Gm friends,
Despite shocks and volatility BTC remains range bound.
But even if you’re taking the opportunity to relax and touch grass, there’s still plenty of news to catch up on.
We’ll start by revisiting Operation Choke Point 2.0, which is back in the headlines and looks a little ominous.
Here’s what’s in today’s issue:
- Sam shares his thoughts on Operation Choke Point 2.0, the SEC subpoenaed 3 crypto VC firms, crypto giants opposing prediction markets ban, Solana ETF predictions & Tether’s CEO raising concerns about EU crypto rules.
- Week 26 crypto portfolio update.
- This week on chain.
- This week’s trending coins by Rebecca.
Get a FREE $500 Bitcoin trading position on Bybit! Just use this link and click register to claim
Operation Choke Point 2.0 Still in Full Swing?
Last year there was a lot of talk about Operation Choke Point 2.0, which is alleged to be a means by which the US Department of Justice can target the crypto industry by putting pressure on traditional banks not to provide services to crypto companies.
This would be a sketchy way for the authorities to operate, but it would also be entirely in character, as the original Operation Choke Point–which targeted businesses that were legal but doing things the government didn’t like, such as payday lending and firearms sales–was shut down in 2017 amid multiple lawsuits and investigations.
Crypto attention shifted onto ETFs this year, but now Operation Choke Point 2.0 is back in the spotlight after Gemini co-founder Tyler Winklevoss posted on Twitter that “Operation Choke Point 2.0 remains in full swing”.
According to Winklevoss, the evidence lies in a Federal Reserve enforcement action against Customers Bank, which provides services to crypto firms.
The Fed now requires the bank to give thirty days’ written notice prior to engaging in “any new strategic initiative, product, service, or relationship with third parties related to the digital asset strategy”, and by digital asset strategy, the Fed means (as defined earlier in the action) “offering banking services to digital asset customers”.
Winklevoss claims “this means that the Fed is now a direct gatekeeper standing between crypto companies and their ability to get a new bank account”, and he frames it as a political issue, stating, “the Fed is on its best behavior at the moment because the election is around the corner.
If Harris wins in November, the gloves will come off.”
This view was backed up by Cardano founder Charles Hoskinson, who commented on the matter by suggesting, “a vote for Harris is a vote against the American Crypto industry”.
Polymarket Puts Harris in the Lead
And as the election result now looks very relevant to crypto, it’s notable that Kamala Harris has moved ahead of Trump on prediction market Polymarket.
While at one point back in mid-July Trump enjoyed a lead over then-candidate Joe Biden of 72% to 17%, that advantage has reversed since Kamala Harris took over as the Democrat candidate, with Trump currently on 45% while Harris is at 52%.
But how do you feel about Polymarket–is it useful for predicting the future, and will you adjust your trading strategy based on expected election results?
Reply to this email and let us know what you think.
SEC Revealed to Have Subpoenaed 3 Crypto VC Firms
Carrying on with the regulatory overreach theme, it was reported last week that the SEC has subpoenaed three crypto VC firms.
This allegation comes from crypto news site DL News, which wrote that it has directly viewed the first page of one of the subpoenas.
The report details that the document is titled “In The Matter of Certain Crypto Asset Offering Intermediaries”, and that it details an SEC investigation.
DL News also explained that it isn’t at liberty to disclose the identity of the firm being investigated, but that its source has also claimed that at least two other VC firms have received “essentially identical document requests”.
Overall then, this all suggests that not only is there no let-up from the SEC in its war against crypto, but that the agency is actively widening the scope of its approach.
Crypto Giants Oppose Proposed Prediction Markets Ban
There’s a lot of overlap between crypto and politics at the moment, partly because we’re in an especially volatile election year.
And when it comes to getting a handle on how results might play out, Polymarket (as cited in the top story above) has become a go-to resource because it works as a wisdom-of-crowds type of indicator, made up of participants with financial skin in the game.
It’s also a working example of a solid crypto use case, and so representatives of Crypto.com, Gemini, and Coinbase, and also of trading platform Robinhood, have now voiced strong opposition to proposals from the CFTC to crack down on prediction markets in the US.
This comes in response to a letter from Democrat lawmakers including Senator Elizabeth Warren, who are pushing CFTC Chair Rostin Behnam to finalize a rule change that would ban what the Commission calls events contracts, which are defined as involving “staking or risking something of value on the outcome of a political contest, an awards contest, or a game in which one or more athletes compete, or an occurrence or non-occurrence in connection with such a contest or game”.
Solana ETFs ‘Inevitable’ According to VanEck
Following on from the approval of spot SOL ETFs in Brazil last week, the Head of Digital Assets Research at VanEck, Matthew Sigel, recently stated that,
“Brazil’s approval of a SOL ETF signals that a U.S. counterpart isn’t just a possibility—it’s as inevitable as the next block in the chain”.
VanEck is one of two firms–the other being 21Shares–to have submitted an application with the SEC to launch a spot SOL ETF, but Sigel also noted that, “it appears US regulation needs a soft fork before it can launch and the White House controls the keys”.
This also then ties back into politics and the upcoming election, with SOL ETF approval becoming much more likely in the event of a win for Donald Trump, who has stated his intention to replace Gary Gensler as Chair of the SEC.
Tether CEO Raises Concerns About EU Crypto Rules
And finally, when the EU pushed forward rapidly with crypto regulatory framework MiCA, it looked like a win for the crypto industry.
And that might still be the case, but at the same time, Tether CEO Paolo Ardoino has recently expressed concerns that the European legislation may actually create systemic risks for stablecoins.
