What's Winning Now in Crypto

Top 15 Crypto Investments Last Week, Why Bitcoin Is Lagging, On-Chain Ethereum Analysis Shows Not a Bear Market, A Long-Term Crypto Portfolio

This issue covers the top performing investments of the past week as well as a review of on-chain metrics showing that we are not currently in a bear market.


  1. What’s Winning Now in Crypto: Top 15 Returning Investments The Last Week

  2. This Week in Ethereum: On-Chain Analytics by Mike Gavela

  3. Ethereum Is Undervalued on a Fundamental Basis

  4. My Take: Why Bitcoin Is Lagging Behind The Market

  5. My Top 30: A Long-Term Crypto Portfolio

  6. Join Our Tuesday Crypto Advice Calls - Next One Starts At 9am PT

  7. Featured Art NFTs by Mrs. Bubble

  8. Coinstack Alpha Fund - May 2021 Results

  9. Who I’m Following Closely on Crypto Twitter

  10. How to Get Started in Crypto Learning

What’s Winning Now: Top 15 Returning Investments Last Week

Here are the 15 top performing crypto investments of the last seven days.

Many of my favorites like Enjin, Chainlink, Kusama, Uniswap, Sushiswap, Nexo, and Thorchain made the top 15 this week.

Here’s the list broken up by market sector.

  • NFTs: Enjin

  • Digital currency: Decred

  • Decentralized Video: Theta & Theta Fuel

  • Decentralized Exchanges (DEXes): MDex, Uniswap, and Sushiswap

  • CeFi & Lending: Nexo

  • DeFi: BakerySwap

  • Core Tech: Chainlink & Rune

  • Wireless: Helium

  • Smart Contract Platforms: Kusama, Horizen, & EOS

Ethereum has also done well, with ETH up 7.4% in the last week.

Our Coinstack Alpha Fund currently holds many of these recent winners like Enjin, Chainlink, Uniswap, SushiSwap, and ThorChain.

Per Messari the following five sectors have led the way in returns over the last week: Gaming, data management, privacy, interoperability, and decentralized exchanges. Here is one week return by sector since the May 23 market bottom: 

This Week in Ethereum - By Coinstack Analyst Mike Gavela

Preview: This is a new series by Coinstack analyst Mike Gavela that uses on-chain metrics to provide commentary on what’s happening with the Ethereum market. Mike is working on becoming the best on-chain analyst for Ethereum. In this update, he shows us how we know that both long-term and short-term Ethereum holders are buying.

So, where are we in the Ethereum market this week? Re-Accumulation Phase.

After a bottom on May 23, short-term holders are now moving back into the market while long-term holders continue to accumulate.

Let’s take a look at our on-chain indicators and see the activity.

What are Short-Term Holders Doing?

Below is ETH’s Short-Term Holder Net Unrealized Profit/Loss (NUPL).  We use this indicator to see how much unrealized profit remains in the system is held by the short term holders of Ethereum, which is defined as those who have held Ether for 155 days or less.

When Short-Term Net Unrealized Profit goes into the red, it’s a sign we’re reaching a near-term bottom, market sentiment is improving, and a trend reversal is near. 

We reached the lowest point on May 23 at -0.06 (shown in circle 1 above) and since we have been moving upward, with short-term holders now into the profit zone at 0.15 (shown in circle 2 above).

When Short-term NUPL goes near or above 0.5, it’s a sign we may be entering into a mania phase and that a sell-off may be imminent. We reached 0.46 on May 11 at ETH $4300, just before the big selloff begin. 

We ended May with a Short-Term NUPL score of 0.15 and a price level of $2,707. 

When we compare this to the -0.06 score we had May 23 it tells us we are seeing the aftermath of last week’s capitulation. Weak hands have been flushed out of the system and panic sold at the bottom last week. 

At the top of the January 2018 bull market we reached 0.56. Since we didn’t pass 0.5 in this cycle yet, most analysts, myself included, believe we still have a long way to go during the 2021 bull cycle.

What Are Long-Term Holders Doing?

Next let’s look at long-term holder NUPL. This is the unrealized profit for holders who have held over 155 days.

We reached a peak of 0.93 on May 11, 2021. Any time this metric goes above 0.90 we are at risk of a major pull back, especially if fundamentals like Ethereum revenue growth aren’t supporting it.

