Some believe Solana is the flaming phoenix, rising from the ashes to soon become crypto’s most dominant layer-one network.
Why, you ask? Just one word: Firedancer.
Get a fresh pot started because this is your mid-week crypto update. ☕️📰
Here’s what’s in today’s issue:
- David shares his thoughts on Solana Firedancer, bullish crypto data, Tether’s Q3 reserve numbers, tokenized U.S. treasuries going 7x in 2023 & Thailand’s 2nd largest bank diving into crypto.
- Rekt Capital has the latest technical analysis for you on the market.
- Erik has an article on the return of Solana.
- In case you missed it by Rebecca.
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1 Million TPS with Solana’s Firedancer
A super-bullish narrative is forming around layer-one Solana, and it all has to do with the upcoming upgrade “Firedancer”.
Firedancer is a validator client upgrade that’s being developed by the trading firm Jump Crypto.
Although an official launch date hasn’t been set, developers are saying Firedancer will send Solana’s transactions per second (TPS) through the roof.
Currently, the protocol can process around 65 thousand TPS, but Firedancer is expected to push this number past 1 million. And yes, you read that correctly.
Fundamentally, the Firedancer news is big because one of crypto’s major headwinds has been the issue of building blockchain infrastructure capable of handling global mass adoption.
For context, Bitcoin and Etheruem currently average 7 and 30 TPS, respectively, while Visa and Solana average about 1,700 and 4,500 TPS, respectively. So clearly, Solana will be able to handle some serious mass adoption if the 1M TPS is technically realized.
Accompanying Solana’s Firedancer news are bullish sentiments and price calls coming from Raoul Pal, VanEck, and others.
Pal, in a recent interview with Scott Melker, said the Firedancer upgrade is “huge” and sets Solana to be a potential “rocket ship”.
VanEck, as we reported on Monday, issued a SOL price of $3,211 by 2030 in their most bullish of scenarios.
Having said all that, it’s important to recognize that Solana’s sailing has been anything but smooth.
First, the blockchain has historically been plagued with outages, although recent data indicates that a lot of improvement has been made with this over the past year.
Second, Solana has struggled to pull in meaningful economic activity onto its network. Case in point is Ethereum with its $22 billion in on-chain liquidity, compared to Solana’s $398 million.
Turning back to Firedancer, only time will tell if Solana can continue stabilizing the network and courting enough economic activity in order to really max out the upgrade.
Bullish Crypto Data Incoming!
Last week’s epic bitcoin pump caused a cascade of bullish data to proliferate across the broader crypto ecosystem. Here’s what you need to know:
- Currently, 40 million bitcoin addresses are in profit. That’s 80% of all addresses, and this is the most addresses in profit ever recorded (actual numbers, not percentage). All this is according to data analytics firm Glassnode.
- Coinglass data shows that the Chicago Mercantile Exchange now has the second highest open interest for bitcoin futures and perpetual contracts, at $3.54 billion. Binance is in first place at $3.83 billion. Open interest is the dollar amount locked into active contracts. This data indicates that institutional investors are increasingly getting exposure to bitcoin derivatives.
- Crypto investment funds just had the largest net inflows in a single week since July 2022. Incoming funds totalled $326 million and were particularly pronounced in Bitcoin and Solana-focused funds. This is according to a CoinShares report.
- The number of transactions that involve more than $100,000 worth of bitcoin per transaction reached a 2023 all time high last week, at 23,400 on October 24th. That’s according to IntoTheBlock. This data again shows that institutions and whales are back in action.
- The total value locked on all DeFi protocols is at a 10 week high, at $42 billion, according to DefiLlama.
Tether Publishes Q3 Reserve Numbers
Tether, crypto’s largest stablecoin issuer by a long-shot and a systemically important entity, published its Q3 reserve numbers on Tuesday.
As of September 30th, Tether had $86.3 billion in assets and $83.1 billion in liabilities. 99.97% of Tether’s liabilities are its issued USDT tokens. Thus, Tether currently enjoys a comfortable $3.2 billion reserve surplus. Nice!
