It seems as if there is a great deal of excitement around the potential for a Bitcoin ETF. There are currently over 17 applications that are outstanding – some of which appear to be in the final stages of review.
However, there is one thing that many people have not considered and that is what form these ETFs will take…
Basically, there are quite a few indications right now that the SEC is more likely to approve those ETFs that are backed by CME Bitcoin Futures.
These are not the ETFs that the crypto community has been hoping for. These are synthetic and won’t have any long term impact on the spot market. There is also a really strong likelihood that they could make the Bitcoin markets more unstable and less efficient.
This is a topic that I will be covering in my video today. I will be explaining exactly what futures ETFs are and how they are structured. I will then look at some of the market inefficiencies that exist with these instruments in traditional finance and how they could play out in the Bitcoin market.
So, if you are excited about the potential of an ETF, you need to watch my latest video!
Few small changes this week. For those of you who saw my video on Arweave yesterday, you will have noticed that I was quite excited about it. Given that I am bullish about Solana (and it’s blockchain is stored on Arweave), it’s a logical buy. I am taking a bit of profit from ETH and putting it into AR.
In terms of other changes, a bit of spring cleaning via sales of some YFI & INJ. These will be shifted into USDC & PAXG. There are a few other projects which I have been considering but I will keep you folks updated in my telegram channel.
ETH 27.46% | BTC 25.91% | SOL 12.55% | ADA 9.44% | PAXG 4.83% | USDC 4.62% | DOT 3.69% | RUNE 2.58% | INJ 2.19% | ATOM 1.78% | MATIC 1.34% | LINK 1.24% | AR 1.20% | YFI 0.88% | LIT 0.28%
Thoughts on Market
Maybe it’s just me, but there seem to be a lot of people out there saying that the run up we’ve seen over the last few weeks is just a bull trap. Put simply, that’s a price pump after the main rally which tricks traders into FOMOing back in just before the big crash comes.
The people pushing these narratives were convinced that the market was finished last week, and then boom, last minute reversal! So, what the hell happened? Why did we dip and then rebound?
My theory up until Friday was that the BTC price was being suppressed by hedging around Bitcoin options expiries. Quite simply, there were over $2 billion worth of options that were expiring on Friday. Depending on how the options are positioned (Puts vs. Call expiry and strike prices), the expiry itself has an impact on the spot market.
This is mostly as a result of market makers adjusting their hedges in the spot market to account for the options expiries. There are also some who think that whales try to impact on the spot market while trading options (although harder to prove). If this all sounds foreign to you, don’t worry, I have covered it in great detail in my video on options trading data.
The long and the short of it (pardon the pun) is that the market makers were selling Bitcoin in the runup to the expiry in order to adjust their hedges. There is also a possibility that some bears with puts could also have been trying to reduce the impact of their losses. In the end, the result was that the moment we rolled past the expiry, the sell pressure evaporated and the pulls could continue pushing the price higher.
Now, having said that, it turns out that the bigger factor at play was the Federal Reserve.
FED Chairman Jerome Powell was set to make a speech on Friday as part of the Jackson Hole Symposium, an annual meet up for money printers (read central banks). The markets were nervous that Jerome would announce a cutback in Fed spending. More specifically, the purchases of government bonds.
If this were to happen, interest rates in the United States would rise. And, as we know from Macroeconomics 101, a rise in interest rates has big implications for the broader economy. Companies find it harder to fund growth and overleveraged companies (and people) find it harder to service debts.
The combination of less company investment and individual share sales leads to a market crash. Moreover, even the knowledge that a tapering is about to happen is likely to precipitate the decline as market participants get ready for it – pretty gloomy.
If BTC’s price didn’t give it away, Jerome danced around the issue of tapering and implied that the FED would not be cutting back on spending any time soon. Various indexes in the stock market hit all time highs as a result. Crazy how that works, right?
Anyways, The Federal Reserve is scheduled to have a press conference on September 21-22, which is when they could potentially announce a taper. This will likely depend on what the inflation numbers look like for August, and we will know that sometime in mid September. Although, given recent inflation trends, it’s likely to be higher than most had expected.
The FED’s potential taper is just a few of the rogue elements at play that could make or break the crypto market, and you can learn about the others in my recent video about that.
Irrespective of what is going on with the Fed, the big money is not shy to pick up more Bitcoin. The best example of this is Morgan Stanley which recently purchased over 240 billion dollars in Grayscale’s GBTC shares. I reckon if BTC was going to crash anytime soon, they wouldn’t have made that bet. In my opinion, it looks like they’re positioning themselves to take advantage of new all time highs in the crypto market.
Starting My Onlyfans!!
Now that I have your attention, it’s time to talk about OnlyFans! More specifically, the way in which the banks have made it incredibly difficult for the company to run their services.
Whatever your view of pornography, the mere fact of the matter is that it is completely legal. It is protected under the constitution with the First Amendment – the freedom of speech.
However, irrespective of whether this speech is protected, banks (and by extension payment processors) have decided that they will be the moral arbitrators for us all. Banks have decided that this is an industry that does not have the right to access the same services we all use on a daily basis.
All of the major credit card processors did the same to Pornhub late last year. While they cited exploitation, it’s more than likely they used it as an excuse to finally pull the plug. They only reinstated services once the platform completely banned user generated uploads. This drove many of those previous models to start using sites like OF.
So, why am I telling you this?
Well, it’s nothing to do with porn. It’s all to do with the banks. The fact that they have so much power to pick and choose which industries are allowed to thrive and which must die. This is something that we have all experienced when it comes to cryptocurrency. In some places, it’s near impossible to get a business bank account for a crypto related business.
