June 13, 2021 - Bitcoin Mining Ban! Should You Be Worried?
One of the biggest causes of the recent crash in Bitcoin was the latest crackdown in China. This crackdown was not only one on retail traders but also on the country's sprawling Bitcoin mining sector.
Last month, these miners (who make up 65% of total hashpower) heard the strongest statement yet on the government’s stance on Bitcoin mining. Since that time, province after province has begun to ban mining outright.
In response to this, miners in the country were forced to close up their farms and sell off their coins in order to avoid the incoming regulations. Mining pools began to restrict Chinese IPs and limit the amount of business they did in the country.
As these miners began to sell their coins, the price tanked along with the total hashpower on the network.
So, all bad right?
No. In fact, this is perhaps the most bullish news of the year for Bitcoin. Despite the short term impact this is likely to have on the network / price, the longer term implications for this ban are not being talked about.
That is why, in my latest video, I explain exactly why this miner exodus from China is likely to permanently change the ecosystem for the better. To completely neuter the “China FUD” and make the market more decentralised, and yes, even more green.
You can watch that right here
📊 Portfolio Update 📊
Took profit on a few of my older altcoin positions including LINK, AVAX & ADA. Going to keep that in stablecoin for the time being until more attractive opportunities open up.
Many ask why I choose USDC and that is just because it's my personal preference. Although I have always been a tad sceptical of Tether, their recent transparency as well as Coinbase’s decision to list it, clears a lot of doubts I may have had.
Coins that are on my radar include the likes of MINA which has one of the most impressive protocols I have seen this year. The price has been in freefall recently which could mean attractive entry opportunities. I covered it in a recent video.
As always, updates on my portfolio are covered in my Telegram Channel.
ETH 30.89% | BTC 25.79% | USDC 11.42% | ADA 8.03% | SOL 4.41% | DOT 4.29% | YFI 3.18% | LINK 2.76% | INJ 2.64% | RUNE 1.95% | ATOM 1.44% | 1inch 0.89% | AVAX 0.82% | REN 0.63% | LIT 0.51% | DODO 0.33%
🔭 Trends I have Noticed 🔭
✅ Bitcoin’s Latest Trends
The market might be dipping, but Bitcoin is seeing serious adoption behind the scenes. As you all know El Salvador recently passed a bill which makes Bitcoin legal tender in the country. Politicians from neighboring countries in Latin America have started signaling their intentions to pass similar motions. The reason for this is simple: they do not want to be left behind.
It’s also important to note that Latin America is a region ripe for adoption of Bitcoin & crypto. Years of currency crises have plagued the continent as regimes have sought to placate citizens with generous social programs. Cryptocurrency is already becoming a life saver in countries like Venezuela etc.
So, why was El Salvador the first to make this move?
Well, having spoken to quite a few people who are aware of the president’s record, it’s perhaps less about helping his people and more about trying to distract from other scandals. Moreover, El Salvador has officially been using the dollar as a legal tender and relations between the Bukele and the US have been rocky recently.
The bigger question is how much custody El Salvadorians will have of their Bitcoin. If Bitcoin transactions are taking place using a custodial middle man like PayPal, then is it really a revolution, or are you just replacing the banks with tech giants?
After all, most El Salvadorians will have a hard time affording the high transaction fees on the Bitcoin network. Luckily, Strike, the most popular Bitcoin app in El Salvador, makes use of the Lightning Network and does give users custody of their Bitcoins.
Bitcoin adoption isn't the only macro thing happening either.
This week the Consumer Price Index in the United States rose by 5% which is even higher than the recent 4.6% rise we saw in April. Moreover, if you are looking at this just on the basis of the core number (excluding food & energy) it is at the highest level in the past 30 years. As you guys know, I am a massive inflation hawk and I covered this recent release more in-depth in a Telegram message.