Tether’s $86.3 billion in assets is composed of U.S. T-Bills ($72.6B), secured collateral for issued loans ($5.2B), other assets ($3.7B), gold ($3.1B), and bitcoin ($1.7B).
Given 84% of Tether’s reserves are denominated in U.S. T-Bills, the company is raking in about $1 billion in quarterly returns, due to high U.S. treasury interest payments.
Tether is working to close down its loan business, which shrunk $330 million from Q2 to Q3. The company had stated a goal of completely shutting it down by the end of 2023, but it looks like this timeline won’t happen given there’s still $5.2 billion in loan collateral on their books.
Tether made the bitcoin community happy when the company announced in May that they’d allocate 15% of their net realized profits into bitcoin. However, the company made no additional bitcoin purchases in Q3.
Tokenized U.S. Treasures Go 7X in 2023
Speaking of U.S. treasuries, the tokenized versions are blowing up across the blockchain.
According to data from RWA.xyz, tokenized U.S. treasuries have done a 7x across the entire crypto ecosystem from the beginning of 2023 to October 31st, with the total market currently valued at $704 million.
Ethereum has the largest share of this pie at 48%, then Stellar at 45%, Polygon at 3.3%, and Solana with 1%. With regards to protocols, Franklin Templeton Benji Investments ($FOBXX, Stellar) controls 44% of the market, Ondo ($OUSG, Ethereum) has 25%, and Matrixdock ($STBT, Ethereum) is at 12%.
The explosion of tokenized U.S. treasuries fundamentally stems from the high interest rate environment brought on by the U.S. Federal Reserve and other central bankers, since March of 2022. The average current yield on these tokenized assets is 5.24%, which is approximately consistent with the underlying bond payments.
Thailand’s 2nd Largest Bank Dives into Crypto
Thailand’s Kasikorn Bank (K-Bank) is sealing the deal for a majority stake in Thailand’s Satang Crypto Exchange. K-Bank is paying $103 million USD for the deal.
Kasikorn Bank Headquarters, Bangkok, Thailand
K-Bank is Thailand’s second-largest with roughly $124 billion USD in total assets. Satang has been operating in Thailand since 2017.
After the deal is complete, Satang will be rebranded as Orbix, and will include three subsidiaries: Orbix Custodian, Orbix Invest (fund manager), and Orbix Technology (blockchain technology development).
K-Bank’s crypto move comes two years after competitor Siam Commercial Bank purchased 51% of Bitkub, Thailand’s largest crypto exchange. Other big crypto players in the country include Gulf, a Thai energy corporation, that is working with Binance to bring a new regulated crypto exchange to Thailand before the end of the year. That exchange will be known as Gulf Binance.
Thailand is one of crypto’s emerging markets, with Bangkok seen as a top-ten crypto hub.
In this weeks edition of the Rekt Capital Newsletter, the following cryptocurrencies will be analyzed and discussed:
- Ocean Protocol (OCEAN)
- Dogecoin (DOGE)
- Woo Network (WOO)
- Verasity (VRA)
- Stellar (XLM)
- Injective (INJ)
As a free member you only have access to the analysis of the first two cryptocurrencies. If you want all 6, make sure to upgrade to Premium.
Let’s dive in.
Ocean Protocol — OCEAN/USDT
In the edition from two weeks ago in my Altcoin Watchlist, I covered OCEAN and discussed how a downside wick below the Channel Bottom followed by a reclaimed of the Channel Bottom would position OCEAN for a revisit of the Channel Top:
Here is last week’s update:
And here is today’s update:
OCEAN has finally broken out from the Channel, rallying an emphatic +43% in the process.
At this stage, with the new Weekly Close already in, OCEAN could dip to as low as the Channel Top for a retest attempt.
It’s important that this retest attempt is successful as it is required to fully confirm the breakout.
