Essential Bear Market Research Tips!!
There is very little we can do about the state of the crypto markets at the moment. We also have no say how long or how deep this bear market is.
What we do have control over, however, is how we spend our time. Bear markets are the ideal opportunity to spend time refining our craft. Doing the in-depth research that is required to find the projects that really do have the best chances in the next bull run.
As I have said on many occasions, the 100x projects of the next bull run are found in this bear market.
Therefore, I have decided to make a video for you on how to most effectively do your research in a bear market environment. This includes what to look for and where to find it. How you sort the wheat from the chaff, shitcoin from moonshot.
I also have a few personal hints and tips that could help save you hours in your research and save you plenty of stress - what's not to like?
You can watch that video here.
📊 My Personal Portfolio 📊
No changes to the portfolio this week. However, there are some projects that I am taking a deeper look into - particularly some Defi protocols that have held up relatively well in this bear market.
One of these is AAVE (which I will be doing a video update on). They are about to release a fully collateralised stablecoin that could rival MakerDAO’s DAI and AAVE is 5x undervalued relative to the TVL in the protocol.
I will keep you updated with any moves if they are made in our official Telegram channel.
BTC 36.16% | ETH 34.50% | USDC 6.94% | SOL 5.54% | DOT 4.36% | ATOM 3.35% | RUNE 1.99% | ADA 1.55% | HNT 1.38% | NEAR 1.33% | MATIC 1.03% | FTM 0.77% | LINK 0.58% | INJ 0.53%
📈 Thoughts on Market 📈
And there we have it folks. The first definitively green week for BTC since March! I’d like to thank the Federal Reserve for making this possible. After all, the only reason markets rallied was because investors got more certainty around the Fed’s plans to raise interest rates. Even though their plans will be bad for the markets, at least investors have their certainty.
And as you might have guessed, the Fed is also indirectly to blame for the crypto dip we saw on Friday. That’s because the jobs report came in for June, and the number of hires was much higher than expected. As I mentioned in our video about the macro factors affecting the crypto market, lots of jobs means the Fed will likely raise interest rates even more.
In terms of crypto-specific factors that moved the market, the first one that comes to mind for me is the fact that Celsius seems to be slowly but surely paying off its debts. At the same time, we’re seeing what is likely to be the last of the crypto companies with exposure to Three Arrows Capital take an L, and one of these appears to be Blockchain.com.
I can’t recall where, but I remember hearing that the crypto bear market could end when all the bad leverage has been flushed out. This is what I see happening with Ceslius, Blockchain.com, and even Voyager Digital (which filed for bankruptcy). Bitcoin miners will also (hopefully) finish selling off their BTC and ETH to pay off some (or all) of their debts.
Obviously we’re a long way away from seeing what’s left of this leverage unwind, but it seems like the worst of it could be over. It’s just unfortunate that the macro factors affecting the crypto market haven’t changed much. This is why I think the bottom won’t be in until later this year at the earliest, and why I think the bear market will last for at least another year.
In any case, there were two crypto-specific factors that caused the crypto dip late last week. The first was the news that Elon is trying to bail on his bid to buy Twitter. This is significant because Elon was apparently planning on introducing a whole bunch of crypto features to the platform. Oddly enough, the Twitter board still wants to close the deal.
The second crypto-specific factor was the news that Federal Reserve vice chair Lael Brainard wants to see crypto regulation ASAP. When you combine that with the news that the US Department of the Treasury is working on a global framework for crypto regulation, you end up with a recipe for some panic selling (though most weak hands are long gone).
On a related note, I’ve been keeping a close eye on creeping crypto regulations around the world. Some of you may remember the recent news that Coinbase users in the Netherlands will be required to complete KYC. This is all basically because of the FATF, and I’ll be doing an update about what they’ve been up to later this week as it’s long overdue.
🤯 The Next Hot Crypto Niche: Decentralised Social Media 🤯
I don’t make crypto market predictions very often, but I’m going to make one now: over the next couple of years, decentralised social media will become the next hot crypto niche. Aave’s Lens Protocol and Polkadot’s Frequency parachain seem to be the first movers in this regard, and I can almost guarantee that they won’t be last.
If you’re wondering why I’m so confident, it’s for one simple reason: censorship. Last week, the EU adopted the so-called Digital Services Act which will see the formation of various ‘Ministries of Truth’ (panels of “experts”) in every European country in the coming years. Naturally, their mission will be to fight misinformation, disinformation, hate speech, etc.
Some of you may also recall the recently paused “Disinformation And Governance Board” (AKA the literal Ministry of Truth) that was announced just days after Elon announced his Twitter acquisition in the United States. Canada is also working on the “Online Streaming Act” AKA Bill C-11 which will see content on social media heavily curated by big tech.
If you’re wondering why there’s such a push for online censorship, it’s for one simple reason: people are angry. There are protests all around the world, and though these have mostly been contained to developing countries such as Sri Lanka, they are starting to spread to developed countries like the Netherlands, with almost no coverage from the media.
