THE TRADING FLOOR

Introduction to Crypto

Instructor: Jay
 Cryptocurrency Introduction

What is Cryptocurrency?

What is Cryptography?
Crypt “hidden” Graphy “writing”
 Decentralization in Crypto

● What is decentralization?
○ Distributing power away from a
central point
○ No single entity has exclusive control
over data or processes
○ Traditional financial and government
systems
● How is this implemented?
○ Blockchains
 The Vast Crypto Market

● Peak Total Market Cap - 3 Trillion USD

● Current Market Cap - 1.15 Trillion USD
● Current Total Coins - 25,000+
● Different Sectors of Crypto: Store of Value,
Blockchain, Scalability, ISO20022, DeFi,
DEX, Data/Data Storage, Privacy, AI,
Metaverse, Gaming, Governance, IoT,
Interoperability and much more.
● Bitcoin - Store of Value
 Advantages/Disadvantages of Cryptocurrencies

● Advantages ● Disadvantages
○ Fast and low-cost transactions ○ Prices can fluctuate dramatically
○ Eliminate intermediaries and ○ Relatively new asset class
reduce fees associated with ■ Regulatory landscape can
traditional financial systems greatly impact the
○ Provide greater accessibility acceptance and adoption
○ Decentralization ○ Requires staying informed if
○ Cryptography wanting bigger gains
■ Time & Money tipping scale
 Roadmap For The Course

● Introduction to Cryptocurrencies ● Fundamental and Technical Analysis

○ Brief history lesson ○ Fun speculation on where BTC may go
○ Basic concepts ● Building a Crypto Investment Portfolio
● Benefits and Risks of Cryptocurrencies ○ Setting up investment goals
● Crypto Exchanges ○ Defining risk tolerance
○ Setting up security measures ○ Long-term vs. Short-term goals
● Wallets and Security ● Managing Crypto Investments
○ Types ○ Tracking performance
○ NYKNYC ○ Tax considerations
● Fundamental Concepts ● Security and Best Practices
○ Tokenomics ○ Protecting yourself against scams/attacks
○ BTC halving cycles ○ Safe storage
○ Different seasons ○ Tips for avoiding pitfalls/mistakes
● Popular Cryptocurrencies
 THE TRADING FLOOR

Brief History of Cryptocurrencies

Instructor: Jay
 Early Origins

● Concept can be traced back to

the 1980-1990s
● In October 2008, an anonymous
person/group published a
whitepaper (Satoshi Nakamoto)
○ “Bitcoin: A Peer-to-Peer
Electronic Cash System”
● In January 2009, the Bitcoin
network was launched
 The Expansion of Cryptocurrencies

● Bitcoin paved the way for new alternative coins

(altcoins)
● 2011: Litecoin was introduced
○ Faster transactions
● 2015: Birth of Ethereum
○ Smart contracts (enabling dApps)
● 2017: Initial Coin Offering (ICO) boom
○ Projects raised funds by issuing their tokens
○ Opened door for fraudulent projects
● 2018/2019: Crypto’s first major crash
● 2020/2021: Birth of emerging sectors
● Push for increased adoption and recognition in
recent years
● Concept of CBDC came from cryptocurrencies
○ Different from cryptocurrencies as its a push
towards centralization
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Blockchain and Decentralization

Instructor: Jay
 Blockchain Explained

● What is a Blockchain?
● Apple vs. Android
○ Giving developers a platform with
App Store and Google Play Store
● Windows vs. Mac vs. Linux
○ Underlying technology for
ecosystems
● Decentralization is key
● Importance of Consensus Mechanisms
● Providing transparency, security, and
innovative smart contracts
 Consensus of Blockchains

● Consensus Mechanisms
○ Ensure agreement among
the nodes and maintain
blockchain integrity
● Two Main Mechanisms
○ Proof of Work
○ Proof of Stake
 Proof of Work (PoW)

