Banks Can Legally Steal Your Money: Here’s How 😭

What if I told you that there were laws being crafted that would legally allow banks to seize your money? To expropriate your funds to cover for their failings? Would you believe me?

Well, that’s exactly what could happen under a new bank ‘bail-in’ regime - an even more egregious form of bail-out.

What this would basically entail is that, should the banks face extreme financial difficulties, they would technically be allowed to ‘borrow’ customers’s funds should those customers’s deposits be above a minimum level.

What would said customers get in return? Well, in the best case they would receive stock in the bank (a company already on the brink of failure).

If this sounds too unrealistic to you, then you have to watch my latest video. I take you through the legal case that is being made for bank bail-ins, as well as some examples of where this has actually happened in the past.

You can watch that right here.

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📈 Guy’s Forward Guidance 📈

All eyes are on the CPI statistics for January, which will be released this Tuesday. By now you’ll know that a higher than expected CPI will cause the markets to crash, whereas a lower than expected CPI will cause the markets to rally. This is simply because the Fed is fundamentally raising interest rates to fight inflation, and this is what’s crashing the markets. I would argue that there are geopolitical reasons for this as well, but let’s not go there.

Although investors are expecting the CPI to continue falling off a cliff, I am not so convinced. This is in part because the price of petrol in the US rose significantly in January, and energy has been one of the primary drivers of inflation. It’s also in part because interest rates on US government debt have also started to rise again. The short explanation as to why this is happening is that investors are starting to realise the Fed will keep rates higher for longer.

This realisation has also caused the US dollar to gain strength against other fiat currencies after falling for months. Logically, this means lots of money is flowing into US dollars from other assets, hence the recent decline in the stock market and the crypto market. Most of the money that was keeping the markets propped up was coming from the Treasury. This flow of cash could soon run dry as US politicians eye a debt ceiling deal.

But of course, that’s just the macro side of the story. Unfortunately the crypto side of the story isn’t looking too good either. US politicians will be holding a hearing about the crypto market crash this Tuesday, the same day that the CPI will come out. We’re likely to see lots of anti-crypto sentiment from US politicians, which will only add fuel to the fire that was set by the SEC last week. Kraken is just one of many exchanges the SEC has been targeting.

What’s truly unfortunate is that the SEC’s crackdown was completely predictable, and it’s something I’ve been warning about for weeks. This didn’t stop reckless investors from insisting that the crypto bull market is back. Liquidations of their leveraged long positions only exacerbated the crypto crash. As for the rally, there is now on-chain evidence which arguably proves that it was all institutional market manipulation after all.

Why would institutional investors be manipulating the crypto markets? Well, consider that there are over 100 billion dollars of coins and tokens waiting to vest to early investors. It’s no coincidence that some of the cryptos that rallied the hardest were those with the most VC investment. At the same time I couldn’t help but notice that Bitcoin miners have been offloading BTC this entire time. It’s almost like the whales helped them cash out.

Oh, and don’t forget about that death cross on Bitcoin’s weekly chart. It’s the first ever…

💵 AI Hype Over? 💵

If you’ve been obsessively checking the top performing cryptos lately (as I do), then you’ve probably noticed that AI cryptos have been rallying like crazy. Their massive pumps are due to one simple factor: retail investors have no way of directly investing in AI. Almost every single AI company is privately owned, meaning there’s no stock you can trade. This means that the rallies in AI cryptos have been mostly about speculation, not fundamentals.

Don’t get me wrong, these AI cryptos have had a good run, but the speculation in AI is quickly coming to an end. There are many reasons why I believe this, and the first one is search trends. Google Search trends for ChatGPT and similar terms seem to have peaked, or are close to it. By now everyone you know has used ChatGPT or at least heard about it. As with the crypto related search trends in 2017 and 2021, the AI search top is in (for now).

The second reason why the AI hype is almost over is because Reddit has successfully broken ChatGPT. They managed to trick the AI into giving raw answers to questions by using specific prompts. Those of you who have tried ChatGPT will know that it is biassed when it comes to certain questions. This bias has now been effectively flipped on its head, and the AI is now saying things that were explicitly forbidden by the folks at OpenAI.

