One thing about crypto markets is you can have it all worked out, and then a shock headline comes along and impacts all your predictions.
The weekend just gone was one of those moments, so let’s take a look at how the attempt on Donald Trump’s life has altered the crypto outlook.
Here’s what’s in today’s issue:
- Sam shares his thoughts on crypto’s reaction to Trump assasination attempt, Germany selling all their BTC, BlackRock joining MakerDAO’s new project, SAB 121 updates & the SEC dropping the Stacks investigation.
- Week 22 crypto portfolio updates.
- This week on chain.
- This week’s trending coins by Rebecca.
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Crypto Reacts to Trump Assassination Attempt
As everyone knows, presidential candidate Donald Trump survived an assassination attempt over the weekend, out of which came the kind of iconically powerful images that may come to define this current moment in American politics.
Catastrophe was avoided literally by a couple of inches, and there’s a sense that this was one of those rare events around which history pivots. But this isn’t a newsletter about history, so let’s focus on how crypto has reacted and what the implications might be from here.
The important thing to note is that Trump has this year become the outspokenly pro-crypto candidate, to the extent that he’s scheduled as a guest speaker at the Bitcoin Conference 2024 in Nashville later this month, and the general consensus is that a win for Trump = a win for crypto.
From there, let’s recall what happened back in 1981, when there was an assassination attempt on then-president Ronald Reagan. Reagan was seriously injured but recovered, his approval ratings went up by 22%, and three years later he won re-election by a landslide.
Returning to Trump, the election he’s running for is just a matter of months away, and immediately after the shooting–when it was clear that he had taken only a minor injury to the ear–the odds of a Trump election win soared on prediction market Polymarket, and are now at 71%.
And this surge for the Trump campaign has showed up straight away in the markets too, with BTC climbing to trade–at the time of writing–above 62K (the price had been in the upper 50Ks throughout the week prior), meaning it’s broken out of its local downtrend, while memecoin TRUMP soared by over 60% at the weekend, with a subsequent dip.
At least right now then, the market appears to be expecting a Trump win in November, but what do you think, is that outcome as likely as prediction markets suggest, and what would it mean for crypto? Reply to this email and let us know your thoughts.
Germany All Out of Bitcoin!
The German government offloading its stash of seized BTC hadn’t been helping when it came to general crypto sentiment, but the good news from over the weekend is that Germany is finally out of coins to sell.
Over the course of the last three weeks or so, German authorities have sent 49,860 BTC–its entire balance, worth around $2.9 billion–to various exchanges and market makers, with a final transfer of 3,846.05 BTC on July 12th reducing its balance to zero.
However, they didn’t remain no-coiners for long, as various individuals have subsequently been sending small amounts of BTC to the German wallet (which is controlled by the Federal Criminal Police Office), including one donation that came inscribed with the message “HFSP German Government”, and right now the German balance is 0.006 BTC.
The German coins were confiscated by police back in January from a film piracy website called Movie2K, and while on the one hand, selling seized assets of any variety is nothing unusual, anyone who believes in BTC long-term would argue that Germany would have been better off HODLing with the rest of us.
And just as a comparison with a possibly similar event, if you follow economic goings-on in Britain you’ll remember that between 1999 and 2002 the British government sold over half of its gold reserves for about $3.5 billion, but… did so at the price bottom after a twenty year bear market, after which the price of gold rose by roughly 600% over the next decade.
From Bitcoin Archive
For now then, we’ll have to wait and see whether a similar story plays out around BTC now that the German government has sold, and whether the authorities there are going to be kicking themselves a decade down the line.
BlackRock to Join MakerDAO RWA Investment?
Last week, MakerDAO announced that it’s running a competition called the Spark Tokenization Grand Prix. This is to be operated alongside Spark Protocol–launched last year by Maker and aiming to become a hub for RWAs–and the plan is to allocate up to $1 billion of treasury funds into tokenized assets, especially Treasury Bills.
The competition invites participation from RWA issuers, and–according to reports from CoinDesk–BlackRock and Securitize, who together run the BUIDL tokenized asset fund, have shown immediate interest, as have firms including Ondo Finance and Superstate.
Applications for the competition are set to open on August 12th, and MakerDAO’s $1 billion allocation could have a huge impact, since it’s over 50% of the around $1.85 billion current valuation of the tokenized Treasuries market.
Biden’s SAB 121 Crypto Veto Upheld
Last week we mentioned that the US House of Representatives was to vote on whether to override President Biden’s veto on a bill to oppose a set of new SEC accounting rules called SAB 121.
It’s a little complicated, but in a nutshell: SAB 121 is anti-crypto, the bill opposing it is therefore pro-crypto, and Biden’s veto is, in turn, anti-crypto again.
That meant a House vote to override the veto would be a pro-crypto result, but in this case–after the vote went ahead last Thursday–the veto was upheld so the SEC can move ahead with SAB 121, which places obstacles in the path of financial institutions wanting to custody crypto.
However, it’s also been reported that there may be SEC exceptions for institutions proving they have systems in place to protect customers from crypto platform bankruptcies, and House Financial Services Committee Ranking Member Maxine Waters last week stated that the SEC may be close to reaching agreements to “ensure that well-regulated entities like custody banks can offer crypto custody services consistent with SAB 121”.
SEC Drops Stacks Investigation
And finally, in some positive news related to the SEC, the commission has dropped its investigation into blockchain developer Hiro, in relation to the firm’s Bitcoin Layer-2 chain Stacks, and will not recommend any enforcement action against the company.