During the January 2018 bull market top, we reached 0.95. If we see this ETH Long Term NUPL ratio go back above 0.95 later in 2021 it will be a sign of caution and a good time to move some of your holders into USDC so you can buy back in on a later dip.

When you look at what’s happening on chain with both short-term (<155 days) and long-term holders (155 days or more), we get Overall NUPL.

We reached a high for this cycle so far of 0.78 on May 11.

Timing The Market Cycles - Using NUPL

Overall NUPL peaked in the January 2018 bull cycle at 0.91. Right now we’re at 0.64, so we know we’re still quite some time away from a cycle peak.

For active investors, when we get above 0.75, we recommend slowly moving about 5% of your holdings each week into USDC to be able to have reserves to buy future dips.

How We Know We’re Probably Not in a Bear Market

There are many signs we’re not in a bear market for Ethereum. 

  • The ETH price is up 256% YTD (from $730 to $2600)

  • ETH’s average daily revenue is up 84% from $5.1M on January 1, 2021 to $9.4M now on June 1, 2021

  • ETH is trading well above its 200 day moving average of $1679

  • Total Value Locked in Ethereum De-Fi is now 299% higher than five months ago ($63.3B vs. $15.8B)

  • Institutional ownership is growing -- the number of ETH addresses with 10,000 Ether or more has grown in the first five months of 2021 from 1,065 to 1191.

If this were a bear market we would see both short term and long term holders continue to sell off but that is not the case. We can see that through the Dormancy and Coin Days Destroyed charts below. 

Dormancy describes the average number of days that each spent coin had remained dormant before it was moved.

As Dormancy continues to trend down the last week we can see that the coins that are being spent are from relatively new holders (Purchased <155 Days) who often don’t understand market dynamics as well. This signals that coins being held by long-term investors are remaining to be unspent.

Like Dormancy, Coin Days Destroyed is a measure of economic activity which gives more weight to coins which haven't been spent for a long time.

As we continue to trend down we can see the day-to-day network traffic dominating network traffic. Older coins are remaining dormant, and conviction to hold the asset remains high which signals a positive sentiment towards the market by ETH’s long term investors.

Experienced Investors Are Buying

This trend of long-term investors holding is further shown by ETH’s HODL Waves.

We can see above that ultra Short Term Holders are leading the selling:

  • 24hrs: -0.62%

  • 1D - 1W: -0.75%

  • 1W - 1M: +1.02%

  • 1M - 3M -1.0%

    • Net Change: -1.35% 

And we can Long Term Holders are leading the buying:

  • 3M - 6M: +1.07%

  • 6M-12M: +0.24%

  • 1Y - 2Y: -0.05%

  • 2Y - 3Y: +0.03%

  • 3Y - 5Y: +0.05%

    • Net Change: +1.34% 

People who have been in the market less than 3 months REDUCED their positions by 1.35% the last week while experienced “smart money” who has been in the market for more than 3 motnhs INCREASED their positions by 1.34%.

These signals show us that we are in a re-accumulation phase and not in a bear market

Otherwise, we would have more Long Term holders exiting the market when at the moment it’s only short term holders panic selling and long term holders either maintaining their positions or buying the dip.

Institutional ETH Buying is Growing

Institutional ownership is growing -- the number of ETH addresses with 10,000 Ether or more has grown in the first five months of 2021 from 1,065 to 1191.

There are now 1,191 entities each with more than $26M worth of ETH each, a powerful economic and lobbying force in the world now holding at LEAST $30B worth of Ether.

Even in the last two weeks we’ve only seen a dip of only 1.07% (1204 to 1191), which is incredibly positive considering the volatility we saw in May 2021.

Ethereum Leverage Has Been Cut by 44%

Leverage in the Ethereum ecosystem has been substantially flushed, dropping from a peak of $11.2B on May 11 to $6.3B today.

Ethereum DeFi Leading The Way

In regards to network activity, we see strong momentum in ETH’s DeFi space over the past week. DeFi Pulse reported a 9.6% increase in Total Value Locked compared to the previous week, and up over 295% since January 1, 2021.

A majority of this activity is done by a handful of apps:

  • Lending: AAVE - TVL: $9.41B / DeFi Dominance: 15.01%

  • Payments: Polygon - TVL: $7.32B / DeFi Dominance: 11.56%

  • Dexes: Uniswap - TVL: $6.64B / DeFi Dominance: 10.49%

  • Asset Management: Yearn - TVL $3.64B / DeFi Dominance: 5.75%

All four of these DeFi applications continue to maintain an upward trend of the Number of Addresses with a Non-Zero Balance. This means that more investors are holding these tokens than a month ago. 

