🧘♂️ALERT: Seriously Hot Crypto
Big Potential for 2022
Last week we dove into Avalanche, a hot layer 1 blockchain.
However, this is not Ethereum’s only competition and today we are going to look at another that could perform well in 2022; Fantom.
Fantom is a fast, low cost layer 1 blockchain with a strong team including Andre Cronje, founder of DeFi blue chip Yearn Finance.
Using Nansen we can break down its potential to perform in 2022.
Next week we will be dissecting Binance Smart Chain, the first major disrupter of Ethereum to understand how the ecosystem might perform in 2022.
To receive our next feature, make sure you’re on our free email list where we are helping over 40,000 people build life changing wealth👇
Our Market Meditations are longer format educational segments. Each letter features a Market Meditation which will deep dive and analyse a relevant crypto event, theme or tool.
👻 Fantom of the Crypto Opera
Step 1: Establishing the Strength of the Layer 1 Chain
(1) Are Active Users on an Uptrend?
Each crypto wallet is assigned a unique address. Daily active addresses is a measure of the number of unique addresses (or users) that interact with a blockchain on a daily basis and is a free indicator offered on Nansen.
Nansen.ai: 12/01/2022 - Fantom Active Addresses
In September 2021, the number of unique addresses skyrocketed when Fantom announced a $370m incentive program, making headlines and driving high yields in the ecosystem.
Whilst the initial hype died down, the number of unique addresses have remained significantly higher than before the spike.
This has been on a downtrend ever since but is currently showing signs of a reversal - signalling that more users are becoming active on the Fantom blockchain.
(2) Is Smart Money Entering the Ecosystem?
To use any alternate layer 1, you must first move assets onto that chain in a process referred to as bridging. Nansen breaks down key data for each bridge so we can understand the hottest ecosystems right now.
Nansen.ai: 12/01/2022 - Cross-Chain Bridges sorted by Smart Money Deposits over 7 Days
The key takeaway is that the Fantom Bridge has the most number of smart money depositors - indicating that smart money is currently entering the Fantom ecosystem.
Whilst we discovered last week that Avalanche had the most volume over the last 7 days, Fantom is currently second on that leaderboard.
Fantom has the only bridge that has increased its number of depositors in the last week.
Step 2: Diving Deep into Opportunities within Fantom
The key indicators in step 1 have clearly shown that activity is flowing back into Fantom. We can now use Nansen to dive deeper allowing us to generate insights that could lead to profit.
Most Used Protocols Over 7 Days
Nansen.ai: 12/01/2022 - Most Used Protocols on Fantom by Number of Users
SpookySwap: This currently has the most number of users and is a decentralized exchange that allows you to trade crypto assets and earn yield through farming.
Tomb Finance: This is an algorithmic token project with a difference. Instead of being pegged to a stablecoin, the token is linked to the price of FTM. Since launch, users have been incentivised with high yields.
Spirit Swap: This is another decentralized exchange and has a similar set of features to Spooky Swap.
Tip: There is a channel on the Spooky Swap discord which will send you a small amount of FTM for free so that anyone can get started using the Fantom blockchain.
After making huge gains in 2021, layer 1 blockchains continue to make headlines and show strength. Using active addresses and smart money bridging activity, we can see that the Fantom ecosystem is starting to become hot once again.
With Nansen’s On-Chain data, you can secure an edge in the crypto and NFT markets:
🤲 Exciting New Opportunities. See where funds are moving their money.
💥 Perform Due Diligence. Get more information on projects or tokens.
🌀 Defend Your Positions. Create smart alerts to track over 100 million ETH wallets.
🔥 Track The Biggest NFT Traders. See what the most profitable NFT wallets are investing in
To grow your crypto portfolio today check out the Nansen website. Currently, they are running a 7 day trial for just $9. Link here 👇
⚖ Crypto Versus the World
The cryptocurrency market cap started the year at about $2.35 trillion, having more than doubled over the last twelve months.
Real Estate: estimated at a staggering $340 trillion, real estate is by far the most significant store of wealth on planet Earth, dwarfing crypto by 160x.
Precious Metals: crypto is roughly double the size of the silver market, but only about 20% of the gold market ($11.3t). However, in 2021 about $10 billion moved from gold to digital gold, backed by high-profile investors like Paul Tudor Jones.
Global Industry: crypto sneaks into the top 10 of global industry, pushing telecoms out. Cars, oil and food are all bigger, but financial services are 10x at a dominating $22 trillion (let’s try and fix that!).
GDP: crypto would also enter the top 10 of GDP in between France ($2.6t) and Italy ($1.9t). The value of all the world’s bitcoin is higher than the GDP of nations such as Switzerland, Argentina, Saudi Arabia and Thailand.
Top stocks: crypto is close to all three of the top stocks – Apple ($3t), Microsoft ($2.5t), and Alphabet (2t). Ethereum is also bigger than Samsung and Walmart.
Quantitative easing: the money printed in the U.S. last year could easily buy the crypto market, pay off all student debt and still have $300 billion in change.
Cost of War: the value of all digital assets currently in existence exceeds the amount spent funding America’s longest ever war (in Afghanistan), while Britain and Germany’s contributions match the market cap of Polkadot!
Quite a journey to become the sixth largest base money in 12 years…
⛑️ TaxBit to the Rescue
Even if you have been keeping a detailed trading journal all year long, filing taxes can still be a daunting task for a crypto trader. Taxbit, a crypto accounting agency has recently launched a network to allow users to connect accounts across the crypto ecosystem and generate forms from each platform in the network. Gone are the days of traders having to hire an accountant or purchase expensive software to calculate their short-term gains, thanks to Taxbit.
This network will allow users to integrate data from over 500 companies, including FTX.US, Binance.US, Coinbase, Gemini, Paypal, etc. You can also connect to DeFi platforms like Uniswap, or NFT marketplaces such as SuperRare & Nifty Gateway.
You can generate a form 8949 (the form the IRS requires of crypto traders) for each venue with which you have traded.
There is no transaction or wallet address limit, but it must be a supported partner of TaxBit. There is a fee to generate forms from unsupported platforms.
Previously the cost of completing these cumbersome tax forms could range from hundreds to thousands of dollars, depending on whether you were purchasing software or hiring an accountant. CEOs of the supported platforms all agree that not only does this new network created by Taxbit remove a barrier to crypto trading, but it will also lead to increased adoption of digital assets.
Some exchanges may allow you to generate the forms from within the exchange’s app, otherwise, you can go to their website and begin linking the platforms you have used throughout the year.
Other agencies include: CoinTracker and Koinly.
Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here.
Disclosure. Some of the links we’ve included are affiliate, they give you rewards and discounts and earn us a commission. Additionally, the Market Meditator writers hold crypto assets. See our investment disclosures here.