Bitcoin Can’t Get It Up?

GM friends. 😀

If you’re troubled by Bitcoin’s performance issues (over $30K), don’t fret because Dr. Dave is here to explain why.

Then, we’ll look at the sad state of Gary Gensler. Poor guy just can’t catch a break as even his allies are turning against him. And finally, it’s altcoin news galore with big developments on Chainlink, Uniswap, and Mantle. 

So brew a fresh pot and take that chair, because this is your mid-week update for all things crypto! ☕️📰

Here’s what’s in today’s issue:

• David shares his thoughts on Bitcoin’s $30k resistance, the SEC losing frens, Chainlink’s CCIP launching, UniswapX & Mantle Mainnet.
• Rekt Capital has the latest technical analysis for you on the market. 
• Erik has an article on what Ripple beating the SEC means.
• In case you missed it by Rebecca.

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The News Now

Bitcoin Isn’t Breaking $30K. 3 Reasons Why. 

In case you haven’t noticed, bitcoin isn’t getting a solid break above the $30K region. Instead, it’s been range-bound for the last month. Here’s the three primary reasons for why this is happening. 

1. The $30K Gateway

$30K has become a serious support and resistance gateway for bitcoin. One does not just casually prance through! 

For whatever reason, the market has historically respected this level. When $30K acted as support in early and mid-2021 (#1 and #2), bitcoin mooned into ATHs in relatively short order. Those were good times! But when bitcoin broke below in mid-2022 (#3), it was a one-way ticket to the underworld. Currently, $30K is that community pool bully (#4 and #5) that won’t let bitcoin come up for some air. 

2. Miners Selling 

Data from Glassnode suggests miners are taking some profits here. 

By the end of June, just after bitcoin hit $30K, miners’ net bitcoin positions flipped from positive to negative. Meaning these no-good back-stabbers have been selling more than they’ve been hodling!!! 

3. US Government Rumored to be Selling Silk Road BTC

All we really know is that in mid-July, 9.8K bitcoin ($300M) began moving in addresses believed to be controlled by the US Department of Justice. Meaning this is Silk Road bitcoin. When the Feds start moving their coins, it typically means they’re selling or gearing up for selling. Clearly they’re not faithful readers of Wealth Mastery. If they were, they’d know a solid HODL strategy into 2025 is the winning play. 

SEC Losing Frens? 

It’s been a rough week for Team Gary and the SEC, and things seem to only be getting worse. After taking the big L in the XRP case last week, it appears members of Gensler’s own party might be turning against him. 

First, there’s U.S. Representative Ritchie Torres (D-NY). On Tuesday, Rep. Torres sent a letter to Gensler requesting that the agency “reassess its regulatory assault on crypto assets” in the wake of the XRP ruling. Translation: Your strategy sucks, please change. 

Second, guess who’s meeting with 100 Congressional Democrats this morning, in a closed door session? Brian Armtrong. That’s right, the CEO of the company that’s in a knock-down litigation war with the Democrat-led SEC, is meeting with 100 House Democrats to discuss digital-asset legislation and related issues. These 100 members form what’s known as the New Democrat Coalition, which is a caucus that supports a pro-innovation, pro-economy agenda. 

Chainlink’s CCIP has Launched 

Chainlink’s Cross-Chain Interoperability Protocol (CCIP) has entered into a mainnet early access phase on Ethereum, Polygon, Optimism, and Avalanche, as of July 17th. CCIP is an infrastructure protocol that provides interoperability between all the blockchains and dApps within the larger crypto economy. CCIP is built off the same oracle infrastructure that’s used for Chainlink’s popular “price feed” services. 

If you’ve ever made transactions on multiple blockchains, or “bridged” assets from one chain to another, you’ll understand that CCIP is a big deal. The crypto economy has developed into a multi-chain ecosystem. The problem is that these blockchains are isolated from each other. Meaning, engaging in economic activities between chains is –  to put it bluntly – a pain in the ass. 

Chainlink claims that CCIP fixes this. The idea is that developers can use CCIP to create dApps that handle all the cross-chain transferring and communication behind the curtain. From a user’s perspective, it’s just the dApp tapped into the broader crypto economy. According to Chainlink, assets, collateral, NFTs, gaming, and everything else happening on blockchains will get pulled in by CCIP. 

Thus far, Synthetix and AAVE have begun using the new protocol. LINK received a very modest price bump on the news. 

Uniswap Unveils “UniswapX”

Uniswap, the world’s largest DEX with approximately $3.83 billion in TVL, has unveiled a new trading platform dubbed UniswapX. 

According to developers, UniswapX’s primary upgrade is the ability for users to trade tokens for lower fees as compared to the current version. The base-version of Uniswap uses liquidity pools to facilitate trading. The problem is those pools sometimes empty out (meaning no more trading) and they are siloed (meaning no competition). 

