The Bitcoin FUD That Just Won’t Die!

The holiday season is beginning and you know what that means… Yep, some of your nearest and… dearest… fudding Bitcoin with all their might because they once read about it online somewhere. 

You know the sort of stuff: bad for the planet, not backed by anything, too volatile, etc, etc. Well, today’s video pushes back on all of that and more. Helpfully, the folks over at Fidelity have put together a report that examines the criticisms people have of Bitcoin. They’ve got to do something to while away the time as they wait for the SEC to approve their spot Bitcoin ETF application, after all. 

The report looks at the nine pain points that Fidelity’s investors have consistently complained of in relation to Bitcoin over the last few years. It also divides them into two categories: misconceptions and potentially valid criticisms. It’s a fascinating and well-timed deep dive into the way Bitcoin is perceived by those outside of crypto.

In today’s video, we go through this report and dissect its findings. Everything we look at will be useful ammunition for you when confronted by that uncle who’s had two glasses of wine and thinks he’s Warren Buffet. You can watch that video here. Lock and load.

📈 Crypto Market Forecast 📈

This week will be an interesting blend of crypto and macro. For starters, by tomorrow the judge in the Binance case will decide whether or not CZ is allowed to leave the US between now and his trial date in February. 

On the flipside, it’s likely that we will get some bullish crypto news out of Argentina. That’s because the new president, Javier Milei, is believed to be pro-crypto. He also wants to dollarize the country’s economy. As reported by CoinTelegraph, it's possible that stablecoins could play a role in this dollarization. 

This relates to a peculiar Ethereum project that’s been raising a few eyebrows. A layer 2 called ‘Blast’ was announced last week, and has since accumulated around 300 million dollars of crypto, mostly ETH staked through Lido Finance (stETH). This has caused some concerns given that it’s only possible to deposit, not withdraw (more about that below). 

This could present a tail risk for Ethereum, which is otherwise looking pretty strong. As you’ve probably heard by now, multiple asset managers have filed applications for spot Ethereum ETFs. Chances are that we will see some more meaningful announcements about these applications in the coming weeks, and they’re likely to be bullish for ETH. 

At the macro level meanwhile, the ceasefire in Gaza (which began on Friday) is expected to continue until tomorrow. After that, we could see some more turbulence in the broader markets if the fighting returns with a vengeance. We could also see more FUD about crypto being used for terrorist financing if this is the case. 

This ties into the OPEC meeting, which is expected to take place this Thursday. Interestingly enough, the meeting was supposed to happen on Sunday, but was apparently pushed back due to disagreements about product cuts (or the lack thereof). Some analysts warn that another production cut could boost oil prices. 

An increase in oil prices could result in inflation, which has been declining according to the CPI. The other inflation statistic the markets are watching closely is the PCE, the Fed’s favourite. The October PCE will also be released this Thursday. It will be an important print given that the PCE appears to have flattened. Any move could mark the start of a new trend. 

At the same time, it appears that long-term interest rates in the US are starting to rise again. For reference, the interest rate on the 10-year treasury recently hit 5 percent, but pulled back sharply. Now it’s rising again. If this turns out to be a new uptrend, it could put pressure on the markets, particularly risk assets. 

Thankfully, Bitcoin’s correlation to the stock market is at multi-year lows. Up only, baby! 

💯 Coin Bureau Discord 💯

Yes, you read that right! The Coin Bureau has officially launched our very own Discord server. This server was launched in order to give our followers the opportunity to interact with their fellow community members (as well as Coin Bureau team members).

This is still a limited release of the server, but a lot more features and functionality are in the works. There is also an exclusive CBC members area for those that are subscribers to the Coin Bureau Club. It’s been open to club members for the past two weeks and already there is a lot of alpha being shared.  

So, hop on over to the Coin Bureau Discord and claim your insider status today!

Sign up here 👉

💥 Blast-ed Securities 💥

A new Ethereum layer 2 project called 'Blast' has dominated discussions on Crypto Twitter and in various crypto Telegram groups this past week. 

It's not surprising, considering that Blast emerged onto the scene promising to be the first layer 2 chain offering 'native' and 'risk-free' yield to users. Especially since Blast assures users that all ETH and stablecoins bridged to the chain automatically earn a fixed yield of 4% and 5% respectively, irrespective of whether that asset is in their wallet or staked on a dapp on-chain.

Combine this with other factors, such as the person behind the project being Tieshun Roquerre (aka Pacman), the founder of NFT marketplace Blur, and the project raising over $20 million from VCs such as Paradigm and Standard Crypto, and you’ve successfully created something that figures in every degenerate crypto DeFi farmer’s wildest wet dream.

At the time of writing, over $370M in assets have already been bridged to Blast in the 72 hours since launch. For context, that’s more than half the TVL present in chains like Solana and Avalanche. This is no small feat, especially when you consider that depositors will be unable to withdraw all those bridged funds until February next year. 

