Ethereum Breaks Higher

Ethereum Breaks Higher

Disclaimer: Your capital is at risk. This is not investment advice.

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ByteFolio brings together ATOMIC, ByteTrend and Token Takeaway to create ByteTree’s model portfolio, known as ByteFolio. This is a selection of crypto tokens, which are weighted according to their risk/reward characteristics. ByteFolio has a modest turnover and will not suit traders. It will appeal to investors who wish to diversify beyond bitcoin, with the aim to beat it.

It is nice to see some good news from Ethereum as the price edges ahead of Bitcoin. A sustained move above $2,000 would be most welcome.

Ethereum Price

Source: Bloomberg

The data show that the Ethereum network is growing again, but there is no surge in activity as yet, but that’ll come sooner or later.

It’s interesting how stable the ETH-BTC relationship has become, with 0.07 being the average for nearly two years. To make a new all-time high, you’d need to see flippening.


Source: ByteTree Terminal

ETH has also seen a drop in volatility too. Over the past 180 days, ETH volatility has been just 1% higher than BTC volatility, last seen in late 2019. That is down from a 25% gap earlier in the year. Surely another sign of better times ahead for crypto.

ETH Volatility Closing on BTC

Source: Bloomberg

ETH is trading at the bottom of the range, with some renewed strength, and is therefore likely to run ahead of BTC in the near term. The bigger question is; how much outperformance over BTC is likely thereafter?

It’s easy to forget that crypto is basically $600 bn in BTC, $230 bn in ETH, $48 bn in XRP, and $40 bn in BNB. After that, they drop off quickly. For ETH to seriously beat BTC, it would have to become the number one asset in crypto, meaning ETH’s utility would become more valuable than BTC’s monetary properties. That’s a big ask. One strong indicator would be ETH having lower volatility than BTC. If that happens, I may start to believe it.

On the rest of crypto, the blue line is rising again, which is welcome. That means the trends are improving. There is no new leadership emerging yet, but at least crypto strength in dollar terms is on the rise.

Crypto Breadth Is Improving

Source: ByteTree Terminal

Another useful indicator is the ByteTree Crypto Average (BCA). This looks at the unweighted daily performance of the top 100 tokens. When it is rising, that means most coins are rising, and vice versa. It currently has two stars but seems to be improving, meaning that the good times are on the way.

Source: ByteTree Terminal


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Cosmos (ATOM)

Binance Labs, the venture capital and incubation arm of Binance, has led a $10m funding round for Neutron. The funding was co-led by CoinFund and supported by Delphi Ventures, LongHash Ventures, Semantic Ventures, and Nomad Capital.

Neutron is the first blockchain to launch using Replicated Security (RS) in the Cosmos ecosystem. With RS, blockchains in the Cosmos ecosystem can rely on the validator set of the Cosmos Hub for their security. Neutron enables cross-chain communication and interoperability among the numerous interconnected blockchains in the ecosystem, creating a favourable and highly scalable environment for smart-contracts development.

As first mentioned in a ByteFolio update in May, Neutron leverages security from Cosmos Hub validators in return for a revenue share. This is expected to bring in additional revenue to the Cosmos Hub, making staking ATOM more rewarding than before, thus increasing its demand.

Central Bank Digital Currency (CBDC)

The chairman of the Swiss Central Bank (SNB) has announced that the central bank is launching a CBDC on Switzerland's SIX digital exchange as part of a pilot. “This is not just an experiment, it will be real money equivalent to bank reserves and the objective is to test real transactions with market participants", said SNB Chairman Thomas Jordan, as reported by Reuters. This initiative aligns with the global trend of various central banks exploring CBDCs, with others launching similar pilot programs with established blockchain protocols.

The Swiss Central Bank's decision to pilot a CBDC on the SIX exchange reflects the ongoing exploration of CBDCs by central banks worldwide. While concerns persist regarding the centralisation of CBDCs, it takes us a step closer to the wider adoption of blockchain and cryptocurrencies.

Down the Rabbit Hole

With the SEC waging war with cryptocurrency exchanges, crypto holders should consider transferring their assets into a self-custody wallet. Remember the phrase ‘Not your keys, not your coins’.

Transferring your cryptocurrency from a centralised exchange to a self-custody wallet removes the third party, meaning only you have full control over your own assets. In this guide, we will briefly walk you through the process.

Choosing a Self-Custody Wallet

Before you begin, it's crucial to select a reliable self-custody wallet that supports the cryptocurrencies you intend to transfer. Here are three popular options:

Ledger Nano Series: Ledger Nano hardware wallets are renowned for their robust security features and user-friendly interfaces. With support for multiple cryptocurrencies, including Bitcoin, Ethereum, and many others, the Ledger Nano Series offers a cold storage solution that keeps your private keys offline.

Trezor Wallet: Trezor Wallet is another hardware wallet known for its exceptional security measures. It supports a wide range of cryptocurrencies and offers an intuitive interface for easy use. Trezor Wallet utilises a secure element to protect your private keys and enables you to store, manage, and transfer your digital assets securely.

MetaMask: Unlike the aforementioned options, MetaMask is a popular software-only wallet that operates as a browser extension or a mobile app. It is compatible with various blockchains, including Ethereum and Binance Smart Chain. MetaMask offers a user-friendly interface and allows you to interact with decentralised applications (dApps) directly from your wallet.

It’s important to do your own research to find a wallet that fits your needs. Once you have selected your preferred wallet, follow these steps to generate and secure your wallet:

  1. Install the Wallet: Visit the official website of your chosen wallet and download/purchase the wallet software or app.
  2. Create a New Wallet: Follow the instructions to create a new wallet. This typically involves generating a strong, unique passphrase and securely storing your recovery phrase (preferably on paper).
  3. Fund Your Wallet: Log in to your centralised exchange account and navigate to the "Withdraw" or "Send" section. Enter your self-custody wallet's address and the amount of cryptocurrency you wish to transfer. Double-check the address to avoid any errors and that the funds are being sent on the appropriate blockchain on both ends.
  4. Confirm the Transfer: Complete the withdrawal process on the exchange, following their instructions and confirming the transaction details. Depending on the blockchain and asset transferred, a typical transaction should be completed within 10 minutes.

Congratulations! By following all of the steps, you have successfully transferred your digital assets from a centralised exchange to your self-custody wallet. Now, you can proudly say that you truly own your digital asset. Welcome to the world of having custody of your private keys!

Next week, we will delve into how we can access decentralised applications (dApps), such as Uniswap, directly via your MetaMask wallet.

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