GM friends.
Crypto multi-millionaire Arthur Hayes recently proposed an apocalyptic scenario whereby the U.S. spot bitcoin ETFs eventually kill bitcoin. What?!?!
Go ahead and pour that morning coffee, but “Don’t Panic.” Everything’s going to be just fine.
Here comes your mid-week crypto update. ☕️📰
Here’s what’s in today’s issue:
- David shares his thoughts on Arthur Hayes’ extreme scenario for BTC ETFs, Solana and Metis getting a Christmas pump, Mt. Got repayments starting, Japan throwing out unrealized crypto profit taxes & the leadership shake-up at Grayscale.
- Rekt Capital has the latest technical analysis for you on the market.
- Erik has an article on crypto index funds.
- In case you missed it by Rebecca.
I aped 20 ETH into Manta. This is a next level layer two using Celestia & Polygon zkEVM tech and is backed by Binance Labs, Polychain, Layer Zero and other titans
Oh, and there’s an airdrop! But you’ll need an invite. Thank you for using mine 👇
Arthur Hayes Presents “Extreme” Scenario for Bitcoin ETFs
On Saturday, Arthur Hayes, the former BitMEX CEO, dropped an end-of-year blog article explaining how the spot bitcoin ETFs could “completely destroy” the bitcoin network.
Before we dig into the details, understand the following.
Hayes acknowledges that his proposed scenario is an “extreme view of a possible future”. Fundamentally, it appears his intention through the article is to deliver a PSA to bitcoin holders for the purpose of further protecting and preserving the network.
Moreover, Hayes states, under the “Election Year” section of his post, that “[t]he best time to buy Bitcoin . . . was yesterday, the next best time is now.”
The point is that this isn’t some call by Hayes to panic and sell your bitcoin. Rather, it’s a reminder about what we can all do collectively – starting now and into the future – to help keep bitcoin as a decentralized asset free from the clutches of the authoritarians.
Ok, so what’s this extreme scenario? Hayes says that if the spot ETFs were so successful that they basically held all the bitcoin in circulation, then the bitcoin network would die. But how exactly would this happen?
It’s well known that the last bitcoin will be mined in 2140. At that point, bitcoin miners will be completely reliant on transaction fees in order to pay for their mining costs.
Transaction fees are dependent on transactions actually occurring on the bitcoin network. So at a certain point in the future, if the ETFs were to horde all the bitcoin, then there wouldn’t be many network transactions.
That in turn means miners would shut off their machines, and the bitcoin network would cease to exist.
Now, for multiple reasons, I don’t think we’ll ever get close to a scenario like this. But I nevertheless appreciate Hayes’ call to action. We do need to educate ourselves about how to properly self-custody our own bitcoin, and then do it. And we should encourage others to do the same.
The more people that elect to do the above helps ensure the health and independence of the bitcoin network. The authoritarians indeed want to destroy bitcoin, and we can’t let that happen.
Solana and Metis Get the Christmas Pump
Hopefully you weren’t obsessively checking prices over the Christmas holiday, so let me update you on what happened earlier this week.
On Monday, SOL broke above $125. Prices have since cooled a bit, but hot damn! SOL is now the 4th largest crypto by market cap and is up more than 1000% since the beginning of 2023.
Analysts attribute Solana’s ascendance to good-ole crypto mania and traders piling into Solana-based meme coins and airdrops.
And on Wednesday, METIS hit $98 on Coinbase. Metis is an Ethereum L2 that launched in mid-2021. As of December 17th, METIS was trading for $25, thus the coin pumped 292% in 10 days. Crazy.
It’s believed that the METIS pump is due to the MetisDAO Foundation’s announcement last week of an ecosystem development fund that will deploy 4.6 million METIS for the purpose of accelerating development and adoption of the protocol.
A tip-of-the-hat to any readers who caught either this latest SOL or METIS profits wave. And if you didn’t, there will be many more crypto pumps over the next two years, so stay frosty.
Mt. Gox Repayments have Started
News has been circulating this week that the Mt. Gox repayments have begun.
If you’ll remember, Mt. Gox was the Japanese-based bitcoin exchange that was hacked in 2014. At that time, Mt. Gox was the world’s largest crypto exchange, and a total of 850,000 bitcoins were lost in the hack.
Eventually, Mt. Gox was successful in recovering about 142,000 of the stolen bitcoin. The exchange has been saying that reimbursements via a bankruptcy process would start in late 2023, and it appears that day has come.
