and the realized value
MVRV can indicate times where the market is generally overheated or undervalued
MVRV Momentum
Used to show momentum of a crypto
MVRV compared to the six month moving average
Derivatives (p.19 / 38)
Futures Volume
Futures Open Interest
Futures Annualized Rolling Basis
Perpetual Futures Liquidated
Options Open Interest
Bitcoin Halving (p.25)
Inflation schedule slows down
Indicator of large interest and price increase in btc historically
Second quarter 2024
All of the above insights are alongside excellent graphics in the full report here. Big thanks to Glassnode and Coinbase!
Author: 0xChex, AB Rocket Pilot
4. Our Portfolio - Buys & Watchlist
Disclaimer: Our buys/watchlist should not be takin as financial advice/investment suggestion. We share this information in the nature of education & transparency. We value the ability for our network to be aware of new projects & ecosystems we’re actively researching, participating & investing in. Always invest responsibly. And remember… Fundamentals > Pumpamentals !!
Introducing - Our Portfolio
In 2024 we strive to continue helping as many people as possible understand more about the blockchain ecosystem. A large part of this, is investing. Against traditional norms of gatekeeping trading strategy or portfolio positions, Advantage Blockchain seeks to help the world understand our approach to investing granted our intensive research / interactive background.
In the name of transparency, we will now be sharing AB Fund’s current portfolio each Moonletter🚀 update. This is not investment advice, but a look into our strategy for educational purposes only.
Recent Buys
Base Swap (BSWAP) @ $0.47
Osmosis (OSMO) @ $1.00
Immutable (IMX) @ $1.40