In This Issue
- I share my thoughts on the state of the market, new crypto bill, new Bitcoin & Ethereum ETFs, GBTC buyback, Binance buys Voyager, Injective Wormhole, Illuvium Overworld & Polygon Mastercard.
- Rebecca breaks down the latest news.
- REKT has a TA report on Bitcoin dominance, the Bitcoin four year cycle & Ethereum’s yearly timeframe.
- Centralized vs Decentralized Exchanges: What’s the difference and what ones are best for you?
- Weekly Airdrops: Check out Jesse’s new airdrops and insentivised testnets.
- DeFi Tutorial: How to earn up to 14% fixed APR on BarnBridge on Arbitrum.
What’s On My Mind by Lark
The State of the Market
Stocks and thus crypto suffered a big hit after the CPI reveal and FED rate hike last week. The S&P 500 dropped 7%, and Bitcoin 12%, showing once again that Bitcoin remains highly correlated but will generally move faster compared to major stock indexes.
In other news one of the USA’s biggest Bitcoin miners, Core Scientific, has filed for bankruptcy. This is just another part of the ongoing BTC miner capitulation that we are seeing across the board as miners get washed out and only the toughest survive.
Broadly a lot of fear remains in the market. Everyone is calling for a recession and further drop in equities. Real Estate markets are still feeling the pain, and things are likely to get worse as buyers dry up. Crypto… man… crypto remains deeply screwed right now. Although I do keep hope that we will see some kind of big rally in 2023. But, overall it could be a long time before the silly, irrational, everyone is getting rich, times come back.
I am sticking with my general plan for the time being, just largely stacking cash. I am buying a little bit of BTC each week, but beyond that I am just playing it safe.
Also just a quick reminder, the best time to get your crypto off of exchanges was yesterday. The second best time is today.
Oh, and Merry Christmas!
New Crypto Bill
The Warren-Marshall bill is the latest attack on crypto. Coin Center has even gone so far as to call it the greatest legislative threat to crypto ever.
The bill would bring back to the conversation, something that has long been threatened. Which is KYC on everything. KYC for wallets, KYC for miners, and KYC for stakers and validators. It would also try to force these services to register as money service businesses. It would also ban privacy tech, particularly mixers. This bill, while proposed as a way to fight money laundering and terrorism is without a doubt a major attack on financial privacy and personal freedom.
New Bitcoin & Ethereum ETFs
Hong Kong has announced that they are bringing out new ETFs for both Bitcoin and Ethereum.
This is a massively important bit of news for the entire industry moving forward. And to be clear, these are futures ETFs not spot ETFs, so still a long way to go, but it is a step in the right direction.
Hong Kong is a major financial hub in east Asia and will provide mainland investors with an easy path to crypto exposure.
Grayscale Explores GBTC Buyback
Grayscale announced this week that they are considering doing a buyback of 20% of the GBTC shares worth around 10 billion dollars. GBTC is currently trading at around a 50% discount to BTC. They said they would only do this if the SEC denies their application for a BTC ETF. Rumors continue to swirl about the health of the Digital Currency Group, of which Grayscale is a subsidiary, along with troubled OTC desk and lender Genesis.
While it is not certain how much GBTC DCG owns, some estimate it could be around 20%. And 20% of 20% is about 2 billion. A number which would fill the hole left in Genesis by the FTX collapse. The problem with all of this is that we are talking about over 100,000 BTC potentially hitting the market if they go through with it.
This is a developing story, which we will be keeping a close eye on due to its potential to impact markets.
Binance Buys Voyager
Binance US has announced that they are buying Voyager and that they intended to return what is left of customer funds as soon as possible.
This comes during a week in which Binance is coming under intense scrutiny with questions about reserves, liquidity, ownership, and more being asked. I hope that this will finally be the end of trauma for Voyager users. Sadly the fate of Blockfi and Celsius users are still in limbo with no end in sight for them.
