Gary Gensler just testified before the US Senate Banking Committee.
Given his statements, he’s either not reading the courts’ decisions or has a head made of steel and a will of iron!
Pour that fresh morning cup because here comes your mid-week crypto update. ☕️📰
Here’s what’s in today’s issue:
- David shares his thoughts on Gary Gensler sticking to his guns, Bitcoin turning into a global payment network, don’t buy the iPhone 15 with BTC, someone paying $500K to transfer BTC & an update on the Vitalik hack.
- Rekt Capital has the latest technical analysis for you on the market.
- Erik has an article on digital identity protocols for humans and bots.
- In case you missed it by Rebecca.
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Gensler Unrepentant at Tuesday’s Senate Banking Committee Hearing
SEC Chairman Gensler testified in front of the Senate Banking Committee on Tuesday.
Many crypto players were paying close attention, given the agency’s aggressive actions against the industry, the multiple pending spot bitcoin ETF applications, and the agency’s two recent court losses against Ripple and Grayscale.
If you were hoping that Gensler broke into tears, confessed his sins, and turned towards the light, then I’ve got bad news. The man is singing the exact same tune as he was a year ago.
“The vast majority of crypto tokens likely meet the investment contract test.” “I’ve never seen a field that’s so rife with misconduct.” “Given this industry’s wide-ranging noncompliance with the securities laws, it’s not surprising that we’ve seen many problems in these markets.”
Did Gensler just once acknowledge that maybe the SEC had applied the wrong legal framework to crypto tokens, or that perhaps they’d been inconsistent in approving bitcoin futures ETFs while rejecting spot applications?
Nope! For Gensler, it’s as if the SEC just won their court battles.
And what of the senators?
Well, if you pay attention to US politics, then you won’t be surprised to know that praise and criticism of Gensler split along party lines.
Senator Sherrod Brown (D-Ohio), who serves as the committee’s chairman, amplified Gensler’s sentiments about crypto being full of hucksters and fraudsters, while senators Tim Scott (R-SC) and Katie Britt (R-AL) accused the SEC chair of pushing anti-business rules and regulations.
Given Gensler’s statements, I’m not expecting a big change in how the SEC treats crypto under his tenure (which ends in 2026).
Substantial legislation can alter the agency’s course, but given the partisan gridlock, this seems unlikely unless voters make some changes at the ballot box.
Finally, if you’re wondering about any mention of a spot bitcoin ETF, it occurred once.
Senator Bill Hagerty (R-Tenn) asked what needs to happen for one to be approved, and Gensler said, “We’re still reviewing the [Grayscale court] decision. I’m looking forward to staff recommendations.”
The neutrality of Gensler’s answer, compared to his others on crypto, gave me a dash of hopium that approval might be on the way.
FMR. PayPal President Working to “Turn Bitcoin into a Global Payment Network”
David Marcus, the former PayPal and Facebook executive, says his company Lightspark is working to “turn bitcoin into a global payment network”. That’s according to a CNBC interview on Tuesday.
Marcus stated that while we do have unified global communication systems (i.e. the protocols behind email and texting), we don’t have one for global payments. And this is a problem.
For example, if you want to send money to someone living in a foreign country, you’d most likely need to get their foreign banking information, physically go to a local bank, and then wire funds via the SWIFT system.
Thus, Marcus characterizes our current payments system as still being in the “fax era”.
Marcus’ bet is that bitcoin’s base layer and layer-2 (Lightning Network) will become humanity’s first unified global payments system.
His company, Lightspark, enables payments on Lightning, similar to Jack Maller’s Strike.
What I find particularly interesting about Marcus’ comments are how they align with those made by Michael Saylor.
Both envision a future where the bitcoin blockchain serves as a global base settlement layer for transferring big value.
And this settlement layer doesn’t become so because of issued mandates from on-high (e.g. U.N, IMF, etc.), but rather it organically forms over time from free market forces.
Thinking about Buying the New iPhone 15 with Bitcoin?
Apple just dropped their new iPhone 15. And like many Apple products, the new iPhone looks solid.
The base model is starting at $799 USD while the iPhone 15 Plus starts at $899.
Now, I’m not telling you to buy or not buy. But I am suggesting that you not throw pearls to swine. That’s because the value of new iPhone releases compared to that of bitcoin is looking pretty nasty!
In a 12 year period, the cost of a new iPhone when denominated in bitcoin decreased by 99.98%. Crazy.
Seeing bitcoin’s long-term price performance is a good reminder for me to continue using dirty fiat for consumer purchases, and the world’s most pristine asset for the things that matter most (i.e. retirement, property down-payments, inheritance, etc.).
What’s Up with the Recent $500K BTC Transaction Fee?
If you were surfing crypto-X over the weekend, then you probably saw the news that some poor devil paid a 20 BTC ($515K) fee for one 0.074 BTC ($2K) transaction on the bitcoin network on Sunday.