UnswapX allows for third-party fillers to compete with Uniswap itself for users’ swaps. These third-parties can fill users’ swaps directly or route the orders to external liquidity pools. Thus, no more empty liquidity pools and lower fees for users due to increased competition. In fact, the development team says the swap environment will become so competitive that users will be able to enjoy gas-free swaps. 

Additionally, developers are saying that UniswapX will become a cross-chain swap station in the coming months. It will be interesting to see if UniswapX uses Chainlink’s CCIP to pull that off. 

UniswapX is currently in opt-in beta testing on the Ethereum mainnet. 

Mantle’s Mainnet is Live

Mantle Network (MNT), the much-anticipated Ethereum Layer 2, officially launched on mainnet this past Monday. Developers announced the launch at the Ethereum Community Conference in Paris. 

Mantle, like other Ethereum L2s, allows people to utilize Ethereum dApps at a fraction of the cost. However, it apparently uses a novel and advanced tech stack to get it done. 

Last week, we looked at Mantle’s proposal to BitDao for a $200 million Mantle ecosystem fund. That vote has since passed. Moreover, Mantle and BitDAO have effectively merged, bringing BitDAO’s governance under Mantle’s banner, as well as a one-way migration for BitDAO’s token (BIT) to convert into MNT. 

BitDAO is the world’s largest DAO with over $1B in assets. The DAO is backed by heavy-hitters like Peter Thiel, Pantera, Bybit, and others. 

MNT trading went live Monday. Since opening, MNT is up approximately 8%.

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Market Analysis by Rekt Capital

In today’s edition of the Rekt Capital Newsletter, the following cryptocurrencies will be analysed and discussed:

• Stellar (XLM)
• Solana (SOL)
• TomoChain (TOMO)
• Lido DAO (LDO)
• Dusk Network (DUSK)
• Chainlink (LINK)

Let’s dive in.

Stellar — XLM/USDT

XLM has recently broken its blue Macro Downtrend to kickstart a new macro uptrend.

Monthly Close beyond this blue Macro Downtrend will only confirm a likely start to a new macro uptrend.

Over the past few months this year, XLM has been ascending at Higher Lows, clearly curving upwards (black).

Despite rejecting from the strong resistance area (red), now XLM has the chance to position itself for a crucial support retest that could enable a revisit of those red highs.

Monthly Close above the blue region here would likely position XLM for a retest of the blue region.

Generally, even on lower timeframes, XLM could dip into blue and retest this region in an effort to turn it into new support.

Fail to retest the blue region however and XLM could actually go for a retest of the Macro Downtrend instead.

For the moment however, XLM is positioning itself for a retest of the blue region.

Solana — SOL/USDT

As a preface to today’s analysis, let’s recount the analysis from last week:

Here is today’s update:

SOL has broken out into a +40% uptrend since breaking the blue multi-month diagonal resistance.

SOL rallied straight into the purple resistance area, historically a major demand area which now looks to be flipping into new resistance.

This rejection however may facilitate a retest of the blue diagonal that SOL had just broken recently.

A dip into the blue diagonal followed by a successful retest of that diagonal would likely enable another revisit of the purple resistance area:

By the way… this Friday, I’ll chart your Altcoin picks in an exclusive subscriber-only TA newsletter and will cover as many as I can.

So if you’d like to have an Altcoin charted, feel free to share max. two TA requests each in the comments below.

I’ll chart the Altcoins that get mentioned and ‘Liked’ the most.

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Ripple Victorious: The Times They Are A-Changin’ by Erik

Ripple’s victory is considered a big deal and not just in the crypto community. Traditional media agree that last week’s ruling in favor of Ripple Labs and against the financial watchdog SEC is big. ‘A key legal victory’ says a CNN headline. ‘A landmark win’ says Reuters. Crypto Twitter is not just victorious but vindictive: ‘FY Gensler’. It is indeed a big win for Ripple, American crypto exchanges, and altcoins in general.

A key part of the ruling of the New York District Court’s Judge was that crypto exchanges that allowed trading of Ripple’s token XRP were NOT engaging in listing an unregistered security. Selling a security comes with strict requirements: disclosure requirements and all kinds of compliance that most crypto projects don’t adhere to. The securities laws, from the 1930s don’t seem to be fit for this new asset class.

Why is this News Big?

First of all, if Ripple’s XRP is not considered a security then it’s hard to imagine which altcoin will. After all, Ripple is one of the most company-like, and least decentralized crypto projects. 