He gave these opinions in an interview with CoinTelegraph, and his fears stem from MiCA requirements for 60% of stablecoin-backing reserve assets to be kept as cash deposits in a bank, which for a large asset like USDT would exceed banking insurance limits and present critical risk in the event of a bank run occurring.
Week 26 Crypto Portfolio Update
No updates this week
See the 10x Portfolio breakdown and weekly history since inception HERE!
Looking at spot BTC ETF flows as they compare to the BTC price, across the history of the funds this year it’s now clear that there’s been a close correlation between flows and price.
This is perhaps not a surprise but also, it’s debatable which of these factors is driving the other, or whether it can be seen as a two-way process.
And speaking of correlations this year, it’s apparent that BTC in 2024 has not been strongly correlated to either stocks or gold on a daily basis, although it should be kept in mind that they still follow similar long-term trends based around broader liquidity cycles.
Meanwhile, if you’re looking for some bullish signs in the crypto market then here are some indicators to consider.
First of all, looking over the last three months we can see that while there have been declines on aggregate across the whole of crypto, if we focus on the top ten blockchains then Daily Active Users and fees generated have been growing, even as prices have gone down, suggesting underlying strength at the top.
Also, it’s notable that TON and Solana both saw rises across all metrics presented here, including price.
Secondly on the bullish front, stablecoin supplies are at levels not seen since January 2022.
And finally, if we take a look at central bank balance sheets, we can see the possibility of incoming increased liquidity, which would tie in neatly with where we should be–according to previous trends–in the four year halving cycles.
To get an idea of how crypto is now evolving rapidly towards Layer-2s, over on Uniswap the number of Layer-2 addresses is soaring, with data showing the amount almost doubling to a new all-time of 8.65 million across July, while in June the number (and previous all-time high) had been 4.93 million.
And on Base, the number of new contracts being deployed took a huge leap upwards over the weekend, with around 327,000 new contracts deployed in a single day.
After Layer-2s, we also have Layer-3s, sometimes known as app-chains and allowing for Web3 projects to create their own product-specific blockchains. One way of doing this is as an Arbitrum Orbit chain, and one to keep an eye on there is the Proof of Play gaming chain.
This is still a niche area, but Proof of Play has shown steady growth this year, with bridge deposits climbing from around $350,000 back in January, to almost $750,000 right now.
Turning our attention to DEXes, in the Base ecosystem Aerodrome is leading by USDC transfer volume over seven days, with a figure approaching $1.25 billion, which is significantly ahead of second-placed Uniswap, which is reaching around the $800 million mark.
And on Solana, we can see that Drift Protocol has been outperforming, as even during recent crypto market losses and uncertain sentiment, volumes there have maintained an upward curve, with daily volumes hitting new all-time highs approaching $1 billion.
And finally, if you’re into memecoins then here’s some brutal data about Pump.fun, a platform that makes it very easy to rapidly deploy new tokens. In the space of one twenty-four hour period, 14,223 new coins were launched there, of which just 116 ‘graduated’, meaning they gained enough traction to make the step up to being traded on the Raydium DEX.
That gives us a hit rate of 0.82%, so take care if you’re playing in that particular casino.
Here are my key takeaways from the trends this week and there has been a ton of new developments and launches.
- Sui is a Layer-1 blockchain that’s launched its Sui Name Service. Grayscale has also launched its new Sui Trust.
- AIT Protocol is a Web3 data infrastructure platform that’s recently been listed on BingX and Bitpanda.
- Ginnan The Cat is a memecoin that’s skyrocketed by 185% in the past week and hit $50 million in market cap.
- Notcoin is a Telegram-based game that’s rallied 19% in the past week after TON’s Binance listing. Notcoin has also had an incredibly successful Lost Dogs game launch with 2.5 million players on Day 1.
- Ondo is a Real-World Assets (RWA) platform that’s launched its yield-bearing treasury-backed USDY stablecoin on the Solana network.
- Toncoin is a Web3 ecosystem within Telegram messenger that’s been listed on Binance for trading and TON jumped 18%. Cocos Studios has also integrated with TON to make it easier to deploy TON-based mini apps.
- Solana is a Layer-1 blockchain that’s seen a spot ETF approved in Brazil. SOL has hit a new all-time high against ETH. Ethena’s USDe has also been deployed on the Solana network.
- Bitcoin whale transactions hit their highest levels since April on August 5 and 6 as the BTC price recovers from the recent pullback to $49K.
- Ethereum’s median gas fees have hit a 5-year low, and Ripple has started testing its RLUSD stablecoin on Ethereum.
- Pepe is a memecoin that’s seen the team announce an Ethereum Layer-2 and users have already spent $8 million on the PEPU token pre-sale.
- VGX is the native token for the crypto exchange Voyager that’s due to have its token delisted from Binance on August 26.
- Neiro on ETH is a memecoin that’s surpassed $100 million in market cap.
- Bittensor is a decentralized machine-learning protocol that’s rallied 45% in the past week after Grayscale launched its new Bittensor Trust.
- Kaspa is a proof-of-work blockchain that’s seen a bar in London accept KAS as payment and the team has given an update on KRC-20 advancements.
- Avail is a data availability project by Polygon that’s held a community meetup in Hong Kong. Just 2 weeks after the Avail mainnet and token went live, there are already over 8 million AVAIL staked.
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 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 upcoming 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
🦧 APEX: #1 ON CHAIN TRADING 👉 GET STARTED NOW
💰 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.
