What is the Ultimate Blue-chip Crypto Asset: BTC, NFTs, or Land?

One of the biggest changes to the crypto market today compared to the last bear market is the different types of assets that exist.

Instead of choosing between Dash, Litecoin, Ethereum, Bitcoin, etc., people can invest in NFTs and plots of digital land in the metaverse.

Common sense indicates that these new, experimental assets are riskier compared to BTC and ETH . While it’s difficult to objectively measure risk, we can use on-chain data to assess price volatility.

With the bear market fully underway, now is the perfect time to compare these assets and see what the ultimate blue-chip assets could be going forward: Crypto, NFTs , or metaverse land.

Here, we’ll compare three hypothetical investors: Abe, Bob and Cathy . One year ago, each put their money into a different asset class within the crypto space.

Abe’s portfolio: 50% BTC & 50% ETH.

Bob’s portfolio: 50% BAYC & 50% CryptoPunks .

Cathy’s portfolio: 50% Decentraland Land & 50% Sandbox parcels.

These comparisons arent’s 1-to-1 (buying 3 Bored Apes at $6,000 each one year ago is a very different move than investing $6,000 in a longstanding “safe” token like ETH.) So, we’ve created 3 “reasonable” portfolios along these 50/50 lines that aren’t exactly the same. To be explained later.

In this article, we’ll track how each of these investors’ portfolio’s performed and explore why some of these investments are more volatile than others. Abe’s Token Portfolio

One of the upsides of investing in tokens instead of NFTs is liquidity and divisibility. We are able to put a precise USD dollar value on BTC and ETH on any given day, buy any amount we want, and receive a fair market rate.

On this day a year ago, June 28, 2021, BTC cost $35,867. For ease of calculation, we’ll round this to the nearest hundred—$35,900. ETH was $2,160—rounded to $2,200.

Our token investor chose an excellent time to jump in. After the enthusiasm of the Coinbase listing on April 13, 2021, and the Federal Reserve dropping interest rates to 0.25% to stimulate the economy, the market roared. However, it was temporarily sent crashing primarily due to a wave of strict regulations in China, and it was roughly here when Abe aped in.

In hindsight, Abe bought the bottom of the cycle, putting $50,000 into BTC and $50,000 into ETH (getting about 1.39 BTC and 22.7 ETH.)

The insane climb upward continued until November 8, 2021, when Abe’s initial investment was worth $203,767.52.

But then, speculative enthusiasm for cryptocurrencies started waning as retail and investors cut back on risky assets.

From January to June, the Federal Reserve raised interest rates by 75 basis points in quick succession, the largest margin in 28 years.

In February, the war in Ukraine triggered a downturn in macroeconomic conditions, resulting in a bearish environment for the crypto market.

To top it off, the flash crash of Terra Luna in May looked like the beginning of a series of blockchain industry car wrecks.All these events have driven down the price of BTC and ETH—assets which, to the vast majority of the non-crypto public, are stand-ins for the “price of crypto” itself. Footprint Analytics – BTC Price & ETH Price On June 28, 2022, Abe’s 1.39 BTC and 22.7 ETH portfolio was worth $54,197.7, down 45.8%. The drop from the all-time high was 73.4%. The NFT Portfolio Although NFTs are not as liquidity as BTC or ETH, they are unique and collectible. And when the market is in a better state, holders can also get a specific dollar value from it.What did the NFT market look like in June 2021? Germination and construction period: In June 2017, CrytoPunks, the world’s first NFT project, was officially born, bringing the NFT concept to a climax. Led by OpenSea, NFT trading has become more convenient and perfect, making NFT application areas gradually expand from games and artworks. Expansion period. By 2021, Axie Infinity sales were rising rapidly, driving the growth of the NFT market. The same year, BAYC was also established and entered the public eye.This is the perfect time for Bob to enter the market when NFTs are in their infancy. Because NFT abides by a rule, the sooner its attributes are rarer, the higher the value and the lower the price is more balanced (the NFT trading market is immature, and the transaction frequency is low).BAYC and CryptoPunks rank among the top NFTs in terms of trading volume in 2021 . Footprint Analytics – NFT Projects by Trading Volume in 2021 Assuming Bob buys 1 BAYC (3.5713 ETH) and […]

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