As Paul Grewal pointed out in an interview:

“Particularly the portion [of the verdict] dealing with trading on exchanges: look for all the references to XRP and just swap out the letters XRP and swap in MATIC, Cardano – I mean you could pick any number of assets including those that are at issue in our [Coinbases’] case. The logic holds. There’s nothing different about the tokens that would change any of the Judge’s analysis. That’s why this thing is such a blockbuster.”

So, US crypto investors no longer have to feel like they are potentially doing something against securities laws.

“For exchanges, for tokens that are listed on exchanges, for regular investors, this ruling strikes a blow to the idea that somehow securities are being traded when people go onto exchanges and trade the assets,” Paul Grewal, chief legal officer at Coinbase, said on CNBC.

What does this mean in practice? A few weeks ago, Robinhood delisted coins ADA, SOL and MATIC. XRP was already long ago delisted by American exchanges such as Coinbase and Kraken. After the verdict, these exchanges relisted XRP. And the current ruling makes it of course likely that Robinhood will make a similar move with respect to mentioned alts. 

Background of the Case

In December 2020, the American Securities and Exchange Commission (SEC) started legal action against Ripple Labs. The heart of the matter was whether XRP is a so-called security or not. If so, then Ripple would have breached the securities laws. Issuing a security comes with all kinds of regulatory requirements.

The American SEC uses the so-called Howey Test to determine what qualifies as an “investment contract” and would therefore be subject to U.S. securities laws. An investment contract exists if there is an “investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.” BTC is not considered a security by the SEC, but instead a commodity. 

XRP is an odd duck among crypto coins. For one thing, the XRP Ledger doesn’t use proof-of-work or proof-of-stake. Instead, it is maintained by independent participants that are approved first. In other words, it’s not permissionless like Bitcoin and Ethereum and it isn’t decentralized. Ripple Labs (which has issued shares) views its payment system as an alternative to SWIFT and wants to draw in clients like (Central) Banks. No wonder that most crypto fans are no fans of XRP, even though the project has its army of shillers. 

The Verdict in Brief

• Ripple putting XRP on exchanges for trading is not an investment contract/security.
• Ripple paying people in XRP is not an investment contract/security.
• XRP is not a security in and of itself even when offered through a securities transaction.
• However, Ripple selling XRP the investment contract to institutional investors in the early days, was an investment contract, and thus a security. This was illegal.

In brief: a crypto asset may initially be sold as part of an investment contract (ticking the boxes as a security) and then later be resold as a non-security. Any commodity (gold, art, whiskey, whatever) or coin may be sold under certain promises and commitments by the seller, which qualify it as a security. But if this commodity or coin is then later resold, these qualifications may no longer apply.

Implications for Crypto in the US

It is considered likely that the SEC will try to immediately appeal this decision to the Second Circuit. But even if the second circuit reverses some of the judge’s findings, it could take years until we get there.

In the meantime, the verdict is a big blow for forces in D.C. that want to ban crypto. It is likely that the anti-crypto armies will have to deal with a legislative agreement that is permissive to crypto assets. After all, that’s what you get if you play the high-stakes game of going to court and it backfires. Another more recent SEC court case revolves around Coinbase. The SEC recently sued and there are signs that things are not going great for the SEC. The SEC claimed Coinbase acted as a middleman trading crypto assets, such as Solana, Cardano and Polygon that should have been registered as securities. This case isn’t strengthened – to say the least – by the Ripple ruling. Not to mention the fact that the SEC had already approved Coinbase’s listing on the stock exchange in 2021 – so it contradicted its earlier approval.

In the words of John Rizzo, a former spokesperson for the U.S. Department of the Treasury:

Far from achieving the end of crypto in America, the SEC’s attempt to cripple crypto in America may lead to a bipartisan regulatory framework that engrains crypto more deeply into the economy than once thought possible – a bad day for those who banked on a strategy of killing crypto assets in America, indeed.

The timing of the ruling is nice, as American Congress feels the urge to put a regulatory framework around crypto assets just like the EU has already done.

This is also the objective of Congressman Tom Emmer, a fierce critic of SEC Chairman Gary Gensler. ‘Now let’s make it law’. Namely, the ruling that a coin is not in itself an investment contract.

Conclusion

The existing framework of financial regulators like SEC is to view the decision if something is a security or not as a binary thing. It either is or isn’t. This NY district court ruling has said – for the first time: it depends on the context. This is a big shift in perspective and is much needed for the future regulation of tokens/coins. After all, they are a new asset class that doesn’t fit in the century-old securities legal framework. Unlike equities and bonds, tokens on a blockchain can be more than a claim on a company’s earnings and assets.

Regulation will have to adapt to this new reality and this verdict is a first step, however the potential appeal of the SEC unfolds. There is bipartisan legislation underway, and this ruling can inform and speed up that process.

