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When Nicholas Merten saw a video explaining Bitcoin in November 2011, he brushed it off, later lamenting that “I unfortunately did not do the right thing.” It’s hard to blame him, after all, he was only 13.
Now 23, he runs DataDash, a YouTube channel with over 470,000 subscribers, making it among the largest focused on the cryptocurrency industry. There, he shares tips about trading and makes thoughtful, balanced, and interesting commentary on various relevant topics along with occasional speculation. What is notable about his channel is that it is almost entirely absent of hype, preferring calculated and tempered analysis.
Merten is also the CEO of Digifox, a DeFi startup that aims to act as a one-stop shop for new cryptocurrency investors, soon allowing them to automatically deposit portions of their paychecks into crypto by way of dollar-cost averaging.
Merten got started with investing at 13, though “even before that I was doing research,” he adds, leaving one to wonder whether his first words were stock tickers. He was quickly bitten by the entrepreneurial bug, and by 17 he was experimenting with a clothing company of his own making, and separately “tried to make relaxation beverages” by formulating recipes with a partner company.
“It was a nice head start to understand a lot of the emotional nature of markets and market cycles.”
It was due to this “intimate interest” in entrepreneurship that Merten, who grew up in Virginia, chose to study business administration and finance at Virginia Commonwealth University. He quickly dropped out, however, opting instead for alternative education through Praxis, which matches accepted students with six-month internships for on-the-job learning after a three-month training period. Often, these internships convert into full-time positions, and Merten “was really hungry to get my first job.”
That first job as a sales data management intern came at age 18, located “six blocks down from where Steve Jobs used to live” in San Francisco, Merten recalls. This was followed by six months as a content manager at ClickUp, a project management software company that is “like a billion dollar unicorn now,” he says, emphasizing the learning opportunities that come with working at such a high-growth firm.
While working at ClickUp, Merten created his YouTube channel called DataDash, which he originally envisioned as dealing with data science and data analytics. Soon, DataDash became a cryptocurrency channel after Merten made a few videos on the subject. “I got a couple hundred views, and I was like ‘you know what, I’ll keep going’,” he recalled.
With the 2017 bull market in full swing, Merten decided to leave his job at ClickUp in order to devote his full-time efforts towards his crypto craft.
In 2019, he expanded by founding Digifox, “which I originally started building back in 2013.” The startup consists of a smartphone wallet app that allows users to trade and earn interest on their cryptocurrency deposits via a plug-in to Celsius.
In the weeks ahead, Digifox will come out with a “get paid in crypto” feature, which will help people to receive a portion of their salary in cryptocurrency, received right in the app. Initially available in the USA and later the EU and UK, workers earning a salary will be able to simply request their human resources departments to direct a portion of their paychecks to a bank account owned by Digifox. ”Your employer doesn’t even have to know your earning crypto,” Merten clarifies, adding that the app charges a 1% flat fee.
“Buying crypto but in the US, I know that a lot of banks, they’ll freeze transactions on debit cards or bank accounts — we think of this as the ultimate crypto on-ramp.”
This method of regularly buying into a cryptocurrency is called dollar-cost averaging, or DCA, and is a common concept from the old world of traditional investing. Merten says that many new investors ask him “if it is a good time to buy, price-wise,” to which he recommends DCA as a way to spread out risk.
Why should you #GetPaidinCrypto?
?Larger investment increments mean smaller fees
?♂️Averaging over time mitigates volatility
?Earn up to 5% interest
?Bitcoin has grown 400% annually on avg.
Getting paid in crypto needn’t be complicated – sign up on the Digifox app today.
— Digifox (@digifox_finance) October 1, 2021
This is because the average buyer may have no way of knowing whether they are buying into a temporary peak. If we were to imagine a continuously rising asset, an investor who does not previously have a large amount of investment capital for immediate allocation would be better off to invest $1,000 per month for 12 months, rather than to save up for a year in order to invest $12,000 at the end. That’s why I get paid in Ethereum — an arrangement that has treated me well.
