The charts and themes from the past week that tell an interesting story in crypto and investing…

1. EVM is winning

If you have been on Crypto Twitter (Crypto X sounds weird) lately, you might think the SVM is eating EVM's lunch, due to the recent price action we have seen in Solana and the ecosystem generally. That is far from being true, as we can see in the chart above, transaction counts in EVM chains have been rising since November.

The chart above shows the daily transaction count on EVM-compatible blockchains, including Ethereum, Avalanche, Binance Smart Chain, Polygon, and Fantom. As you can see, transaction counts have been rising since November, despite the recent price action of Solana.

This suggests that the EVM is still the dominant platform for decentralized applications (DApps). Solana has seen some impressive growth in recent months, but it is still a relatively small ecosystem compared to the EVM.

Drilling down into polygon transaction count appears to be going through the roof. Similar dynamics also exist on Avalanche shown in the chart below.

This is a result of the ordinals on this chain. PRCs-20 on Polygon and ASCs-20 on Avalanche.

2. Drying OpenSea

OpenSea's revenue has plummeted from a high of $387 million in January 2022 to just $1.93 million in November 2023. This significant drop can be attributed to a combination of factors, including:

NFT Volume Slump: The overall NFT market has experienced a substantial downturn in trading volume, which has directly impacted OpenSea's revenue as they earn a percentage of each transaction.
Eroding Market Share: OpenSea's dominance in the NFT marketplace has diminished, with its market share declining from 95% to 35%. This reduced market share has led to a decrease in the number of transactions occurring on the platform, further impacting revenue.
Margin Compression: OpenSea has faced pressure to lower its platform fees in response to increased competition and falling NFT prices. This compression of margins has resulted in a smaller revenue per transaction.

The combination of these factors has painted a challenging picture for OpenSea's financial performance. The company is currently exploring various strategies to address these challenges and regain its footing in the evolving NFT landscape.

3. Holy Grail?

In the world of investing, there is no such thing as a guaranteed path to riches. Every strategy carries some level of risk, and there is no one-size-fits-all approach that will guarantee success. However, some strategies have proven to be more effective than others over time, and one such strategy is dollar-cost averaging (DCA).

DCA is a simple investment strategy that involves investing a fixed amount of money into a particular asset at regular intervals, regardless of the asset's price. This approach can help to reduce the impact of market volatility on your portfolio and can help you to accumulate wealth over time.

To illustrate the power of DCA, consider the following example:

If you had invested $10 worth of Bitcoin (BTC) every day since the asset's all-time high of $68,789.63 in November 2021, you'd be up 33% today. The hypothetical portfolio would have invested $7,500 over time and it'd be worth over $10,000 today.

Of course, this is just a hypothetical example, and past performance is not necessarily indicative of future results. However, it does illustrate the potential benefits of DCA. By investing a fixed amount of money into an asset regularly, you can help to smooth out the impact of market volatility and accumulate wealth over time.

Benefits of DCA

There are several benefits to using DCA as an investment strategy:

Reduces the impact of market volatility: By investing a fixed amount of money into an asset regularly, you can help to average out the price you pay for the asset over time. This can help to reduce the impact of market volatility on your portfolio.
Disciplines your investment approach: DCA can help to discipline your investment approach and prevent you from making impulsive decisions based on market fluctuations.
Can be automated: DCA can be easily automated, which can save you time and effort.

Drawbacks of DCA

There are also a few potential drawbacks to using DCA as an investment strategy:

May miss out on opportunities: Because you are investing a fixed amount of money regularly, you may miss out on opportunities to invest more when the price of an asset is low.
May underperform in a bull market: In a bull market, DCA may underperform relative to a lump-sum investment.

DCA is a simple and effective investment strategy that can help you to accumulate wealth over time. It is a good option for investors who are new to investing or who are not comfortable with investing large sums of money at once.

And that's it for this week.

Have a great weekend everyone.

- Pascal

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