The anti-crypto army no longer has a realistic chance of winning in the US. The times, they are a-chaingin’.

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In Case You Missed it by Rebecca

Crypto Market News

• BlackRock CEO Larry Fink has appeared live on CNBC stating he’s seen increased demand for crypto from gold investors. Source
• The US Securities and Exchange Commission (SEC) has acknowledged Bitcoin ETF applications from BlackRock and Bitwise indicating the review process is underway. Source
• Coinbase Wallet users can now send encrypted instant messages using .eth domains. Source
• Ark Invest has taken profits on Coinbase by selling 135K of its shares as the price hit $90 and another $53M as the stock hit $114. Source
• Former Celsius CEO Alex Mashinsky has been arrested and the SEC has filed a lawsuit against the lender. Source
• Celsius has been fined $4.7B by the US Federal Trade Commission. Source
• Europe’s first spot Bitcoin ETF is set to launch later this month after a year-long wait. Source
• Australia’s first fully licensed spot bitcoin ETF has been filed under new regulatory guidelines with the Australian Securities Exchange (ASX). Source
• Ethereum, Solana, and Cardano have topped the first institutional-grade crypto ESG ranking. Source
• Coinbase’s Layer 2 network Base has launched for builders and will welcome users in August. Source
• Coinbase is pausing its staking service in the US states of California, New Jersey, South Carolina, and Wisconsin. Source
• Marathon Digital is being sued by its shareholders alleging that the CEO and top execs breached fiduciary duties. Source

Coins and Projects

• Berenberg has increased its Bitcoin price prediction for April 2024 to $56,630. Source
• Starknet’s Quantum Leap upgrade has gone live on the mainnet to increase the transactions per second (TPS). Source
• zkSync Era has launched Boojum, a new STARK-based proof system that will run on consumer-grade GPUs. Source
• Uniswap has unveiled UniswapX, a new blockchain protocol for trading across different liquidity sources. Source
• Aave has launched its algorithmic stablecoin GHO on the Ethereum mainnet. Source
• Aave has launched its Lens protocol V2 with the aim to serve as a social layer for Web3. Source   
• Mantle Network has unveiled its mainnet alpha at the Ethereum Community Conference (EthCC) in Paris. Source
• Unstoppable Domains has integrated with Ethereum Name Service to add support for .eth domains. Source
• Binance has laid off at least 1,000 staff in recent weeks as it contends with regulatory and legal pressures. Source
• Binance has completed its integration of Bitcoin’s Lightning Network less than a month after announcing its plans to do so. Source
• Polygon has proposed to upgrade its MATIC token to a multi-purpose token and will be renamed to POL. Source
• Algorand DeFi borrowing and lending protocol Algofi is to shut down by the end of the year. Source
• Chainlink has launched its Cross-Chain Interoperability Protocol (CCIP) on Ethereum, Avalanche, Polygon, Arbitrum and Optimism. Source
• Sui has launched a decentralized order book for building DeFi tools. Source
• Sui network has hit 1M active addresses less than two months after launching its mainnet. Source
• Osmosis has added a new feature called “supercharged liquidity” and aims to improve capital efficiency of the network. Source
• Oasis has launched an Ethereum Virtual Machine (EVM) compatible blockchain called Sapphire to take advantage of improved privacy features. Source
• XRP has been officially declared not a security, except to institutions, as Ripple has won its case against the US SEC. Source
• Ripple has invested in a funding round for an AI-metaverse company called Futurverse, alongside FIFA and Mastercard. Source
• Aptos has partnered with Pyth Data Association to provide dApps with second-sub price feeds on the network. Source
• Celo is proposing to return to the Ethereum network by transitioning from an independent EVM-compatible layer-1 to an Ethereum layer-2 solution leveraging the OP stack. Source
• Multichain has announced it’s “forced to cease operations” due to a lack of operational funds after its CEO’s arrest in a long-awaited statement on Twitter. Source
• MultiversX, formerly Elrond, has launched on-chain two-factor authentication (2FA) feature for wallet security. Source

Macro News

• US inflation came in lower than expected at 3% for June. Source
• The US government has moved almost 10K bitcoins worth around $299M that were linked to Silk Road. Source 
• Brazil’s CBDC pilot source code will have access to individual wallets and will be able to freeze funds. Source
• Elon Musk has launched a new AI company called xAI. Source

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Final Notes

Watch my interview with Raoul Pal as he shares insights on Bitcoin, Ethereum, Solana, and tech stocks. 👇

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Lark and the Wealth Mastery Team

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Legal Disclaimer

Wealth Mastery (Lark Davis, and the Wealth Mastery writing team) are not providing you individually tailored investment advice. Nor is Wealth Mastery registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. Wealth Mastery 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.