Hello Cointribe! 🚀
Today is Friday, December 29, 2023, and like every day from Tuesday to Saturday, we summarize the news of the last 24 hours that you shouldn't miss!
But first…
✍️ Cartoon of the day:
A quick look at the market…
🌡️ Temperature:
Partly Sunny 🌤️
24-hour crypto summary ! ⏱️
🚀 Bitcoin at 1 Million: Perianne Boring's bold prediction
Perianne Boring, founder of the Chamber of Digital Commerce, made a bold prediction on CNBC, stating that Bitcoin could reach 1 million dollars by 2029. According to her, this estimate is based on an analysis of the S-curve, predicting widespread adoption of Bitcoin with 90% of American households involved by 2029. She highlights Bitcoin's limited supply as a key feature for achieving this value.
Facing concerns about the introduction of central bank digital currencies (CBDC), Boring expressed reservations, considering them potentially dangerous surveillance tools. She does not see Bitcoin as a direct competitor to CBDCs, but rather as a store of value coexisting with fiat currency. She also cites Michael Saylor, who does not believe that Bitcoin will replace fiat currency, but sees it as a distraction causing mental roadblocks for many people.
Although Bitcoin's limited supply could theoretically support such a valuation, the impact of CBDCs and the growing competition in the crypto space could modulate this trajectory.
🧬 Ethereum: Vitalik Buterin proposes simplifications for Proof-of-Stake
Vitalik Buterin, co-founder of Ethereum, has proposed solutions to simplify Ethereum's Proof-of-Stake (PoS) consensus mechanism, aiming to solve its systemic complexity. Despite successive upgrades to Ethereum, Buterin identifies several flaws, including centralization, excessive usage of Layer 1, and governance issues. He emphasizes that the proper functioning of the network requires a large number of digital signatures, which represents a significant workload for validators.
Buterin has proposed three main solutions to alleviate this workload: increasing the minimum amount of ETH required for validators, establishing two levels of stakers, and randomly selecting validators. These proposals aim to simplify and lighten the implementation of consensus while aligning with Ethereum's protocol improvement plan.
Buterin's proposals to simplify Ethereum's PoS aim to address complexity and scalability issues. However, increasing the minimum amount of ETH required for staking could further centralize the process, contradicting the ideal of decentralization.
💸 Crypto: 2 billion stolen in 2023!
In 2023, the amount of cryptocurrencies stolen in hacks and scams reached approximately 2 billion dollars, a significant decrease compared to the 4 billion in 2022, according to a study by De.Fi. This decrease is attributed to improved security protocols and increased vigilance. However, the total number of incidents remains high, with Ethereum recording 1.35 billion dollars in losses in 170 cases.
The context of 2023 is more favorable than in 2022, with a decrease in trading volumes due to the widespread collapse of crypto prices. However, the stolen amount remains substantial, highlighting persistent shortcomings in securing decentralized exchanges. Despite advances in security, the decentralization of the crypto ecosystem continues to present exploitable vulnerabilities.
While the decrease in stolen funds in 2023 indicates an improvement in security and vigilance, the amount remains significant, highlighting a persistent vulnerability in the crypto ecosystem.
📉 Donald Trump sells more than half of his ETH
Donald Trump recently sold more than half of his Ethereum holdings, parting ways with 1,075 ETH, according to Arkham Intelligence data. Before this sale, he held about 5 million dollars in ETH, mainly from royalties from his NFT collections. The movements of his portfolio indicate a significant sale, halving his Ethereum holdings.
The value of the ETH sold by Trump was 2.4 million dollars at the time of publication, but with price fluctuations, the total value could be different. Questions remain about the exact amount of ETH Trump owns, with estimates varying between Arkham Intelligence and Citizens for Responsibility and Ethics. Trump's latest NFT collection also generated notable trading volume, indicating continued interest in his digital assets.
The sale of ETH by Donald Trump may reflect a personal investment strategy or a reaction to market volatility and should not be interpreted as an indicator of Ethereum's long-term value.
Crypto of the day: PancakeSwap (CAKE)
PancakeSwap (CAKE) is a native token of the Binance Smart Chain (BSC), although it also operates on other platforms like Ethereum. It represents a major innovation in the decentralized exchange (DEX) space by offering a fast and cost-effective alternative for users wishing to trade cryptocurrencies without intermediaries. Its added value lies in its ability to provide trading, liquidity farming, and staking services while allowing users to participate in the protocol's governance.
CAKE is mainly used within the PancakeSwap ecosystem for governance, staking, and liquidity farming. CAKE holders can vote on governance proposals, stake their tokens to receive rewards, and participate in lotteries. The initial distribution was done through farming and staking mechanisms, attracting a large user base. Benefits for holders include transaction rewards, voting rights, and access to exclusive liquidity pools.
Recent Performances:
Current Price: €3.33
Percentage Change: -1.45% (24h)
Market Cap: €810,635,311
Rank on CoinMarketCap: 78
Mastering Profit and Loss (PnL) in crypto trading
Profit and loss (PnL) are crucial indicators for any investor or trader, including in the cryptocurrency field. They measure the financial performance of a position or portfolio by reflecting the difference between current values and initial costs. Here is a more detailed exploration with examples to better understand how to calculate and interpret PnL.
Understanding PnL
Mark-to-Market (MTM):
Definition: MTM is a valuation method of an asset based on the current market price.
Example: If you own 1 Bitcoin bought at €30,000 and the current price is €35,000, your MTM profit is €5,000.
Realized PnL:
Definition: Realized PnL refers to the confirmed profit or loss after selling an asset.
Example: You buy 2 ETH at €1,500 each and later sell them at €1,800. Your realized PnL is (€1,800 - €1,500) * 2 = €600.
Unrealized PnL:
Definition: Unrealized PnL is the potential profit or loss on open positions that have not yet been closed.
Example: If you still hold the 2 ETH now valued at €1,700 each, your unrealized PnL is (€1,700 - €1,500) * 2 = €400.
Methods for calculating PnL
FIFO (First-In, First-Out):
Principle: The first assets purchased are the first ones sold.
Example: You buy 1 BTC at €30,000, then another one at €32,000. When you sell 1 BTC at €35,000, the PnL according to FIFO is €35,000 - €30,000 = €5,000.
LIFO (Last-In, First-Out):
Principle: The last assets purchased are the first ones sold.
Example: Using the same purchase as FIFO but selling the last purchased BTC, the PnL according to LIFO is €35,000 - €32,000 = €3,000.
Weighted Average Cost:
Principle: The average cost of all assets is used to calculate the PnL.
Example: If you bought 1 BTC at €30,000 and another one at €32,000, the average cost is (€30,000 + €32,000) / 2 = €31,000. If you sell 1 BTC at €35,000, the PnL is €35,000 - €31,000 = €4,000.
Analyzing positions
Open and Closed Positions: Regularly tracking your open (unsold purchases) and closed (realized sales) positions helps you understand your performance and adjust your strategy.
Year-to-Date (YTD) Calculation: This method measures the performance of your investments from the beginning of the year until today, providing an overview of performance over a given period.
Tools and considerations
Tools: Specialized spreadsheets, accounting software, and automated trading bots can help track and analyze PnL.
Considerations: Always consider transaction fees, taxes, and market volatility when calculating PnL. These factors can significantly impact the final result.
Conclusion
Understanding and calculating PnL is essential for effectively managing your cryptocurrency investments. By using proper methods and taking into account all relevant factors, you can get an accurate picture of your financial performance and make informed decisions based on real data.