The Rake Review: March 2024
The Rake Review: March 2024
The Rake Review: March 2024
Just before we dive into this month's edition of The Rake Review, the Stormrake team which is currently hiring and expanding hopes you enjoyed the Easter break with your loved ones. As you may have noticed, our team has tripled in recent months and are still on the lookout for talented, passionate and focused crypto traders, developers and brokers, so if you or anyone you know fits that description, please send them our way.
Our mission and vision is clearer than ever before and our capacity to serve you, our valued clients and crypto investors, has gone from strength to strength and we're building some truly incredible tools and resources for you to take advantage of right away. For now, you have 7 day a week, 365 days a year access to an elite team of crypto brokers, so please feel free to use that resource by calling or emailing us with your requests and inquiries.
Without further ado, let's dive into The Rake Review!
Blackrock's Most Successful ETF Launch
BlackRock's iShares Bitcoin ETF, IBIT, has set a remarkable precedent in the ETF realm, achieving a staggering $10 billion in assets under management (AUM) on March 1, merely seven weeks post its launch on January 11. This feat establishes IBIT as the swiftest ETF to attain such a milestone, positioning it as the premier spot ETF Bitcoin trading instrument.
This milestone not only highlights the escalating investor trust in digital assets but also signifies a pivotal moment in the evolution of the cryptocurrency market as a credible and viable investment avenue. Surpassing the previous record held by SPDR Gold Shares (GLD), which took over two years after its inception in 2004 to hit the $10 billion AUM threshold, IBIT's achievement underscores the rapid adoption of cryptocurrency investment vehicles.
The meteoric rise of IBIT was also fuelled in part by an unprecedented surge in trading activity and capital inflows across a consortium of 10 spot Bitcoin ETFs. IBIT alone witnessed inflows of $604 million on February 29, closely trailing a single-day record of $612 million the preceding day. According to Bloomberg Intelligence, more than three-quarters of IBIT's AUM originated from investment inflows, with the remainder attributed to price appreciation. Notably, iShares Bitcoin Trust amassed $4.5 billion in capital throughout February.
Numerous factors contribute to the burgeoning appeal of IBIT. Firstly, it provides a secure and regulated avenue for investors seeking exposure to Bitcoin, mitigating concerns surrounding security, custody, and regulatory compliance inherent in direct cryptocurrency investments. Secondly, the ETF simplifies access to Bitcoin, catering to a broader investor base, including novices in the cryptocurrency realm and proponents of traditional financial instruments.
Against the backdrop of robust demand for spot Bitcoin ETFs, the world's largest cryptocurrency has embarked on an unstoppable rally this year. Bitcoin soared to an all-time high of $73,500 on March 13th before retracing below $64,000. At its pinnacle, the cryptocurrency boasted a year-to-date surge of approximately 63%, outstripping global equities and fostering optimism within the digital asset sphere.
The message here is quite simple, do not sell your Bitcoin cheap just as an unrelenting bid has entered the markets and billions of dollars flows into the world's most pristine asset.
Now let's shift gears from Bitcoin and institutional adoption to a sector of the market that is more dominated by the retail investor... Memecoins.
Now let's shift gears from Bitcoin and institutional adoption to a sector of the market that is more dominated by the retail investor... Memecoins.
Memecoin Mania
A clearer image of the chart can be found here ---> https://www.tradingview.com/x/jOaTF0Bp/
You may be looking at the eye-watering returns of these memecoins and thinking to yourself, this is beyond ludicrous.... How can I get involved? I mean for goodness sake, WIF (hat stays on) has pulled a 12x in the last 3 months alone and makes DOGE paltry 172% return look amateur.
As this is our 4th cycle in crypto, we're here to tell you that you haven't seen anything yet as the silly season has only just begun. However, please don't misconstrue our understanding of market cycles as an endorsement of memecoins. This kind of risk is not for everyone.
Although the return profile has many throwing whole chunks of capital and deploying a spray and pray methodology, we're here to cool your jets and provide some insights on how to potentially play these memetic coins if you wish to partake in the madness.
Tip #1 - Don't marry your positions - WIF isn't the future, just the latest craze.
Tip #2 - Don't waste your time hunting microcaps, it's a recipe to get rugged.
Tip #3 - Respect strength as you're better off having exposure to the category leaders.
Tip #4 - Keep a small selection of memecoins in the portfolio, 2 or 3 should do the job.
Tip #5 - Size the allocation and exposure relative to your overall Bitcoin position.
Tip #6 - It's incredibly unwise to play memecoins if you have zero Bitcoin exposure.
