Disclaimer: Your capital is at risk. This is not investment advice.
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.
The crypto space is stabilising as the number of tokes in downtrends has fallen sharply, as shown by the retreat of the red zone on the breadth chart.
The crypto winters in 2018 and 2022 both saw a lack of blue as the market was dominated by downtrends. Then the blue returned in 2019, briefly interrupted by the Covid crash in March 2020. The Bitcoin halving came about in May 2020, and a period of strength resumed. If history repeats itself, we should be heading into a stronger seasonal period where we see better market conditions.
However, the big alt rally may not come until after the Bitcoin halving next April. Last time, Bitcoin was very much in the lead right up to that point. Thereafter the market breadth turned blue as many tokens started to outperform Bitcoin.
Still, we carry on looking for opportunities. There are three 5-star trends when measuring the leading 100 tokens in BTC.
Bitcoin Cash (BCH), we have rejected. Wise Token (WISE) is illiquid.
Injective (INJ) is potentially interesting, but the on-chain data is weak.
Litecoin Halving in 2023
Launched in 2011, Litecoin (LTC) is one of the earliest altcoins in the crypto space, created as a “lite version of Bitcoin”. Rather than a hard fork of Bitcoin, Litecoin is an independent blockchain based on a copy of Bitcoin’s source code. This means that the two blockchains share a lot of similarities, with the biggest differences being the hash function, max supply and transaction speed.
Similar but Different
|Max Supply||21 million BTC||84 million LTC|
|Block Speed||~ 10 minutes||~ 2.5 minutes|
|Difficulty||2016 blocks (~14 days)||2016 blocks (~3.5 days)|
|Halving Epochs||210,000 blocks||840,000 blocks|
Source: Bitcoin Forum
Although Litecoin can process blocks around four times faster than Bitcoin, its halving block interval was also extended, meaning Litecoin follows the same 4-year halving cycle as Bitcoin.
|LTC Halving||Date||Block Height||Block Reward (LTC)|
|Epoch 0||7 October 2011||0 (Genesis)||50|
|Epoch 1||25 August 2015||840,000||25|
|Epoch 2||5 August 2019||1,680,000||12.5|
|Epoch 3||~2 August 2023||2,520,000||6.25|
Source: Litecoin Halving
In a nutshell, the halving event halves the block reward for miners, meaning fewer new coins will enter into circulation in the new halving epoch, making the supply scarcer. Since Litecoin, like Bitcoin, has a max supply of tokens, the halving mechanism also makes the LTC token deflationary.
Current LTC Inflation Is 3.7%
Crypto token prices are volatile, and there are no crystal balls to predict future prices. Since halvings are hardcoded events, they tend to attract heavy market speculation where the expectation is that the price will go up when the supply becomes scarcer. In reality, there are many factors in play that will impact the price.
Litecoin Halving Epochs
The previous halving period (epoch 1) saw a price rally ahead of the 2019 halving, but it dropped again after the halving event. This year, the LTC price action leading up to halving has been more lacklustre, as shown in the ByteTrend chart below.
LTC in USD (Past 5 Years)
ByteTree’s 12-week Fair Value indicator puts the current LTC price at a premium. Perhaps there is a little hype around the halving after all?
The other side of halving is of course the impact it has on the miners. With the block reward halving, the miners will become more reliant on fees to meet costs and increase profits.
Litecoin Weekly Fees in USD
Fees are correlated with network demand and usage. Although there has been an increase in daily transactions since the last halving event, the activity has remained fairly steady over the past year.
Litecoin Daily Transactions
While the 2023 spike in daily transactions is impressive, an all-time high in fact, it is not as exciting as it seems. Instead, it relates to the introduction of LTC-20, the Litecoin version of Bitcoin ordinals. Sadly, NFTs are low in cost to transact, and the sudden increase in activity is barely registered on the fees chart above.
All things considered, the 2023 Litecoin halving is currently shaping up to be uneventful. One can only hope that it whets people’s appetite ahead of the Bitcoin halving in 2024.