Of course, it wasn’t all plain sailing either. In line with the miner bans that I covered above, China has continued its crackdown on retail trading of Bitcoin. This week came the news that Chinese social media giant Weibo has blocked a number of influential cryptocurrency related accounts.
This has way more of an impact on retail trading in the country than the exchange ban can have. That is because these social media sites are perhaps the only way that users in the country can get information on crypto. It is not covered in the state run media and most outside news sources are heavily restricted.
However, when it comes to the price action itself, it’s less about the news cycle and more about what the whales are doing. It’s pretty spectacular how well the Wyckoff method has predicted the recent price action of Bitcoin. As I pointed out in another Telegram message this week, we still appear to be in the accumulation phase.
That means that the whales are moving the markets to shake out any more of those retail investors who may be on the sidelines about whether to sell their coins. These temporary “tests” are psychological tactics. In fact, there are many more tactics that these whales use to play the markets - something I will be covering in an upcoming video.
✅ Parachain Auctions Going Live
I have been talking about Kusama’s upcoming parachain auctions for quite some time and finally, the moment has come. On the 15th of June, we will have the first auction going live on the network. This is perhaps one of the most pivotal moments not only for Kusama but also for Polkadot.
There are going to be quite a few projects in the first round of auctions but those that I find most interesting include:
- Kurara (KAR): This is the testnet version of Acala which I have talked about a few times. It will be a decentralised finance hub of Kusama which will have a number of features including an AMM Dex, crypto collateralised stablecoins and an EVM compatible blockchain.
- Shiden (SDN): The testnet for Plasm Network which will be a smart contract layer for Kusama. It will also be a multichain solution building bridges to various blockchains. (Ethereum, Secret Network, Cosmos)
- Khala Network (K-PHA): Testnet for the Phala network which is a privacy-preserving decentralized database with smart contract functionality. The native token for Khala is K-PHA and will be swappable 1:1 with Phala’s native PHA.
In fact, I have actually covered both Acala & Phala as two of the most interesting Polkadot tokens in a video that I did earlier this year.
These Parachain loan offerings could be your best bet in order to get access to some of those native tokens that are being distributed. No investment is required apart from committing KSM during the auction process.
And, speaking of KSM, it has been going crazy over the past few weeks. This is most likely as a result of the fact that users have been trying to get their hands on KSM in order to partake in these upcoming auctions.
This was something that I brought up in my Kusama video that I released two weeks ago. That video was also pretty helpful as it gave you an overview of how to actually participate in these parachain loan auctions and bid for slots.
However, if you found that as a bit of a stretch and you would prefer to use a simpler centralised solution then there could be other options. It seems as if Kraken will be supporting these auctions on their exchange. It will allow their users to vote for their favourite project right there on their client dashboard. You can read about how you can participate over here.
If you think that you missed out on that recent KSM rally then you may want to keep your eye on DOT. Remember, Kusama is a testnet or “canary” network for Polkadot. That means that if these Parachain loan auctions are a success, it will bode well for those that eventually come on Polkadot.
🔝 Top Newbie Tips 🔝
DCA stands for Dollar Cost Averaging, and it's something you should familiarize yourself with during times like these. Most people who have invested in cryptocurrency since the start of the year are currently in the red zone (assuming they didn't sell already of course).
This is because we all have a tendency to FOMO in when we see prices going up, and panic sell when we see too much FUD in the news. Your susceptibility to these emotions is heavily influenced by your investing strategy. If you threw an entire paycheck (or two or three) into a single coin when it was at its peak, you're probably feeling the pain.
If you had DCA'd by putting just a portion of the money you plan on investing each week or each month into a basket of coins, you'd probably be in the green or at least not as much in the red. The market is giving mixed signals right now, and if you try to trade it you will probably get rekt. Just be patient and DCA. Not financial advice.
You can learn about some other trading mistakes you can avoid by watching my videoabout that.