With so many people around the world getting justifiably upset with rising costs and relentless government corruption, the people in power are desperate to turn the attention away from themselves. Although the narrative seems to be that Putin is responsible for the price hikes, people aren’t buying it. That’s because the free flow of information makes it possible to know that it’s a big club, and you’re not in it.
People are increasingly aware of the power of international institutions such as the World Economic Forum and how much influence they have over the national affairs of each country. I’ll never forget the guy at Bitcoin Miami who said his mission was to destroy the BIS.
In other words, the individuals and institutions with the actual power are quickly becoming household names. It’s getting harder and harder to distract the average person from these truths, so there’s only one solution: censor information as much as possible. People are already noticing the censorship, and they will notice it even more with all these crazy laws.
Now, you’d think that people would simply switch to using apps that preserve more privacy such as Telegram and Signal. The problem there is that these companies are centralised, and that means they can be easily regulated. Case in point, the German government successfully clamped down on Telegram earlier this year and I’m sure Signal is a target too.
This leaves only one option, and that’s decentralised social media platforms - truly decentralised social media platforms that can’t be censored or shut down, no matter how hard governments try. Mark my words, people will adopt these platforms out of necessity in the not so distant future. Decentralised storage cryptos will likely play a role too. Watch out.
😤 Crypto Isn’t The Problem 😤
The last few weeks have been some of the most challenging in the crypto community's history. Stories abound of people who lost their life savings on the Luna crash or who have them locked up on platforms such as Celsius or Voyager.
What’s even worse is that the mainstream press and their followers have pointed to it as the perfect justification as to why crypto is doomed to fail. When reading comments on MSM news articles, I can’t help but notice the intense schadenfreude that exists towards the community.
The really frustrating thing about this is the fact that it’s nothing to do with cryptocurrency or the technology that underpins it. It’s mainly the actions of centralised entities that have developed a huge systemic risk for cryptocurrency.
It seems that with each passing day, we are getting more information on just how many companies were exposed to Three Arrows Capital. They include the likes of Voyager, BlockFi, Genesis Trading, Blockchain.com, Babel Finance, Deribit, Bitmex, Finblox, Defiance Capital - the list goes on. This dependency and exposure was created by the choices of people, not because of fundamental protocol errors.
This systemic risk exists precisely because of the lack of transparency that we would have expected from Wall Street banks in 2008. This creates further uncertainty around exposure and hence drives panic in the market. This is the antithesis of blockchains and open, permissionless Defi.
The reason that people have their life savings tied up on Celsius or Voyager for example is because these companies did not manage the duration risk of their assets and liabilities. Just because the assets in question were cryptocurrencies, doesn’t mean that the assets are the problem.
What’s even worse is that the mainstream media isn’t making an effort to separate the two. For example, this WSJ article talked about Celsius and termed it “DeFi’s Existential Problem”.
Yet, in actual fact, it was the Defi protocols that operated as was intended. Fully collateralised and open for all to see. User withdrawals were not at the whim of a centralised gatekeeper, but at the full discretion of the users themselves.
That’s not to say that Defi protocols were not exposed to 3AC. It’s just that they handled it better than the “risk managers” in Cefi firms. To quote Arthur Hayes in his latest piece:
“what’s conveniently going unmentioned by much of the media is that both centralised and decentralised lending companies / platforms had exposure to 3AC — and only the players in one of these two markets went belly up”
So, it’s now more important than ever to make sure that the narrative doesn’t get hijacked by the powers that be to restrict all of our financial freedoms. We need to defend Defi.
🔥 Deal of The Week 🔥
We can all agree that the past few months have been some of the most volatile in crypto’s history. However, this volatility comes with opportunity for traders who are looking to take advantage of mispricings etc. There are only two problems with that though:
1) Many crypto traders have no idea if the strategy they are using is a winning one. However, 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 setups take place at times when you are not behind your computer screen. However, when you automate your trading strategy you can execute these buy & sell orders around the clock.
If either of those problems seems familiar to you then you might want to explore the world of automated trading algorithms. I’ve even done a video telling you everything you need to know about them!
If you don’t have time to watch the video, then you can get going with one of the best software packages out there from 3Commas! Even better, you can try it out for FREE! No commitments.
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🔮 Video Pipeline 🔮
- Europe’s Energy Crisis: How Did We Get here?
- Aave Update: DeFi Giant Rises
- Food Disruptions: Coincidence or Conspiracy?
- FATF Returns With A Vengeance
🏆 What's New At CoinBureau.com This Week? 🏆
✅ NGRAVE ZERO Review: Is This Hardware Wallet the Future of Crypto Storage?
That’s all for this newsletter. Yes, those crypto markets may feel ice cold right now. However, the whole Coin Bureau team would like to give you a warm thank you for continuing to support our work.
Guy your crypto guy
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.