CRYPTOS KICK OFF MAY WITH A MEMECOIN BANG!

Hello and welcome to a brand new month crypto champions!

And what a month is has been already.

The Fed have hiked interest rates...again, regional banks in the US are tanking, crypto degens have been going crazy for memecoins, and Bitcoin's daily transactions hit new all-time highs.

And let's not forget about Star Wars day (May the 4th be with you)! 🌌 😉

So, with a lot to unpack after the first week of May, and a lot to look ahead to, let's get to it:

• Recognise - crypto investors now look to US inflation data 📈
• Respond - should you be getting in on memecoin mania 🐸?
• Research - the Graph Protocol, an example why tokenomics is so important 🔥

RECOGNISE - CRYPTO INVESTORS NOW LOOK TO INFLATION DATA 📈

So, the Fed did exactly what everyone was expecting them to do and raised rates by another 25 basis points last week (even as US banks are burning around them).

Is this the last hike we will see? I sure hope so, but who can really tell what's going on inside the head of Jerome Powell ...

Especially, as the Fed left the door open by saying that future rate decisions will be purely macro data dependent.

Which is why all eyes are now turning to April's CPI results - and so should we 👀.

On Wednesday May 10th, US residents will find out exactly how much the cost of living is burning a hole in their pockets 👎.

And the Fed will get their first piece of macro data to feed into their interest rate calculating algorithm (whatever the heck that is).

What we do know is that the previous 12-month percentage CPI change (for March) was 5%.

The Fed wants this down to 2%.

So, on Wednesday, I will be looking to see if the CPI comes in lower than 5%.

Anything lower than 5% means that inflation is continuing to cool = Fed can take their foot of the gas with regard to interest rate hikes.

Anything higher than 5% means that the price of goods and services is continuing to increase = Fed stamping their foot on the gas even harder.

RESPOND - SHOULD YOU JOIN MEMECOIN MANIA 🐸?

People have been going absolutely insane for memecoins over the last two weeks!

This was kicked off by PEPE - a memecoin based on Pepe the frog - which has increased by 4000% over the last 18 days.

It has almost certainly made new memecoin millionaires. And good for them.

I hope they are running around shouting it from the rooftops.

But, for anyone watching from the sidelines it can often lead to people questioning, "should I be getting in on the memecoin action?"

Well, I'm going to put it to you this way - if you are in the fortunate position where you have a small sum of money lying around that you honestly don't mind throwing out of the window 💸 - have a play around with memecoins.

If you don't - stay well clear!

And there's two main reasons for this.

1. Usually, you need to be holding the memecoin right at the very, very start of a bullish run to make any considerable money.
2. And if you were at the start and made considerable money, you need liquidity to exit - which can be hard to come by.

For example, this week I saw an example of a trader that lost $300k+ in one trade because they tried to sell all of their PEPE tokens at once without setting a slippage tolerance.

They still came out with $1.7M, so I'm not going to feel too sorry for them, but I'm sure the -$300k hit stung a bit.

Anyway, that's my two cents on the memecoin madness.

If you want to play around in the degen world, and have money to spare, absolutely go for it.

But, in my opinion, the major benefit of memecoin mania is that...

...it's burning a sh*ton of ETH! 🔥

RESPOND - THE GRAPH PROTOCOL (GRT), AN EXAMPLE OF WHY TOKENOMICS IS SO IMPORTANT

A project that I have been watching for almost a year now is the Graph Protocol and its associated cryptocurrency, GRT.

Make no mistakes - this is a monster of a project. The use case is monumental.

BUT there is a problem. The tokenomics are bad 🙈.

And that can change everything when analysing a project.

Let me start by explaining exactly what the protocol does.

This project is sometimes referred to as the Google of Blockchains because it helps to index data stored on the blockchain.

Data is stored on blockchains, such as Ethereum, and is recorded immutably. It can't be changed. But it also can't be extracted and used very efficiently.

The Graph helps to extract that data from blockchains and input that data into decentralised applications so that it can be used for decisions.

Indexing data means that decentralised applications can run much quicker.

So, demand for a service like this is huge and it has been gathering immense pace. Therefore, you would be forgiven for thinking that this project sounds like an absolute 'no-brainer'.

Unfortunately, the problem lies in the distribution and subsequent release of GRT tokens.

57% of the coins initial supply was held by the team and early backers - way too high for any project.

To make matters worse, the release of new GRT coins has been frequent and heavy (40% of the entire coins supply was released in 2022).

It's for these reasons that I wanted to use it as an example for why tokenomics are so important.

If you had purchased GRT in 2021 or 2022 based purely on its use case alone, you would have been crushed over the last year 📉.

From its all time high in February 2021, the coin had fallen nearly 99% by December 2022.

But if you had discovered the threat of token unlocks, you could have placed your funds in far more lucrative places.

With the above being said, I still like this project.

It's current price of $0.13 makes it a much better proposition. Is it enough for me to invest just yet? I'm not sure.

However, I thought it was a great example of how crucial it is to evaluate tokenomics ahead of making an investment, so I hope it's helped.

And that wraps up this week's newsletter!

Thank you so much for subscribing and being part of something brand new.

I hope you enjoyed this fifth issue of the 80/20 newsletter and hope that it is helping you cut through the crypto noise.

As always, if you have any feedback or you would like to see something different in the newsletter - please reach out! Every idea is a good idea!

Have a great weekend and I'll see you for the next one!

James

CEO & Founder of Access All Crypto

​
​Unsubscribe · Preferences​