🧘‍♂️ALERT: Smart Money Activity

Dear Meditators

There is an abundance of profit to be made in crypto, however, it can be impossible to keep up with the market.

Today, we are going to break down Nansen’s key factors for investing in crypto, demonstrating how to find actionable insights to improve your performance.

Part 1 examines indicators that shed light on the activity of top investors.

Part 2 will explain market indicators that can be used to better understand any crypto investment. We’ll be sending that over to you next week.

Today’s Meditations: 

• Smart Money Activity
• PayPal Just Made A Big Announcement
• US Senators Have A Plan For Crypto

⏰ Top Headlines

• Frax co-founders propose spending $20 million to buyback FXS token
• Yuga Labs revokes code that allowed creation of infinite Bored Apes
• US central bank digital currency commenters divided on benefits, unified in confusion
• Edge announces confidential no-KYC digital currency Mastercard

? Place You Bets

The majority of traders lose money in crypto. However, there are a select few who manage to consistently beat the market. With Nansen, we are able to track the activities of these top investors both individually and as a segment of the market. This article will provide a summary from Nansen Research. For the full article, click here.

Smart Money Activity

Through the use of Nansen’s smart money labels, we are able to identify activity of top funds like BlockTower capital:

Nansen.ai: 05/05/2022 – Things to look out for when investing in cryptocurrencies – Example 2: BlockTower capital

• In the above example, BlockTower capital made 300% profit in a little over 2 weeks!
• Using Nansen to follow BlockTower’s on-chain activity could have made you the same profit. An example of just how powerful it can be to track smart money.

Smart Money Stablecoin Holdings

The amount of stablecoins an investor holds in their portfolio reflects their market sentiment. A high percentage of stablecoins demonstrates less appetite for risk, and vice versa.

Nansen.ai: 08/06/2022 – Stablecoins vs All Coins (Smart Money)

• Nansen’s Stablecoins vs All Coins suggests smart money have been growing increasingly risk off since April 2022.
• This, would have acted as an earlier indicator that market conditions were turning sour. Information that could have helped investors to manage their risk and protect their capital.

✅ Tip: Use Nansen’s smart money token holdings dashboard, to see the exact tokens that smart money are holding at any given time.

Remember, whilst smart money indicators can be used to great effect, they also carry risk. Investment decisions should never be based on a single indicator. However, when used in a wider strategy to assess confluence, smart money behavior is an invaluable tool.

In part 2, we will run through key market indicators that can be used to assess investment opportunities. For Nansen’s full report, click here.

With Nansen’s on-chain data, you get an edge over everyone else by tracking the behaviour and on-chain activity of prominent wallet addresses.

• Exciting New Opportunities. Follow Smart Money, identify new projects, and trace transactions down to the most granular level.
• Track The Biggest Traders. See what the most profitable wallets are investing in.
• Defend Your Positions. Create real-time custom alerts and get notified when and where a wallet has been moving its funds.

Simply sign up for a Nansen account and consider the wealth of free tutorials we have for how to use Nansen to make a profit in NFTs, Defi, Yield Farming, and much more. Our tutorials are available here under the ‘Nansen’ section.

Sign Up Now!

? Send It

PayPal announced yesterday that they had begun rolling out a long-awaited feature for people that hold cryptocurrency in their accounts. What are they doing and why now?

• In the last quarter of 2020, PayPal opened up crypto trading and payments for eligible customers in the U.S., with a $20,000 per week trading limit.
• The coins supported to begin with were Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
• At the time, CEO Dan Schulman said there was an inevitable drift toward virtual currencies, highlighting the “efficiency, speed, and resilience of the payments system”.
• However, crypto could only be bought, sold and spent via the PayPal platform. Receiving and sending with non-PayPal accounts was not possible, potentially as part of a deal with regulators to get a Bitlicense.
• Yesterday, that all changed. SVP and GM Jose Fernandez da Ponte announced that select U.S. users could now transfer, send and receive all four cryptocurrencies with external wallets and exchanges.
• There would also be no fees or network charges to “send crypto to family and friends on PayPal in seconds”.

It is notable that despite double-digit share price losses in the recent market downturn, PayPal is forging ahead with their crypto plans. Jose Fernandez da Ponte told Decrypt that they “believe a substantial portion of commerce is going to move to digital currencies”. Since launching, they have increased the weekly limit to $100,000 and confirmed they are exploring the creation of their own stablecoin.

? Wen Widespread Adoption?

On Tuesday, US Senators Lummis and Gillibrand released their long-awaited crypto bill. After teasing the regulatory framework for months, the senators went to Medium to announce the release. The short title for the proposal is the “Lummis-Gillibrand Responsible Financial Innovation Act.

• The framework itself provides clarity and guidance on many facets of the crypto market.
• A stablecoin is defined and interpreted as an asset-backed note redeemable on a one-to-one basis for USD or other foreign assets defined as legal tender, (except where nations have adopted digital assets as legal tender.)
• The IRS will be forced to adopt guidance classifying airdrops and forks, proceeds from staking or mining, etc., and given a timeline to do so.
• It also allows you to use crypto to pay for purchases less than $200 without incurring a loss/gain.
• The crypto broker term is clarified.
• While the CFTC is given dominion over the spot markets, any company that raises funds through digital asset sales will be required to make disclosures to the SEC.
• The bill clarifies custody arrangements, specifically how exchanges treat customer holdings should they go bankrupt.
• A timeline is established for interagency coordination of the guidance and regulation that they must issue.

Under this proposed bill, bitcoin and ethereum would fall under CFTC oversight with other commodities. Hate it or love it, this is the most comprehensive regulatory framework to come from lawmakers regarding digital assets. If the senators can garner enough support for the bill to be enacted, it will absolutely pave the way to widespread adoption.

Twitter 

• 99% of cryptocurrencies are not currencies and should be named something else. POW still means prisoner of war and POS still means piece of shit. Algorithmic stablecoins are not stablecoins. We have a major problem with our vernacular.- The Wolf Of All Streets
• Question: A lot of people I really respect think that inflation has structurally changed and a smaller group think it hasn’t. What is your view/best guess based on ONLY these two choices? For pedants – 1% or more higher than 2% to 3% for an extended period of 1yr+ – Raoul Paul

Play to earn gaming is more than a way to earn passive income during a bear market. In fact, there’s a movement gaining momentum that may revolutionise the entire blockchain gaming industry.

Bear markets are for building and now’s your chance to get in at the ground level. Ready up for tomorrow when we deep dive into the status of crypto gaming, where it’s headed, and how to turn knowledge into returns during downtrends.

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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 Ellen B.

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.