While Binance Smart Chain DeFi TVL dropped 43% in May 2021, Ethereum DeFi dropped just 7.6%.

As long as holders, users, and DeFi TVL is growing quarter over quarter, our bullish perspective for ETH continues.

The bullish trend is further supported by ETH’s Percent of Supply Locked in Smart Contracts, up from 16% on January 1, 2021 to 23% today.

Our Conclusion - More Growth Ahead

When looking at the on-chain activity as well as ETH’s DApp ecosystem for the past week we can conclude that the market is indeed in a Re-Accumulation phase. 

Long Term Holders continue to keep their investment in ETH while buying the dips while ETH’s Defi space continues to prosper in an upwards trend.

ETH Undervalued Based on Its Fundamentals
By Ryan Allis

Looking at our Ethereum Fundamental Value Model (FVM), ETH at $2600 remains undervalued based on its past 12 months of revenues. A good time to buy is when the ETH Price is under the green line. A good time to reduce holdings into stablecoins is when we near or pass the red line.

The current fair value range of ETH per the above model is $3400 to $4700, representing a PE ratio range of 100-140. This uses the last 12 months of actual revenues, 100% of which will start going to holders when ETH2 launches.

You can see the live model on our new Beta site. The full web site will be going live in a few days. We explain the model in detail on the page.

Now it’s important to note that Ethereum’s revenues have come down a bit the last two weeks as some volume has begun to move onto Ethereum’s L2 and sidechain solutions like Polygon and Arbitrum, which launched this week. Eth’s revenues bottomed out May 30 at $6M per day and has been going up since. 

So what does fundamental value look like using only the last 7 days of Ethereum revenues?

During the last 7 days Ethereum generated average revenues of $9.55 million per day. That’s $3.485B annualized. At a PE range of 100 to 140 that would mean the fair value market cap would be $348B to $487B.

This means that using actual revenues from the last 7 days, ETH’s fair value should be somewhere between $3000 and $4198.

We will be watching very closely this summer to see if sidechains like Polygon and L2 scaling solutions like Arbitrum, Optimism, ZkRollup, or ZkPorter decrease Ethereum revenues (by taking volume away from mainnet) or increase Ethereum revenues (by increasing the total amount of transactions done at a lower cost).

While scaling is GREAT long-term for usage and DeFi and for the industry overall, it may in the short-term reduce revenues. We shall see.

My Take: Why Bitcoin is Lagging Behind The Market by Ryan Allis

This is my take on what’s happening right now in the crypto markets and tech and why Bitcoin has been outperformed substantially by Ethereum over the past 12 months.

Here’s my take…

  • Ethereum’s daily revenues are already 3.18x that of Bitcoin.

  • Institutions are figuring this out and rotating from BTC into ETH. 

  • BTC is down 37% in the last month. ETH is down 7%. 

    • Bitcoin is technically in a bearish market, trading under its 200 Day Moving Average of $41,290

    • ETH is trading well above is 200 day moving average at $1679

    • ETH is only down in the short-term as many think it’s similar to Bitcoin, when in fact it’s very different.

  • People are starting to realize that without cash flows to users or real utility as a decentralized programming platform, Bitcoin is becoming a game where the last one out loses most.

  • This future isn’t a fait accompli QUITE yet, but will become true in 12 months if ETH successfully launches a consistently deflationary asset that can be used as both a commodity (gas), money (ether), and cashflowing asset (staking).

  • Yep, I see a future where BTC is essentially a meme token with no cashflows or significant utility to holders and no longer the best monetary supply. Its ossification has become a liability. Remember that fundamental value comes from utility and cash flows.

  • Yes, I do see Ether having a higher market cap than Bitcoin by 2025 at the latest (and potentially within 18 months).

  • Then there’s the environmental argument… ETH moving to PoS reduces its energy usage by 99.95%. No more needing the energy of entire countries to run a blockchain.

  • ETH will soon be giving 100% of its revenues out to its holders either directly via staking rewards or indirectly via token burns.

  • Actual cash flows to holders create a fundamental value for Ether that traditional finance types can understand and model.

  • DeFi is by far the biggest actual use case in crypto.

