Crypto markets continue to surge on institutional demand 📈

Hey folks!

I hope you guys made the most of the long weekend and celebrated Diwali with loads of food, fun, and frolic. While we take a break from the festivities, let’s sit for a bit and enjoy an informative read on finance, crypto markets, and investments. 

Let’s get started with this week's read!

Dhanteras, the first day of Diwali celebrations is all about wealth creation through investments. Back in the day, gold was a trusted source of investment partly because of a lack of alternatives. This is not the case anymore. Today, we have multiple investment alternatives available to us. 

But despite the options, you would have still missed investing for some reason. Don't worry, we have your back. Click on the video below to learn more about mutual fund investments to embark on your mutual fund journey.

Up next, we bring you an interesting read on a little-known financial phenomenon that can erode your savings in the long run. Read on to build your financial health and protect your wealth. 

Typically, our income increases every year. This is true for both salaried employees and business people. But do our savings increase proportionate to our income? If the answer is no, chances are that the silent savings killer “lifestyle Inflation” is eating up your hard-earned money.

Lifestyle inflation refers to an increase in spending when an individual's income goes up. 

Lifestyle inflation, also known as lifestyle creep, tends to get bigger every time an individual’s income increases. The vicious cycle of increasing expenses with an increase in income makes it difficult for individuals to repay their debt, save for retirement, or meet their bigger financial goals. 

Wanting finer things in life and enjoying the fruits of your hard work is no sin. You may upgrade your phone, dine at gourmet restaurants, enjoy expensive alcohol, buy expensive clothes and accessories, and go on luxury vacations. This gradual increase in expenditure is known as lifestyle inflation. While this is normal within limits, this can go out of hand easily. 

Here are some pitfalls to watch out for:  

• Keeping up with an aspirational lifestyle

We all crave a good life. It is easy to get caught in a comparison game where you start aspiring to live your life like your friends, family members, or at times even Instagram influencers. If your aspirational group is buying a new car or going on a vacation, you may feel pressured to do the same, even if you cannot afford it. Societal pressure may propel you to think you must keep up with the current trends and follow the herd. 

• Subconsciously raising your standards

As you earn more, you tend to think that you must raise your standard of living. This can lead to you spending more on things like food, clothing, and entertainment. This gradual increase in the cost of living can erode savings over time. 

• Not keeping tabs on your spending

You might not want to intentionally increase your spending. But, if you don't track your spending, it's easy to overspend without realizing it. This can lead to lifestyle inflation, even if you don't intend to spend more money. Social media and even ads fan your desires, encouraging you to spend on unnecessary things. 

Hope you are enjoying the read! Here’s a small exercise to stretch your mind as you begin a new week. Compare your expenses for the last three months with your expenses for the same period last year and see if there is a sustainable increase in your spending. And, if there is an increase, identify if the increase is due to a change in lifestyle choices. This will help you understand if lifestyle inflation is creating a dent in your financial health. 

Keep watching this space. We will give you some tips on how to avoid lifestyle inflation in next week’s edition.

Last week, crypto markets continued to see a spike in prices across the board, in a rally that was started by BTC but was accelerated by ETH, and finally cut short by XRP! 

The overall crypto market cap surged last week to top $1.45trn, as Altcoins also started attracting more risk capital. BTC again led the charge with prices almost touching the $38k level, followed by a slight correction. Bloomberg analysts predict that we are currently in a week-long window where the Spot BTC ETFs might get approval and have also raised the prediction for approval by Jan'24 to 90%! 

However, the star performer of the week was ETH, up almost 10% through the week and has blasted past the $2k level with continued upward bias. The primary reason for the jump in prices came after it was revealed that BlackRock, the world's largest asset manager, has applied for Spot ETH ETF. 

In sort of an anti-climax over the weekend, there were further rumors that Blackrock had also filed for another spot ETF for Ripple's XRP, sending prices up sharply. However, this was a hoax and brought a halt in the broader market's rally as well!

Another big development to highlight would be the sudden rise of announcements by funds to raise capital for deployment. Last week, Polygon announced an $85 million grants program while Lightspeed Faction launched a $285 million early-stage fund. Even TradFi is getting in on the action with Standard Chartered and SBI Holdings announcing a joint $100mm fund for investing in Web3 startups. Capital does follow price!

On the individual token front, it was a sea of green as most tokens were trading at higher prices amidst strong buying interest. The Blackrock ETH ETF news had a major positive impact on liquid staking tokens LDO and RPL, sending their prices higher sharply! 

Polygon's MATIC too had a surge in prices after it announced its partnership with NEAR to build a modular ZK prover for WASM blockchains!

Solana's SOL continued its upward march as institutional capital flowed into SOL-specific funds. Similar institutional interest is peaking in Chainlink's LINK, where the price of the regulated Grayscale Chainlink Trust, is trading at a massive premium to spot, suggesting that demand for the instrument is on the rise. 

Another ETH competitor on the rise is Avanache's AVAX, up over 30% last week as it continues to ship new subnets, each requiring staked AVAX to be locked, reducing supply and pumping prices!

Arbirtum's ARB is also pumping in prices after announcing ARB Yield season for its protocol Dapps, but the maximum surge was witnessed in Web3 gaming token Illuvium's ILV, as it announced that the first RPG game from the protocol will go live this month on Epic store!

• ETH $2,043 ⏫ 8.72%

• MATIC $0.9429 ⏫ 32.02%

• AVAX $16.97 ⏫ 33.17%

• ARB $1.10 ⏫ 1.75%

• XRP $0.6541 ⏬ 4.34%

(All data here is as of 4.15 p.m., 14 November, 2023)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• Cboe Digital, the crypto arm of the Chicago Board of Options Exchange, has received CFTC nod to list margined BTC and ETH futures from 11 January. It is the first regulated US exchange to offer spot and leveraged derivatives trading on a single platform. Read more here. 

• HSBC in a statement said it plans to start a digital-assets custody service for institutional clients focusing on tokenized securities in partnership with Swiss crypto safekeeping specialist Metaco. Read more here. 

A goal without a plan is simply a dream, one that you might or might not achieve. This is true for your financial goals as well. Your financial goals need a roadmap and the book under review today will help you simplify your financial planning. 

The One-Page Financial Plan: A Simple Way to Be Smart About Your Money

Author: Carl Richards

We often let money lie idle in our bank accounts while we wait for the best opportunity to invest because we have all been badly burnt in the past. What we don’t realize is that bad calls about money aren’t failures; they just happen when emotional creatures make decisions about the future with limited information. In this book, Richards says that we need to stop striving for perfection and instead commit to a process of guessing and making adjustments when things go off track. Of course, we’re going to make the best guesses we can—but we’re not going to obsess over getting them right every time.

This is because you only need a single page to prioritize what you really want in life and figure out how to get there. That’s because a great financial plan has nothing to do with how markets are performing, what your real estate agent is pitching, or the hot stock your friend told you about. On the other hand, it has everything to do with what’s most important to you as an individual. 

The book is packed with financial knowledge and is written in a simple, easy-to-understand style. Invest in this book to plan your finances efficiently. 

Before you get on with your day, don’t forget to flex those brain muscles with our weekly crypto crossword.

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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