The Censorship is About To Begin!

Towards the end of this week, everyone on Crypto Twitter and beyond was getting excited about Sora, the latest offering from OpenAI that turns a few lines of text into video. It’s a timely reminder of just how fast the pace of AI development is.

However, while AI will undoubtedly provide us with infinitely more ways to waste time when we should be working (assuming it hasn’t taken our jobs by that point) we should remember that other entities have rather more sinister intentions for it.

These intentions were discussed at length during a recent sitting of a US House of Representatives subcommittee on the Weaponization of the Federal Government. Just the fact that such a body exists at all should be cause for concern. The committee sat to discuss the funding by the US government of AI technology designed to develop tools for censorship and propaganda. Yes, you should be worried.

There was a lot of crazy stuff discussed at this hearing and, if you think it doesn’t have implications for you, think again. Whatever your political stance, or wherever you happen to be, the use of AI by governments to censor speech and information online will eventually affect you in one way or another.

In today’s video, we summarise what was said at that hearing. We pull out the key talking points, analyse them and discuss their implications. We also give you some crucial pointers on how you can push back against the growing censorship industrial complex.

You can watch the video here.

📈 Crypto Market Forecast 📈

It’s going to be an interesting week. For starters, the Chinese stock market will apparently reopen after the Lunar New Year celebrations. As some of you may have heard, Chinese stocks have been in the toilet of late, due to a combination of a weak Chinese economy and an imploding housing sector.

Naturally, this has put intense pressure on the People’s Bank of China to respond with stimulus. The catch is that they can’t stimulate too much, as it could tank the yuan’s value. The caveat to this catch is that many major economies are falling into recession, with Japan and the UK being the latest. This is putting pressure on central banks to ease, including the Federal Reserve.

What this means is that the PBoC could soon have room to stimulate, and some reports suggest that it’s preparing to do just that. If it does, then the boost to Chinese financial markets could spill over into the crypto market because lots of Chinese citizens still hold crypto, despite the CCP’s strictures. Stimulating during the second week of the new year celebrations would make sense.

But, even without stimulus from the PBoC, it looks like the crypto market could still see another big week. This is simply because economic data in the US is finally starting to come in weaker than expected, retail sales being an easy example. Although inflation is still high, as per the CPI, the weakness in other economic measures is a sign that inflation could soon follow suit.

And of course, any signs that the economy is weakening open the door to the rate cuts that investors have been actively pricing in. While Fed Chairman Jerome Powell was hawkish during the Fed’s most recent press conference, it seems the FOMC is not on the same page. If the Fed’s minutes contain a dovish tone when they’re released this Wednesday, it could boost the markets.

It’s not just the macro stuff either. As most of you will know, major stock indices like the S&P 500 have also been heavily driven by the so-called magnificent seven - a group of seven big tech stocks. Obviously, the most magnificent of them all has been Nvidia due to the AI hype. Lo and behold, Nvidia will be publishing its latest earnings on Wednesday - the same day as the Fed’s minutes.

Here’s where things get interesting. Nvidia stock crashed after its last earnings report in November, despite it exceeding expectations. Not surprisingly, this has apparently led to expectations that the same thing could happen again with the earnings next week. However, it could just as easily surprise to the upside, especially if everyone is positioned for another drop.

On that note, there are many BTC traders expecting a clean move to 55k, 60k, or even higher in the near future. As CoinTelegraph reported, however, there seems to be a ‘brick wall’ of sell pressure around the mid-52k range. This would explain why BTC has had so much difficulty breaking above this key level, and it’s possible this could be the case this week too.

If it is, then the silver lining is that capital will likely start to rotate into ETH and altcoins. The recent spike in the ETH/BTC pair combined with on-chain analysis reveals that whales are shifting their bets from BTC to ETH. Declining yields as a result of weak economic data and a dovish Fed would be a tailwind for altcoins too.  

There’s just one headwind to be on the lookout for, and that’s all the ruckus around stablecoin regulation. To bring you up to speed, Treasury Secretary Janet Yellen has been calling on congress to pass stablecoin regulation ASAP. According to a recent report, Jerome Powell is now asking for the same.

In case you haven’t noticed, Congress is pretty partisan right now. This begs the question of what could happen if they fail to pass this stablecoin regulation (which is reportedly very close to becoming a done deal, by the way). The answer seems to be that FSOC (which includes the Treasury and the Fed) would regulate by enforcement. Let’s hope it doesn’t come to that.

🪂 Disappointing Airdrops 🪂

Airdrops are a tricky game. For projects that manage to do them right, the community rewards them with good publicity and loyalty. For projects that don’t, FUD pours in from all directions.

Lately, it seems like projects, even the major ones, have been getting it wrong more often. Given how we’re in the middle of airdrop season, you’d expect these projects would prioritise figuring out how to execute their airdrops for the best possible landing.

So, why does it feel like users are only getting more disappointed?