“It’s a great strategy. In this case, for someone to passively invest and not have to stress about the market,” Merten confirms. Another useful factor in the dollar-cost-averaging method is that its systematic nature tends to mitigate against the oft-dreaded “panic selling” which many new investors succumb to after seeing their investment drop in value.
Unlike many other channels, Merten’s DataDash does not encourage its followers to over-trade or enter leveraged positions despite the potential rewards. “The first principle I say is ‘do not day trade’,” he emphasizes, saying that passive investors are 95% more likely to end up in profit. But there’s something potentially even more dangerous than day trading — doing it on leverage.
? We’re hosting a webinar and LIVE Q&A with @Nicholas_Merten on Dollar Cost Averaging next week!
You can ask him a question by joining us on zoom.
— Digifox (@digifox_finance) October 11, 2021
According to Merten, leveraged trading is the biggest danger faced by crypto investors today. It is enticing, with a single correct call “easily” netting huge returns in a short timeframe — but at great risk. Despite his warnings, leverage is seen as an intrinsic part of crypto-investing by many, with a large number of influencers referring to leveraged trades as “positions” to differentiate them from mere “spot” holdings which are 1:1.
“It’s really bad that a lot of people are getting into leverage trading — you know they’re getting into trading on derivatives platforms, and it’s generally a losing game for most people.
With margin trading off the table, Merten encourages users to put their cryptocurrency to work using decentralized finance, or DeFi solutions. Merten believes that the app’s DeFi-like functionality is important, because high gas costs on Ethereum make on-chain transactions expensive for retail investors even if they know exactly what they are doing. “A small investor, like a $1,000 investor, they’re going to have a difficult time because there’s an immediate 5-10 percent fee on their trade,” he says, his example very likely an understatement.
ETH gas fees are highest from 4 pm to 12 am EST, especially on Tuesday & Thursday.
It’s cheapest to trade ethereum on weekends, especially Sunday, from 1 am to 6 am EST. ? pic.twitter.com/wj8pLHHnpZ
— Digifox (@digifox_finance) September 28, 2021
Gas fees rack up quickly when trading tokens or adding liquidity pairs to decentralized exchanges like Uniswap or SushiSwap. “As great as it is for someone who might be trading thousands, hundreds of hundreds of thousands of dollars, it doesn’t make sense for our everyday users,” Merten claims. Recently, NFT minting has been blamed as a cause for spikes in gas prices.
Once the crypto hits the Digifox wallet, users can choose to deposit it into a yield account, where it “can earn up to 5%” in interest denominated in the same currency. This is done through a direct plug-in to the external Celsius platform. Similar to traditional banking, earnings of depositors ultimately come from other users who elect to borrow from Celsius using cryptocurrency as collateral. “We try to say it’s like a kind of savings account,” Merten explains.
“I think that this is one of the few major opportunities we have in our lives in the 21st century — where you can invest in something and really make a sizable return”
Though, “Celsius doesn’t have a major insurance policy” for the user’s cryptocurrency they hold in custody while paying interest, Merten says he chose the platform after researching the security protocols of its competitors including BlockFi and NEXO. In the future, he expects that the company will allow users to earn a lower amount of interest, also known as yield, in an insured pool where “some of the yields that they’re giving up goes into an insurance fund” to compensate for potential losses.
He admits that it “provides some peace of mind” that Celsius has $20 billion under management, which makes Digifox a very minor player at around $10 million.
Merten believes that we are now halfway through the cryptocurrency market cycle — not in a period of fear or doubt, but neither yet at peak optimism, which he sets at Bitcoin approaching $200,000 and Ethereum trading between $15,000 and $20,000. He says this would bring the crypto market to a total value of $10 trillion, a far cry from the current $2 trillion market valuation.