● PoW = Early bird gets the worm

● Advantages
○ Extremely secure
○ Decentralized
○ Transparent
● Disadvantages
○ Energy consumption
○ Scalability
○ Cost
● Main PoW Blockchain - Bitcoin
● Bitcoin mining farms may start to make
sense in the news now
 Proof of Stake (PoS)

● PoS = the more, the merrier

○ Required to stake to play
○ More staked coins = better odds of getting
selected
● Advantages
○ Energy efficient
○ Scalable
○ Environment friendly
● Disadvantages
○ Centralization
○ Security
● Many PoS Blockchains
○ Ethereum, Solana, Avalanche, Cardano, etc.
 Security, Transparency, and Smart Contracts

● Provides security
○ Tamper-resistant transactions
● Provides transparency
○ Anyone can view/verify
transaction
● Smart Contracts
○ Eliminates middle-man
○ Automatically execute
transactions when conditions
are met
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Risks & Challenges of Crypto

Instructor: Jay
 What You Need To Look Out For

● Risk-on asset with enhanced

volatility
○ Exposed to market
manipulation
● Security vulnerabilities
● Lack of regulatory clarity
● Self protection
 THE TRADING FLOOR

Price Volatility in Crypto

Instructor: Jay
 Major Causes of Price Volatility

● Crypto is known for having high

price volatility
● Supply and Demand still reigns true
● Other factors:
○ Market Sentiment
○ Investor Speculation
○ Regulatory Developments
○ Technological Advancements
○ Media Coverage
○ Macroeconomic events
 Understanding Other Assets

● Crypto is a drop in the ocean

comparing to forex
● Bitcoin (~500B TMC) is roughly 26x
Forex ~ 2Q
smaller than Gold (6.5T/day)
● Positive/Negative news hits harder
with less volume

NYSE ~ 44T
Commodities ~ 20T

Crypto ~ 1.1T
 Volatility Impact on Crypto

● Positive impact of volatility

○ Offers an opportunity to make
higher gains than other assets
● Attract more investment fueling
innovation and growth
● Viewed as instability by bigger
money
● Important to create a risk plan
 THE TRADING FLOOR

Market Cap, Tokenomics & Price Dynamics

Instructor: Jay
 Market Capitalization

● Refers to the total value of a

cryptocurrency
○ Current price * circulating supply
● BTC Market Cap June 2023
○ $26,731 * 19,394,718 BTC =
~$518.4 Billion Market Cap
● Market Cap Categories
○ BTC and ETH in their own tier
○ Large Caps = 1 - 100B
○ Mid Caps = 100M - 1B
○ Small Caps = 10 - 100M
○ Micro Caps = <10M
 Tokenomics

● Economic design of a Distribution

cryptocurrency ● Initial Coin Offering (ICO)
● Factors that influence value ● Initial Exchange Offering
○ Supply (IEO)
○ Demand ● Initial DEX Offering (IDO)
○ Inflation Rate ● Airdrop
○ Distribution ● Staking
○ Utility ● Bounty programs
○ Accessibility
 Price Dynamics

● Price is mainly influenced by the

supply and demand of the
cryptocurrency
● Market Cap + Price are connected
but not always the same
○ Market Cap = Overall Value
○ Price = Value of a Single Unit
● Other factors like volume and
sentiment will play a role
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Understanding Supply & Demand

Instructor: Jay
 Supply

● Total Supply - amount of tokens

that will ever exist
● Mining or Minting - rate of tokens
being created
● Tokenomics -
inflationary/deflationary rules of
certain tokens
○ Burn = deleted from existence
= deflationary tool
 Demand

● Utility and Use Cases - does it

have a real world use case?
● Adoption and Acceptance - drives
up demand exponentially
● Market Sentiment and Speculation
- investor sentiment, news, market
trends, etc.
Trading Supply & Demand
 THE TRADING FLOOR

Bitcoin Halving Cycle

Instructor: Jay
 Why is Bitcoin and this cycle influential?

● Bitcoin (BTC) is nearly half the

entire crypto market
○ Supply and Demand
scenarios for BTC mean
more
● Factors that make BTC influential
○ First of its kind
○ Labeled as “digital gold”
○ Only crypto labeled as a
commodity
 What is the Bitcoin Halving Cycle?

