Gm friends,
The SEC has again waved the white flag in one of its crypto battles. This time, it’s Consensys and Ethereum that are the victors. You know you love to see it.
So pour up a coffee and take a seat, because here comes your mid-week crypto update. ☕️📰
Here’s what’s in today’s issue:
- David shares his thoughts on the SEC ending their Ethereum investigation, HashDex applying for a joint spot BTC and ETH ETF, tokenizing commercial real estate, stablecoins helping the US dollar survive & who’s actually behind the DJT token?
- Rekt Capital has the latest technical analysis for you on the market.
- Erik has an article on governance tokens and whether or not they can be a good investment.
- In case you missed it by Rebecca.
Orderly is doing a huge airdrop campaign for their upcoming token. You can earn merits by trading on supported exchanges.
Here is what you need to do:
- Sign Up To Woofi
- Deposit USDC and start making trades on Woofi Pro (the more trades, the more points you earn)
- Check your weekly points status here
SEC Ending Ethereum Investigation
On Wednesday, Ethereum developer Consensys announced that the SEC is dropping its investigation as to whether ETH is a security.
According to Consensys, the SEC’s Enforcement Division notified the company that the agency will be closing its investigation into Ethereum. Consensys described the news as a “major win for Etheruem developers, technology providers, and industry participants.”
Consensys is the development company behind the very popular Metamask crypto wallet. The trouble started when the SEC issued a Wells notice to Consensys in March, notifying the company that it was violating securities laws by offering Ethereum to users via Metamask.
Consensys didn’t blink, and responded by suing the agency. But after the SEC approved the spot ETH ETFs in May, Consensys followed up with the agency to confirm that their investigation would be closed, to which the SEC responded in the affirmative. And that’s because – from a legal perspective – the SEC approving the spot ETH ETFs implies that the agency views ETH as a commodity, and not a security.
The political nature of all this is astounding. The SEC touts itself as an unbiased referee that regulates the US markets per established law. And for the past 3.5 years, the agency has been on an anti-crypto warpath, arguing that most of the industry has been in violation of that law.
However, once Biden’s White House realized the political liability they were incurring due to their actions against crypto, their unbiased referee – the SEC – all of a sudden began reading the law very differently from how it did just a few months ago.
HashDex Files for Joint Spot BTC/ETH ETF in U.S.
Also on Wednesday, news broke that Hashdex filed an application with the SEC for a joint spot BTC and ETH ETF. Hashdex is a crypto asset manager with approximately $900 million in assets under management.
If approved, the ETF will be called the Hashdex Nasdaq Crypto Index US ETF. And of course, it will be the first American ETF to hold a mix of both crypto assets.
Here’s what else we know about the proposed ETF.
It will be market cap weighted. This means that the ETF’s mix will be based on the ratio between bitcoin and Ethereum’s market caps, which is currently at 2 to 1 (i.e. bitcoin has a $1.2T MC and Ethereum has a $400M MC).
The application allows for the addition of other digital assets into the ETF, per the prior approval of the SEC. Coinbase and BitGo will act as custodians, and the SEC’s final deadline for approval is March 2025.
Hashdex already operates a similar blended crypto ETF in Brazil. The company believes there’s a large appetite for such products given the benefits of diversification.
KPMG Says Commercial Real Estate will be Tokenized
According to KPMG Canada’s digital asset co-lead, Kunal Bhasin, tokenization will be the future of commercial real estate. Bhasin made these comments this week at Collision, which is a tech conference happening now in Toronto.
More specifically, Bhasin stated that he believes institutional investors will be increasingly likely to purchase commercial real estate via tokenized shares on-chain, and that such tokenization will help diversify the investor base in the commercial real estate market.
Bhasin further noted that tokenized commercial real estate could become one of crypto’s largest use-cases for the institutional crowd.
This all sounded pretty fantastic, until Bhasin said that he thought institutional investors would likely demand that such tokens operate on permissioned blockchains with stringent KYC checks.
Let’s hope he’s wrong on this final point, and that the institutions instead opt to use open and permissionless networks like Ethereum and Solana.
Paul Ryan: Stablecoins Can Help U.S. Dollar Stay Afloat
Heads turned in the crypto community over the weekend after the former U.S. Speaker of the House, Paul Ryan, dropped an interesting opinion piece in the Wall Street Journal.
Titled “Crypto Could Stave Off a U.S. Debt Crisis”, Ryan argues that in order for the U.S. dollar to survive, the global demand for U.S. bonds must remain intact. The problem however is that certain countries – notably China and Saudi Arabia – are increasingly selling their U.S. treasuries. And that’s not good.
