August 1, 2021 - This is What The Fed Thinks of Crypto!
One of the most powerful people in the world right now is the Fed chairman.
An unelected central bank governor who controls the US money supply and can impact nearly every financial market.
More recently though, the Fed has been taking pretty strong stances on cryptocurrencies. This could either be to limit their competition to USD fiat or to limit potential competition to a Fed issued CBDC.
This is why it is extremely important to know where the Fed currently stands on crypto. It will help determine whether any regulations are in the pipe. Regulations that could significantly impact the future of all cryptocurrencies.
So, in my video today, I explore exactly what the Fed thinks of crypto. I analyse and break down all of his past statements from before he was chairman to current day.
I also give my own view on what these imply as well as what regulations we could one day see. Perhaps the chances of a Fed Issued US dollar are higher than we think…
All covered in my video right here.
📊 Portfolio Update 📊
Only minor changes to the portfolio this week. Took a little bit of profit on some ETH and bought some more SOL with it. My rationale is just to diversify some of ETH exposure to other smart contract chains. Moreover, I still remain extremely bullish on the potential of SOL in the medium to long term.
In terms of any additions, there are a few other tokens that I am thinking of adding. I am currently doing research on some of these for an upcoming video. I will keep you guys updated on those projects in my official Telegram channel.
BTC 31.07% | ETH 30.79% | ADA 6.89% | USDC 6.70% | SOL 6.43% | DOT 3.30% | YFI 2.78% | PAXG 2.63% | RUNE 2.32% | INJ 2.29% | LINK 2.06% | ATOM 1.53% | REN 0.65% | LIT 0.57%
📈 Market Trends 📈
This has been the strongest week in the crypto market that I can remember, and not just because prices went up. It’s one of the few times that Bitcoin dominance rose while all crypto prices were also rising. What this shows me is that this rally isn't being driven by retail greed - it's institutions getting back on board.
The primary driver of this week's strong rally seems to be the crackdown on centralised exchanges. I know that sounds crazy, but it's what the on chain indicators suggest. For example, this week we had the news that Binance would be limiting daily withdrawals on non-KYC accounts to 0.06 BTC. The moment that this happened, the amount of BTC on exchanges skydived, and the amount of BTC held by whales spiked along with it. It's not only Binance; we have also seen other exchanges like Bybit et al bringing in mandatory KYC requirements.
I suspect that there are quite a few wealthy crypto investors that are operating outside of the system, and now they're forced to sit on their BTC and alts until they can find a way to cash out without revealing their identity. I'm a bit torn about this KYC requirement. It seemed inevitable and it means less privacy but at least it helped to lift the crypto markets.
However, I think that regulators are looking to get a lot more active in their crypto lawmaking quest. There are a few bills and amendments floating around in the United States wanting to do crazy things like have the Federal Reserve control stablecoins or radically increase the taxes on crypto gains.
We also have the likes of Elizabeth Warren who seems to be on a crusade to limit the one technology that can actually help marginalised communities.
I'm not sure if any of these will pass or whether Warren will get her wish. This is because crypto does have allies in congress including Cynthia Lummis as well as its own lobby group. Moreover, the news isn't deterring big investors, so I'll take it as a sign that these aren't as big of a threat as they've been made out to be.
By contrast, a worldwide crypto crackdown could be coming later this year. This is as per the Financial Action Task Force's recommendations that have been made over the past few months. It could have some serious implications, and I'll be doing an in depth video about that later this week.
Speaking of later this week, there is something else happening which I have been looking forward to for over a year…
✅ Wednesday’s The Day
It’s been a long time coming but the Ethereum London Hard Fork is upon us. On the 4th of August, it will officially be rolled out with one of the most anticipated improvement proposals yet - EIP 1559.
This is something that I have been talking about for over a year but it is great to see that it’s about to become a reality. As we know, EIP 1559 will see a base fee burn implemented which will significantly reduce the amount of ETH inflation.
It is hard to tell exactly how much the burn will impact on supply. According to Tim Beiko, a core Ethereum Dev, it could be anywhere between 25% - 75% of the fee. This also depends on how much gas users are willing to pay on top of the base fee to get urgent transactions through.
As I covered in my most recent video on Ethereum, based on past averages, the base fee burn is likely to crimp ETH inflation down from approximately 4.4% to about 1.7%. This is coincidentally about the same inflation rate on Bitcoin.
Despite how important EIP 1559 is for the Ethereum ecosystem, it still pales into comparison with what else is currently being built. We cannot forget that ETH 2.0 is being worked on in the background and we are likely to see a move to Proof-of-Stake earlier than you think.
According to the ETH 2.0 roadmap, the PoS merge is still estimated to take place this year. Moreover, we have recently had a pull request for EIP-3675 being published in Ethereum’s GitHub. This is the “merge” pull request that will see Proof of Stake become a reality on the network.
Apart from these upcoming improvements and upgrades, the Ethereum network is as active and bullish as ever. A few weeks ago, Ethereum had more active addresses than Bitcoin which only shows the massive demand there is to use the network.
On top of this, you also have increasing institutional interest in ETH over the past few months.
For example, you have the folks over at Goldman Sachs who think that it’s possible Ethereum overtakes Bitcoin. You have JP Morgan claiming that ETH 2.0 could jump starta $40bn staking industry. Fidelity is beginning to offer ETH trading for their clients in 2022.
So, while the 4th of August is an important milestone in Etheruem’s journey, it’s still a small stepping stone in the mountain we are climbing. I am glad that I have been accumulating over the past few weeks and this is the reason that ETH is currently one of my largest holdings.
