🔴 When Bitcoin Goes Up, _____ Does Too
The crypto market is one big pool of money sloshing from one asset to another.
Bitcoin's price movement is closely tied to the stock market, which is closely tied to global liquidity.
This means that stocks and Bitcoin generally go up when the economy is doing well.
People are willing to take risks when the economy is doing well. This increases demand for investment assets, which increases price. Expect the opposite when the economy is doing poorly.
Bitcoin’s marketcap is smaller than the stock market's, so its price goes up or down more when people buy or sell it.
That explains why Bitcoin and the stock market can move in the same direction, but Bitcoin increased 37% last month while the stock market increased 5.7%. Of course, the election results helped boost investor confidence, and likely will for the next four years, but this isn’t an outlier. Look at any month on the S&P 500 - whether up or down, Bitcoin moves more.
When Bitcoin Goes Up, _____ Does Too
In crypto, you can make (and lose) more than just 37% a month.
Crypto isn’t limited to a few coins - it’s an entire ecosystem of smaller sectors with house money sloshing around. Investors with a massive appetite for risk put their profits from Bitcoin in all sorts of different corners of the cryptocurrency space, hoping for 10x, 50x, and even 100x return on investment.
These opportunities range from NFTs, decentralized finance (defi), crypto-backed loans, meme coins, AI coins, Layer 2 tokens, gaming tokens, and altcoins, to name just a few.
These pockets of crypto are like a high-stakes casino.
Markets change quickly and many walk out empty-handed.
But with some information, you have a fighting chance to make more money than if you only invested in Bitcoin or Ethereum. This newsletter is my attempt to give you some useful information.
I can’t tell you exactly how to do it (because I don’t know exactly how). The best I can do is give you some graphs and resources to make your own conclusions.
Let’s look at Google Trend analytics to show how Bitcoin’s price drives interest to the crypto space overall.
The progression of interest is quite simple.
People hear about Bitcoin’s price breaking new all-time highs. It may be the third or fourth time hearing about Bitcoin in the last 10 years so they finally look into it. Then, they discover that Bitcoin is just one aspect of the crypto space.
They may look into other big coins, meme coins, and eventually NFTs.
That’s generally how the money flows throughout crypto.
The progression goes something like this:
People make money off Bitcoin, and now they’re looking for the next opportunity. They buy other coins with their house money. These coins go up because everyone else buys into “the next thing”. This happens a few times until eventually, the crowd gets into NFTs, and NFT prices go up.
But you can’t pick just random NFTs. A “safer” bet is established projects that have a large collector base and a good brand.
If you’re minting new projects, be sure to know the founder’s track record and take all hype with a grain of salt.
The two established projects I currently own are VeeFriends (I work there) and an NFT project created in 2017 called Curio Cards.
WITH FULL TRANSPARENCY, I plan to sell most of my Curio Cards this cycle. I love the project and at the same time want to make a profit on it.
Do your own research and please be smart and rational about the money you invest, and remember the thing about investing…
How can you make an educated decision about when to sell?
Other than the old adage of “nobody ever went broke taking a profit”…
You can look at on-chain metrics of the blockchains your NFTs live on.
Here, you can see the number of active addresses over time on the Ethereum network. This gives you an idea of how many people are using the network. As a general rule of thumb (based on gut instinct and experience), I like to assume that for every two active wallets, there is one active person. Many people hold access to multiple wallets. two wallets = one person.
The chart below shows the number of active Ethereum wallets from 2015 - 2024.
It’s healthy to see a steady number of active addresses on the network, even during the bear markets of 2022-2023.
It’s also healthy to see a steady amount of transactions happening throughout the bear market, and now activity is picking up again!
We can expect activity to increase as price draws people into using the network.
And with more people on the network, we can expect more demand for different sectors.
It’s generally understood that the most popular NFT project called CryptoPunks is the metric of how healthy the NFT market is. If CryptoPunks is doing well, the NFT sector is doing well.
You can see that CryptoPunks just started the next rally. Given Bitcoin’s 4-Year-Cycle, I like the odds that this momentum continues throughout 2025.
If you haven’t yet, learn how to buy an NFT or two. Spend $150 on a VeeFriends Series 2 to get the experience of owning a digital collectible.
The NFT marketcap is around $8.5 Billion, which is tiny compared to the overall crypto space of $3.4 Trillion. There is so much more room for NFTs to grow, and we’re only at the beginning of the next cycle.
Here’s a list of resources I’ve been using recently. These resources can help you decide what projects to explore.
NFTPriceFloor provides floor price data and activity on select projects.
NFTScan provides collection-specific data including history, holder data, and price.
NFTGo has great overall market data and in-depth collection-specific data
Cryptoslam provides market activity and historical data on many chains.
Opensea is the go-to for buying and selling NFTs
The Block has some great on-chain data
I hope this newsletter helps you start the next stage of your crypto journey.
I’ll write more about crypto throughout 2025, as I’ve been in the space for 7 years, and I love the potential for good in the world crypto offers.
Until then, if you enjoyed this and want to support me, join my next Whatnot livestream where I’m selling my original fine art prints :)
13 people bought my first run of limited edition prints. I’m selling a few more + other things on my next show!
Bookmark the next show for December 11th at 7:30pm ET.
Click here for $15 your first purchase on Whatnot!
Keep up the amazing articles Ezra 💙