“Different from most people, I don’t think the cycle is going to end this year, and I don’t think it’s going to end in early 2022 — I think it will be late 2022 or early 2023,” he says, referring to the many industry pundits who are calling for a peak around the upcoming new year.
Instead of relying on times of the year, Merten believes in “expanding cycles,” where the market cycles expand by “11 to 13 months from previous cycles.” He explains that in his view, the first Bitcoin market cycle was 11 months, followed by the second which lasted 24. As the cycle ending in 2018 took 35 months, he anticipates the 2022 bull market to last about 47 months.
“If history repeats, it would be December 2018 for the start and November 2022 for the cycle end,” he says referring to Bitcoin, adding that altcoins are likely to top “soon after.”
Despite his tendency to make predictions, he admits that he was entirely blindsided by this year’s NFT boom “I thought CryptoKitties was kind of the end of it in 2017, and I did not see it coming back with such a vengeance,” he recounts with a sense of bewilderment, referring to the cat-breeding NFT project which clogged up the Ethereum network in 2017. Merten says he is keeping an open mind despite fraud and “over-hype” in the sector.
With 10 years of investing experience, Merten considers a long-term outlook as a key virtue for those looking to make long-term profits.
“I like to make a few simple coordinated investments for trades — over a one to two year timeframe. I like to get into the maximum point of fear and doubt in the market when prices are at historic discounts, and I like to ride the wave.”
Bitcoin (BTC) could still crash to $29,000 and lower, but price action is “healthier” than a week ago, the latest research concludes.
In a fresh market update on Friday, analysts at trading suite Decentrader said that BTC price action is finally showing “green shoots of optimism.”
After a difficult week in which BTC/USD dipped to just under $33,000, market analysis is now focusing on the likely outcomes of the rangebound behavior seen over the past few days.
For Decentrader, there is reason to be cautiously optimistic now where there was none a week ago.
“We believe that the current derivatives landscape shift and this extremely negative sentiment backdrop does increase the potential for at least a near-term relief bounce,” analysts summarized.
The reason lies in factors that had previously not fully “reset” as price action declined, notably the structure of derivatives markets. These include open interest declining toward less speculative levels, along with deepending negative funding rates.
As Cointelegraph explained, negative rates correspond to overall market sentiment calling for fresh losses — often perfect conditions for an upward price shift.
“We are now also beginning to see meaningful buyers step in, which is driving a potential change in the higher time frame trend from bearish to bullish,” the market update added about the additional positive pressure on the available BTC supply.
Selling overall, while uncharacteristic of bull markets, hints that those behind it are taking losses.
Going forward, the outlook for support is a bounce zone at $29,650, something tha would itself only come into play should several other areas above $30,000 fail to hold.
To the upside, meanwhile, resistance lies between $38,850 and $39,700, Decentrader said, followed by a significant “empty” patch to $47,900 and then $53,400.
“Support remains for now at $32,700 though there is some argument to suggest that price reached that level with Monday’s wick falling just $300 short of it,” the update reads.
“Beyond that level, the next support is just shy of $30k, at $29,650 leaving the door open for a potential sub-$30K liquidity grab.”
Sentiment, in line with funding, continues to stay in “extreme fear,” as per the Crypto Fear & Greed Index, this now rivaling the 2018 bear market trough and the March 2020 coronavirus crash in terms of record-breaking length.
Flushing Financial Corporation, the parent company behind New York-based Flushing Bank has partnered with crypto firm New York Digital Investment Group (NYDIG) to offer Bitcoin (BTC) services to its customers.
The bank was founded in 1929 and according to its Q4 report it held more than $8 billion worth of assets at the end of 2021, with a net income of around $200 million.
According to an announcement, the partnership with NYDIG will enable the bank to offer its customers BTC buying, selling and holding services in a “safe and secure environment.”
Flushing Bank stated that it aims to launch its BTC-related services later this quarter and will divulge further details of its roadmap soon.
