Assessing Crypto Portfolio: SOL Holding Steady While Ethereum Shakes Things Up

Over the last five months, the crypto market has proven just how volatile it can be. In our portfolio, Solana (SOL) is holding steady with a 15% gain, while the rest of our positions are experiencing double-digit losses. Even Bitcoin (BTC) has remained relatively flat. To add to the complexity, traditional markets like the S&P 500 and Nasdaq have gained around 12% in the same period, making the crypto underperformance stand out even more.

But is this short time frame long enough to determine whether our investments are working for us or not? In this second part of our portfolio update series, we’ll explore key performance metrics, recent developments, and price movements for each of our holdings to assess whether we’re still bullish or if any concerns have emerged.

Agenda for Today’s Report:

1. KPIs: A quick snapshot of the key performance metrics driving each of our holdings.
2. Recent Developments: A review of the latest strategic moves, partnerships, and any game-changing announcements affecting the market.
3. Price Movements: An analysis of recent trends and how our holdings are navigating market volatility.
4. Conclusions: Insights into whether our investment thesis still holds or if adjustments need to be made.

But before we dive into individual assets, let’s take a moment to discuss something important that has been buzzing across the crypto community—Ethereum’s (ETH) rapidly dropping fees.

Ethereum’s Fee Drop: A Game-Changer?

Ethereum’s network has long been plagued by high transaction fees, but recent upgrades, especially the Dencun upgrade, are dramatically changing that narrative. Back in March, Ethereum’s weekly fees were soaring at $150M, but now they’ve plunged to just $10M—a massive 90% drop.

This fee reduction is a big deal, especially for cash-flow-driven investors who assess the value of Ethereum based on the revenue it generates from transaction fees. A 90% drop in fees means Ethereum’s Price-to-Sales (PS) ratio—a critical valuation metric for investors—needs to be completely recalibrated.

With this change in how we value Ethereum based on its cash flows, many investors are starting to question: is this a bullish or bearish signal for the future of ETH?

Key Performance Indicators (KPIs) for Our Portfolio

Let’s take a quick look at the performance metrics for the major assets in our portfolio:

• Solana (SOL): +15% since inception, continuing to benefit from low transaction fees and high scalability.
• Ethereum (ETH): Relatively flat, but the fee drop has introduced major shifts in valuation models.
• Bitcoin (BTC): Flat performance as well, though institutional interest remains strong.
• Other Altcoins: Most are seeing double-digit losses, underperforming compared to major assets.

Recent Developments Across Our Positions

1. Solana (SOL): Standing Strong

Solana continues to be a standout performer in our portfolio, with a 15% gain since inception. This network’s ability to process 65,000 transactions per second at incredibly low fees has attracted a wide range of DeFi and NFT projects, cementing its reputation as a high-performance blockchain.

Recent Developments:

• Partnerships with major gaming projects are driving interest in Solana NFTs.
• Ongoing network upgrades aimed at improving security and stability.

2. Ethereum (ETH): A Shift in Value Metrics

Ethereum’s Dencun upgrade has been the talk of the town, reducing fees by 90%. While this is great news for users, it complicates things for cash-flow-based investors. With much of Ethereum’s revenue coming from transaction fees, its Price-to-Sales (PS) ratio is now much lower than expected.

Recent Developments:

• Fee reductions could improve user adoption, especially for smaller transactions.
• The upcoming Shanghai upgrade is set to further improve network efficiency and staking mechanisms.

3. Bitcoin (BTC): Institutional Interest Still High

While Bitcoin has been flat for the selected period, it’s worth noting that institutional interest continues to grow. The approval of spot BTC ETFs is on the horizon, which could potentially push Bitcoin into another bull run.

Recent Developments:

• BlackRock’s ETF filing is still awaiting approval, but the market is optimistic.
• Bitcoin’s role as digital gold remains solid, especially with rising concerns over inflation.

Price Movements: Navigating the Volatile Market

The crypto market has been volatile, and while some assets have managed to hold their ground, others have suffered significant losses. Here’s a quick look at how our top assets have been performing:

• Solana (SOL): As mentioned, +15% growth, largely driven by network scalability and growing ecosystem.
• Ethereum (ETH): Relatively flat but could see renewed interest due to reduced fees and upcoming network improvements.
• Bitcoin (BTC): Flat but remains poised for a potential breakout if ETF approvals come through.

Other assets in our portfolio have been more challenging, with several experiencing double-digit losses. However, it’s important to note that this is a short-term view, and crypto investments often require a longer-term horizon to fully realize gains.