🔝 Top Newbie Tips 🔝
I said it before and I'll say it again - you can't rely on a single exchange to do all of your trading. You need to have multiple altcoin exchanges as well as numerous fiat-crypto payment gateway accounts. There are many participants that are trying to make it harder for us to use these exchanges (banks and regulators).
Moreover, the exchanges themselves are seeing the ground shifting and are limiting user access in anticipation of potential regulation.
For example, on top of that move by Binance on non-KYC’ed accounts, they have also been restricting more users from particular geos. They are limiting futures tradingsupport in Europe and have been ordered to limit access to users in Malaysia. Obviously there are ways around this, but based on all the articles I'm seeing in the crypto media about that, it's probably a matter of time before a lot of these services are KYC only.
If you were (or will be) affected by rules like these, this is the perfect time to take full custody of your funds. Get yourself a hardware wallet and store your coins securely. Nobody can restrict where you choose to send them or what you choose to do with it.
Moreover, now is a great time to learn about decentralized finance and familiarise yourself with all the different protocols and how to use them. Swapping, lending, borrowing, cross-chain, the whole shebang.
It takes a bit of cash and a bit of practice, but I've got loads of tutorials to help you how to set up a Metamask, how to connect to the Binance Smart Chain, and also the Polygon Ethereum side chain. All of these tools will allow you to take full control of your crypto and use it as intended.
I will be exploring many more DeFi topics and tutorials in the coming weeks.
🔥 Deals of The Week 🔥
Those crypto markets have been on a tear this week. But are you satisfied to just hodl your current crypto stack to new all-time-highs? Or are you looking to build that portfolio up whilst you can? If you take this second view then there are three core ways to make that happen:
- Buying more crypto with fiat
- Earning crypto interest
If any of that interests you, then you’ll want to know about these two crypto solutions…
📈 3Commas: Now, those crypto markets are currently swinging wildly at all hours of a day. That means there are plenty of trading opportunities for those with the skills to take advantage of that. However, there are two major obstacles:
1) Many crypto traders have no idea if the strategy they are using is a winning one or not. But here’s the thing, you can stack the deck in your favour by backtesting your trading strategy against historical price data. By doing that, you’ll know if your strategy would have turned a profit in the past - a useful indication to help you gauge if that strategy is worth pursuing today.
2) Oftentimes, the most profitable opportunities to trade take place when you are asleep. However, when you automate your trading strategy you can execute these buy & sell orders 24/7/365
If any of those problems seem familiar, then you are going to want to take a look at crypto trading bots. I’ve done a dedicated video telling you everything you need to know about that!
However, if you haven’t got 25 minutes to spare, I will save you the time and let you know that the crypto trading bot I personally use is 3Commas. It allows you to test out your trading strategy and automate those trades!
But no one wants to pay for something without trying it out.
👉 Sign Up To 3Commas For A 3 Day FREE Trial & 50% OFF
💵 Swissborg: Want to know the easiest way I’ve found to buy crypto with fiat as well as earning crypto interest? Well, that would be the Swissborg app and it’s the option for you if you are looking for an easy way to buy Bitcoin and altcoins with GBP, CAD, EUR, ZAR, DKK, SGD, SEK, CHF, NOK, PLN, RON, HUF, HKD, CZK or ILS.
Now, that is pretty extensive fiat currency support. Even better, you can earn up to 9.7% interest on stablecoins and up to 5.25% on cryptos like ETH. That’s not too shabby when you probably would have just sat on that crypto and earnt nothing.
Also, if you deposit €50 you’ll get up to €100 FREE in CHSB tokens! So, you can collect that value whilst trying Swissborg for yourself.
👉 Download Swissborg & Get Up To €100 FREE
Want a helping hand getting started on Swissborg? Well, I’ve done a step-by-step Swissborg walkthrough showing you exactly how to use the app.
🗞️ Crypto News Focus 🗞️
- Mike Novogratz - The billionaire fires shots back at Elizabeth Warren’s anti-crypto stance. I can’t believe that anyone needs explaining that DeFi is way more transparent than banks.
- BTC Whale Alert - Bitcoin whales stack $5.2 billion in Bitcoin in just 28 days!
- Deutsche Bank - Bankers that claimed crypto was a ponzi scheme get caught promoting a ponzi scheme!
🔮 Video Pipeline 🔮
- Robinhood Vs Coinbase: Which is best for crypto?
- FED study: Did stimulus cheques impact BTC’s price?
- FATF global crypto regulations: What you need to know!
- Cardano Update: Is ADA still worth it?
- My top 5 crypto picks for 2021
- How Robinhood Makes Money off of You!
🏆 What's New At CoinBureau.com This Week? 🏆
✅ What Are Cross-Chain Bridges: And Their Importance for DeFi
✅ Plan B’s Stock-to-Flow Model on Bitcoin: Beginner’s Guide
✅ Getting Starting with Yield Farming: The ONLY Guide you Need
✅ Trading Crypto-Related Equities: Complete Guide
That’s all for this newsletter. However, I do need to thank you for making me your crypto captain for this trip into the cryptoverse.
You should know that my team and I will continue raising the bar, when it comes to creating top-notch crypto content. All that, whilst keeping things ad free.
Thank you so much for changing my life and my teams. It is truly a privilege to spend all day thinking about crypto and producing this content for you.
Anyhow, I hope you enjoy my latest video and that you find it interesting.
Guy your crypto guy
Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.
Guy is one of the founding members and face of the Coin Bureau. Like many of us, he is just an average joe who became “crypto curious” back in 2013. After recognising the potential of blockchain technology, Guy set off on a mission to create crypto educational content, working with others to start the Coin Bureau website and released our first video on YouTube in 2019. You can learn more about him in his Who is Guy? blogpost.