July 25, 2021 - This REALLY Worries Me The Most!!
There is one risk right now that could have severe consequences for the financial markets. A risk that most people are not even paying attention to...
I am of course talking about stagflation. That unique economic ailment where you have high inflation coupled with low growth and high unemployment.
Most market participants dismiss the potential for this outright. They point to strong economic growth and falling unemployment rates. They crow on about the all time highs on the stock market and record consumer spending.
However, conditions appear to be changing and those that continue to dismiss it may be blindsided when it's already too late.
In my video today, I take a deeper look into the current economic climate. One with alarming rates of inflation and numerous economic headwinds. I then explain the concept of stagflation and why it could be so destructive to the world economy.
I also analyse what it could mean for all markets and how I am personally positioning my portfolio to hedge against these risks.
You can watch that right here.
📊 Portfolio Update 📊
As mentioned in my video today, I have decided to take the step to diversify a bit and allocate some of the stablecoin position I have into PAXG (tokenized Gold). Holding such a large percentage of my portfolio in an asset (USDC) that was depreciating at the rate of inflation was suboptimal for me.
I have also decided to buy the dip on RUNE and pick up a bit more of it. I know that recent exploits have cast some doubts on the project but I am still extremely confident in it. No users lost funds and they are going to be completing audits on the protocol. Moreover, as I cover below, we are in dire need of a cross chain DEX protocol and Thorchain is one of the most promising out there.
If I have any further updates, I will let you know in my official insider Telegram channel.
ETH 32.87% | BTC 29.87% | USDC 7.72% | ADA 7.48% | SOL 4.69% | DOT 3.15% | PAXG 3% | YFI 2.88% | INJ 2.30% | LINK 1.84% | ATOM 1.56% | RUNE 1.48% | LIT 0.58% | REN 0.57%
🔭 Trends I have Noticed 🔭
✅ Is This The Market Reversal?
The week started off in a really somber mood. Bitcoin had fallen below 30k as fear started to fill the air about how the Grayscale unlock would lead to a wave of selling. Well, it turns out that it was more FUD than anything and the unlock had virtually no impact. I broke it down in a bit more detail in this Telegram post.
However, it does finally look like we are getting some confirmation that the bull market could be back on track. I had a gut feeling that the B-Word event would be the turning point, and I was almost certain in the 24 hours before when I suddenly started to see a bunch of positive news coming out.
Make no mistake though; there's no way in hell that Elon Musk has this much influence over the crypto market. As I've mentioned many times before; retail investors only make up a fraction of trading volume on any given day. I always point to that Chainlysis reportwhich shows that over 85% of liquidity is coming from 4% of the traders (institutions & whales).
What Elon says probably doesn't have a big effect on institutions, especially if they're not invested yet, but it definitely has the potential to spook weak retail hands. The same applies in reverse - the revelation that SpaceX holds Bitcoin and that Elon holds Bitcoin, Ethereum, and Dogecoin definitely riled up retail investors which, again, can't do all that much to influence price in the grand scheme of things.
As bullish as everything is looking right now, I can't help but feel that we're not quite out of the woods yet. I'm not a fan of the fact that Bitcoin dominance is still so low, something which reflects greed as per the crypto fear and greed indicator. If you wanted to know more about this indicator, it is something I discussed in my video about sentiment analysis.
That said, a lot of money seems to be moving into Ethereum. ETH and other ETH tokens have been exploding ever since the B-Word event, especially tokens related to gaming like Axie Infinity's AXS, The Sandbox's SAND, and Decentraland's MANA. All three of these tokens look like they're in blow off top territory, but they could continue to rise against all odds along with the rest of the crypto market.
What's odd is that we have yet to hear anything about those two Ethereum ETFs I discussed in my video about where we are in the crypto market. With EIP 1559 going live on August 4th, seeing one or even both of those ETFs get passed around that time would be more than enough for ETH to flip BTC, at least temporarily.
Then again, BTC could see enough inflows from institutions to hold the throne. As revealed in Twitter's recent quarterly earnings call, CEO Jack Dorsey is calling on shareholders to greenlight the decision to invest heavily into BTC, and I reckon that's something we're likely to see. With Tesla, Twitter, and SpaceX all buying, how long before other tech giants like Amazon and Apple join in?
✅ Are NFTs Coming Back?
The hottest crypto market of the year has to be what was going on in the NFT space. From under $3m in sales at the beginning of the year to over $170m during the peak back down to less than $10m during June. You can see the market trends here.
Many were wondering that this was a passing fad. A typical cycle in the crypto space where people rush to buy the latest gimmick and flip it before it flops.
Well, I happen to think that things are only just getting started for the sector. This is because of the massive amounts of money that is being invested in NFT infrastructure. Here is a short list of some of the recent action:
- Opensea Raises $100m at a 1.5bn Valuation
- Dapper Labs Raises money for a $7.5bn Valuation
- Rarible Raises $14.2m in a Series A
- SuperRare art market Raises $9m in Series A
- Company Called Bitski Raises $19m from a16z
These are only some of the most high profile VC raises out there. And as I have talked about on the channel before, seeing where institutional inventors are placing their bets can be a great way to determine broader trends.
It’s not just VCs funding new marketplaces, but it is also industry titans jumping into the space. For example, just a few days ago it was announced that DraftKings plans to launch its own NFT platform. This will be aimed at curating sports and entertainment themed digital collectibles.
For those that don’t know, DraftKings is the biggest Fantasy betting site in the US and they currently have over 1 million monthly active users. These users will now be able to trade NFT collectibles - more than is offered by most other marketplaces in the space.