With these tips in mind, you're always welcome to give your crypto broker a call as they're always happy to help you avoid common traps and pitfalls within the wild west.
The Stormrake Story
Our own journey started in 2015 when Bitcoin was relatively unknown and Litecoin, Dogecoin and XRP had recently been introduced. 2015 was the year Vitalik Buterin started Ethereum (July '15) and with that launch a seed was planted for the 2017 Retail lead crypto ICO boom.
The Stormrake founders (Michael Milmeister & Douglas Hemingway) had just been introduced to the entire concept of Bitcoin. A decentralized, better money that had an unknown founder and an economic model where incentives would drive the network of users to behave in the right way. The idea thrilled us! Was it actually possible for an asset to have a capped supply? If so, the implications of that were enormous. Was it possible for this project to survive even though it was an obvious threat to fiat (national) currencies and nation states control over money and monetary policy? Was it possible for this thing to be hacked? We argued about all these questions passionately with our friends. In the end, we decided to give it a go and buy some Bitcoin.
Our first experience with buying bitcoin was by going to a physical bank and wiring funds to someone that promised to send Bitcoin back. We assumed the funds were going to disappear but amazingly the bitcoin was actually sent. Back then there was no other way to buy bitcoin easily in Australia. There was no broker that could get it easily done for you.
Soon our trading activities developed and we realised there were arbitrage opportunities available. Crypto was the wild west and professional investors were not participating. It meant that markets were often incorrectly priced meaning we could make money buying low and selling high elsewhere.
Soon, the retail craze of 2017 started and things really took off. Bitcoin went first and hit all time highs sending waves of excitement through the market. Ethereum allowed for new coins to be created easily and many went up really quickly creating a lot of wealth and a cycle of FOMO. We saw unlimited opportunity and decided that our day jobs (which were great) were actually holding us back. We decided to quit our jobs and devote our careers to this new industry. It was a brave or crazy move but we were willing to take the big risk. We wanted to be in a growing industry and we could smell the opportunity. By 2017, we felt the questions that faced Bitcoin were answered. No, the network could not be hacked. Yes, it was possible to achieve actual decentralisation and as a result it was possible to have the world's first asset that had a known supply cap. Bitcoin had done the hard yards and proven itself.
2018 was a tough year as markets cooled off and people that bought in Dec 2017 were facing large losses. This did not deter us however as our conviction was incredibly strong. We were acutely aware of Bitcoin's need in this world not only because of the investment opportunity but also through the enablement of freedom money. Bitcoin was clearly part of the solution and we wanted to be part of it.
On Jan 2 2019 we officially registered Stormrake. Initially as an arbitrage business but soon it would become a crypto broker as our friends and family asked for help to invest in crypto. Pretty soon, it became harder and harder to make money arbitraging markets as more professionals came into the business. Meanwhile, our brokerage model was finding its feet. We found that clients were really happy with the full service we were providing and things went from strength to strength. Operating in a cyclical world we certainly experienced ups and downs but we were making progress and learning from the hard times.
2021 brought, a renewed Bull market and Bitcoin went for another huge run hitting $69,000. The boom was marked by decentralised finance (DeFi) projects which created many millionaires but also caused part of the risk buildup that lead to the eventual bear market in mid to late 2022. The enormous corporate failures led by SBF’s FTX exchange as well as a cascade of others created a credit fuelled disaster which has only recently been resolved.
2022 was not only the year of a savage bear market but the year we brought on our head of sales & brokerage, Bisher Khudeira. We doubled down and refocused our efforts on our core services of brokers and custodians and all throughout the bear market continued knocking on doors, building new technology and improving capacity. We knew the bear market wasn't going to be a permanent fixture in the crypto space, it was just a matter if time before our efforts and patience will be rewarded as it had been in the past.
When 2023 rolled around, we saw many calling for the death of Bitcoin but the whispers of a spot Bitcoin ETF were emerging and our sharpened senses told us the recovery was afoot and that we could spare no time or expense in preparing for the upcoming bull market. We hired some incredible talent, launched new tools for our brokers & traders and laid the foundation of a fantastic service you have all come to know and love.
And now it's 2024 and we are part of a renewed bull cycle. This time, we have all the experience gathered over multiple 4 year cycles. That experience is there for our clients to draw on and use. For Stormrake clients, the service provides not only execution but the benefit of direct access to an experienced broker who has seen all the mistakes and all the successes of previous years.
Market Update
- The main change in the Top 10 was DOGE moving back in with a pretty impressive 54.7% return for the month of March.
- BTC is up over 14% for the month as it marches on to a 1.5 trillion dollar valuation.