  • TradFi Institutions get the actual use case for DeFi -- and are seeing billions of dollars of revenue from DeFi protocols = real cash flows

  • The world is building a brand new banking and financial system on top of Ethereum.

  • Ethereum has substantially more developers working on it than any other chain.

  • And it’s scaling…

  • Layer 2 scaling solutions like Polygon (MATIC) that make Ethereum cheaper have been skyrocketing. 

  • Other Ethereum scaling solutions like Arbitrum, ZkRollups, and Optimism are coming this summer, enabling much higher volumes of Ethereum transactions

    • As long-time Bitcoiner Eric Wall said on May 31, 2021 - “I noticed the layer 2 solutions on Ethereum were providing benefits that you can’t do on Bitcoin where you don’t have statelessness, a virtual machine, or rollups.”

  • Other L1s that are competing with Ethereum include

    • Binance Smart Chain (BNB)

    • Solana (SOL)

    • Fantom (FTM)

    • Harmony (ONE)

    • Tezos (XTZ)

    • Algorand (ALGO)

    • Avalanche (AVAX)

    • Polkadot (DOT) - not yet launched

    • Cardano (ADA) - not yet launched

    • Mina Protocol (MINA) - not yet launched

  • I expect Ethereum will do exceptionally well the next 5 years along with many of its up-and-coming competitors. As Eric Wall, CIO of Arcane Assets said this week on the Bankless podcast…

    • “Tons of people are coming into the Bitcoin debate and will think that Bitcoin uses too much energy. The flippening is no longer off the table. Ethereum has been fundamentally undervalued. I built out a big Ethereum stack and now I’m outperforming Bitcoin because of that.”

  • While some promote Cardano as an Ethereum killer, it has yet to launch after 5 years of development, has no smart contracts, has no apps, and is built on with a hard-to-use programming language (Haskell). Cardano is vaporware currently with minimal excitement among the developer community.

    Others talk about Polkadot as an alternative to Ethereum. Polkadot gives each app its own blockchain (called a parachain), while sharing security. Polkadot also has yet to launch and is on track for a Fall 2021 launch. There is much more excitement and buzz about the Polakdot programming language (Substrate) and many dozens of Polkadot apps are now in development and will be launching later in 2021.

My Top 30: A Long-Term Crypto Portfolio

If I were creating a portfolio from scratch right now that I didn’t want to touch for 5-10 years, I would be absolutely sure to include my top 5: ETH, DOT, KSM, RUNE, & MATIC. Here’s my top 30…

To see which exchanges to buy these on, use Coinmarketcap or Coingecko.

What NOT to Invest In…

In crypto there’s a lot of coins that have zero fundamental value, unlimited supply, or no longer have any active development.

Here’s a list of what’s on my shit list right now and that I do NOT recommend investing in for long-term returns.

  1. Doge (DOGE) - A PoW fork of Luckycoin. No development team. No apps. No supply cap. Lots of inflation. Being pumped as a pet project by Musk who doesn’t yet grok that scalability requires a lot of focus and effort and that the future is PoS.

  2. Shiba Inu (SHIBA) - Same as above. Include any doggy token with this list.

  3. Safemoon (SAFEMOON) - Scam ponzi project. No actual value.

  1. Cardano (ADA) - A serious project, but not launched yet after 5 years of work, no smart contracts, no apps, a difficult to use programming language (Haskell), a 33 year old founder who often picks Twitter fights with people, and an incessant army of pumpers who don’t seem to understand technology. Wait till it launches to see if it’s real.

  2. Bitcoin Cash (BCH) - Failed Bitcoin fork

  3. Bitcoin SV (BSV) - Failed Bitcoin fork

  4. Ethereum Classic (ETC) - A failed Ethereum fork. No apps, no usage, and staying on PoW. Being completely left in the dust as ETH 2.0 launches and moves to PoS.

  5. Ripple (XRP) - Money transfer service run by a centralized company. Under investigation currently by the SEC that may last another 12-18 months. Invest in open-source decentralized versions Stellar (XLM) or Celo (CELO) instead. Price may pump in the short term by a digital army (known as the XRM/ADA army), but overvalued in my opinion. The future is decentralized and open source.

Remember in the short-term the prices of the above may pump, but I don’t think any of the above will do as well as simply holding ETH or the tokens listed earlier in my top 30.

