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Tuesday, November 30, 2021
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Crypto and Equities Outlook in This Bull Cycle

#crypto #blockchain #BullCycle #NFT #DeFi #equities

$GBITS $BTCUSD $ETHUSD $SPY

Bitcoin and other cryptocurrencies, sans GIBITS, fell sharply Tuesday, retreating from near-record highs. Stocks finished flat.

The world’s largest digital coin briefly fell below $60,000 during morning trade London time, slipping as low as $58,702 at 1 point.

It later recovered some of those loses and was 5.2% lower at $60,595.44 as of 4:10p EST, according to Coin Metrics data.

Ether, the 2nd-biggest cryptocurrency, fell 6.8% to $4,254.74.

GBITS is trading at $425.58554 at this writing.

Outlook

Currency relies on network effects for success. Much like the marketplaces it enables, a currency is only as useful as the number of participants willing to conduct business while utilizing it as a medium of exchange.

In that regard, currency is not special as there exists an entire product class that relies on network effects for success. Cryptocurrency exchanges and social networks are only as valuable as their ‘liquidity’ meaning the number of active participants.

Marketplaces are the ultimate network effect-dependent product. Consumers want to find their desired products at price levels comfortable to them.

Depth of liquidity defines one’s ability to interact with the network of participants providing various products at various price points.

In crypto, network effects create interesting scenarios. Raising capital in private sales depends on the private validation of a project. Public capital performs proportionately to private validation, which is measured by the amount of capital raised in the private sale.

The success of a medium of exchange, which depends on its acceptance and use by a sizable proportion of the public, is determined by a small group of private investors who initiate a chain reaction.

Network effects play a pivotal role in ensuring the success of the crypto industry. Bitcoin’s resilience, both technically and economically, is attributable in part to network effects.

Depth of liquidity defines 1’s ability to interact with the network of participants providing various products at various price points.

In crypto, network effects create interesting scenarios.

Raising capital in private sales depends on the private validation of a project. Public capital performs proportionately to private validation, which is measured by the amount of capital raised in the private sale.

Essentially, the success of a medium of exchange (cryptocurrency), which depends on its acceptance and use by a sizable proportion of the public (network effect), is determined by a small group of private investors who initiate a chain reaction.

Network effects play a pivotal role in ensuring the success of our industry. Bitcoin’s resilience, both technically and economically, is attributable in part to network effects.

Crypto’s total market cap has grown from approximately $2.3-T in a yr, that almost 700% increase. This success is attributed directly to the volume of transactions and the number of market participants and projects in the space. Every new entity creates value by introducing more opportunities for interaction to other ‘players,’ further fueling the blockchain economy.

Macro factors have played a major role in the rise of cryptocurrency prices, but the importance of network effects cannot be understated. Just 1 new person joining the crypto ecosystem leads to a positive feedback loop that expands exponentially as more people join, creating an increasingly valuable industry with each additional participant and interaction point.

NFT marketplaces, DeFi, play-to-earn and the explosive growth of CeFi are all happening, with extremely positive spillovers between the products.

Network effects are at the core of forming cities and sometimes entire industries – such is the case of Silicon Valley, where a group of companies creates positive spillover effects for one another, triggering the creation of additional companies. The formation of companies triggers the inbound traffic of more skilled labor and the creation of more efficient marketplaces.

A lot of the realities around the crypto industry in terms of employment, innovation and education are also driven by network effects and the resulting resiliency that is created through an increasing number of participants.

We are seeing a similar global boom happening in equities as well as the blockchain economy, as growing volumes and number of users draw opportunistic entrepreneurs, causing a spike in investor interest and availability of capital, which is then used to attract talent that develops the next generation of products and services.

The 2020-2021 Bull Cycle has been good to both crypto and equitie participants worldwide. We are seeing true generational wealth form and lives forever changed. The good times may end, but 1 hopes with strong intentions we are at the edge of something special and market defining.

A Key defining outcomes of this Bull cycle was the fact that millions of new users have gotten their hands on both cryptocurrency and cryptocurrency-enabled products. This cycle has forever changed the fabric of finance and how we view money.

We have seen network effects take hold and drive financial products into the mainstream with successful IPOs, millions of users and billions of dollars in funding, the most ever, and more than companies established between Ys 2013 and 2017.

Time will tell us what paradigm shifts and market leaders will be born as a result of the 2021 Bull cycle.

Stay tuned…

Have a prosperous day, Keep the Faith!

Paul Ebeling
Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.   

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