One of the biggest regulatory threats to the crypto space at the moment is the SEC. Over the past 2 weeks, it has become clear that the agency wants to assert itself in the crypto space.
Quite simply, it’s trying to lead with enforcement rather than clarity. And one of the individuals who is leading that enforcement drive was invited to a hearing on Capitol Hill last week.
This was one for the ages, as pro- and anti-crypto politicians clashed with each other and the SEC. Topics covered included definitions of “securities”, the SEC’s jurisdiction and its regulatory ambiguity.
As is usually the case, I found this hearing particularly interesting and have decided to break it down in my latest video. I also add some commentary to what was discussed and what this could mean for crypto enforcement going forward.
You can watch that video here.
📊 My Personal Portfolio 📊
If you guys watched my most recent video on Ethereum, you will know that I am quite optimistic about a merge this year. Moreover, the final two testnet merges have been announced, which has added further certainty around the mainnet merge.
As such, I have decided to pick up some stETH with some of the free USDC I have been hodling. If the merge does go ahead, it will close the gap between ETH & stETH. Moreover, stETH is yield-bearing, which adds to its investment case vis-a-vis ETH.
Of course, there is always a chance that the merge is delayed again and, as such, it will be a relatively minor portion of my altcoin portfolio.
ETH 40.10% | BTC 32.76% | SOL 5.28% | USDC 4.47% | DOT 4.09% | ATOM 3.33% | RUNE 1.80% | ADA 1.40% | MATIC 1.38% | NEAR 1.28% | STETH 1.20% | HNT 1.11% | FTM 0.78% | LINK 0.57% | INJ 0.44%
📈 Thoughts on Market 📈
Christmas came early this year. While everyone was expecting the crypto market to crash on big tech earnings, the Fed’s latest rate hike, and GDP figures that were almost certain to reveal a recession in the United States, we saw the opposite happen. The crypto market rallied, resulting in some crypto traders getting rekt to the tune of 200 million dollars.
Well, a few reasons, some of which I covered in yesterday’s livestream on Coin Bureau Clips. It all has to do with one word: expectations. Investors were expecting the Fed to raise interest rates by 0.75%, and that’s exactly what it did. Even though higher interest rates are objectively bearish for riskier assets, the certainty was enough to cause risky assets to rally.
Then came the GDP figures. This is where things get tricky, because nobody really knew how the crypto market would react to news of a recession, which the US is now technically in. Well, we got our answer. The crypto market rallied, and I suspect that’s because of a combination of expectations and the possibility that the Fed might be forced to pivot.
Last, but certainly not least, we have the tech earnings, which were really a mixed bag. At the start of last week, Microsoft and Google both missed their Q2 earnings estimates, which wasn’t a good look leading into the Fed’s rate hike and the GDP figures. This is in stark contrast to Apple and Amazon, which crushed Q2 earnings, causing markets to rally.
This is where things get interesting, because it makes you wonder how the Fed will react to such a mixed bag of news. It’s clear that some companies are struggling, and so too is the average person (based on consumer confidence figures). At the same time however, some people are thriving, and those finding new jobs are apparently making lots of money.
Luckily for the Fed, they won’t have to make a firm decision until they return from their 2 month recess in September. In the meantime, we get to look forward to all sorts of potential black swans, like China declaring war on Taiwan because US politicians are travelling there, and comments Fed chairman Jerome Powell could make at Jackson Hole in late August.
We also have a bit of a mixed bag coming up for crypto. As some of you might have heard, Cardano’s hard fork combinator event was just delayed. However, for once it appears as if the Ethereum merge is all systems go, with the final merge testnet to occur in early August.
Make no mistake, these two milestones will be incredibly bullish for the entire crypto market. The only problem is that they’re taking place against a concerning crypto-specific backdrop. I’m referring to the SEC, which is reportedly going after Coinbase. Kraken is also being accused of violating US sanctions, but I wonder if this is happening for other reasons.
In any case, it’s going to be an exciting couple of months in cryptocurrency, and I definitely expect us to see lots of green between now and September. Just remember that there’s no such thing as “up only”. We are more than likely to see corrections along the way, which is why I suggest learning how to spot local the top so you don’t ape in at a bad time.
😤 “Decentralised” Digital IDs Are Here 😤
If you follow me on Twitter (or scrolled down to the bottom of this mailer) you’ll know that I’m going to be doing another Polygon update in the coming days. As I often do with coin reviews, I asked you guys what I should pay attention to specifically, and I was surprised to see that nobody mentioned Polygon’s decentralised digital ID solution.
As I mentioned in our video about cryptocurrency governance, a decentralised digital ID is the key to taking cryptocurrency to the next level. From where I’m standing, Polygon looks perfectly positioned to provide this service to the entire crypto ecosystem. It is by far the most popular scaling solution for Ethereum, and it’s seeing ever more institutional interest.
More importantly, Polygon’s decentralised digital ID is already up and running, and the Polygon PoS chain is also starting to be adopted by governments for other ID solutions. This means Polygon is within arms reach of securing a contract for a government-issued digital ID that will be used for everything from driving, to eating, to working, to… wait a minute…
If you don’t know what I’m getting at, take a gander at the link I just provided (I’ll put it here again so you don’t get lost). That’s right, the Indian government is issuing digital caste certificates. For those who don’t know, the Indian caste system effectively segregates society based on family origins, with the lowest castes being permanently oppressed.
