Is The Pain Over Yet? Maybe.

Risk is decreasing for many alts, Grayscales interesting research, and a Crypto 101 on stablecoins.


Is The Pain Over Yet? Maybe. 

Alts are having a great day today with some strong bounces across the board. They still look like they fell off the Punch Me In The Face Tree and hit every branch on the way down, but they don’t look as beat up today. Let’s see if it lasts. 🤕 

In today’s Litepaper, we’re looking at one of Santiment’s on-chain measurements of whether a crypto/token is in a good risk vs. reward position.

Also on deck: Grayscale’s interesting research on the growing importance of crypto as a political factor and a Cryptot 101 on stablecoins. 📰

Before we dive in, here’s today’s crypto market heatmap:

And here’s a look at crypto’s total and altcoin market cap YTD:

Tell Me What You Want What You Really Really Want 🔊 

Quick note here: Let me know what you’d like to see more of in the Litepaper.

More charts? More on-chain analytics? More data? Let me know! 🎇 

E-mail me here: [email protected]

Is The Bottom In? 🤔 

I need to preface this article with a notice to Santiment: I wish you didn’t write about something on your data three days before I was going to, damnit. 😀 

I really thought I was going to be all fancy schmancy with a look at Santiment’s MVRV Ratio for Chainlink ($LINK), Cardano ($ADA), and Uniswap ($UNI) because they’re stupidly low.

Little did I know that three days ago, they made a post on X highlighting those three along with $DOGE, $LTC, $ETH, $XRP, and $BTC.

In a nutshell, the Market Value To Realized Value (MVRV) tells us how much profit or loss token holders are sitting on by comparing the market price to what they actually paid. High MVRV? Everyone's bragging about their gains, which usually means it's overvalued. Low MVRV? The market's probably bleeding. 💡 

For buyers, that means if the MVRV ratio is crazy low, adding or creating new positions isn’t as risky—at least in that timeframe. LINK, ADA, and UNI all have MVRVs in negative territory on a 30-day timeframe.


Cardano MVRV - Click to enlarge.


Chainlink MVRV - Click to enlarge.


Uniswap MVRV - Click to enlarge.

A good chunk of the altcoin market has an MVRV ratio similar to one of the three altcoins above. It doesn’t necessarily mean the bottom is in, but it does indicate the risk for entry is lower. 😌 

Crypto: The Unlikely Bipartisan Issue of 2024 🤷

A Harris Poll conducted for Grayscale between April 30 and May 2, 2024, confirms what we’ve known for months. American voters haven’t changed their tunes since last November, but interest and opinions about crypto are heating up. 🔥 

  • Bitcoin's growing relevance: Almost half of voters (47%) expect crypto to be part of their portfolio, up from 40% last year.

  • Inflation as the top issue: Inflation remains the big concern (28%), highlighting Bitcoin’s potential value.

  • Bipartisan support for crypto: Trump’s pro-crypto stance and recent bipartisan crypto bills, FIT21 and SAB 121, show crypto appeals across party lines. Ownership rates are nearly identical between Republicans (18%) and Democrats (19%).

Is November shaping up to be "the Bitcoin Election"? “ 🤔 

A Broader Spotlight

Since November, more voters are noticing Bitcoin (41% vs. 34%). New survey questions revealed that the US spot Bitcoin ETF approval in January and the Halving in April piqued voter interest in crypto. The ETF approval, in particular, made 9% of retiree voters more interested in crypto investments.

Crypto interest isn’t just about Bitcoin. Since January, nearly a third of voters (32%) have been more open to learning about or investing in crypto. More voters now see crypto as a good long-term investment (23% vs. 19%) and expect it to be part of their portfolios (47% vs. 40%). 🤯 

Crypto: The Bipartisan Issue

While Trump is waving the crypto flag, data shows bipartisan ownership: Republicans at 18% and Democrats at 19%. Voters are equally split on which party is more crypto-friendly (30% each), suggesting balanced interest across the spectrum.

  • Voter priorities: Republicans focus more on inflation and the economy (54% vs. 33% for Dems), while Democrats are more concerned about issues like gun violence, climate change, and income inequality.