Injective Protocol (INJ)
Built on the Cosmos blockchain as a Layer 2 application, Injective Protocol is a decentralised exchange (DEX) that offers cross-chain margin and derivatives trading. The protocol leverages cross-chain bridges, enabling traders to access cryptocurrencies from various blockchain networks. Unlike popular DEXs like Uniswap or PancakeSwap, Injective Protocol diverges from using an automated market maker (AMM) formula for liquidity management. Instead, it adopts the order book model, which has a longstanding presence in both centralised stock and crypto exchanges. Through this approach, Injective aims to combine the efficiency of traditional finance with the transparency inherent to decentralised exchanges.
Multichain, a cross-chain bridging protocol operating across multiple blockchains, has experienced a devastating $120m exploit. The exact cause of the exploit remains unknown, but Multichain's team has confirmed that the funds were illicitly transferred to an unfamiliar wallet. In light of this incident, Multichain advised all users to immediately discontinue the use of Multichain services and revoke any smart-contract approvals associated with the protocol. Unfortunately, this is not an isolated occurrence, as similar exploits have plagued cross-chain bridges in the past. These incidents not only inflict substantial losses on unsuspecting users but also leave a lasting impact on market sentiment, undermining the reputation of the entire industry.
Negative: On 4 July, the Danish Financial Supervisory Authority (DFSA) issued an official order to Saxo Bank, a local investment bank, requiring it to divest its cryptocurrency holdings. The DFSA has asserted that Saxo Bank's involvement in crypto activities falls outside the legal scope of financial institutions, citing Section 24 of Denmark's Financial Business Act. This decision highlights the regulatory scrutiny and challenges faced by institutions engaging with cryptocurrencies in Europe as authorities seek to define the boundaries of their involvement in the evolving digital asset space.
Positive: In a significant move, Namibia, an emerging African nation, has taken a progressive step by approving a bill that regulates digital assets, cryptocurrencies, and virtual asset service providers (VASPs) within the country. This landmark bill aims to establish a comprehensive framework focused on consumer protection, combating market abuse, and mitigating the risks associated with money laundering, financing of terrorism, and proliferation activities in the digital asset markets. By embracing this legislation, Namibia joins a growing number of countries worldwide that are recognising the need for clear regulations to foster a safe and secure environment for the growing cryptocurrency industry. This development signals Namibia's commitment to harnessing the potential benefits of digital assets while ensuring regulatory oversight and safeguarding against illicit activities.
Down the Rabbit Hole
Connecting your MetaMask wallet to Uniswap allows you to seamlessly access one of the most popular decentralised exchanges in the cryptocurrency world. This guide will walk you through the steps to connect your MetaMask wallet to Uniswap and start trading digital assets in a decentralised manner.
Step 1: To get started, you need to install the MetaMask wallet extension in your web browser. Visit the official MetaMask website and follow the instructions to install MetaMask for your preferred browser (such as Chrome, Firefox, or Brave).
Step 2: You can skip this step if you have already created a wallet with MetaMask. Once you have MetaMask installed, set up your wallet by creating a strong password and securely backing up your seed phrase. Make sure to write down the seed phrase and store it in a safe place. This phrase is crucial for recovering your wallet if you ever lose access to it.
Step 3: Open a new tab in your web browser and visit the official Uniswap website. This will take you to the official Uniswap interface, where you can access various features of the decentralised exchange.
Step 4: On the Uniswap homepage, locate and click the "Connect to a wallet" button. This will open a pop-up menu with several wallet options. Select "MetaMask" from the list.
Step 5: After selecting MetaMask, a MetaMask pop-up will appear, asking you to authorise the connection between MetaMask and Uniswap. Review the information presented and click "Connect" to proceed.
Step 6: A final confirmation message will appear on both MetaMask and Uniswap, indicating that the connection has been successfully established. You are now connected to Uniswap through your MetaMask wallet.
By following these simple steps, you can easily connect your MetaMask wallet to Uniswap and begin trading digital assets in a decentralised manner. Remember to exercise caution and conduct thorough research before engaging in any financial transactions on Uniswap or any other decentralised exchange.