I hope you’ll forgive me for not being a huge fan of such a system, especially when it’s digitised and put on an immutable blockchain which guarantees that there’s no escape. This digital dystopia is something that’s being pushed by some of the enemies of cryptocurrency, who seek to leverage its revolutionary technology to ensure total control for themselves.
Now, to be clear, I’m not blaming Polygon here. As I mentioned in our previous Polygon update, the project is under a lot of pressure from a government that’s looking to ban cryptocurrency outright, and it’s more than likely that if it didn’t cooperate then another crypto project would (or worse, a permissioned blockchain by the likes of JP Morgan).
Even so, it doesn’t change the fact that some governments are eager to leverage the technology that Polygon and other cryptocurrencies have to offer. It also doesn’t change the fact that the decentralised digital IDs we have today aren’t truly decentralised, because they require completing KYC with some centralised entity (and never mind that KYC doesn’t work).
What’s needed now more than ever is a truly decentralised digital ID, something akin to what Ethereum creator Vitalik Buterin proposed with his soulbound NFTs. To Polygon’s credit, this is something they’re hyper aware of as well, which is why co-founder Sandeep Nailwal only sees Polygon ID as a stepping stone to something more decentralised.
Let’s hope this new solution comes sooner rather than later…
🏆 Ponzi or a Revolution? 🏆
One of the biggest debates raging in the crypto space right now is whether these new “Move to Earn” projects are worth all the hype. I have considered exploring the space more in-depth and this recently came to a head for me when I saw that SweatCoin recently completed a raise.
This also comes at a time when one of the pioneers in the space, StepN, has been through its own hype cycles. Prior to the collapse of Terra and the broader market in May, its native GMT token was soaring to new highs that had many questioning its sustainability.
There are two equally valid sides to the Move-to-Earn argument.
Firstly, there are the critics who claim that the economics of these ecosystems are a “Ponzi” in nature. They point out that they rely on new users joining the ecosystems to keep them growing and for the price to continue appreciating. Moreover, many of these projects create a disincentive for people to withdraw their tokens, which adds to further artificial demand.
Then, you have proponents who claim it’s a great way to get non-crypto users into the ecosystem and, unlike Play-to-Earn games, encourages them to do something in a constructive and healthy manner. They also say that the tokenomics can be constructed to be sustainable over the long term.
For me, that last point is the most important. If projects really want to assuage the fears of the sceptics, they have to design rock-solid incentive schemes. Incentives which can carefully balance supply, while still incentivising participation. Incentives able to reward early participants, without making the barrier to entry for new users prohibitively high.
Moreover, it would be great to see projects create token ecosystems which keep users engaged without resorting to explicit monetary rewards. This is perhaps the hardest nut to crack, as people are inherently driven by these rewards. It’s part of the reason that early blockchain games (despite being boring to play) managed to keep people engaged.
I would love to see M2E projects that try to develop greater utilities for their tokens beyond just the “moving” part. Perhaps they could include social aspects that create a broader community of like-minded “players.”
Of course, I know that this is easier said than done. And, there will always be sceptics of the M2E ecosystem, no matter what projects do. Moreover, it is going to be hard for any crypto project trying to achieve any sort of “mass adoption” given what’s happened over the past few months.
But, that doesn’t mean that we shouldn’t try and build technology that brings us closer to that holy grail of mass adoption. I don’t know if M2E is necessarily that technology, but I’m at least willing to give it the benefit of the doubt. I hope to eventually do a video on the space and I will keep you guys updated on it as we progress.
🔥 Deals of The Week 🔥
I’ve just dropped my hot new Illuminati Bitcoin t-shirts in the Coin Bureau store! So, if you want to grab one of those limited edition shirts then you’d better be fast!
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Now, I know that in this bear market, it’s hard to get a valuable exchange deal. Exchanges have become tight fisted as cost cutting has been the norm.
Well, not all exchanges…
One that appears to be bucking the trend is Binance has been expanding at a rapid clip. Not only that, but the Coin Bureau has even been able to negotiate a super special deal just for you! Sign up through Coin Bureau and you’ll get:
- A 20% trading fee discount for life
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Want to give Binance a spin and get that hot deal?
👉 Create a Binance account!
Those that want to learn more about Binance will want to watch my dedicated Binance overview!
🔮 Video Pipeline 🔮
- How To Beat Inflation?
- The Recession is Here – What it Means!
- Polygon Update: MATIC Ready To Rally?
- How To Analyse Fed Press Conferences
- Cryptocurrencies The SEC Is Targeting
🏆 What’s New At CoinBureau.com This Week? 🏆
✅ Connecting the Binance Smart Chain to Metamask
✅ Declining Crypto Prices: Is Shorting Crypto a Good Idea?
That’s all for today. The guys and girls at Coin Bureau HQ would also like to thank you for your support. We couldn’t pursue our passion for crypto education without you – so thanks for giving a damn about our content.
Guy your crypto guy