The euphoria surrounding Blast is clearly undeniable. 

Having said that, there are many who’ve expressed concerns about the project’s marketing approach and security measures. Notably, many have called it a Ponzi scheme, comparing it to the likes of Luna and Bitconnect.

The subject of controversy seems to be Blast’s onboarding and marketing strategy. Put simply, Blast is using a tiered referral system similar to those used by multi-level marketing companies to onboard users.

Specifically, Blast features an airdrop program for early adopters that rewards users with 16% of the airdrop points farmed by their direct referrals and 8% of the airdrop points farmed by the referrals of their referrals. 

To be fair, referrals and gamified adoption schemes have been the norm in crypto for the past few months – just take a look at the meta.

And for reasons we’ll look at shortly, we don’t think this is nearly as bad as the risks presented by the next two factors – security and security.

The first security refers to concerns around the safety of funds. As noted by many, including Adam Cochran and Sisyphus, the Blast L2 ‘bridge’ is currently just an Ethereum mainnet contract owned by a five person multisig, without any L2 capabilities. 

This means that all funds deposited are currently under the control of these five wallet addresses. As noted by Polygon engineer Jarrod Watts, the five signer wallets of Blast's multi-signature contract are all new addresses and their identities are unknown. This exposes users to potential rug pull risks, though this scenario is unlikely considering the team and the VCs behind the project have placed their reputations at stake.

Additionally, Jarrod noted that the contract was upgradeable and also detailed potential vulnerabilities, specifically the “enableTransition” function and the “mainnetBridge” contract. Theoretically, attackers could exploit these elements to allow unrestricted access to all bridged ETH and DAI, posing a considerable risk to investors’ assets.

As for the second ‘security,’ it refers to the favourite word of our beloved Mr. Gensler and the SEC. That’s right, the current setup of Blast carries significant regulatory risk. To refresh your memory, the US Securities and Exchange Commission has been on the warpath over the past few months, cracking down hard even on projects whose models could only be defined as securities under a dystopian legal framework.

Having said that, Blast’s system of pooling funds and delegating them for yield rewards presents centralisation and intermediary risks. Combine this with the marketing language of promising ‘risk-free’ returns, you have the perfect candidate for a securities law violation. 

There’s a higher chance of this risk affecting the project first, especially since Blast does not prevent US residents from interacting with its platform. 

It hasn’t even been a year since the SEC went after entities like Kraken for similar offerings. Frankly, we’re confused about how none of the VCs or team members behind Blast considered this to be a potential issue.

So, with all that in mind, we would be wary of YOLOing into Blast, at least until mainnet launches and the project becomes sufficiently decentralised.

📊 Guy’s Personal Portfolio 📊

If you’re subscribed to Coin Bureau Club, you’ll have seen that Guy felt the FOMO this past week and decided to ape into quite a controversial altcoin.

It’s a relatively small allocation and the plan is to sell out of the position if the project sees some healthy gains over the next week or so. If it doesn’t, then he’s content to HODL until it does. 

CBC will now be the place where Guy’s portfolio is hosted and members can also see those of other core Coin Bureau team members. There’s also a watchlist feature, which shows what cryptos they’re considering buying, and of course Coin Bureau’s famous altcoin review videos. 

So far, CBC has featured videos on Tron, XRP, Kleros Network, Metal Blockchain, Axelar, Realio and more besides. Members get unlimited access to CBC’s growing archive, as well as the ability to vote on which project they’d like us to cover next. There’s also an exclusive research feed where Guy and the team share opinions and alpha, and many more features coming soon. 

Signup to Coin Bureau Club 👉

P.S. We are also giving away two Ledger Nano S devices every month for active subscribers. So, be sure to signup before the next draw. 

🔮 Video Pipeline 🔮

  • Worst Crypto Mistakes: Are You Making These?
  • Coin Bureau Crypto Portfolio Update 
  • Solana Update: Anymore Potential?
  • ETF Upside: Where is Bitcoin Headed?

🏆 What's New at This Week? 🏆

✅  CoinGecko Expands Cryptocurrency Offering with Zash Acquisition

✅  CoinStats Review 2024: The Crypto Portfolio Tracker You NEED!

✅  The Bitcoin Rich List – A Look Into Top Bitcoin ‘Hodlers’

✅  Best ETH Staking Pools in 2024: Where to Stake Ethereum!

📖 Quote of the Week 📖

This week was one of the most seminal moments in crypto’s history. CZ fell on his sword for the greater good of the crypto industry. Binance will live on and the markets have breathed a sigh of relief. Some may say that we’re “lucky” but, in the end, there was a lot of hard work behind the scenes and, thanks to CZ, the crypto industry is bigger and stronger than it was before Binance came along.

“There is no overnight success. Luck is built over the long run, a little bit at a time consistently.” - Changpeng Zhao

Team Coin Bureau

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 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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