One of the biggest changes to today’s crypto market compared to the previous bear market is the different types of assets that exist.
Instead of choosing from Dash, Litecoin, Ethereum, Bitcoin, etc., people can invest in Metaverse Digital Land NFTs and plots.
Common sense is that these new experimental assets are BTC and ETH.. Risk is difficult to measure objectively, but on-chain data can be used to assess price volatility.
Now that the bear market is fully advanced, it’s a great time to compare these assets and see what the ultimate good assets could be in the future: Cryptography, NFTOr Metaverse Land.
Here we compare three fictitious investors. Abe, Bob, Kathy.. A year ago, each put money into a different asset class within the crypto space.
Abe’s portfolio: 50% BTC & 50% ETH.
Bob’s Portfolio: 50% BAYC & 50% CryptoPunks..
Kathy’s Portfolio: 50% Decentraland Land & 50% Sandbox parcel.
These comparisons are one-to-one (buying three boring monkeys a year ago for $ 6,000 is very different from investing $ 6,000 in a long-standing “safe” token like ETH. increase). Therefore, we have created three “reasonable” portfolios.These 50/50 lines are not Exactly same. I will explain later.
In this article, we’ll track how each of these investor portfolios was executed and explore why some of these investments are more volatile than others.
Abe’s token portfolio
One of the benefits of investing in tokens instead of NFTs is liquidity and splittability. We can always put the exact USD value in BTC and ETH, buy any amount you like and receive a fair market rate.
A year ago, on this day, June 28, 2021, BTC cost $ 35,867. Round this to the nearest $ 100 ($ 35,900) for ease of calculation. ETH is $ 2,160, rounded to $ 2,200.
Our token investors have chosen the best time to dive. After the enthusiasm for listing Coinbase on April 13, 2021 and the Federal Reserve lowering interest rates to 0.25% The market barked to stimulate the economy. However, it was almost here that Prime Minister Abe invaded a temporary crash, mainly due to a wave of strict regulations in China.
Thinking back, Abe bought the bottom of the cycle and put $ 50,000 into BTC and $ 50,000 into ETH (acquiring about 1.39 BTC and 22.7 ETH).
The insane rise continued until November 8, 2021, when Prime Minister Abe’s initial investment was $ 203,767.52.
But then, speculative enthusiasm for cryptocurrencies began to diminish as retailers and investors reduced risky assets.
From January to June, the Federal Reserve raised interest rates by 75 basis points, achieving the largest margin in 28 years.
In February, the war in Ukraine caused a deterioration in macroeconomic conditions and created a bearish environment for the crypto market.
In addition to that, the flash crash Terraruna In May, it looked like the beginning of a series of car accidents in the blockchain industry.
All these events have pushed down BTC and ETH prices. These assets are a substitute for the “cryptocurrency price” itself for the majority of non-cryptocurrencies.
On June 28, 2022, Prime Minister Abe’s 1.39 BTC and 22.7 ETH portfolio was worth $ 54,197.7, down 45.8%. The drop from the highest ever was 73.4%.
NFT Portfolio
NFTs are not as liquid as BTC or ETH, but they are unique and collectable. And when the market is in better condition, holders can then get a certain dollar value.
What was the NFT market like in June 2021?
- Germination and construction period:
In June 2017, the world’s first NFT project, Cryto Punks, was officially born, culminating in the NFT concept. OpenSea-led NFT trading has become more convenient and perfect, and the NFT application area is gradually expanding from games and artwork.
By 2021 Axie Infinity Sales increased rapidly, driving the growth of the NFT market. In the same year, BAYC was also established and attracted public attention.
This is the perfect time for Bob to enter the market when NFTs are still in their infancy. NFTs adhere to the rules, so the faster their attributes, the higher the value and the lower the price (the NFT trading market is immature and the trading frequency is low).
BAYC and CryptoPunks Trading volume in 2021..
Assuming Bob buys one BAYC (3.5713 ETH) and one CryptoPunk (28.9191 ETH) at an average price on June 28, 2021, his initial investment is worth $ 71,478.88 at that time.
In 2021, global economic development was heavily affected by the epidemic, with fiscal easing in major economies causing inflation and currency devaluation, and users entering crypto markets such as artwork, NFT and BTC. Trading activity in the NFT market continued to increase from August to March 2021.
If Bob followed ETH and sold at its peak on November 8 (ETH was $ 4,826.25), and if the average prices for BAYC and CryptoPunk were 43.8835 ETH and 98.5848 ETH, respectively, his portfolio would grow 861.95% to 687,587.63. Worth a dollar. ..