After all, we’ve seen failed post-breakout retests before (red circle).
That being said, that failed post-breakout retest yielded a minimal reaction to the upside whereas here we’ve witnessed a very convincing breakout.
Any dips to the Channel Top may constitute a retest and it’s key that price Weekly Closes above the Channel Top, should that retest indeed occur.
The Monthly Timeframe analysis attests to this, though with additional nuance that we’ll discuss:
With the Monthly Close just around the corner, it’s important to flag how this upcoming Close may impact price.
A Monthly Close below red could set OCEAN up for a price rejection to at least the orange level below and in a more volatile case to the blue level (which is the retest zone of the Channel Top).
Breaking the red resistance area would be bullish as the next major resistance would reside around ~$0.50, but for OCEAN to rally that much, it would need to reclaim the red resistance area first.
Dogecoin — DOGE/USD
Here is the analysis on DOGE from two weeks ago:
I also mentioned the following:
However, I am open to the possibility of DOGE reclaiming its Lower Low on price action, because the breakdown confirmation hasn’t been too decisive or strong. There needs to be a stronger reaction for the scenario of a potential fake-breakdown to assuage.
And here is today’s update:
And here is today’s update:
Dogecoin has rallied +31% in total from Channel Bottom to Channel Top, even producing an upside wick beyond the Channel Top, just like on the previous orange-highlighted occasions.
Because DOGE Weekly Closed below the Channel Top, that now means that if price cannot reclaim the Channel Top as support in the coming days, there is a threat of a stronger rejection that could send price to the bottom of the market structure.
After all — historically, whenever DOGE has Weekly Closed below the Channel Top, price would revisit the Channel Bottom for a retest.
Either way, there are two key triggers for me at this time:
- Reclaim of the Channel Top as new support to confirm the breakout
- Revisit of the Channel Bottom for a retest
CLICK HERE to go Premium and read the rest of this week’s Market Analysis – Premium subs can read Rekt capital’s full report.
The Return of Solana: Quantity has its Own Quality
What the hell is going on with Solana? In recent weeks, it has outperformed BTC and every major altcoin.
Let’s have a look at the charts and look at some usage data and current narratives about the coin that was until recently belittled as ‘Sam coin’.
Let’s look at some metrics, upgrades and narratives. Spoiler alert: after Firedancer goes live there are new use cases on the horizon.
Crypto Market News
- The Crypto Fear and Greed Index hit 70.6— its highest level since November 2021. Source
- Bitcoin options open interest has hit an all-time high of $17 billion surpassing peak interest from the 2021 bull run. Source
- Crypto investment funds have seen net inflows of $326 million in the past week which is a 15-month high with Bitcoin and Solana leading the rally. Source
- Bitfinex Securities will list its first tokenized bond in November, a 36-month, 10% coupon bond denominated in Tether’s USDT. Source
- BlockFi exits bankruptcy and is allowing US and international customers to submit withdrawal requests. Source
- Kraken has announced it will be required to report customer information to the IRS of those who transacted more than $20K in a single year between 2016 and 2020. Source
- Kraken is set to suspend trading for USDT, DAI, wBTC, wETH and wAXL in Canada from November 30 due to regulatory changes. Source
- MoonPay has teamed up with Mastercard to incorporate Mastercard’s Crypto Credential system and integrate payments tech like Mastercard Send and Click to Pay. Source
- Ark Invest has taken more profits after selling another $1.8M of Grayscale’s Bitcoin Trust (GBTC) and $1.7M of Coinbase shares. Source
- Grayscale has partnered with FTSE Russell to create five crypto indexes that will track the performance of different crypto sectors. Source
- JP Morgan’s JPM Coin handles over $1 billion in daily transactions according to the global head of payments at the company. Source
- $4.4M in crypto has been drained across 80 wallets stemming from a LastPass data breach in 2022. Source
- VanEck has amended its application for a spot Bitcoin ETF with the amended change revealing unique details about its seeding approach. Source