Don’t believe me? Try and speak to any of the UK banks and see how quickly the door will be shut when they find out you are involved in cryptocurrency. This is something that many of you will have seen with your personal accounts as well.
Cryptocurrency is also not alone. In fact, there is a long history of banks limiting the ability of companies to engage in completely legal commerce on the grounds that they don’t like the business. I encourage you to read this post by Nic Carter over on Coindesk. It explains how the government deputised banks through a program called “Operation Choke Point”.
The long and the short of it is that the DOJ & FDIC was able to exert power over the banks in order to get them to limit services to politically disfavoured industries. An example of this was the firearms industry, where numerous banks decided to illegally deplatform merchants.
The point is that banks have the power to destroy businesses that they don’t like. It could be politicians leaning on them to do it. Or it could be other pressure groups that are trying to drive a narrative. And while now they can do it to porn, crypto or guns – they could do it to anyone.
The same argument could of course be said about other centralised systems that deplatform people and companies. Power that rests in the hands of a few can marginalise anyone they like.
That is why I am so ideologically aligned with cryptocurrency and decentralisation. Yes, we are in a battle against the banks, regulators & politicians. However, it’s a battle worth fighting because decentralisation is one of the only ways in which we can limit our dependence on the good graces of the men in suits.
Top Newbie Tips
This week I came across this story in the Metro here in the UK. Title: Redditor bet life savings on Bitcoin and lost it all.
It made me wonder how on earth that was even possible especially given that Bitcoin had not collapsed during the week. Then, when I read a bit deeper into the story, it turned out that the redditor had in fact lost his life savings by using leverage. Now, I don’t want to get into how misleading this title is. However, it is a good opportunity to once again warn about the risks that come from leveraged trading.
Futures and other leveraged instruments are not safe for beginners and are far too often shilled as a way to multiply gains. In reality, they are also a method in which you can multiply your losses if you are positioned the wrong way. Moreover, there is so much manipulation going on in the unregulated Bitcoin futures market that whales are often able to use their heft to liquidate the smaller newbies.
I will also say that I know many wealthy crypto investors and very few of them have engaged in leveraged trading. Those that have, have extensive experience in these instruments and rarely ever go over 5x leverage. They have openly told me about how the futures game is stacked against the smaller retail traders. Some have even railed at how unstable it makes the Bitcoin markets (something I will be covering in an upcoming video).
On top of all this, when users do tend to use this leverage and lose their savings, we get these sorts of headlines. Headlines which can’t discern between a risky leveraged bet and a simple “buy and hold” strategy. These continue to perpetuate the narrative that cryptocurrency is too risky to invest in. It will continue to invite overburdensome regulation from government agencies.
So please guys, just don’t do it!
Deals of The Week
Now, I’d guess that many of you have already got your crypto positions set and ready for the next market legup.
Earn Interest With your Crypto: Some people are happy just holding that crypto. Whereas many go-getters are earning interest on their crypto whilst waiting for those prices to skyrocket. That’s quite a smart strategy as you can earn even more crypto in interest and increase the size of your stack.
I personally use Celsius – one of the biggest crypto lending platforms out there. Here, you can earn up to 17.78% interest on alts like SNX token and up to 6.20% on Bitcoin.
But things get even better! If you sign up to Celsius, deposit $400+ in crypto you’ll get $50 FREE. Just use the code: COINBUREAU
Sign Up To Celsius To Earn Crypto Interest & Get $50 FREE When You Deposit $400+
Want to learn even more about Celsius? Well, I have put this platform head-to-head with it’s fierce rival BlockFi in a video!
Keep That Crypto Safe: Now, I know you may think that crypto hacks can’t happen to you. But there is surely nothing worse than seeing that altcoin rising to life changing money and discovering that those coins have been stolen by some crypto hacker.
So why not protect those coins and tokens based on what their future value might be? If you want to take your crypto security seriously, then you’ll need to get yourself a hardware wallet. But which one is best?
Well, I’ve actually already done a dedicated video on the top 5 hardware wallets on the market right now!
But, if you don’t have time to watch that, then I’ll be straight-forward and let you know that the one I use personally is Trezor!
Here you can store over 1,000 cryptocurrencies in an ultra secure way.
Get A Trezor & Level Up Your Crypto Security!
Crypto News Focus
– OnlyFans Competition – Tyga deletes OnlyFans account and plans to launch competitor Myystar and allow creators to sell NFTs.
– Bankers Are Worried – Warning issued that cryptocurrency could replace the dollar in just 5 years!
– NFTs Are Going Crazy – A rock NFT was sold for $1.3 million!
- My ultimate guide to FTX
- Cryptocurrency governance: Why does it matter?
- The risk of leveraged trading to the crypto markets!
- Top 10 crypto apps 2021!
- Avalanche Update: Still worth it?
- My trading strategy revealed!
- This Fidelity report is crazy!
What’s New At CoinBureau.com This Week?
Cryptowatch: Cross-Exchange Trading Terminal
Dogecoin Spinoffs: All Bark & No Bite or Something More??
Top 6 Crypto-Friendly Banks: Complete List
That’s it for this week’s newsletter. However, I want to thank you for all your support and giving a damn about the channel. I want to thank you for enabling me to pursue my passion for crypto education full-time. Me and my team will never forget that it is YOUR support that makes all that possible.
Now, I cannot promise you that those markets are going to go into the stratosphere. I cannot promise that you’ll reach financial freedom through crypto. However, what I can promise you is that the Coin Bureau will continue to strive to improve our content and continue trying to add value to the wider crypto community.
Anyhow, I hope you enjoy my latest vid and don’t forget to stay cryptic!
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.