● Proof of Work - Rewarded 50

BTC per mined block in 2009
● Halving cycle cuts the mining
rewards in half every 210,000
blocks mined (usually around 4
years)
○ 2012 - 25 BTC reward
○ 2016 - 12.5 BTC reward
○ 2020 - 6.25 BTC reward
● Next cycle is looking around
early-mid Q2 2024
 When might be the next halving cycle?

● Halving cycle = every 210,000 blocks ● Latest BTC block

○ 793,452
○ 4th halving cycle (in 2024) = 840,000 ● 3rd halving cycle date
● [Link] ○ May 11, 2020
● Days since halving
○ Find latest BTC block mined ○ 1123 days
● Number of blocks mined since
● [Link] ○ 793,452 - 630,000 = 163,452
○ How many days elapsed since last ● Average blocks mined per day
○ 163,452 / 1123 = ~146
halving cycle? ● How many blocks are left to mine
○ How many blocks have been mined ○ 840,000 - 793,452 = 46,548
● Approximate days left
since that day? ○ 46,548 / 146 = ~319
■ Determines potential average ● Current projected date of 4th halving
○ 319 days from June 8th, 2023
moving forward ■ April 22, 2024
 So what’s the point?

● BTC Supply/Demand affects the entire

crypto market. It is the first mover.
● Results of the previous halvings
○ Nov 28, 2012 - $12 to $1,000 a year
later
○ July 9, 2016 - $670 to $2,550 a year
later finishing 2017 at $19,700
○ May 11, 2020 - $8,787 to its recent
ATH ~$68,000
 THE TRADING FLOOR

BTC Halving Cycles + Crypto’s Seasons

Instructor: Jay
Stages of Bitcoin
 Crypto’s Seasons

● Bitcoin Season
○ First mover - outperforms the market
● Ethereum Season
○ Second mover - outperforms the
market
○ Can occur during the accumulation
phase
● Large Cap Season
○ Usually during the distribution phase
● Alt Season
○ Majority of investors have profited
from BTC/ETH peaks and are looking
to combine for a quick turnaround
 THE TRADING FLOOR

Fundamental Analysis

Instructor: Jay
 What is Fundamental Analysis?

● Measuring a token’s intrinsic value

○ Focusing on if it’s overvalued/undervalued to its
true potential
○ Current price does not matter as much in this
sense
● Crypto Specific FA
○ Project Team and Development
○ Technology and Innovation
■ Are they the main innovators in their
niche?
○ Use Case and Market Adoption
■ Who are their partners?
○ Community and Ecosystem
○ Financial Performance and Fundamentals
○ Regulatory Landscape
■ SEC vs. Ripple (XRP) court case
○ Market Sentiment
■ Fear and Greed Index
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Understanding Crypto Projects & Sectors

Instructor: Jay
 Different Types of Crypto Sectors

● Blockchain / Layer 1s ~ $774B

● Smart Contract Platforms ~ $303B
● Exchange-based tokens ~ $55.9B
● Decentralized Finance ~ $41.9B
● Meme ~ $13.8B
● NFT ~ $11.9B
● Layer 2s (L2) ~ $8.6B
● Gaming (Game-Fi) ~ $7.7B
● Metaverse ~ $6.2B
● Privacy ~ $4.9B
● Storage ~ $4.4B
● Artificial Intelligence ~ $2.3B
● Internet of Things ~ $2.2B
 Blockchains / Layer 1s (L1)

● Market Cap ~ $772B as of June

2023
 Layer 2s (L2)

● Market Cap ~ $8.75B as of June

2023
 Gaming

● Market Cap ~ $7.79B as of June

2023
 Exchange Based Tokens / De-Fi / Internet of Things

● Exchange Based Tokens market

cap ~ $56B as of June 2023
● De-Fi market cap ~ $41B as of
June 2023

● IoT market cap ~ $41B as of

June 2023
 THE TRADING FLOOR

Building a Crypto Investment Portfolio

Instructor: Jay
 Determining Your Investment Goals & Risk Tolerance

● Questions you need to answer for yourself

○ What is your starting capital?
■ $100, $500, $1000, $5000+?
○ When can you consistently invest and how much?
■ Weekly, Biweekly, Monthly? ; $50, $100, $500+?
○ What is your Monthly Budget?
■ Document a Month of Statements (Money
In/Money Out)
● Rent/mortgage, utilities, car/phone payments,
insurances, food, gas, income made
 Crypto Risk Tolerance