For instance, earlier this week, Starknet - a zero-knowledge (ZK) Ethereum Layer 2 scaling solution that’s being built by Israel-based blockchain firm StarkWare Industries - announced that it was finally releasing its STRK tokens into circulation via an airdrop to early users and contributors on 20th Feb.

The announcement was initially met with celebration, especially since many users have been waiting for the STRK token to drop ever since it was first announced in 2022.

However, the narrative appeared to quickly change once many users realised that they did not meet the project’s eligibility criteria. Even the users who received an allocation were not happy, as they realised the token had a massive unlock event just two months after launch.

Typically, token unlocks happen a year after the token first begins trading. However, since the StarkWare team conducted an ‘off-chain’ token generation event (TGE) for STRK in 2022, the majority of the cliff for early investors has supposedly already passed.

Long-term community members of the project were not happy, since this will inevitably result in significant sell pressure for STRK as early investors will likely be incentivised to book profits on their investments after all these years of waiting.

We’ve seen similar controversy and disappointment with the actions of other projects that recently launched airdrops. The most notable of these are Jupiter’s $JUP and Sei Network’s $SEI airdrops.

So, who is to blame here? Is it the teams of these projects for their lack of foresight and strategy?

Well, the answer isn’t as simple as one might hope. The disappointment is a result of many factors on both sides – the users and the project.

To elaborate, on one hand, we have recently had an influx of new users rushing to farm airdrops, while on the other we have projects rushing to capitalise on the airdrop mania.

Most notably, many projects raised funding during the past cycle at the peak of the bull market. These projects have likely been under pressure from their VCs and early backers over the past couple of years to launch tokens so they can realise profits on their investments.

We suspect this is also the reason why the Starknet team decided to make an off-chain TGE event years before the token was ready to be deployed on-chain.

Another factor that likely impacts the team’s poor execution is taking a rushed approach to capitalising on the airdrop frenzy. Specifically, many projects view airdrop programs as an effective form of marketing and a method to bootstrap on-chain activity for their projects. This has led to many DeFi projects announcing airdrop programs ahead of the expected incoming bull cycle.

In Jupiter’s case, the airdrop program generated a lot of activity for the protocol. However, the team’s failure to effectively communicate certain aspects of its liquidity provision for the token resulted in users interpreting the team’s decision to withdraw a portion of its liquidity from the pool as evidence of a rug pull.

On the side of the users meanwhile, a rise in airdrop programs has resulted in Crypto Twitter becoming an echo chamber that persistently advertises the ‘1000x’ gains users could supposedly make from airdrop farming.

This has led to an incoming cohort of fresh airdrop farmers who have been groomed by unrealistic expectations. While it’s true that some of these airdrops do offer users a significant chunk of free money, they are few and far between.

In reality, seasoned airdrop farmers who consistently make significant profits often run bot farms to generate activity across multiple wallets. They also formulate a clear thesis for the projects they farm activity for and often wait a long time to receive rewards for their efforts – sometimes months or even years.

This is something the newer farmers are still learning. As long as we’re in this current state of euphoria for airdrops, the chances of disappointment will only rise.

🔥 Hot Deal of The Week 🔥

The crypto markets are heating up! Bitcoin is back above $50k and many think that alt season could be around the corner.

If you are looking to take advantage of these conditions, then you are going to need a top notch exchange to do so.

An exchange that offers access to hundreds of exotic altcoins, deep liquidity, a seamless trading interface and super low fees.

An exchange that offers all of that and much more is Bybit. It’s become one of the go-to exchanges for team Coin Bureau.

As such, we’ve also been able to negotiate a special deal on Bybit that you’ll find nowhere else. Sign up through the Coin Bureau and you’ll get an exclusive bonus up to $50,000 and 0% maker fees for 30 days. That’s one of the best exchange deals out there - so you might want to take advantage of that whilst you can.

👉 Try out Bybit

Want to know more about Bybit? Well you’ll want to watch our Bybit ultimate guide! Over there we tell you everything you need to know.

🔮 Video Pipeline 🔮

* ETH Layer 2s: Which ones should you be looking at?
* Near Procol: Any upside in 2024?
* TradFi capture: What you need to know!
* Crypto in Korea: Why are Koreans so crazy about crypto?

🏆 What's New at This Week? 🏆

* Stacks (STX) Review: Making Bitcoin Programmable
* Best DeFi Projects in 2024: Top DApps to Watch!
* Best 5 Crypto Derivatives Exchanges 2024
* DeFi 101: What is Decentralized Finance and Why it's Important
* M6 Labs Crypto Market Pulse: ATHs Incoming!
* Akash Network Review 2024: The Ultimate "Supercloud"?

Press Releases

* CoinStats Launches AI-powered Exit Strategy Feature to Maximize User Profits

📖 Quote of the Week 📖

To succeed in crypto, you need a few things. These include skill, knowledge and a little bit of luck. While we can help you with the first two, the laws of nature and karma will dictate the third. However, there is another factor that is often forgotten, but which can completely make up for Lady Luck’s absence - grit and determination.

“Money grows on the tree of persistence” - Japanese Proverb

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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