Onchain analysis, famous for its ever-bullish predictions, has been heavily scrutinized by the crypto community and became something of a laughingstock. That doesn’t mean that onchain itself is trash, though.
The problem with onchain as with most other crypto analysis these days is that it treats crypto as if it were able to chart its own course, when it is not.
The reality is that crypto at the moment trades along with high-risk assets and tech indices. That does not say anything about crypto’s fundamentals, it is based purely on perceived risks and utilities of a novel asset.
Crypto fundamentals are always the same, but the market needs a proof
Until a few years back, crypto traded independently and was not correlated with legacy finance the way it is now. That was because crypto was in its penny stock phase: Nobody cared about it.
Now that the institutional adoption happened, the perceived value of crypto changed and will not change again until crypto proves its utility beyond serving as a high-risk diversification tool in portfolio balancing.
This is why these days, it doesn’t make any sense at all to analyse crypto on its own, without considering legacy markets and the broader economic conditions.
You might even make your analyses quite sophisticated, like we see in the blog of Arthur Hayes - it won’t change anything. One day that will be the way to read these markets but for now, it’s too early for that.
Good crypto analysis takes into account the bigger picture
So, where to get that kind of info?
There are a number of newsletters for financial analysis out there, but the ones from legacy sources that mention crypto are usually completely skeptical of it as a whole.
On the other hand the crypto native ones tend to be dedicated to hopium dealership, no matter how far from reality that takes their audience.
I skim a lot of free crypto newsletters. Most of what lands in my mailbox from Substack is Defiant.io or other publications related to the NFT flavour of the week. It’s is mostly just noise with a flashy graphic design, I haven’t found any good market analysis on Substack yet.
Below are the newsletter that I often find worth looking at:
- The LocalCryptos P2P market runs a newsletter that, true to the opinions of the marketplace’s founder, highlights the political implications of current events, such as the holding an author of an open source code responsible for the misuse of the code in the recent Tornado Cash issue.
- CryptoBits is a newsletter from the OTC platform B2C2. Every week it comes with a chart that breaks down who’s buying and who’s selling: small family shops vs larger organisations, based in North America, Asia vs Europe.
- Bitfinex Alpha is quite obviously a newsletter written by people who have some skin in the game, or at least are very good at acting like they do. It is a realistic look at what matters for the crypto markets, including its weaknesses and the broader context.
That’s pretty much it. Kraken runs an insight newsletter for their traders too but I never thought it was any good. The analyses are too wordy for a text that is narrowly focused on (usually) a sh1tcoin.
Another newsletter that is quite good is the one of Independent Reserve, but it’s just a plain overview of the past week’s news headlines as seen by an OTC desk based in Australia.
If you are used to forever bullish on-chain news or on the NFT gossip, you might be in for a shock especially with Bitfinex Alpha.
Bitfinex, as you know, is one of the most popular cryptocurrency exchanges in the world with a wide range of markets, most of them still open to no-KYC users. The platform is well positioned as the place where crypto whales trade (until the market manages their risks for them). Being kind of in the shadows, Bitfinex is probably not the place that will ever be able to rely on the same type of marketing as Coinbase, Kraken or FTX.
It certainly seems like Bitfinex is taking the route of providing value to those traders who want to be profitable and will stick around, rather than to gamblers.
Below you can read the intro of the Alpha issue 19 from the end of August 2022.
You don’t actually have to trade on Bitfinex if you want to subscribe. Go to the Bitfinex homepage, scroll down to “NEWS” and click on the latest Bitfinex Alpha post - it has an opt-in form inside.