We’re long-term investors here at MyWallSt, but that doesn’t mean we don’t keep our ears to the ground on the wider investing world around us. Crypto has been one of the defining stories of the past few years, with the alternative asset class taking us all on a rollercoaster ride throughout 2022.
Despite our advocacy for buying and holding good businesses that will continue to grow from strength to strength, we couldn’t help but weigh in on some of the hottest news emanating from cryptoland this year.
Let’s dive in, shall we?
Another Acronym: DAO
January hadn’t even ended yet and Rory was already taking a look at how the world of investing was continuing to collide with cutting-edge technology. This piece saw him examine yet another entry into the long list of acronyms we investors have to commit to memory — DAO. DAO stands for decentralized autonomous organization, something that could be compared to a venture capital fund of sorts, but without a typical hierarchical structure.
The idea was adopted heavily by the crypto community, leading to numerous DAOs attempting to raise funds for a wide assortment of sensational purchases. It was the latest new concept to be brought to us by the crypto-coherent masses, and it certainly piqued our interest.
“Though the original DAO failed, the concept has been taken further by a number of crypto investors over the last few months. However, like all new concepts, many of the finer details don’t appear to be fully fleshed out…”
NFTs (Not a Fair Transaction)
At one point in 2022, NFTs were all anybody wanted to talk about. Mike took the reins and decided to educate the rest of us on the dos and donts of this highly incendiary new asset. This piece looks at rug pulls, unscrupulous marketers, a general lack of policing, and many more of the intricacies surrounding the NFT bubble.
“Donning our tinfoil hat and rewinding back to last year and the sale of Beeple’s ‘5000 Days’ piece, it’s easy to get a little conspiratorial. I’m not saying that this is what happened, but if you were a crypto whale with money to burn, how would you create excitement and enthusiasm toward a new industry that will vastly increase the value and application of your own personal fortunes? An eye-watering sale worth $69 million, backed by the legitimacy of Christie’s sounds like a great way to do it…”
How Will The Crypto Crash Affect The Economy?
In June, Anne Marie took a pointed look at the implosion of many of the world’s leading cryptocurrencies and cryptocurrency exchanges. The case study was that of Celsius Holdings, the firm that refused to let its 500,000 users withdraw their own money due to “extreme market conditions.” Aside from detailing the fall of Celsius, Anne Marie also looks at how crypto’s struggles would be reflected in the stock market, with many battle-hardened investors getting flashbacks of the infamous dot-com bubble.
“While we have heard some stories about traditional funds getting caught up in the crypto collapse — the second biggest pension fund in Canada made an investment in Celsius last year — most have kept their positions very small and off the blockchain. The reason for this is that most financial institutions have their own, very strict regulations about what makes an investment appropriate. Crypto doesn’t make the cut and this probably won’t change anytime soon…”
Ethereum Just Went Green — What Does It Mean?
Anne Marie went against her better judgment to once again delve into the world of cryptocurrency. This time, she took a look into the Ethereum merge that occurred in late September this year. What was it, what did it mean for the state of cryptocurrency across the globe, and was this new way of doing things actually going to change anything? And, perhaps most importantly, would this spell disaster for some of our favorite stocks?
“In our current financial system, a whole host of intermediaries are responsible for overseeing the movement of money and the release of currency. In the crypto world, this comes down to millions of miners, their computers, and super complicated math…”