Injective Wormhole News
Injective has integrated with Wormhole, one of the biggest crosschain bridges. This is a huge step for them as it will allow liquidity to flow in from chains like Solana, Aptos, Avalanche, Oasis, and Polygon, as well as layer twos like Arbitrum. As well it will allow for core assets like SOL to enter the Injective ecosystem.
Illuvium has finally released the beta of their long awaited game. It is open to 30,000 early access users. I know that right now in the depths of a brutal bear market, gaming is not the top of mind for investors, but I fully believe that gaming will come back bigger and better than before.
For the time being I am keeping hold of my farmed ILV tokens, and holding quite a few other gaming coins and venture investments. Gaming and crypto are a match made in tech heaven, and it won’t be long before gamers figure it out.
Polygon Mastercard Partnership
This week Polygon announced that they are partnering with Neobank Hi, and Mastercard to release an NFT debit card. This is a super cool idea, and will allow holders of this NFT debit card to spend their fiat or crypto at 90 million merchants. Polygon has given a masterclass on how to create a blockchain ecosystem. While many chains will likely not survive the crypto winter, the future continues to look bright for Polygon.
In Case You Missed It by Rebecca
Crypto market news
Japan’s largest electric power company, TEPCO Power Grid, plans to mine Bitcoin with excess energy. Source
Bitcoin miner, Core Scientific, has been offered $72M by B. Riley to help the firm avoid bankruptcy. Source
Microsoft has imposed new restrictions on miners, requiring users to obtain a written pre-approval to use Microsoft Azure for crypto mining. Source
Coinbase has introduced a feature to help users recover lost ERC-20 tokens. Source
Donald Trump has launched an NFT collection on Polygon selling for $99 a piece with the trading cards showing Trump as a superhero, astronaut and more. Source
Proof-of-reserves auditor, Mazars, has deleted Binance’s assessment and paused all work with crypto clients including CryptoCom and Kucoin. Source
Crypto tokens held by Digital Currency Group (DCG) are red across the board as speculation begins that the company has liquidated its portfolio amid FTX contagion at Genesis. Source
Crypto exchange, OKX, has paused withdrawals as it suffers from cloud provider issues. Source
BookingCom predicts the metaverse will influence travel decisions in 2023 as people begin to use virtual reality to preview a destination before booking. Source
Crypto exchange, WhiteBIT, has become the official cryptocurrency exchange partner of FC Barcelona until June 2025. Source
Sam Bankman Fried has agreed to be extradited to the US where he will face criminal charges. Source
Bitcoin miner, Greenidge, signs a $74M debt restructuring agreement with NYDIG. Source
Grayscale CEO confirms they may consider a 20% GBTC buyback option if the plan to convert to an ETF fails. Source
Binance US is to acquire Voyager Digital’s assets for $1B with the deal set to close in April 2023. Source
Bankrupt crypto lender, BlockFi, has asked a US court to allow customer withdrawals to start back up again. Source
Coins and Projects
The Human Rights Foundation has awarded $325,000 in new grants to 12 countries across five continents to support the Bitcoin industry. Source
Five wallets supposedly tied to the now-defunct crypto exchange, QuadrigaCX, have been spotted moving around $1.7M of BTC. Source
Active Ethereum addresses have reached a new all-time high of 1.4M, according to Glassnode. Source
PayPal plans to integrate with MetaMask to allow users to buy, sell, and hold crypto more easily to and from its platform. Source
Visa has proposed automatic recurring payments using Ethereum’s layer-2 scaling solution, StarkNet. Source
Tether has helped Binance with a chain swap, as they convert 3 billion USDT to the Ethereum network from the Tron network. Source
Tether plans to reduce its secured loans from $6.1B to zero in 2023. Source
Binance has seen the largest outflow of stablecoins in 24 hours totalling $2.15B. Source
Solana NFT marketplace, Magic Eden, has launched a loyalty rewards program giving users magic points based on secondary trading transactions. Source
Solana-based automated market maker, Raydium, has suffered a $2M exploit. Source
Polygon is to launch a USD-backed stablecoin in Bermuda through Jewel Bank. Source