- Standard Chartered Bank has launched its institutional crypto custody platform called Zodia in Hong Kong. Source
- Crypto VC firm Andreessen Horowitz is planning to spend $3.4 billion for its next early-stage and seed-stage funds. Source
Coins and Projects
- Bitcoin dominance has hit 54% which is the highest level in 2.5 years as the halving is less than 6 months away. Source
- Bitcoin on exchanges has dropped to a 5-year low of 2.3 million down from 2.6 million just a year ago. Source
- The Bitcoin whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System” has turned 15 years old. Source
- Bitcoin could rise to a cycle peak of $150K by mid-2025 according to Bernstein. Source
- Bulgaria’s oldest football club, Botev Plovdiv FC, has adopted Bitcoin and Lightning Network payments. Source
- Matrixport is sticking with its Bitcoin price target of $45K by the end of 2023, having first made the prediction earlier in the year. Source
- Bitcoin’s price will increase by 74% to over $59K in the first year after an ETF is approved according to Galaxy Digital. Source
- LayerZero will integrate wstETH into a new token to allow it to be bridged over to Avalanche, BNB Chain, and Scroll. Source
- USDC issuer Circle has partnered with FamilyMart, Taiwan’s second-largest convenience store chain, allowing customers to exchange loyalty points for USDC. Source
- Tether has released its proof of reserves for Q3 showing an all-time high of 85.7% cash and cash equivalents. Source
- Arbitrum will integrate Celestia into its Orbit and Nitro software stacks. Source
- Arbitrum can now settle payments from Layer-3 networks created using its developer program, Orbit. Source
- Polygon has launched the contract for its new POL token which will eventually replace MATIC. Source
- SOL could skyrocket by 10,600% to $3,211 by 2030 according to VanEck. Source
- PancakeSwap has added a portfolio manager feature in partnership with DeFi protocol Bril Finance. Source
- Avalanche blockchain explorer Snowtrace[.]io will shut down its website powered by Etherscan on November 30. Source
- Ava Labs has proposed an upgrade called Astra to help improve the network’s subnets. Source
- Stars Arena has lost another team member after the CEO stepped down. Source
- Solana has gone live on Google Cloud’s BigQuery platform offering advanced analytics and insights into the blockchain network. Source
- Celestia has launched its mainnet as the airdrop of its native token TIA goes live. Source
- Unibot, a Telegram-based trading bot, has been hacked for around $640K worth of crypto. Source
- dYdX has launched its layer-1 blockchain with the creation of the genesis blocks. Source
- MultiversX has launched one-click wallet creation with Google accounts xAlias to bypass the need for seed phrases. Source
- CryptoPunk NFT holders have been offered the chance to receive a physical print of their art for 48 hours only. Source
- The US economy grew faster than expected in Q3—at an annualized rate of 4.9%. Source
- The European Central Bank (ECB) has paused interest rates at 4%. Source
- Eurozone inflation dropped to a two-year low of 2.9% in October but the economy also contracted by 0.1% in Q3. Source
- The UK has published its final proposals for crypto and stablecoin regulation with plans to become law by early 2024. Source
- Turkey has raised its interest rates from 30% to 35% after inflation rose to 61.53% in September. Source
- The Bank of Japan (BoJ) has increased the flexibility of its yield curve control by eliminating the upper limit ceiling of 1% but keeping 1% as a reference. Source
- Global demand for oil, coal, and gas could peak by 2030 according to the International Energy Agency (IEA). Source
- Norway’s sovereign wealth fund lost $64 billion as all its asset classes fell in Q3. Source
- El Salvador’s President Nayib Bukele has launched his reelection bid for the country’s 2024 presidential election in February. Source
- Elon Musk has said X payments will remove the need for a bank account by the end of 2024. Source
- Kenya is set to introduce digital IDs for its citizens by the end of 2023. 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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See you next time!
Lark and the Wealth Mastery Team
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