There are 4 main categories in crypto Potential Reward per Category

Low Risk, Low Reward Low Risk, Medium Reward NOTE: Nothing is guaranteed in
crypto. Even with low risk, you
Bitcoin XRP, Cardano, Solana, can still lose. It matters when you
Ethereum Polygon, Chainlink, etc. enter/exit.

Top 2 - $100B+ MC ~Top 50 - $1B-100B MC ● LR/LR - 3-5x (maybe 10x)

● LR/MR - 10x (maybe 20x+)
Medium Risk, High Reward High Risk, Super Reward ● MR/HR - 20-50x (maybe
100x)
Fantom, Render, Gala, Reserve Rights, Kaspa, ● HR/SR - either losing your
Casper, Moonbeam, etc. Ronin, Energy Web Token money or 100x+

~Top 200 - $100M-1B MC Below T200 - <$100M MC

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Determining Potential Sell Levels

Instructor: Jay
Determining Current Prices

● Current Price = Demand / Supply

○ Demand = Current Market Capitalization
○ Supply = Current Circulating Supply
● ETH
○ MC = $196,742,916,456
○ CS = 120,135,854 ETH
○ Price = 196,742,916,456 / 120,135,854 = $1,637.67
Determining Future Prices

● Future price = Future Demand / Future Supply

○ Future Demand = Market Dominance * Expected Total Market Cap
○ Future Supply = Current Circulating Supply + Expected Vesting Emissions at Peak
● Determining Market Dominance
○ MD(%) = (Specific Coin’s Market Cap / Total Crypto Market Cap)*100
○ Helps determine minimum/maximum price values
● Future Supply
○ If possible, find a supply chart and do a little math to estimate future supply
● Let’s use Solana for example
○ Potential Min MC = $272B
○ Future Potential Supply = 553.1M SOL
■ SOL peaked with BTC on same day
● YTD CS % change = ~16.77%
● 546 days after halving = Oct 22, 2025 for this bull run
○ 26 months away = ~35.8%+ on current pace
● Current Circulating Supply = 407.3M * 1.358 = 553.1M SOL
○ Theoretical Future Price = $272B / 553.1M = $491.86/SOL / $904/SOL
 THE TRADING FLOOR

Introduction to Staking

Instructor: Jay
What is Staking?

● Staking is a way to earn rewards for participating in the security and

maintenance of a blockchain network.
● You lock your coins away for an agreed time and they are used to help verify
transactions on the network
○ You are rewarded with more cryptocurrency
● Proof of Stake - validators are randomly selected to verify transactions and
earn rewards. The more cryptocurrency you stake, the more likely you are to
be selected as a validator.
○ Blockchain = geographically distributed network of computers or servers called “nodes”
○ Validators = special nodes responsible for validating new blocks and attaching them to the
blockchain
Different Types of Staking

1. You can stake your cryptocurrency directly on the blockchain network.

a. EX: Avalanche and Hedera
2. You can stake through a staking pool.
a. EX: dApp in a blockchain (Saucer Swap on Hedera)
3. You can stake through your cold storage wallet
a. Ledger (Ethereum, Solana, Polkadot, Cosmos, NEAR, Tezos, etc.)
b. Note that certain projects require a minimum (to stake ETH you need 32 ETH and for DOT you
need 250 DOT)
4. You can stake through an exchange.
a. Both centralised and decentralised
b. Top centralised exchanges after staking options
i. Don’t need 32ETH to stake ETH there
ii. Most dangerous staking option
Example of
Staking in the
Hedera Hashgraph
ecosystem