Over the past few days, some members of the mtgoxinsolvency subreddit group have made posts stating that they’ve received Mt. Gox payouts in yen via Paypal. It’s expected that these reimbursements will continue through 2024.
The Mt. Gox repayments event has been a point of bitcoin price FUD for a long time. Honestly, this seems like an ideal time for this to be happening, as any dips (likely minor IMO) might be an ideal buying opportunity before the April halving.
Japan Might Throw Out Corporate Tax on Unrealized Crypto Profits
A proposal is currently working its way though the Japanese Parliament, that if approved, would end a tax on corporations for unrealized crypto profits.
The proposal, which is backed by the ruling Liberal Democratic party, passed a key legislative hurdle last week and is now headed for a parliamentary debate and vote in January. If approved, as of April 1, 2024, Japanese corporations will no longer be required to pay taxes on cryptos held on their books that are in profit.
Japan is trying to kick-start their crypto and Web3 economy, and it’s thought that this proposal is part of that larger initiative. This unrealized crypto profits tax has only applied to corporations, as Japanese citizens are not subject to it.
Leadership Shake-Up at Grayscale
There’s some drama happening over at Grayscale.
According to a SEC filing on Tuesday, Barry Silbert, who serves as the CEO of Digital Currency Group (DCG) and Chairman of Grayscale Investments, will be stepping down as the Grayscale Chairman. Silbert will be replaced by Mark Shifke, who currently serves as DCG’s chief financial officer.
DCG is the parent company of Grayscale. The chairman transition is set to happen on January 1.
No reason has been given for the change, but I can’t help but to think it might be one of the SEC’s conditions for approving Grayscale’s application to turn their GBTC trust into a spot ETF.
DCG, under Silbert’s leadership, was sued in October by the New York Attorney General for fraud. To me, this appears to be the SEC preemptively cleaning up the Grayscale operation before a spot ETF is approved.
Let’s dive into today’s Altcoin Watchlist.
In today’s edition of the Newsletter, the following cryptocurrencies will be analysed & discussed:
- Woo Network (WOO)
- Polygon (MATIC)
- Coti (COTI)
- Band Protocol (BAND)
- UniSwap (UNI)
- VeChain (VET)
Let’s dive in.
Woo Network — WOO/USDT
Earlier this December in the Altcoin Watchlist, we discussed a crucial retest for WOO:
The following week, we spoke about how it was successful to enable a +29% rally but also how another retest was on the horizon (green path):
And before Christmas we talked about WOO’s phenomenal +118% breakout from its macro pattern and how it was positioning itself for a potential retest:
And here’s today’s update:
WOO performed a Weekly Candle Close above the black $0.42 level of resistance, which is already a notable technical step to take towards positioning price for further continuation.
In performing this Weekly Close, WOO has positioned itself for a retest of the black level and in fact this retest is now underway.
WOO is retesting this level as new support as we speak, offering a +11% rebound from black earlier this week.
If history is any indication (yellow circle from 2022), WOO could perform a volatile retest at these levels.
After all, in 2022 WOO experienced a long downside wick during its retest back then before rebounding strongly to the upside.
Of course, that was then and this is now — right now, WOO has enjoyed an over +100% rally to the upside, with very little pullbacks in between.
WOO may very well be setting itself up for a retest but it’s very important to also have measures put in place to protect the gains that we have achieved over the past few weeks that we have been following WOO together.
Because losing the black $0.42 as support would see WOO drop into the green-arrowed range that price had almost completely skipped past on its way up but nonetheless serves as a Volume Gap that never really saw much price action get entertained here.
Losing black as support could reasonably open WOO up to a period of re-accumulation inside the green-arrowed range.
However, WOO is still holding the black $0.42 as support, the retest is in progress, and as long as price stability here is showcased (and it is thus far) then WOO’s positioning is titling more so to the upside than downside from here.
Polygon — MATIC/USDT
A few weeks ago, we spoke about how MATIC needed to retest the top of its macro pattern as new support to rally higher:
And here’s this week’s analysis:
MATIC has rallied +44% to the upside following its successful retesting of the top of its macro market structure.
MATIC has confirmed a breakout from its main pattern and has only just entered into a new macro uptrend.
If MATIC is able to Monthly Close above the blue resistance of $1.07 then MATIC would be able to rally even higher without much interruption, especially since price has just broken out from its post-breakout re-accumulation period:
That Re-Accumulation period was an Ascending Triangle and it would be healthy if price were to dip via the orange path into the top of this pattern to confirm the recent breakout.
That’s something that could reasonably occur in the short-term, however long-term MATIC has broken it Macro Downtrend and confirmed a new Macro Uptrend that should see price rally to new highs over time.
