🧘♂️ALERT: Understanding Billionaire Portfolios
Market Meditations | November 17, 2021
And How You Can OutSmart Them
Dear Meditators
There are big players in the crypto markets.
Fortunately (and unlike in other markets) we have a LOT of tools at our disposal to see exactly how they are investing.
Today’s Meditations:
BTC Market Update
Smart Money Part 3: Understanding Billionaire Portfolios
LUNA Briefing
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? Top Dollar?
“It’s over”. “Buy the dip”. “HODL”.
If you follow Crypto Twitter or Youtube you’ll be flooded with opposing messages like this all the time, because the truth is, nobody definitively knows where the top is until after it’s happened.
But that doesn’t mean we can’t broaden our tool box to help manage our risk on the way up.
Apart from a Google search rise, consider these indicators:
RHODL Ratio – the realised value is the price at which a coin last moved. The RHODL value looks at the ratio of 1-week old coins compared to 1-2 year old coins to determine whether the market is overheating or not.
MVRV-Z Score – this compares market cap (using current price) to realised cap (using price each coin was last moved at) to estimate whether Bitcoin is over- or under-valued compared to ‘fair value’.
Trolololo Trend – created by a Bitcoin enthusiast in 2014, this is a colourful way to visualise long-term price movements using logarithmic regression on a rainbow band.
These are just a few of a whole host of indicators out there. You can find a lot of them at lookintobitcoin, but keep in mind that all indicators based on the past are only correct until they aren’t anymore, and any sites that try to aggregate them into a single view are making assumptions that may not be statistically valid.
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.
Whale Watching on the Ethereum Blockchain.
In parts 1 and 2 of our smart money series, we considered how tracking the portfolios of the most successful crypto participants can increase our own profits.
Today, in part 3, we are going to use Nansen to explore exactly who these smart money players are and what tokens they are holding.
Ethereum’s Biggest Players
Nansen.ai – 17/11/2021: Smart Money Token Holdings sorted by entity
This chart shows a breakdown of the biggest token holders in the Ethereum ecosystem.
Smart money accounts for around $12bn of value on the Ethereum blockchain highlighting the huge impact they have on the market.
Top funds include Alameda who make up 10% of all smart money token balances, a16z and Paradigm.
One individual Whale makes up a total of 22% of the entire Smart Money segment.
Aggregate Smart Money Portfolio
Nansen.ai – 17/11/2021: Smart Money Token Holdings sorted by token
This chart shows the aggregate portfolio of the entire smart money segment.
The largest holding is WETH, followed by cETH. These are “wrapped” versions of Ethereum that can be used within the decentralised finance ecosystem. This shows how much smart money participates in DeFi – not just the holding of Eth.
42% of all balances consist of tokens that sit outside the top 10. This stresses that smart money holdings are diversified across a number of assets and on aggregate take a risk managed approach.
Tracking Whales Through Time
So far we have spoken about taking a current snapshot of smart money however tracking this through time can also generate insights we can use to better understand the market.
If we go back just 3 weeks ago, CRO was not a top 10 asset. However in the time since it has risen well over 100%, becoming the 5th largest. To gain further insight we could track exactly which smart money players held CRO before its major move up.
Tracking this data through time also allows us to understand how smart money portfolios are changing at a macro level. This can give us confluence for our own trading and investing decisions.
Conclusion
Knowing who the biggest participants on Ethereum are allows us to keep tabs on exactly what they are doing and gain insights into their strategies. With Nansen, this becomes easy.
Next week we will complete our smart money series, putting the first 3 parts together to show you how you can regularly generate actionable insights from tracking smart money.
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 ?
?The Sky Is Falling!
Luna investors may have thought Luna was a gift from above when it hit an all-time high just a week ago.
Now that the price has fallen almost 20%, is the sky falling too?
The crypto markets, in general, were in the red yesterday after what appears to be another leveraged shake-out. Luna suffered a greater pullback than BTC, ETH, and even BNB, so why is Luna down so much more than the rest of the market?
Recently the Luna community approved a proposal that would burn 88.7 million Luna tokens from the treasury, in order to mint billions of dollars in UST providing liquidity to an insurance protocol that is launching on the ecosystem.
The 88.7 million Luna tokens have been released into the circulating supply because Luna is only burnt every 800 blocks.
As the Luna burn continues, the circulating supply of Luna will decrease.
Terra’s ecosystem is growing and expanding, which will also increase the use case and demand for UST.
Keep in mind from our previous articles about Terra, the supply of Luna is elastic, decreasing as UST is minted and increasing if UST is burned. You can keep tabs on the ecosystem here.
They even have a one-stop-shop for airdrops that you might be due from the different protocols called terradrops.io.
While today’s price for Luna may look like the sky is falling, the future looks bright for this protocol created by Do Kwon.
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??♂️✍️ Stories in this newsletter were written by D. Beverly, Isambard FA, Nick T., Max P., Kimia K., Ellen B. and Koroush AK. Graphics were produced by Gerasimos P.