Join Our Tuesday Crypto Advice Community Zoom Calls With Ryan Allis

Every Tuesday I do a live 30 minute Crypto Advice Zoom call at 9am PT / 12pm ET / 5pm GMT. All buyers of Mrs. Bubble’s NFTs (and investors in the Coinstack Alpha Fund) are invited to join and ask questions and share learnings with each other. 

Just buy any Mrs. Bubble NFT on OpenSea and then let me know by replying to this message or sending me a Telegram message and I’ll add you to our weekly call invite. 

You can think of buying the NFT as supporting beautiful joyous art AND a ticket into our community. We had 10 callers on last week’s call. 

Join our weekly calls by getting a Mrs. Bubble NFT or investing in the Coinstack Alpha Fund.

Mrs. Bubble’s NFTs of the Week

You can buy a Mrs. Bubble NFT here and join our community for weekly crypto Zoom calls. We use these funds to be able to create more art. Mrs. Bubble the artist is my wife Morgan, so supporting her work directly supports our family, her art, and this newsletter being able to continue.

Here are the featured Mrs. Bubble art pieces for this week. Mrs. Bubble is putting up a new piece each day and plans to build a long-term NFT following. You can think of her NFTs as both beautiful art that uplifts the world AND your digital ticket into our live weekly crypto advice calls.

Here are a few of Mrs. Bubble’s new art pieces...

And here are her most viewed art pieces so far out of her first 130...

Thank you so much for joining the Coinstack community and supporting Mrs. Bubble’s art.

Coinstack Alpha Fund - May 2021 Results

During May 2021, our Coinstack Alpha Fund ended down 19.45% while the overall crypto market dropped 31% from $2.2B to $1.5B and Bitcoin dropped 35%.

We are happy with our outperformance of the market during May and believe we have chosen very strong long-term oriented crypto assets that we expect will appreciate in value as the year continues.

As gas fees have come down, we have lowered our minimum investment size to $5,000. The fund allows for instant deposits and withdrawals. If you do invest, we recommend thinking of it as a 5-10 year hold period for optimal return compounding.

The biggest value of investing in the fund is that we will actively manage it for you -- and later in 2021 when we believe we have reached near the cycle top we plan to cycle a portion of the portfolio into stablecoins that will generate yield via DeFi. Our goal is to perform better than the market during bull cycles and bear cycles for optimal long term growth with capital preservation. Whether we achieve this, only time will tell. 

The top holdings in the fund to date are: ETH, RUNE, SUSHI, MKR, DOT, AAVE, PER, and YFI

You can invest here.

As always with crypto, never invest an amount you can’t afford to lose and know that the best life changing crypto returns usually come when you hold through multiple four year cycles.

Join The CoinStack Telegram Community

Joinour Telegram Channel here to chat with our community, ask questions, and learn more about the future of money as we move to a decentralized internet and the creation of a new open global monetary system that works for everyone. We now have over 1500 members on our Telegram.

The People I’m Following Closely on Twitter

  1. Vitalik Buterin

  2. Justin Drake

  3. Hayden Adams

  4. Zhu Su

  5. Hasu

  6. Ryan Adams

  7. Camila Russo

  8. Ryan Selkis

  9. Anthony Sassano

  10. Lyn Alden

  11. Gavin Wood

  12. Cathy Wood

  13. Beniamin Mincu

  14. Barry Silbert

  15. David Hoffman

  16. Dan Morehead

  17. Willy Woo

  18. Ultra Sound Money List

  19. Polkadot Ecoystem

  20. Mrs. Bubble The NFT Artist (my wife Morgan Allis)

How To Get Started With Crypto Learning

  1. The Infinite Machine by Camila Russo (Book) 

  2. Crypto Theses for 2021 by Messari (PDF)

  3. Bankless - The DeFi community (Substack + Podcast + Discord)

  4. Understanding Polkadot - The Next Generation Blockchain Tech (Website)

  5. The Ethereum 2.0 Report from Messari (PDF)

  6. Blockgeeks (Videos)

The Coinstack Newsletter:

Tracking the most important blockchain stories of the 2020s including a decentralized internet and the creation of a new open global monetary system that works for everyone. As always, published for informational purposes only. Just my opinions. Not intended as financial advice. At the time of publication, we are long on nearly everything we write about as we believe in it. Please do your own research. Published weekly. Published and written by Ryan Allis. Comments and thoughts welcome:

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