Once you have those coins, you will have to decide where to hold them. While most are likely to hold them on an exchange, nothing beats taking control and placing it in self custody. Even if the exchange that you are using is highly secure and the amount that you are storing is not life changing, it creates a bad habit for the future.
While I always suggest a hardware wallet for anyone with over $1k in crypto, there are numerous free software wallets that you can use - some of which have a really strong track record. They are also really easy to set up and use. I will be covering my top 5 picks in an upcoming video!
Finally, if you are going to store the coins in an offline wallet, make sure that you take precautions to do it securely. That includes the following:
- Make sure you are downloading it from the official website and double check the URL
- Create backups of the seeds that you have created
- Make sure that you have installed antivirus to keep your PC clear of Malware
Seriously folks, holding your coins offline will take anywhere between 5-30 minutes and once you have done it, you are ready to roll for quite some time. It’s a great habit to get into especially before you start accumulating large amounts of crypto.
🔥 Deal of The Week 🔥
Let’s face it, it's not been the most exciting time in crypto markets. However, one famous phrase springs to mind: You snooze, you lose.
Sure, it can be easy to switch off when markets are running slightly against us or trending sideways. However, I personally think those ‘boring’ times are the best to get that crypto portfolio in order without all that distracting market noise.
With that in mind, which crypto platform should you be looking at to get your crypto house in order?
📈 Binance: Done some research and uncovered a hidden gem or undervalued crypto? Well, you are going to need a top-notch exchange to get your hands on it.
It is no secret that Binance is the top crypto exchange for hodlers and traders alike. After all, it is home to some of the best liquidity, has a newbie friendly interface and offers a plethora of different crypto products and services. Oh yeah, 100’s of different altcoins are listed there too - so it’s a bit of a one-stop crypto shop.
Now you would have thought that there would be no deals to be had for this crypto Eldorado. However, you’d be dead wrong in thinking that.
I’ve actually been able to negotiate a super special offer - which you’ll find nowhere else!
All you need to do is to sign up to Binance through my link and you’ll automatically get a 20% trading fee discount for life! But here comes the really special part: If you deposit more than $100 in crypto or fiat, you’ll get $10 in free USDT - no strings attached!
The chaps at Binance tell me this is the best deal they have been able to offer anyone and it’s a Coin Bureau exclusive.
So you probably want to grab that limited-time deal whilst you can.
👉 Sign up to Binance to get a 20% trading fee discount + $10 FREE!
🗞️ Crypto News Focus 🗞️
- Should you Move To El Salvadore? - The President of El Salvadore welcomes crypto investors and entrepreneurs saying there will be no capital gains tax for Bitcoin and that permanent residence will be granted to crypto entrepreneurs.
- Shark Tank’s Kevin O’Leary Bullish on BTC - Doesn’t care if BTC goes up $20k or down $20k. In his opinion, Bitcoin is a long term play and he’s not selling!
- Adoption In The US - Texas allows state banks to hold Bitcoin.
🔮 Video Pipeline 🔮
- Best free crypto wallets 2021
- Richest crypto billionaires & how they got there
- The truth about crypto private sales!
- How to prepare for the bear market
- Worst crypto losses in history
- Complete guide to whale watching. How to read their movements!
- Ethereum update: still potential?
🏆 What's New At CoinBureau.com This Week? 🏆
✅ UNUS SED LEO Review: The Bitfinex Exchange Token
That’s all for this week's newsletter, folks. However, it is still blowing my mind how many people are continuing to join Team Coin Bureau. Honestly, I started all of this in my living room several years ago and never in my wildest dreams did I think that things would get this big.
It fills me with great pride that so many of you seem to get value from my videos. That’s ultimately the goal of any educator on YouTube and I will always strive to push the boundaries and up my game.
I would also like to thank my great team here at Coin Bureau HQ for helping me produce all this wonderful content for you guys. Without them, I really wouldn’t be able to do it.
For now, I hope you have a great Sunday and I hope that you enjoy my latest video.
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.