In today’s Exponential Investor

  • Godzilla vs. Kong
  • The first almost flippening
  • Ready for round two?

I’ve been waiting for some time for the Godzilla vs. Kong movie to be released. I really like the whole “Monsterverse” that was built around Kong and Godzilla.

So when it dropped on to streaming services in the last couple of weeks, I hit the rent button and put it on the big telly in the living room.

Epic. Loved it. Lots of fun.

Without giving too much away, there’s a moment when in the “Hollow Earth” Kong is on top of a mountain, and he reaches up, almost touching the peak of another mountain that’s upside down in a weird, gravity defying world above him (this is the “Hollow Earth” after all remember…).

It’s quite a surreal moment, even for a movie. Then as I was doing some research this week, I saw something that funnily reminded me of this Kong moment – when the “king” was reaching out, almost reaching the pinnacle he so desired to touch.

Take a look at this chart below.

Source: CoinMarketCap

In particular, this bit:

Source: CoinMarketCap

See that just before July 2017? What looks like two mountain peaks getting close to each other, but not quite touching? That is one of the wildest moments in crypto’s history. One that could have changed the very face of the crypto markets we see today.

At the time it was called “The Flippening”.

Huge at the time – but a non-event, which I’ll explain shortly.

However, it appears, “The Flippening” is set to happen again. This time though, it’s very different. It’s a “Flippening” that no one is really talking about but again, could change the very course of our crypto future…

2017’s Flippening

The peaks I showed you earlier was the convergence of bitcoin’s market “”dominance” and Ethereum’s market “dominance”.

This is the total fiat-converted value of the crypto relative to the total fiat-converted value of the entire crypto ecosystem.

Since the beginning of bitcoin it has always been “king”. It has maintained its dominance over everything else by some way. Bitcoin alone has always been more valuable by fiat-converted market cap, compared to everything else out there.

But in the lead-up to July 2017, Ethereum was on a run. Its price was shooting off. Bitcoin was somewhat of an afterthought. Everything was about Ethereum. And its dominance kept climbing and climbing.

Soon it got to a point where people started to release that Ethereum may soon be worth more than bitcoin. It would have been a huge outcome, for a relative newcomer to displace bitcoin would have changed our perception of the “king” no doubt.

The ETH–BTC “flippening” never happened. And ever since, no other single crypto has come remotely close to “flippening” the king, bitcoin.

However, shortly after Ethereum came close (on its own) to de-throning bitcoin, interestingly something else happened.

We got a crazy FOMO (fear of missing out) filled bull market run not just in Ethereum and bitcoin, but in all of the crypto space.

This meant “other” crypto were rising in dominance, and when bundled together, were heading fast towards “flippening” bitcoin.

On 13 January 2018 the “other” crypto came ever so close to flippening bitcoin.

It was the closest anything had come to dethroning the king.

This also coincided with the absolute peak of the 2017 and 2018 bull market cycle and the start of the “crypto winter”.

Bitcoin has maintained its dominance ever since, widening that gap.

Except there’s something happening now that suggests we’re eyeing off a similar pattern to what we saw in 2017 and 2018. If it repeats, then strap in folks, ‘cos things are about to get wild…

The next peak isn’t even close

There’s a significant difference in the market between today and the ramp-up in 2017 and peak in 2018.

Right now, the development is mainly focused into a couple of key areas. These areas are not just integral to the future of crypto networks, but to the future of a globally decentralised financial system.

How we transact, financially interact, transfer wealth, buy goods, sell services and configure entire supply chains are changing. My take is in the near future all of these financial networks will be underpinned by crypto networks.   

In my view, the construction of a fully decentralised financial system, a “DeFi” financial system, is taking place right now. What we’re seeing in development now is the foundation of our globally connected financial future.

Also, as the world of DeFi is being built out now, you have a chance to get ahead of this change and position yourself in line to reap the benefits. It’s a huge fundamental change in global networks. It’s a huge change in the balance of financial power as well.

Tomorrow I’m releasing a special broadcast that’s going to explain exactly what’s taking place, why it’s taking place and how you could benefit from it. It’s in line with another predication I’m making which is the Race to Bitcoin $1 million.

Yes, I know that might seem ridiculous. But I have all the evidence to indicate that not only is $1 million bitcoin a very possible outcome, but that might even be selling it short!

You will be able to see all my evidence, all my reasoning and importantly what crypto I think will really boom in the next mega cycle if this all plays out the way I expect – if you tune in to my special briefing that’s going live this Thursday at exactly 2pm.

Make sure to get your viewing pass for this ground-breaking broadcast here.

When I go back to those charts around bitcoin’s market dominance and the rise of other crypto, I can only draw one conclusion.

Even though we’ve seen incredible outcomes from some of the newer players into the crypto world in the last year, like Uniswap, AAVE, SushiSwap, Compound, Solana, Terra and Avalanche (just to name a few), I don’t think we’re anywhere near the market top.

In my view, when we see a real boom in “other” crypto and the dominance of “other” starts to head higher and closer to bitcoin’s dominance – then we’ll be seeing a top come into play.

When “other” crypto almost flipped bitcoin in 2018, it was at a market dominance of around 32% which was almost exactly the same as bitcoin’s dominance at the time.

Today, at the time of writing, bitcoin’s dominance is around 54% and the “others” are at almost 19%. Bitcoin’s dominance is trending down, while the “others” are trending up.

My view is that only when the “others” get near, or surpass bitcoin’s dominance is when we may be looking at a top from this cycle.

That means there’s a lot of water to flow under this bridge yet, and arguably, the real “alt season” hasn’t even begun. Which also means if you’re not yet using some punt money in this space, then perhaps you should be thinking about it.

Of course, there’s a lot to this story and there are ways to best position yourself to help manage the risks and the pitfalls. Which is exactly why you should head here to get your viewing pass for my special broadcast this Thursday at 2pm sharp.

Regards,

Sam Volkering
Editor, Exponential Investor

PS Coinbase is listing on the US market today. It’s going to be a huge deal and a huge valuation. I have my view on how big it will be, but how big do you think it will be?

How much will the Coinbase listing reach in market cap?

☐  Less than $100 billion

☐  $100 billion to $150 billion

☐  More than $150 billion