Flushing Financial Corporation CEO and president John R. Buran attributed the firm’s BTC adoption play to its desire to keep up with growing trends in financial markets:
“As part of our ongoing digital transformation, we recognize the importance of staying current with emerging market trends and consumer demand for alternate financial services.”
On the banking front and credit union front, NYDIG states that it has more than 35 partnerships in the sector, including deals with Five Star Bank, Idaho Central Credit Union, STAR Bank, U.S. Bank and NYMBUS to name a few.
NYDIG Chief Innovation Officer Patrick Sells stated on Jan. 25 that the firm is paying significant attention to partnering with traditional financial institutions as it’s “ready to show the world that banking is better with Bitcoin.”
Sells highlighted a growing demand for crypto exposure via organizations that users are already familiar with:
“Our research is clear; consumers want Bitcoin and they want it through the banks and credit unions they already trust.”
The firm has also been steadily growing its mainstream presence via partnerships with top sporting organizations such as the NBA’s Houston Rockets, along with Luxury Automobile Dealer Post Oak Motor Cars.
Bitcoin (BTC) price continues to flash mixed signals, raising uncertainty among investors and negatively impacting asset prices across the market.
Data from Cointelegraph Markets Pro and TradingView shows BTC price pinned below $36,000 and even though crypto and equities markets underwent a brief relief rally on Wednesday, comments from the recent FOMC meeting appear to be settling in as investors internalize the fact that interest rate hikes are on the way.
Here’s a look at what analysts and traders are saying about Bitcoin’s most recent price action and the macroeconomic factors impacting the wider crypto market.
The long-term range-bound trading that BTC has been in since early 2021 was addressed by Mike McGlone, Senior Commodity Strategist for Bloomberg Intelligence, who posted the following chart and asked, “What ends Bitcoin, Ethereum range trade?
According to McGlone, the key to escaping the current range are the “bullish fundamentals” that back the underlying strength of Bitcoin.
“By the rules of economics, a market with rising demand and declining supply will go up over time, suggesting that Bitcoin may be forming a bottom again around $30,000 as $60,000 resistance ages.”
A deeper analysis on the impact of Wednesday’s Federal Reserve meeting was provided by Bilal Hafeez, CEO and head of research at Macro Hive, who noted that the tone of the meeting “turned out to be more hawkish than expected.”
Hafeez pointed to the decision by the Fed to raise the inflation forecast as a sign that the central bank has realized that “they need to be more hawkish than before,” and he highlighted Powell’s comments that “this cycle would be different to the last cycle, which suggests faster hikes than before.”
With that being said, Hafeez indicated that the Fed “has not decided on a path yet,” and noted that Powell “didn’t give much additional information on quantitative tightening except that it would operate in the background.”
“Overall, the Fed is comfortable with equity and risk markets selling off as it tightens financial conditions and so could reduce inflation. Bond yields have risen after the meetings, equity and crypto markets have given back gains. The Fed continues to add downside risks to risky markets.”
The near-term outlook for BTC was briefly touched upon by derivatives traders and pseudonymous Twitter user ‘Crypto McKenna’, who posted the following chart and stated that “BTC price action is about to get very boring.”
“No trade season for the next 10-20 days in my opinion.”
Despite this projection for near-term weakness and sideways price action, the long-term outlook continues to brighten for multiple reasons, as noted in the following Tweet from crypto analyst Will Clemente.
Bitcoin price weakness because of risk-off behavior while fundamentals strengthening: Intel creating mining chips, Russia looking to get involved in mining, Goldman Sachs bullish, Google partnership w/ Coinbase, El Salvador Bond.
Hard to think asymmetry is to the downside.
— Will Clemente (@WClementeIII) January 27, 2022
The overall cryptocurrency market cap now stands at $1.663 trillion and Bitcoin’s dominance rate is 41.5%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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