Dear valuable clients,
We aim to present you on a monthly basis some key insights which might be helpful for you.
Overall take-home message:
The overall stance hasn’t changed. Crypto markets are still in a choppy state that could explode to the down- or upside. People with no exposure to crypto-assets might find entry points within the next few weeks to months. This is where professional assistance can help.
1) What happened last month?
Last month, the expectation was that Bitcoin would move towards the $50k mark if it held $44.5k. In early April, Bitcoin did indeed move higher, but was then stopped out just above $47,000. As a result, a reversal set in and the Bitcoin price corrected all the way down to its support level around $37.7k. The strongest force pulling Bitcoin down was the strengthening dollar. In fact, towards the end of April, the dollar approached a critical resistance level, which some also refer to as the danger zone. Looking at the first few days of May, one is tempted to conclude that the dollar failed to break above this key resistance level, the crossing of which would bring further downside to the crypto markets.
2) Where do we stand?
With the Fed being as dovish as possible at its press conference in early May, Bitcoin saw a relief rally from the lows at $37.7 to $39.7. There it met strong resistance for the time being. Although the Fed did everything it could to cheer up the markets by hinting that there will be no quantitative tightening (QT) until June and showing a willingness to pivot and forgo 50 basis point (bps) hikes if the consumer price index starts to decline, there are still some reasons to view the markets with caution: For now, war, inflation, interest rate hikes and the risk of recession are still on everyone’s minds.
3) Outlook: Where do we go from here?
Quite a few market watchers still believe that Bitcoin’s ultimate capitulation moment will occur within the next few weeks. That’s why the Bitcoin price is currently below $30k. Others argue that Bitcoin is still in an uptrend after a correction that started back in November 2021. One argument is that the correlation between Bitcoin and stocks is currently at an all-time high, so a potential stock rally in the midterm elections will also benefit Bitcoin. In fact, in every stock market midterm rally since 1933, the markets have averaged a return of over 28%. And while this is true and a real possibility, some point out that the rally usually began later in the year of the midterm elections. So it’s possible we’ll see a sideways movement with volatility in risk assets for the rest of the summer.
What does all this mean for altcoins? For altcoins to skyrocket, the bitcoin price needs to be in a stable state. Due to the many macroeconomic uncertainties, the mother of all cryptocurrencies cannot currently offer such price stability and certainty. So, attention may gradually shift to Bitcoin in the coming weeks. Especially if Bitcoin starts pumping consistently again, the first part of the rally would be dominated by Bitcoin.
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Fitness Finance (FitFi) – When DeFi meets the real world
Currently, an app called StepN is all over social media. It is at the forefront of the Fitness Finance movement, short FitFi, that allows players to earn crypto tokens for exercising and running in the real world. FitFi, also referred to as Move-to-Earn (M2E), is the next hyped development in blockchain gaming, or more precisely, in Play-to-Earn (P2E) gaming.
Of course, FitFi games involve a sophisticated in-game economy, which in most cases requires players to make a pre-investment (e.g. purchase an NFT) and encourages them to spend their earned tokens in the game economy instead of selling them. The StepN App even knows two different tokens, one of which can only be earned through participating in the game, while the other could be purchased in an ICO.
So far, the StepN App has proved very successful as hundreds of players join the community every day. Since its ICO, the StepN token GMT has made a 300x. Their in-game token GST has also seen a steady increase in price since the beginning of the year.
New competitors, new Opportunities
A successful crypto project is never alone. The FitFi industry is on a fast track to crypto stardom and attracting many new projects, which are developing their own versions of FitFi apps. While each of these is following a slightly different approach, the underlying concept is similar: players get rewarded for moving their bodies in the real world.
Here is a list of four promising FitFi crypto projects, which all have their own tokens. Some of these tokens can be purchased on centralized crypto exchanges (CEXs), while others can exclusively be purchased on decentralized exchanges (DEXs).
Dotmoovs (MOOV) – Thanks to AI, players can film themselves juggling a football or dancing a choreography. The AI rates the performance and rewards players accordinlgy. Dotmoovs is an interesting alternative to StepN as it offers non-running Move-to-Earn games.
Genopets (GENE) – Genopets is a combination of Move-to-Earn and Play-to-Earn. A Genopet is a player’s digital spirit animal that evolves through a player’s real-world activity. Genopets is still in the beta testing phase.
Step App (FITFI) – Step App rewards players for running. Other than StepN, it prioritizes decentralization and works with a decentralized autonomous organization (DAO) model. Step App has not launched its app yet
OliveX (DOSE) – OliveX wants to merge real-world fitness with the metaverse. For this, it is collaborating with The Sandbox metaverse. Animoca Brands, which also is a large stakeholder in The Sandbox, is one of the lead investors in OliveX.
Investments in hyped FitFi projects can generate lucrative returns. Investors should keep in mind though, that the mid to long-term sustainability for some of these projects is questionable. Thus, before investing, investors should define an exit strategy or contact one of our professionals @PTGR.
We hope that this newsletter has given you a good insight into the current situation of the crypto market.
We thank you for your support.
Your PTGR AG TEAM