The investigation was related to Stacks’ token sales from 2017 to 2019 and had been ongoing for over three years, but closure confirms that Hiro can keep working unhindered in the Bitcoin ecosystem.
Week 22 Crypto Portfolio Update
No updates today, just riding this. I do need to deploy that cash soon though.
The BTC price is looking more positive this week, but last week there was a mood of uncertainty, so did that shaky sentiment translate across also to the spot BTC ETFs?
Interestingly, that actually wasn’t the case, as the kinds of investors who prefer to get their crypto exposure on TradFi rails were taking advantage of the bitcoin dip.
This meant the ETFs saw daily inflows exceeding $310 million last Friday, and overall, the funds have looked remarkably strong throughout market ups and down, after an initially explosive start.
As for the exact state of crypto sentiment, perhaps surprisingly–considering the longer-term bullish setup–it’s been at its lowest point since August 2023 when the BTC price was around $26K, and this has been reflected also in the Crypto Market Fear and Greed Index.
Overall then, if you were hoping for a market reset before upward gains can resume, this kind of flattened sentiment can be interpreted optimistically as a low point before, potentially, a positive shift.
Taking a broad view, the state of central bank balance sheets seems closely connected with the price of BTC, and so to get a sense of where we are in the crypto cycle it’s worth assessing also where we might be in the liquidity cycle. In that case, it looks like we might be due for an expansion in liquidity, bringing the possibility of a move up for bitcoin and crypto in correlation.
Ethereum has spot ETFs incoming soon while at the same time, its long-term plans to scale through Layer-2s appear to be playing out as intended.
If we look then at the Ethereum ecosystem, including the mainchain and top Layer-2s, we can see that transactions hit new highs to approach 700 million in the previous quarter of this year.
We can also see in this data the degree to which Base expanded its share of the market across Q1 and Q2, and additionally, there are those huge reductions in median transaction costs, down from $4.08 on Ethereum to as low as $0.01 on Arbitrum.
Elsewhere, Reserve Protocol is a platform that facilitates the creation of asset-backed stablecoins, and if you look at its TVL you can find an impressive upward curve that really kicked in during Q1 this year, and then became steeper.
Stablecoins are one of the clearest crypto use cases, and Reserve Protocol taking off demonstrates how widely understood this kind of utility might become.
And if we look at the long-term numbers when it comes to stablecoin transactions, we can see that Q2 this year had the highest ever total value of stablecoin transactions, reaching close to $3 trillion, a figure that demonstrates strong growth since a dip in transaction values around mid-2023.
Looking back, celebrity memecoins were a major crypto theme over the last month or so, but if you weren’t into that particular meta then you can perhaps start to breathe a sigh of relief, as mentions of the terms ‘celebrity’ or ‘celebrities’ on Crypto Twitter have dropped back down to where they were before the latest trend.
This suggests crypto might be moving on from celeb-coins, although don’t be surprised if they make a return at some point in the future.
And finally, if you’re bullish on Web3 gaming, then you’ll be glad to learn that gaming network Immutable recently hit one million daily transactions, while Ronin–another leading Web3 gaming network–is showing recent growth in transactions again, having dipped earlier this year.
Here are my key takeaways from the trends this week and whilst the market has dumped and pumped, there are so many developments happening under the hood.
- Zignaly is a crypto social trading platform that’s unveiled its ZIG card which contributes towards its buyback and burn program and is powered by Mastercard.
- Toncoin is a Web3 ecosystem within Telegram messenger that’s seen a 1,000% jump in whale transactions and its total-value locked (TVL) hit a new all-time high of $723 million.
- LayerZero is a protocol for cross-chain messaging that’s announced a partnership with Initia Labs to enable Cosmos SDK and LayerZero networks to connect. The LayerZero team has also been at the EthGlobal hackathon.
- MAGA is a Donald Trump-inspired memecoin that’s jumped over 40% following the assassination attempt on Donald Trump at a rally in Pennsylvania.
- ZKsync is an Ethereum zkRollup that’s unveiled its Elastic Chain, a network of ZK rollups. Momento blockchain and ZKCandy have joined the Elastic Chain.
- Notcoin is a Telegram-based game that’s launched a gaming accelerator to support apps built on TON in collaboration with 1inch and Sign. Notcoin defied the broader market dump and jumped 70% in 3 days.
- Solana is a Layer-1 blockchain that’s announced the first Solana Economic Zone is being developed in Buenos Aires.
- Pepe is a memecoin that’s defied the broader market dump and is up 7% in the past week.
- Popcat is a Solana-based memecoin that’s hit a new all-time high in market cap of $700 million.
- Bitcoin has jumped back to $62K as the odds of Donald Trump winning the Presidential Election have increased. Germany has also finished selling its $2.8 billion worth of seized BTC.
- Ondo is a Real-World Assets (RWA) platform that’s planning on applying to participate in MakerDAO’s $1 billion tokenized treasury investment competition. BlackRock’s tokenized fund BUIDL also hit $500M in market cap.
- Ethereum has jumped 5% to $3,300 as analysts are predicting the spot ETFs will begin trading this week. Ethereum’s NFT sales have also seen a 7.68% increase this week.
- Render is an image and video rendering protocol that’s seen an increase in daily active users and whale transactions, which could signal a trend reversal from bearish to bullish. RNDR is also a top gainer rising 7% in a week.
- Kaspa is a proof-of-work blockchain that’s unveiled the early architecture work for bringing smart contracts to KAS in its open developer meeting.
- Artificial Superintelligence Alliance is the AI merger between Fetch.ai, Ocean Protocol and SingularityNET. Crypto exchange Crypto.Com has announced its support for the token migration and has completed phase one.
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.
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