Talk about a bad day for that dude.
The crypto-X community has been scratching its collective head over this one. Money laundering? Some deal between the sender and the mining pool? A glitch in the matrix?
It’s still not clear, but one plausible theory is it was a typo mistake by the sender, who might have accidentally pasted the wrong numbers into the fee slot when setting up a manual transaction.
Other users noted that the wallet in question is extremely active, and thus is likely operated by a large exchange or payment processor. So another theory is that a bug in the sender’s wallet software is responsible for the mistake.
The F2Pool mining pool processed the block that contained the transaction. They put out a notice stating they’d return the money if the rightful owner comes forward within three days.
Vitalik Update: SIM-swap attack used to hack ETH Founder’s X Account
We’ve got an update for you about the hacking of Vitalik Buterin’s X account, which we initially reported on Tuesday.
Buterin has since revealed that a SIM-swap attack was used by the hacker to gain access to his X account.
A SIM-swap attack occurs whenever a hacker fools a mobile-carrier into transferring a phone number away from a victim’s SIM card, and to one controlled by the hacker.
Once the hacker has control of the phone number, they can gain access to the victim’s online accounts where SMS texting is used as an account password reset option.
And this is what happened to Buterin’s phone number (T-Mobile is his carrier) and his X account. Buterin has since secured his account, but not before the hacker absconded with a cool 700 ETH from his followers.
And FYI, if you want to protect your X account from a SIM-swap attack, you can do so by completely removing your phone number from your account under X’s security settings.
In today’s edition of the Rekt Capital Newsletter, the following cryptocurrencies will be analysed and discussed:
- Stacks (STX)
- Ocean Protocol (OCEAN)
- Verasity (VRA)
- Power Ledger (POWR)
- Injective (INJ)
Let’s dive in.
Stacks — STX/USDT
In late May, I discussed how STX needed to drop into the blue Range Low support:
And then when STX rebounded +77% from the blue Range Low, price rejected at the $0.78 Range High resistance and we spoke of additional downside back into the blue Range Low again:
And here is today’s update:
STX has finally dropped into the blue Range Low.
So what’s next?
STX has been meandering inside this purple downtrending channel for a while now.
Now that price has dropped into the blue Range Low, it’s possible that STX could bounce and challenge for a Channel breakout.
However, upside wicks beyond this Channel Top have happened before (yellow circles) which is why a Weekly Close beyond the Channel Top would be necessary for price to breakout from the structure.
Because a failed breakout beyond the Channel Top would see STX drop back into the blue Range Low support and maybe even have to dip below it to tag the Channel Bottom, something like this:
- It’s possible a STX bounce to the Channel Top is on the horizon,
- At Channel Top resistance, a Weekly Close below the Channel Top could set price up for a rejection,
- And if STX fails to hold blue, it could drop into the Channel Bottom for a retest
The blue level right now is crucial for support for STX.
Ocean Protocol — OCEAN/USDT
A few weeks ago we spoke of the downside wicking below the pattern for OCEAN:
And here is an update:
OCEAN reversed from the very bottom of its Channel and rallied +14% to the Channel Top, rejecting there and even reverting back to the Channel Bottom again.
Generally, OCEAN is simply consolidating inside this red downtrending channel.
Downside deviation below the Channel Bottom has proven to offer outstanding opportunities for OCEAN.
At this stage, I’ll either way for such a deviation and/or for a confirmed breakout beyond the Channel Top (i.e. Weekly Close followed by a successful retest of the Channel Top as new support to springboard price to new Yearly Highs).
But it’s not just the USDT pair that is showcasing potentially interesting price action, but also the BTC pair:
Historically, whenever OCEAN reclaims the blue Range Low as support, it tends to rally to the blue Range High resistance.
I like to think of the blue range as a mean-reversion for price whereas periods of deviation outside of the range are exactly that — deviations.
Price deviations which also represent deviations in market psychology.
The blue range represents the point where most of market doesn’t feel too strongly about price.
But when OCEAN/BTC deviates below the blue Range Low — that’s when the market feels most pessimism and fear and doubt.
On the flipside, when OCEAN deviates beyond the Range High, that’s when FOMO and euphoria dominate.
At the moment, OCEAN is slowly lifting itself out from extreme fear territory and is in the process of retesting the Range Low area as new support in an effort to move higher within the range.
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Digital Identity Protocols for Humans and Bots
Digital identity is a pressing issue from many angles.
First, we need a future-proof way to distinguish between bots and humans.
Second, we need to liberate our identity from the walled gardens that are social media companies.
And third, we need to ‘identify the unidentified’: the roughly 1 billion people on earth who don’t have a passport or other form of official identity.
There are multiple protocols emerging. Some are built on the blockchain, some aren’t. Some issue tokens, some don’t. Let’s have a look.