With distinct macro policies from both candidates, the next administration’s approach to digital assets like Bitcoin will be pivotal. Particularly for younger voters, as 62% of Gen Z and Millennials believe in crypto as the future of finance. 🔮

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Crypto 101: Different Types of Stablecoins 🪙 

Stablecoins are designed to keep their value steady while the rest of the market swings like a pendulum. If you're new to the game, let's break down some of the types of stablecoins and why they matter. 🫵 

Fiat-Collateralized Stablecoins: The Classic Anchor ⚓️ 

Fiat-collateralized stablecoins are backed by traditional currency reserves like the good old US Dollar. For every token issued, there's an equivalent amount of fiat currency sitting in a bank. Think of them as digital IOUs.

  • Examples: Tether ($USDT), USD Coin ($USDC)

  • Pros: Stability and wide acceptance.

  • Cons: Centralized control and trust in the issuer.

Crypto-Collateralized Stablecoins: Backed by Blockchain 🪙 

Crypto-collateralized stablecoins are pegged to the value of other cryptocurrencies. They're over-collateralized to account for crypto's notorious price swings. If you want a decentralized option, this is your stop.

  • Examples: $DAI

  • Pros: Decentralized and transparent.

  • Cons: Complex mechanisms and potential for volatility.

Algorithmic Stablecoins: Code Over Collateral  

Algorithmic stablecoins don't rely on traditional assets or crypto reserves. Instead, they use smart contracts to balance supply and demand, like a digital seesaw, to keep the price stable. When demand goes up, the algorithm increases supply and vice versa.

  • Examples: DJED from $COTI and $ADA

  • Pros: Fully decentralized and innovative.

  • Cons: High risk of losing peg and complex to understand. With the exception of a couple of existing stablecoins, all others have failed.

The Backbone of Liquidity 🩻 

One of the critical roles of stablecoins is their ability to provide liquidity across various platforms and exchanges. In the world of crypto, liquidity is king. Without it, transactions can become sluggish, and prices can be manipulated.

Stablecoins grease the wheels of the crypto economy, allowing for smoother trading experiences and more stable markets.

Choose wisely, stay informed, and remember: even in crypto, it's good to have something that stays put. 🚀

Crypto News In Three Sentences 📰

💸 Whale Takes a Hit on $5.11M PEPE Coin Investment 

A major investor, holding 519 billion $PEPE worth $5.11 million, recently sold on Binance, incurring a loss of around $207,000. The investor missed out on a potential $3.47 million profit by not selling at PEPE's all-time high in late May. Spot On Chain reports the whale is also grappling with $6.68 million in unrealized losses on other crypto holdings like AAVE and YFI. Full story at U.Today.

🪓 North Carolina Governor Vetoes CBDC Ban 

Governor Roy Cooper vetoed a bill that would ban a US Federal Reserve-issued CBDC in North Carolina, despite overwhelming legislative support. Critics accuse him of playing partisan politics, with accusations that he opposed it just because his opponent supports it. Legislators might override the veto with their strong majority. From Cointelegraph.

💣 Bitcoin Mining Difficulty Drops 5% Amid Price Slump 

$BTC’s mining difficulty fell by 5%, the largest drop since May, as prices remain stuck below $58,000. ASIC miners with less than 23W/T efficiency are now unprofitable, leading to a shakeout of weaker miners. Big players like CleanSpark ($CLSK) continue expanding, hitting mid-year hashrate targets despite the turmoil. Read more at Cryptopolitan.

💰 US National Debt Skyrockets by $876 Billion in Six Months 

The US national debt ballooned by $876 billion in just six months, reaching $34.866 trillion. Ex-CIA Director Mike Pompeo warns that this massive debt is a national security threat, potentially weakening the dollar and empowering rivals like China and Russia. Pompeo urges immediate action to curb the debt before it spirals further out of control. More from The Daily HODL.

💸 0.1 BTC Might Be Your Retirement Ticket by 2038 

Despite recent price drops, holding just 0.1 Bitcoin could be enough for a comfortable retirement by 2038, according to a bullish analyst. Using a 50% annual growth rate, Bitcoin could hit tens of millions per coin, making even small holdings valuable. Even with a more conservative 30% growth rate, 0.1 BTC could be worth a solid $300k. ZyCrypto has more.

🚀 Ethereum Co-Founder Donates 100 ETH to Boost Adoption 

Vitalik Buterin donated 100 $ETH, worth around $300k, to 2077 Collective, an unofficial marketing group dedicated to promoting Ethereum. The collective aims to "make Ethereum cool again" amid declining adoption rates due to competition and high fees. Recent network upgrades have lowered transaction fees, potentially revitalizing interest in Ethereum. From Coin Edition.

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