So one of the remedies according to Ryan are U.S. dollar-backed stablecoins. The basic idea is that if the U.S. government helps support and grow the stablecoin industry, it will create more demand for stablecoins, which in turn means more demand for U.S. treasures.
And that’s because stablecoin issuers typically back their tokens with U.S. treasuries. In fact, Ryan notes in his piece that issuers already serve as the sixteenth largest holder of U.S. treasuries, when compared to the top twenty foreign government holders. To make the example concrete, Tether’s USDT market cap is $112B. 84% of that is backed by “cash or cash equivalents”, and U.S. treasuries make up 80% of those cash or cash equivalents.
Ryan closes his piece calling on Congress to pass reasonable stablecoin legislation. We’ve come a long way, folks.
Who’s Behind the DJT Token?
A new Trump-themed memecoin dropped this week. It’s called the TrumpCoin, or DJT, and it’s already causing lots of drama.
The Solana-based token went viral on Monday as it was believed to be directly linked to Donald Trump and his son, Barron. But then, blockchain sleuths discovered evidence indicating that Martin Shkreli was involved. Shkreli is the former pharmaceutical CEO who served time behind bars for securities fraud. Lovely.
Shkreli initially denied having any involvement in the token, but then after a series of bets were made on X as to the token’s creator, Shkreli announced that he and Barron Trump were indeed the creators. Neither Donald Trump nor the Trump campaign have made any comment with regards to their association with the token.
But all this controversy definitely hasn’t hurt DJT, as the token has already done about $460M in trading volume. According to Coinmarketcap, DJT is currently trading slightly below its opening price of $0.012, with a market cap of $118M.
In today’s edition, the following cryptocurrencies will be analysed & discussed:
- Arweave (AR)
- Coti (COTI)
- Avalanche (AVAX)
- Kyber Network (KNC)
- Bitcoin Cash (BCH)
- Theta Token (THETA)
Arweave — AR/USDT
Arweave faked a breakout from its light blue Bull Flag and failed to retest the $43 (black) level as support to confirm that breakout.
AR has since retraced back into the blue Macro Downtrend, even overextending below is considerably.
But until that Monthly Close is in — nothing is confirmed.
The downside volatility has been quite extreme as of late and extreme fear tends to precede opportunity.
Which is why it’s key for AR to hold this blue Macro Downtrend.
In the past, AR has experienced volatile retests of this Macro Downtrend, producing downside wicks below the Downtrend.
With AR now below the Macro Downtrend, could it be that this is another volatile retest?
For that to be true, AR would need to Monthly Close above the Macro Downtrend later this month.
Coti — COTI/USDT
In mid-2021, COTI would find support at the orange level and downside-deviate considerably into the light blue order block and even as low as the black level at $0.08.
In 2024, COTI has actually turned that major orange support into resistance this month, rejecting into the light blue order block and even teasing to drop into the black level as well.
The light blue box represents a support from mid-2021 and a resistance in 2022 through 2023 so COTI finally has a chance to reclaim this area as support once again.
The entire Altcoin market is retracing heavily, but not much is needed from Altcoins like COTI to end the month with a volatile downside wick to secure a major support.
COTI needs a Monthly Close above the light blue box to secure it as support but in the meantime, downside volatility to the black level could be on the cards if BTC retraces a bit more.
CLICK HERE to go Premium and read the rest of this week’s Market Analysis – Premium subs can read Rekt capital’s full report.
Can Governance Tokens be a Good Investment?
The problem with governance tokens is that there is no value accrual mechanism. In other words, increased network activity doesn’t directly benefit the token price.
This doesn’t mean a governance token can’t be a good investment. Why? The token’s protocol and network activity can be great, and people simply want to own a piece of that.
TO READ THE REST OF THIS ARTICLE, CLICK HERE – “Can Governance Tokens be a Good Investment?”