CLICK HERE to go Premium and read the rest of this week’s Market Analysis – Premium subs can read Rekt capital’s full report.
Crypto Index Funds: How to Get Exposure to Crypto in Traditional Markets
We all love buying coins on our favorite exchange or dex, hopefully even self-custody part of it or all. But buying coins is not for everyone (hi dad!).
What are our traditional options to get exposure to the rising tides of the crypto ecosystem?
Here’s an overview of the options, ranging from crypto-minded ETFs to the one current publicly traded true crypto index fund.
Crypto Market News
- MicroStrategy has bought another 14,620 bitcoins for $615M bringing its total holdings to 189,150 BTC. Source
- Global crypto users could reach 850-950M in 2024 according to Bitfinex. Source
- Mt. Gox users have taken to Reddit and Telegram to share the news that they have been repaid via PayPal after 10 years. Source
- Barry Silbert, CEO and Founder of Digital Currency Group (DCG) has resigned as Grayscale’s chairman. Source
- Ledger has confirmed it will reimburse users affected by the $600K hack to its Connect Kit and will change the transaction signing process following the exploit. Source
- Trezor has added support for Solana and Solana Program Library (SPL) tokens. Source
- Grayscale’s CEO has said a spot Bitcoin ETF in the US could bring $30 trillion to the market. Source
- Coinbase stock is up 400% in 2023 beating out Nvidia as a top pick for the year. Source
- Bitcoin could reach $160K in 2024 due to the halving and spot ETF according to CryptoQuant. Source
- Galaxy Digital’s Mike Novogratz told CNBC he still thinks a spot Bitcoin ETF will be approved by January 10. Source
- Bitcoin Google searches show Brazil has overtaken Nigeria as the second most interested country, with El Salvador retaining the top spot. Source
- Ark Invest has sold more Coinbase stock bringing its total offloaded in December to $210.5M. Source
- Coinbase has gained approval to operate as a digital assets service provider in France. Source
- Bitcoin miner Core Scientific will exit Chapter 11 bankruptcy proceedings by mid-January. Source
- Bulgaria has ended its investigation into crypto lender Nexo and has found no evidence of criminal activity. Source
- The Securities and Exchange Commission (SEC) has set a deadline for final updates to the spot Bitcoin ETFs of December 29. Source
Coins and Projects
- Bitcoin’s hash rate has reached a new all-time high of over 544 exahashes per second (EH/s). Source
- Spot Bitcoin ETFs could surpass the entire existing crypto-ETF market according to BitMEX. Source
- USDC issuer Circle has gained approval to operate as a digital assets service provider in France. Source
- Ethereum developers are targeting January 17 for its Dencun upgrade to launch on the Goerli testnet. Source
- Immutable has launched its Passport Wallet with a Google or Apple login. Source
- zkSync suffered a 5-hour outage on Christmas Day after a bug in the software caused a security protocol to be mistakenly triggered. Source
- Avail has signed an agreement to provide Starkware with its “data availability” solution to new application chains built using Madara. Source
- Cardano has partnered with Brazil’s state-owned oil company Petrobras to explore energy sector use cases and provide blockchain education. Source
- Solana has overtaken XRP as the fifth-largest crypto by market cap after hitting a 20-month high of $33.7 billion. Source
- Solana’s Phantom wallet has expanded support for Bitcoin, Ordinals, and BRC-20 tokens. Source
- Solana surpassed Bitcoin and Ethereum’s trading volume over the Christmas weekend. Source
- Solana has hit a new all-time high of 15.6 million active addresses. Source
- A PancakeSwap proposal to reduce the supply cap of CAKE from 750M to 450M tokens has triggered a price gain of 21% in just hours. Source
- Curve Finance has voted to reimburse liquidity providers affected in the $61M hack back in July. Source
- Ripple has gained approval to operate as a digital asset service provider in Ireland. Source
- Shiba Inu has announced plans to launch a domain for SHIB holders. Source
- Worldcoin has reportedly stopped iris scanning in India, Brazil, and France. Source
Macro News
- Elon Musk will launch payment services on X by mid-2024. Source
- Argentina’s Minister of Foreign Affairs has said Bitcoin is an acceptable payment for contractual agreements. Source
- Nigeria’s top banks are working on a new stablecoin called cNGN. Source
Thank you so much for your support, and I truly hope that today’s issue will give you insights needed to help you master your wealth.
If you are reading this it means you are on the free version of the Wealth Mastery Investor Report, which is great for news and tips on the crypto markets.
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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.
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