- SOL has maintained lofty valuations as it added 56.7% to it's growth for the month of March. If it hits the current market cap of ETH from it's current price, that will be a 4x appreciation in price taking it to approx $1,000 USD.
- Memecoins such as PEPE and WIF have been on absolute tear having added 110% and 270% growth respectively.
- Thorchain (RUNE) had breached $10 at one point and currently sits at $8.61. Having added nearly 50% to its valuation in the month of March, it's set for continued strength should Bitcoin ETF inflows remain high.
Video of the month
Australian banks get brought to the coal face by Sky News for their massive overreach and misuse of supposed consumer protections.
In the news
- MicroStrategy Completes $1.05 Billion Offering of Convertible Notes at 0% Coupon and 50% Conversion Premium with Bitcoin Use of Funds.
- Thorchain & BASE surge into top 5 chains by volume signalling demand for new ways to move funds on-chain.
- March 12th saw net inflows of 1 Billion dollars into spot Bitcoin ETFs. We keep sharing the same sentiment, don't fight these inflows and sell your Bitcoin cheap!
- Assets are moving from Ethereum into L2s with Arbitrum taking top spot for bridge inflows.
- Kucoin and its founders have been charged with a myriad of money laundering and unlicensed money transmission charges.
- March 2024 was the first month in THORChain history with over $10b in trading volume.
- Fetch.ai, Ocean Protocol, and Singularitynet to Merge Tokens Into 'Artificial Superintelligence'.
- The FTX/SBF saga has concluded its sorry saga as Scam Bankrupt-Fraud has been sentenced to 25 years in prison.
Education
Education
Education
Real World Assets
Today we delve into the intriguing realm of real-world assets (RWAs) within the cryptocurrency space. This intersection of traditional finance and blockchain technology offers compelling opportunities for savvy investors seeking to enhance their portfolios. Join us as we navigate through the key insights from Stormrake's RWA Education corner and uncover the wealth of potential that RWAs hold for astute investors like yourself.
Before we dive into the report's findings, let's establish a clear understanding of RWAs. Essentially, these are tangible assets from the real world that have been tokenised and brought onto blockchain platforms. This includes a diverse array of assets such as real estate, commodities, and debt instruments, all accessible through decentralized platforms.
Now, let's explore the notable Real World Asset segments that are already claiming market share & utility.
1. USD-Pegged Assets Dominate: If you have been around crypto long enough, chances are you have already used or interacted with stablecoins in way or another, particularly those pegged to the US dollar. These stable assets serve as a reliable hedge against market volatility, making them a preferred choice for risk-averse investor or those looking for instant settlement cross-border payments and remittances.
2. Commodity-Backed Tokens Shine: We have found growing popularity of tokenised commodities, backed by physical reserves. Whether it's gold, uranium, or other precious metals, these assets offer investors a tangible hedge against inflation and economic uncertainty. This offers up an opportunity for risk-off investors and commodity cowboys an avenue to experience and explore DLT and near-instant settlement.
3. Tokenised Treasury Products Soar: Amidst market turbulence, tokenised US treasuries have emerged as a sanctuary for cautious investors. The significant growth of these assets are a signal that their appeal rests with their perception of being a safe haven within the crypto ecosystem. This also signals significant demand for other asset classes to become tokenised such as the global equities, a market that is currently worth over 100 trillion dollars!
As we absorb these insights, it's crucial to approach RWAs with a nuanced understanding of risk and reward. While the potential for returns is enticing, investors must remain vigilant to regulatory considerations and market dynamics.
By staying informed and diversifying across a range of RWAs, investors can position themselves to capitalize on the transformative potential of blockchain technology while mitigating risk. Remember, informed decision-making and strategic allocation are the cornerstones of successful investing in any portfolio.
In conclusion, we understand the important & dynamic nature of RWAs within the cryptocurrency space are here to stay. With diligence and discernment, investors can leverage the power of RWAs to build resilient and profitable investment portfolios.
Until next time, happy investing!
Memes of the month
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No Advice Warning
The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.
Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.
Disclaimer
All statements made in this newsletter are made in good faith and we believe they are accurate and reliable. Stormrake does not give any warranty as to the accuracy, reliability or completeness of information that is contained here, except insofar as any liability under statute cannot be excluded. Stormrake, its directors, employees and their representatives do not accept any liability for any error or omission in this newsletter or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided in this newsletter is owned by Stormrake. You may not alter or modify this information in any way, including the removal of this copyright notice.Copyright © 2022 Stormrake Pty Ltd, All rights reserved
