🚀Gotta Catch 'Em All

Cheap Gas, Mass Adoption, and Alpha

June 11th, 2021 | Sign up

Happy Friday. Today we’re excited to present a special guest post from our friend Alphaketchum! Enjoy! 🚀

Price Check 📉 7 Day Change

⬇️ Bitcoin: $36,769 (-6.2%)

🩸 Ethereum: $2,447 (-14.4%)

🩸 Dogecoin: $0.32 (-18.9%)

🩸 SushiSwap: $9.28 (-29.6%)

🩸 Polygon: $1.35 (-26.5%)

⬇️ Solana: $39.11(-1.5%)

Prices as of 10 PM PST 6/10, data from Coingecko

Ladies and gents…. Alphaketchum 👇

Hi all, Alpha here. I'll be occasionally guest posting on Zoomer Money. Here are two quick thoughts…

Single Digit Gwei ⛽️

(gwei = how gas fees are denominated on the Ethereum network)

Gwei is Low, so DeFi must be dead, right?
In early May, Ethereum’s dad Vitalik sold off all of his dog tokens causing a cascading set of liquidations in the market. Since then, gas fees have plummeted, with gwei now hovering in the mid-20s. So is DeFi dead? Or, more importantly, is the average price of gwei now a bad proxy to judge Ethereum block-space demand?

Well, if you've spent any time in the DeFi market, you'll know $MATIC has had staggering performance, with YTD returns that are 38x Bitcoin. And for those who are not familiar with Layer 2 (L2) terminology, Matic is a side-chain solution to Ethereum's congested block-space by performing off-chain computation.

Two of the biggest L1 Ethereum blue-chip projects, $AAVE & $SUSHI made the decision to promote liquidity on Matic, potentially jeopardizing their competitive position on L1. However, it seems fragmenting liquidity is starting to pay off for projects that positioned themselves there. Here is SushiSwap's Trading Volume for the last week, showing Matic taking the lead on June 8th:

Key takeaway: Gas fees as an indicator for bearish or bullish directionality matters a little less now.

El Salvador 🇸🇻

Bitcoin isn't a toy anymore. El Salvador has gone beyond decreeing it legal tender. Instead, it is looking to Bitcoinize its state.

In contrast to China's crackdown, which focused on trading restrictions and energy concerns, El Salvador is an economy that’s potentially on the cusp of pseudo-de-dollarization—much to the alarm of the International Monetary Fund (IMF), who shortly raised concerns on financial, economic, and legal grounds.

While most participants see the move as a paradigm shift, this creates some immediate headwinds for Bitcoin. First, which we've seen with the IMF, is it forces the West to respond. Then it forces us to once again re-evaluate what Bitcoin is: is it a store of value or is it a medium of exchange? While it can simultaneously take on both qualities, this will again usher in a period of temporary uncertainty for Bitcoin's future.   

In other words, this is like beta-testing Bitcoin... and what happens in El Salvador will set the tone for Bitcoin as a monetary asset and currency.

- Alpha

Small Bitez 📰

Thanks for reading! 👋

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