{"id":247031,"date":"2022-07-07T09:30:38","date_gmt":"2022-07-07T08:30:38","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=247031"},"modified":"2022-07-07T05:21:50","modified_gmt":"2022-07-07T04:21:50","slug":"what-is-the-ultimate-blue-chip-crypto-asset-btc-nfts-or-land","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/what-is-the-ultimate-blue-chip-crypto-asset-btc-nfts-or-land\/","title":{"rendered":"What is the Ultimate Blue-chip Crypto Asset: BTC, NFTs, or Land?"},"content":{"rendered":"

One of the biggest changes to the crypto market today compared to the last bear market is the different types of assets that exist.\u00a0<\/span><\/p>\n

Instead of choosing between Dash, Litecoin, Ethereum, Bitcoin, etc., people can invest in NFTs and plots of digital land in the metaverse.<\/span><\/p>\n

Common sense indicates that these new, experimental assets are riskier compared to <\/span>BTC and ETH<\/span><\/a>. While it's difficult to objectively measure risk, we can use on-chain data to assess price volatility.<\/span><\/p>\n

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, <\/span>NFTs<\/span><\/a>, or metaverse land.\u00a0<\/span><\/p>\n

Here, we'll compare three hypothetical investors: Abe, Bob and Cathy<\/strong>. One year ago, each put their money into a different asset class within the crypto space.\u00a0<\/span><\/p>\n

Abe\u2019s portfolio:<\/strong> 50% BTC & 50% ETH.\u00a0<\/span><\/p>\n

Bob\u2019s portfolio:<\/strong> 50% BAYC & 50% <\/span>CryptoPunks<\/span><\/a>.\u00a0<\/span><\/p>\n

Cathy\u2019s portfolio:<\/strong> 50% Decentraland Land & 50% Sandbox parcels.\u00a0<\/span><\/p>\n

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 <\/span>exactly<\/span><\/i> the same. To be explained later.<\/span><\/p>\n

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.\u00a0<\/span><\/p>\n

Abe's Token Portfolio<\/b><\/h2>\n

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.\u00a0<\/span><\/p>\n

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\u2014$35,900. ETH was $2,160\u2014rounded to $2,200.\u00a0<\/span><\/p>\n

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%<\/span> 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.<\/span><\/p>\n

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.)<\/span><\/p>\n

The insane climb upward continued until November 8, 2021, when Abe's initial investment was worth $203,767.52.\u00a0<\/span><\/p>\n

But then, speculative enthusiasm for cryptocurrencies started waning as retail and investors cut back on risky assets.<\/span><\/p>\n

From January to June, the Federal Reserve raised interest rates by 75 basis points in quick succession, the largest margin in 28 years.<\/span><\/p>\n

In February, the war in Ukraine triggered a downturn in macroeconomic conditions, resulting in a bearish environment for the crypto market.<\/span><\/p>\n

To top it off, the flash crash of <\/span>Terra Luna<\/span><\/a> in May looked like the beginning of a series of blockchain industry car wrecks.\u00a0<\/span><\/p>\n

All these events have driven down the price of BTC and ETH\u2014assets which, to the vast majority of the non-crypto public, are stand-ins for the “price of crypto” itself.\u00a0<\/span><\/p>\n

\"Footprint
Footprint Analytics – BTC Price & ETH Price<\/figcaption><\/figure>\n

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%.<\/span><\/p>\n

The NFT Portfolio<\/b><\/h2>\n

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.<\/span><\/p>\n

What did the NFT market look like in June 2021?<\/span><\/p>\n