The plunge in the crypto market has led to a decline in investor interest in NFTs, which has had a significant impact on their overall trading volume and market capitalization decline. Over the last 90 days, total trading volume has decreased by 63.84% and total market capitalization has decreased by 38.07%.
As of June 28, 2022, ETH is trading at $ 1,144, BAYC is trading at 113.5035 ETH and CryptoPunk is trading at 77.6991 ETH. Bob’s portfolio is worth $ 218,735.77, up 206.01% year-on-year. It is 68.19% lower than the highest ever.
Obviously, as of early summer 2022, good NFTs are not as volatile as many think, compared to so-called “secure” crypto investment BTC and ETH.
* Investing half of the portfolio in BAYCNFT was not very sane in June 2021, so this portfolio takes a different approach to 50/50. Bob bought one punk and one ape.
Land portfolio
By being interested in the June 2021 Metaverse, Kathy can be considered an early adopter. At that time, the word “Metaverse” was not yet a common name.
Facebook’s rebranding to Meta was still four months away.
Was Metaverse a new version of Second Life? Did you need a VR headset to access it? Almost no one knew who wasn’t deep inside the cryptocurrency hole.
But the rumbling was there. On June 4, Sotheby’s opened a virtual gallery in Decentraland. The game shook as the first game to break through a million with the sale of land in the Metaverse.
On June 28, 2021, Kathy became the landlord of the Metaverse. Her purchase was one of 37 NFT sales at Decentraland, generating a total of $ 148,500.
All transactions on the blockchain are done in the public ledger, so you can actually see and analyze all the land sold on this day.
The average selling price on June 28th is about $ 4,000, and these sales seem reasonable. (That is, if there was a single sale at an astronomical price, the average amount that Kathy could pay would be a bad standard.)
So, soaking her toes in the Metaverse, Kathy bought a plot of land for $ 4,000. Perhaps this is:
She also added a parcel to the sandbox. At the time, the search term “sandbox” hardly came up with a Metaverse title that would take over the news headline in just a few months, as token prices rose 3842%.
On June 28, 46 NFTs were sold, with an average price of $ 945, to $ 43,500. This is hundreds higher than the median of the day, but still accurate enough to do a general analysis.
Therefore, to maintain an almost 50/50 quota for the two well-known products in the asset category, Cathy bought Decentraland land for $ 4,000 and Sandbox land for $ 945 each. That’s a total of $ 7,780 in Metaverse’s land portfolio.
Her judgment will prove to be foresight. By November 8, 2021, when ETH BTC peaked, Decentraland’s average selling price rose 3.0469 ETH to $ 14,705. The average price of sandbox land soared to $ 6,096, up 734.62 percent.
On average, her one Decentraland plot and four Sandbox parcels are worth $ 39,089.
Instead, looking at the above physical assets costing just below $ 4,000 on June 28, 2021, it increased by $ 59,135. It turned over at $ 55,313 on November 15, 2021 and was the closest sale to the ETH peak.
The following year, Decentraland and The Sandbox volumes fell by 76.81% and 79.03%, respectively, resulting in a sharp drop in land prices in the Metaverse.
June 28, 2022, Cathy’s The portfolio was down $ 14,811 from ATH (-62%). It’s a big hit, but it’s still well above her initial investment. The land of the Metaverse is clearly very volatile and can be called the Hail Mary Pass rather than a safe and good stock.
Overview
Although NFT and Metaverse lands have increased significantly in the bull market, chain data for top projects show that prices do not fluctuate as much as many believe they do compared to “safe” assets such as BTC and ETH. is showing.
In this article, we created three virtual portfolios and found that secure cryptocurrency bets are declining from ATH more rapidly than investments in NFT and Metaverse lands (as of June 28). .. Profit in the bull market would have been significantly higher for the latter two “risk” assets as well.
There are several possible explanations for this (for example, it’s difficult for institutions to lower NFT and land prices), but this data shows that top NFTs and Metaverse land projects worked very well throughout last year. It supports the idea. — Boom, bust, crash, etc.
Date and author: July 7, 2022, Vincy
Source: Footprint analysis – BTC & ETH trend analysis
This work, Footprint analysis community.
The Footprint Community is a place where data and crypto enthusiasts around the world can gain insights and insights into Web3, Metaverse, DeFi, GameFi, or other areas of the new world of blockchain. Here, lively and diverse voices support each other and move the community forward.
What is Footprint Analytics?
Footprint Analytics is an all-in-one analytics platform for visualizing blockchain data and discovering insights. Clean up and integrate on-chain data so users of all experience levels can quickly start investigating tokens, projects, and protocols. With over 1000 dashboard templates and a drag-and-drop interface, anyone can create their own customized charts in minutes. Reveal blockchain data and invest smarter with Footprint.