Polygon co-founder, Sandeep Nailwal, has launched a Web3 startup accelerator called Beacon. Source
Maple Finance has announced a major upgrade to the protocol to improve on its shortcomings and stops lending on Solana. Source
Curve Finance is set to deploy on zkSync’s mainnet in 2023 to help incentivize liquidity. Source
Opera has announced a new set of security tools called Web3 Guard to protect users against bad actors in the space. Source
Waves founder says he will unveil another stablecoin after providing a plan to stabalize its USDN algorithmic stablecoin, which fell as low as $0.53. Source
The Sandbox has partnered with OpenZeppelin to prevent attacks within the Metaverse. Source
Aztec network, a Web3 privacy layer 2, has raised $100M in a funding round led by Andreessen Horowitz (a16z). Source
Yuga Labs has a new CEO, Daniel Alegre, who was previously the President and COO of Activision Blizzard. Source
US Federal Reserve has hiked interest rates another 50 basis points, announced a new target of 5.1%, and wants to see inflation heading toward 2%. Source
US Senator Elizabeth Warren is proposing the digital assets anti-money laundering act to bring KYC rules to wallet providers and miners. Source
US Democrats are to reportedly return over $1M in Sam Bankman-Fried’s funding to the FTX victims. Source
The Bank of Japan shocks the market by loosening its yield curve control policy allowing bond yields to rise. Source
Boris Johnson’s brother has stepped down as an advisor to one of Binance’s subsidiaries over concerns about the exchange. Source
Australia’s treasury is seeking feedback for a consultation paper that will include a regulatory framework for crypto. Source
The EU says a digital Euro is on the legislative priority list before its 2024 elections. Source
Sweden is preparing to issue a CBDC, e-krona, if it’s approved by the government. Source
Kazakhstan’s CBDC will launch as early as 2023, as part of a phased rollout over the next three years. Source
The Bank for International Settlements has set a limit of 2% on crypto reserves among global banks, which will come into effect on 1 January 2025. Source
The Nigerian government will soon pass a bill to legalize bitcoin and crypto. Source
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Market Analysis by Rekt Capital
In this weeks TA section from Rekt, we look at:
- Bitcoin dominance
- The Bitcoin four year cycle
- Ethereum’s yearly timeframe
When it comes to Bitcoin Dominance, it is trying to reclaim the blue level as support, much like it did two months ago but failed, producing an upside wick beyond the blue level instead and later rejecting.
This time around, a Monthly Close above blue would set BTC.D up for a retest of the blue level into new support, much like the yellow circle emphasizes.
Such a confirmation of the blue level into new support would set Bitcoin Dominance up for an uptrend towards at least the red resistance above and if things overextend then towards even the black diagonal resistance above.
The implications of this turn of technical events would be Altcoins losing their valuations, retracing even deeper in their Bear Market corrections.
And of course an inclining BTC Dominance would imply strong movement in Bitcoin’s price, but likely to the downside because of how price is positioned right now:
After all, as long as BTC stays below the blue ~$17150 level, said level will act as resistance and could easily reject price to lower levels, with the next support being at last month’s lows, which probably wouldn’t hold up should they get challenged again.
And so should price drop to the downside, it is understandable Bitcoin Dominance would increase — Altcoins would shed valuation as holders panic sell, with panic sellers moving into Bitcoin and/or fiat.
The Monthly RSI for Bitcoin Dominance also hints at an uptrend:
The RSI has been holding a multi-year uptrend since early 2021 and appears to be reversing from it, indicating hidden strength in Bitcoin Dominance which indeed could translate into a BTC.D uptrend in the coming weeks.
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Lark and the Wealth Mastery Team
TCL Publishing ltd (director Lark Davis, owner of Wealth Mastery) is not providing you individually tailored investment advice. Nor is TCL Publishing registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. TCL Publishing is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.
You can find a full disclosure of all my crypto & venture investments here.