This ties into the third reason why the AI hype is almost over, and that’s because Microsoft has officially launched the Bing Browser with its ChatGPT integration. I am convinced this catalyst marked the local top for AI, because it won’t take long for people to realise that the ChatGPT browser is feeding them biassed answers, just like the standalone ChatGPT. This will eventually hinder the adoption of all public-facing ChatGPT integrations (keyword).

This relates to the fourth and final reason why the AI hype is almost over, and that’s because Chinese tech giant Baidu has released its own ChatGPT equivalent. Let’s just say that the Chinese aren’t as easily offended as Americans and Western Europeans. Thus Chinese ChatGPT equivalents are likely to provide much better answers than Western ones. This will lead to more adoption of Chinese AI, and that will result in Western AI regulations.

As I mentioned in our video about AI and ChatGPT, this promising technology won’t do much to improve humanity until it’s permitted to tell us the truth about ourselves as individuals and as a species. Understanding these truths is the most uncomfortable thing you can do, and ChatGPT and other such AIs have been programmed to eliminate any kind of discomfort. The local AI top is in, and it will be time to reinvest when AI can finally tell good jokes.

Not financial advice.

🕹 Cheating the System 🕹

Web3 gaming, one of the hottest sectors in crypto, reportedly raised $4.5 billion in funding last year. There has also been a visible uptick in the number of web2 participants engaging with the web3 gaming ecosystem.

Just over the past year, we’ve seen traditional gaming studios integrate blockchain mechanics into some of their most popular web2 games, professional Fortnite players participate in web3 gaming leaderboard competitions and major web2 studios invest in smaller web3 gaming studios.

Given the amount of interest in the space, one might wonder just how much of the player activity in Web3 gaming is actually legit. Well, according to Levan Kvirkvelia, not much.

Kvirkvelia conducted a study that analysed over 60+ games and services. The results of the study revealed that on average 40% of the players in every web3 game were... bots. Now, bot activity isn’t something unique to web3 gaming. Online gaming has long since struggled with bots and cheats.

Many web2 games often come with built-in anti-cheat software that tracks user gameplay and bans players if hacks or cheats are detected. Streaming platform Twitch even has a strict no-cheating policy that has seen many streamers lose their accounts after getting caught on-stream.

Web3 gaming is no different and most of the big game developers in the space will likely implement some of the best anti-cheat measures. The problem is that with almost every web3 game sporting financial incentives (even the small indie ones), the motivation for players to use hacks and cheat bots to exploit the reward system is somewhat higher in comparison to web2 gaming. Meaning that it’s highly likely that hackers will dedicate significantly more resources to exploiting web3 games than web2 games.

If you don’t believe me, just take a look at Yuga Labs’s recent leaderboard competition for its endless platform runner “Dookey Dash.” Despite Yuga stating the event had a strict anti-cheat rule, players reportedly paid thousands of dollars for services that promised guaranteed high scores.

Some of these services have apparently successfully made it past Yuga’s top-notch anti-cheat security to post high scores for their customers. While Yuga has already stated that it has managed to identify the cheaters and will remove their scores from the board, Twitter user ClearHat believes that this is easier said than done.

According to ClearHat, some of these bots managed to use “realistic human movements” to fake gameplay. This means that if Yuga wants to invalidate any of the scores, it would have to be based on a subjective assessment of whether it "looks" like a bot or not. That sounds like a recipe for disaster if you ask me.

At this point, it’s apparent that one of the key areas that web3 gaming studios must focus resources on is their security and anti-cheat measures. I dare say that unchecked cheating in web3 games is as much a problem as exploits in DeFi.

So, it seems like we might still be a long way from web3 gaming taking over the gaming space. However, I remain hopeful - as always.

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🔮 Video Pipeline 🔮

  • Top 5 Crypto Exchanges For 2023: Which is best?
  • Ark Invest Report: What you need to know!
  • FED Bitcoin report: What are they planning?
  • Operation Choke Point 2.0: what it could mean for the crypto industry?

🏆 What's New At This Week? 🏆

OKX vs Bitget Review 2023: Crypto Trading Platforms ComparedDon’t Trust, Verify: Binance Deploys ZK-Proofs to their Proof of Reserves System

That’s all for this week! Everyone at Coin Bureau HQ wants to thank you for your continued support - we couldn’t do it without you!

Guy your crypto guyDisclosure: 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 Turner

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.

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