Crypto Market News
- Bitcoin could reach $200K in 2025 according to Bernstein who has increased its price prediction from $150K. Source
- T-Mobile parent company Deutsche Telekom is planning to mine Bitcoin. Source
- Bitcoin investment products saw $621 million in outflows last week. Source
- Hashdex has filed an application with the SEC for a hybrid spot Bitcoin and Ethereum ETF. Source
- The US Securities and Exchange Commission (SEC) is dropping its investigation into Ethereum. Source
- The Australian Securities Exchange (ASX) has approved its first spot Bitcoin ETF and it’s been given to VanEck. Source
- MicroStrategy has announced a $700M stock sale to buy more Bitcoin. Source
- Donald Trump wants all the remaining Bitcoin to be mined in the US. Source
- Bitcoin miner Riot Platforms has increased its stake in Bitfarms to 14%. Source
- CleanSpark has acquired 5 mining facilities in Georgia in a $25.8 million deal. Source
- US-listed Bitcoin miners reached a total market cap of $22.8 billion in June according to JPMorgan. Source
- El Salvador President Nayib Bukele is considering creating a private investment bank for Bitcoin investors. Source
- MoonPay has integrated with PayPal to allow customers in the EU and UK to buy crypto using PayPal within the MoonPay platform. Source
- A dormant Bitcoin wallet has moved $536 million after a 5+ year hiatus. Source
- Australia’s treasury will include stablecoin rules in its crypto bill draft. Source
- The Texan power grid will need to expand its capacity more than it expected to cope with the demand from AI and Bitcoin mining. Source
- Bitwise has estimated that crypto and AI could add $20 trillion to global GDP by 2030. Source
- President Biden’s re-election campaign may be exploring accepting Bitcoin and crypto donations. Source
Coins and Projects
- Bitcoin has seen selling pressure from miners and long-term holders. Source
- Bitcoin has overtaken Ronin to become the blockchain with the third-highest record for all-time NFT sales behind Solana and Ethereum. Source
- Tether has launched a gold-backed US dollar stablecoin called Alloy. Source
- USDC issuer Circle is adding support for the Solana network and will take place in two phases: programmable wallets and gas station feature. Source
- Paxos has cut 20% of its workforce as it focuses on tokenization. Source
- Coinbase experienced its biggest Ethereum outflow of the year on June 12 with more than $1 billion in ETH leaving the exchange. Source
- Ethereum ETFs will lack institutional interest without a staking feature, according to analysts. Source
- Ethereum ETFs could start trading in the US by July 2 says Bloomberg analyst Eric Balchunas after SEC Chair Gary Gensler says they will be finalized over the summer. Source
- Ethereum restaking protocol Renzo has raised $17M in a funding round led by Galaxy Ventures and Brevan Howard Digital Nova Fund. Source
- Zksync has launched its token airdrop with over 45% of the tokens already claimed in less than two hours putting the market cap at almost $800M. Source
- TON has flipped Ethereum in daily active addresses for 10 days in June, not including Layer-2 networks. Source
- TON blockchain’s total-value-locked (TVL) has hit a new all-time high of almost $610 million. Source
- Solana DePIN projects Hivemapper and Helium are early sector winners, according to Franklin Templeton. Source
- Solana’s gaming-focused Layer-2 Sonic has raised $12M in a funding round led by Bitkraft. Source
- DePIN provider Aethir has launched its cloud computing network on the Ethereum mainnet. Source
- MetaMask has launched its staking service allowing pooled staking for Ethereum holders. Source
- Polkadot parachain Moonbeam has launched a $13 million gaming fund. Source
- Ronin’s upcoming zkEVM has been built using a modified version of Polygon’s CDK and will be used to scale Web3 games. Source
- Terraform Labs will shut down after agreeing to pay $4.47 billion in its SEC settlement. Source
Macro News
- US interest rates have been kept unchanged at 5.25-5.5% and the Fed hints at just one cut in 2024. Source
- Australia has kept interest rates unchanged at 4.35% but says a rate rise could be on the cards. Source
- Nvidia has overtaken Microsoft to become the world’s most valuable public company. Source
- Saudi Arabia has ended its 50-year petrodollar deal with the US meaning it will no longer trade oil in USD. Source
- The UK is expected to see a record number of millionaires leave the country—the forecast is 9,500 in 2024, up from 4,200 in 2023. Source
- The UK’s annual inflation rate fell back to its 2% target rate in May. Source
- Ethiopia has taken its first step towards establishing a legal framework for introducing a CBDC. 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.
If you really want to take advantage of fastest growing asset class EVER, I highly recommend that you check out my new altcoin course: Mastering Altcoin Investing
In this course we’ll teach you all about how to spot, choose and acquire the winning altcoins of the next bull market.
Learn how to build your portfolio so that growth is ensured and risk is mitigated. Let me help you build a strategy that’ll change your life forever in the upcoming bull run.
See you next time!
Lark and the Wealth Mastery Team
💰 BINANCE: BEST EXCHANGE FOR BUYING CRYPTO IN THE WORLD 👉 10% OFF FEES & $600 BONUS
🚀 BYBIT: #1 EXCHANGE FOR TRADING 👉 GET EXCLUSIVE FEE DISCOUNTS & BONUSES
🔒 BEST CRYPTO WALLET TO KEEP YOUR ASSETS SAFE 👉 BUY LEDGER WALLET HERE
1️⃣ COINLEDGER: #1 CRYPTO TAX SOFTWARE 👉 IF YOU OWN OR TRADE CRYPTO YOU NEED THIS
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.