Crypto Market News
- Franklin Templeton, who has $1.5 trillion in assets under management, has applied for a spot Bitcoin ETF. Source
- Google will allow ads for NFT games starting from September 15 after updating its crypto advertising policy. Source
- Coinbase has launched a crypto lending service for institutional investors in the US. Source
- PayPal has integrated with MetaMask to allow US users to sell crypto to dollars directly from their wallets into their PayPal balance. Source
- Grayscale has asked the US Securities and Exchange Commission (SEC) to work on a way forward for its Bitcoin ETF conversion. Source
- Justin Bieber has had one of his songs “Company” turned into an NFT allowing fans to earn royalties from future streams. Source
- UK crypto companies have been given a 3-month grace period until January 2024 to comply with new advertising rules. Source
- Crypto should be valued at current prices on US balance sheets as the Financial Accounting Standards Board (FASB) approves the accounting rule change from December 2024. Source
- Apple has reportedly paid $5M for the rights to Michael Lewis’ upcoming book about Sam Bankman-Fried, which is set to be released on October 3. Source
- Coinbase, Circle, Aave, and others have partnered to launch a crypto advocacy group called the Tokenized Asset Coalition. Source
- Texas Senator Ted Cruz has said he is a “big believer in Bitcoin mining and cryptocurrency as Bitcoin mining can enhance the resiliency of the grid.” Source
- FTX holds $1.16 billion in Solana tokens and $560M in Bitcoin according to a court filing. Source
- Celsius 2.0 has announced its company board proposal led by former Algorand CEO Steven Kokinos. Source
- Bitget has announced a new $100M fund for crypto development which is in addition to the $100M fund it launched back in April. Source
- HSBC is working with crypto custody technology firm Fireblocks. Source
Coins and Projects
- ZK rollups are coming to Bitcoin as two projects take steps to make the development a reality. Source
- Marathon Digital’s Bitcoin mining rate fell by 9% in August due to the Texas heatwaves but it’s still 5x more than August 2022. Source
- Bitcoin miner Iris Energy was paid $26K for each Bitcoin mined in August by the Texas energy grid for using excess power. Source
- Bitcoin miner Riot Platforms was paid over $31M to help balance the grid in Texas during August. Source
- Former PayPal President David Marcus in a recent CNBC appearance shared his vision to turn Bitcoin into a global payment network. Source
- Bitcoin user’s error led to a record transaction fee of $510K. Source
- Bitcoin added over 700K new addresses on September 9, making it the second-highest new daily address count since 2017. Source
- JP Morgan has reduced its Bitcoin mining cost estimate from $21,000 to $18,000 after The University of Cambridge admitted to over-estimating Bitcoin’s energy consumption. Source
- ARK Invest and 21Shares have filed a spot Ethereum ETF application following the SEC’s delay in approving the Bitcoin application. Source
- Ethereum co-founder Vitalik Buterin’s X (Twitter) account has been hacked and over $691K has been drained from victim’s wallets due to a malicious link promoting a free NFT. Source
- Vitalik Buterin has revealed his X account was hacked due to a SIM swap attack. Source
- Coinbase’s Base network has suffered its first major outage since its launch with block production halted for 43 minutes. Source
- Coinbase has increased its interest rate on USDC to 5% up from 4% earlier in the year. Source
- dYdX plans to launch a decentralized order book exchange on Cosmos after it migrates from Ethereum. Source
- Binance is set to delist privacy coins in Belgium from September 21 after doing so already in France, Italy, Poland, and Spain back in June. Source
- Binance is set to remove support for Polygon NFTs and users have until the end of the year to withdraw them from the Binance NFT marketplace. Source
- Solflare has integrated MetaMask Snaps to let MetaMask users manage their Solana portfolio from their wallet. Source
- Ripple has acquired Fortress Trust, a crypto-focused chartered trust company. Source
- Avalanche’s HyperSDK testnet has reportedly hit over 140,000 transactions per second (TPS). Source
- SushiSwap has expanded its services to the Aptos network and is the first time it’s accessible on a blockchain that’s not EVM compatible. Source
- Manta Network has launched its ZK-proof Layer-2 network with the aim of lowering fees and enabling higher throughput. Source
- The US and Vietnam have made business deals worth billions to advance AI, semiconductor, and cloud computing industries. Source
- Canada has left its interest rate unchanged at 5% in September as it’s seeing signs of a weaker economy. Source
- Australia has held its interest rate unchanged at 4.1% for a third month. Source
- Poland surprises the markets with a 75-basis point cut to its interest rates even with inflation at 10%. Source
- Japan is planning a new stimulus package in October to support increases in wages and energy bills. Source
- The G20 has announced it’s moving forward with the implementation of a cross-border crypto framework beginning in 2027. Source
- The Bank for International Settlements (BIS) has announced a COP28 initiative to encourage developers to find blockchain-based solutions for sustainable finance. 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.
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