On this week in the markets, Toby Lewis, CEO, Novum Insights Toby joined Paul Gordon to review the last week in the crypto markets.
On the Impact of Coinbase IPO
(02:19) There has been a lot of hype around Coinbase as a result of the IPO and with that, there was going to be big movements in price. As it stands now the biggest exchange of crypto, which is supposed to be the niche market is bigger than the biggest real stock exchange. This shows the potential of cryptocurrency to be the future of finance. The market would continue to have its 20-30% volatility that the market has been used to, only at a higher rent.
The Rapid Growth of DeFi
(04:09) One of the fastest-growing areas in the crypto space is DeFi. Notably, the total value locked in DeFi last year was under a billion dollars but has grown to fifty billion now. This rapid growth has been driven by decentralized exchanges, being able to tap into Ethereum and make all sorts of trades happen that wasn’t happening before.
(05:06) Yet a lot of the trending coins and DeFi projects are linked to the “Doge Trend” in crypto’s “silly season” as Toby characterised it.
Leaderboard from Novum Insights
The more active coins have been the Shib Inu Coin and Dogira. In the last 90days, if you bought the Shib, you would have made 943000% as a return. Novum Insights through its momentum pairs helps traders predict 30-day winners like these.
(07:20) “At the moment, we are at the peak of the silly season. So after Shib, there’s the Dogira, then there’s Safe Earth, which is a derivative of the Safe Moon stable, Poodle and Method,” said Toby.
(07:48) Visor has also been allowing users to stake and harness some of the gains from UniSwap v3. UniSwap v3 has been removing some of the issues linked to the gas price on Ethereum and allowing people to provide liquidity, which is one of the new kind of tools of the DeFi market and they’re allowing people to do this in a very interesting way.
(08:20) Amid the “silly season”, which is continuing in quite a big way with Poodle, DXH, RenDodge, WDodge, Dodge, the data over the last seven days has been crowded out a bit by just this monster trend linked to link to meme coins and Doge.
(09:02) Novum’s insight product allows the user to look at everything on Uniswap Novum does not recommend people to the dog trend despite existing data showing that they are good trades, because Toby believes the dogs are eventually going to “slow down.”
Novum’s analysts are helping people pick some of the “more sensible” coins as well. Over the last week, Ampleforth, Maker, Duck, Veractity, Cyber Five have all been made good returns even in the down market, Novum’s analysts have focused on not losing a lot of money for people.
DeFi and Binance Smart Chain
(12:41) While a lot of people in the decentralized crypto market are slightly sceptical about the approach of Binance in playing DeFi properly, they are with their centralization solving one of the big problems of DeFi, Toby believes.
(13:03) “Ethereum v1 at the moment lends itself to people with pretty big portfolios. To transfer something on the Ethereum network at the moment, you’re paying $20 in gas fees and to interact with a smart contract, you’re often paying upwards of 200. The smallest trade that we would recommend people to make if you’re just interacting with Ethereurm v1 is a free ground token purchase, and then to interact with a smart contract and begin providing a liquidity pool, you’re looking at putting upwards of 10 grand to work to make the numbers make sense. That’s excluding a lot of people” Toby explained.
(14:02) As a retail-driven industry, Crypto needs projects that allow for easy accessibility for the mass market, and Binance with PancakeSwap and its smart chain have been the first group to probably solve that issue at scale for people. Although names like Babylon and Avalon are also building products that allow DeFi to take place, the big game in the market remains Binance.
PancakeSwap and SafeMoon Token
(14:44) The big story of PancakeSwap, which has been so far fad-driven, Toby says is the SafeMoon token. The coin which traded 6 billion in volume in the course of a day the past week crushed Binance
The data at the moment suggests that the market is in peak silly season with Doge and Safe Moon trend. Yet, this is proving in the short term to be quite profitable for people in a similar way to Wall Street Bets and Gamestop. The group that has been driving a lot of the euphoria around Doge and SafeMoon has been the sister Satoshi Street Bets Reddit channel, a crypto variant of Wall Street Bets.
(16:50) In future what would be important for the crypto industry is how newcomers can protect themselves from the potential scams that are out as there is no centralized exchange as a gatekeeper.
The Insights and Data From NovUM
Novum Insights runs a DeFi calculator, a completely free tool on its website, where one can look at how the various pairs perform. As well, it runs a subscription service. Very easy. You can try it out for £1 or get the annual subscription for £300 as well as access to a trading group, WhatsApp to share ideas and a weekly trading discussion for members to discuss what’s going on in the market.