Then of course we have all the exciting stuff that is happening in the blockchain gaming space where NFT based collectible demand is going through the roof. One such game was Axie Infinity which I covered in a video earlier this week.
The point is that there are signs that the NFT space is only just beginning.
But of course, like anything in the crypto space, you can’t just buy any old NFT and expect it to have value in the future. Just because something is “rare” does not make it valuable. Over 95% of all the NFTs in the space will most likely not produce a return. This is actually the case in the broader art / collectible market in general.
I can’t tell you how to invest in particular NFTs as “value” is hard to judge with such unique assets. However, if there are infrastructure plays in the NFT space, then those are easier to value and their value is more closely tied to the market in general. These include any governance tokens tied to an NFT marketplace or gaming ecosystem.
I hope to be doing an NFT update video in the near future where I can speak about some of these in greater detail.
🛑 Regulatory Risks? 🛑
Are you feeling the FOMO?
It's okay, I am too. The markets are showing some positive signs of a turnaround and it's hard to ignore them.
The only thing that we need to worry about right now is what regulators have up their sleeves. For example, we have seen this continued crackdown on exchanges and lending platforms taking place. They are getting a lot more forceful and are targeting those services that are easy to go after (centralised platforms).
Not only that but it also appears as if the Defi space is feeling the heat. Fears about offering registered securities to trade is one of the reasons that Uniswap recently limited trading in certain tokens. I talked about this in greater detail in this telegram post.
This move by Uniswap has me wondering whether this could be a canary in the Defi coalmine. The team is incredibly well connected (Harvard Law, Andreessen Horowitz etc). Perhaps they have gotten wind about potential regulations that could be implemented around KYC requirements for decentralised exchanges.
Perhaps this could be in relation to stablecoin regulations that have been discussed by numerous US regulatory agencies. There must be a reason as to why Tether has voluntarily come out and stated that they will be releasing audited financial statements.
If you're wondering what you should do, that depends entirely on you. If you're comfortable with KYC, find an exchange that you trust and complete it there to save yourself the headache that's on the horizon.
If you're a crypto believer to the core and refuse to reveal your identity, well you probably already know what options are on the table for you. I for one will be complying with regulations, but I won't be doing so silently.
🔥 Deals of The Week 🔥
The last few days have seen some nice green candles throughout crypto markets. But do you think the bottom is in? Well, if that’s the case then it might not be a bad idea to convert a bit of that dirty fiat and beef up that crypto portfolio.
Maybe it’s also a good time to get those coins off those exchanges and hodl to new all-time-highs too?
If you agree with any of that, then you’ll want to check out these crypto solutions…
💸 Swissborg: Those recent fiat deposit issues on Binance have seen many people scrambling to find a new method to get in and out of crypto. Well, if you are living in Europe, UK, Canada, Singapore and Switzerland then the Swissborg app is definitely an option you should look at.
Personally, I’ve been using Swissborg for some time now and, honestly, it is the easiest way I’ve found to get in and out of those crypto markets. Also, when I cash out some crypto to pay for boring things like rent, I was pretty amazed to find that the fund hit my bank account in minutes!
Around 20 different cryptos are available here and what’s also cool is that you can earn yields of up to 9%. That might be something you want to take advantage, if your plan is to hodl to the moon.
Also, if you deposit €50 you’ll get up to €100 FREE in CHSB tokens! What’s there not to like?
👉 Try Out Swissborg & Get Up To €100 FREE!
For those that want a bit of a walkthrough on how to buy crypto on Swissborg, I’ve done a dedicated walkthrough showing you exactly that! So, you might want to check that out!
🔒 Trezor: Now, I have always advocated that the safest way to store your main hodl position is by holding it in a hardware wallet. That way you don’t run the risk of an exchange being hacked and losing all your crypto.
Personally, I use Trezor as my crypto hardware wallet of choice. But I appreciate that many of you might want to weigh up your options here. So, if that is you then you’ll want to check out my video on the top five hardware wallets on the market right now!
Anyhow, with those crypto markets seeming to be heating up, now might be a good time to upgrade that crypto security.
🗞️ Crypto News Focus 🗞️
- Why Crypto Education Matters - Apparently, a third of crypto holders don’t know what they are doing!
- Is The NFT Hype Back? - A 12 year old makes $160k in ETH on NFTs within 24 hours.
- Whale Movements - BTC whale who sold at $60k, reaccumulated over 17k Bitcoin between $30-39K.
🔮 Video Pipeline 🔮
- My daily crypto routine
- Celsius Vs BlockFi: Which lending platform is best?
- 101 guide to the new Binance NFT marketplace
- Robinhood Vs Coinbase: Which is best for crypto?
- Flexa (AMP) Update: Is it worth it?
- FED study: Did stimulus cheques impact BTC’s price?
- Stablecoin collateral: What does it mean?
- What the Fed REALLY Thinks of Crypto
🏆 What's New At CoinBureau.com This Week? 🏆
✅ Stellar Lumens Review: The Network Moving Micro Payments
✅ Solrise Finance: Decentralised Fund Management On Solana
✅ Chainlink Review: Smart Contract Solutions for any Blockchain
✅ Cryptohopper Review: Complete Bot Overview
✅ Crypto Staking: The Dividends Of Blockchain
That’s all for this week’s newsletter guys. I’d also like to thank you for joining me on this crazy crypto journey. Honestly, if it wasn’t for your support, my team and I wouldn’t be able to pursue our passion to produce the best crypto content possible.
I feel very blessed to do what I love and it all down to you guys. So, thank you so much for making that a reality for me.
Anyhow, I hope you find my latest video intriguing and you find my insights valuable!
Guy your crypto guy
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 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.