It’s no secret. Ethereum gas fees are one of the main reasons that people are trying to migrate to other alternative cryptocurrencies.
However, the decision does not have to be between different cryptocurrencies but between different solutions all within the Ethereum ecosystem.
Right now there are Ethereum layer 2 solutions that are helping it scale and helping to reduce the gas burden for the users. These are offchain solutions such as the Polygon Network, Optimism and Arbitrum.
For the past few weeks, I have been using some of these to conduct my own Defi swaps and it has been a breath of fresh air. Imagine Uniswap transactions completing in under ¼ of a second or at fees almost 15x cheaper than that on the main chain!
That is all a reality when you migrate off the beaten chain. So, in the video today, I take a deep dive into Ethereum sidechain and layer 2 solutions. Not only do I explain all the tech but I also give you a complete step-by-step guide to using them.
Start saving gas now and watch my video.
📊 Portfolio Update 📊
Took a bit more profit on SOL and closed out of YFI. These are being split 50/50 into an allocation of PAXG & UST. The latter is because I want to keep dry powder in a decentralised stablecoin and if you saw my video on Terra, you will know why I am diversifying away from USDC.
When it comes to PAXG, this is because I want to diversify to a traditional risk hedge (gold). However, I would prefer to hold tokenised gold given how easy it is to get in and out of it.
In terms of other projects that are on my horizon, I am still considering more allocation to DOT & ATOM. I also have my eyes on ALGO and am currently doing a video on Algorand – so stay tuned for that.
As always, I will keep you updated in my official Telegram Channel.
ETH 25.76% | BTC 21.83% | SOL 14.91% | DOT 7.53% | PAXG 5.65% | UDSC 4.78% | ADA 4.53% | ATOM 4.29% | UST 2.90% | RUNE 2.23% | INJ 1.88% | LINK 1.20% | AR 1.18% | MATIC 1.12% | LIT 0.22%
📈 Thoughts on Market 📈
So far, September has been anything but uneventful. As volatile as the markets have been, there are still a few things that you need to have on your radar over the coming weeks.
First and foremost, regulators are continuing their crackdown on crypto, specifically stablecoins and crypto lending and borrowing. The FED and Treasury really don’t like dollars floating around that they can’t control.
Meanwhile, Wall Street doesn’t like the billions of dollars flooding into interest bearing stablecoins on platforms like Celcius and Coinbase, the former of which is now feeling the heat in 3 US states. As I mentioned a few weeks ago, this was likely to happen in the wake of the moves by these states to clamp down on BlockFi.
Whether we are likely to see a national move by the SEC on crypto lending and stablecoins depends on whether they are likely to get given any special powers in congress. Many in congress have already been working with the SEC to see what sort of powers they are able to give (see Gary’s testimony section below).
In terms of timeline, I don’t expect much to happen until they have voted on that infrastructure bill and it looks like the official date for that will be September the 27th.
Naturally, there are other concerning things for crypto popping up at the last minute, namely an additional anti-crypto provision in the infrastructure bill that was missed by crypto analysts. I mean, who can blame them? The damn thing is over 2700 pages long and written in legal speak!
But, in a nutshell, this oversight provision means US citizens will have to report any crypto transaction they received that’s worth more than $10 000. Obviously that’s a problem, because this involves collecting personal information on the sender, which is impossible with DeFi protocols.
As a cherry on top, we have this Evergrande situation happening in China. I’ve talked about it before and gave a summarised breakdown in this Telegram post. Apart from the risks around general global market contagion, there are also concerns about what impact it could have on the commercial paper market. As we know, stablecoin issuers like Tether hold almost half of all their assets in this commercial paper. I will be doing a complete video on it so be sure to keep those eyes peeled.
It’s not all doom and gloom though. There are a number of positive developments within the crypto space.
Institutions are still looking to increase their exposure to the crypto space. We have recently had the news that Fidelity held a private meeting with the SEC where they were pushing the case for their Bitcoin ETF. This is important because Fidelity is one of the largest asset managers in the world and perhaps the most well known applicant for an ETF.
Surprisingly enough, Fidelity believes that Bitcoin belongs in the same safe haven category as precious metals and bonds. The global asset manager has also been making numerous positive overtures towards Bitcoin, some of which I covered in my video on Fidelity’s recent research report.
Over in the altcoin space, we have the news that Avalanche has just raised over $230m to jumpstart its Defi ecosystem. This now places the project on par with Solana when it comes to firepower. They both have unique tech stacks and it will be interesting to see their ecosystems evolve in the coming months.
So, despite all the Global Macro risks and regulatory headaches, the crypto ecosystem is still growing and it’s the latter that I am focused on in the long term. It’s important to be optimistic about the future without being blinded to certain risks.
🇺🇸 Gary’s Testimony 🇺🇸
Quite recently, I did a video that tried to break down the SECs thinking about cryptocurrency. Well, this week we had a pretty comprehensive look into the lens with which the Chairman views the financial and crypto markets. This was at a hearing before the senate banking committee.
There was quite a lot of ground covered but there were a few things that stuck out for me…
Firstly, there is the view that Gary holds that “dozens of assets” that are trading on Coinbase are unregistered securities. While this was no doubt a dig at Coinbase (given their legal spat), it raised a lot of questions in my mind as to which assets they could be referring to. There is no shortage of candidates who meet the rough definition of the Howey Test.
Secondly, Gensler is of the view that cryptocurrency is just for speculation and he dismissed the idea that it could be a path to financial freedom. This is a view that was also shared by Elizabeth Warren which pointed to the crypto crash last week as evidence of retail investor risks.To me it seemed as if Warren sees Gensler as an ally at the SEC – one who can do the bidding of the (anti)progressive caucus.
Thirdly, it’s the fact that although these agencies and politicians want to regulate defi, they don’t seem to have a strong grasp of it. For example, Warren said that “the fee to swap between two tokens on the Ethereum network last Tuesday was more than $500.”
On top of that number sounding highly inflated, we all know that gas fees are driven by market factors. They are protocol defined and are designed to adjust based on competition for block inclusion. Warren seems to think that the Ethereum blockchain is ripping off users on their fees.
As shocking as this is, it was Gary’s response to her question about gas fees which is most frustrating. He claimed that the fees on the decentralised exchanges were “whatever the exchange outlined in their user agreement”. I could give him the benefit of the doubt and say perhaps he misspoke, but it’s clear that the regulators are not fully in tune with what makes Defi tick.
It wasn’t all that bad though. There were numerous Republican senators who wanted to stand up for the crypto sector. These included the likes of Pat Toomey who thought that the SEC’s “regulation by enforcement” was wrongheaded. I also found this question by John Kennedy about whether Gary views himself as the “Daddy” of those that he regulates to be amusing.
Gary also seems to be actually taking action on other more hot button issues. For example, he mentioned that he wants to try and limit Payment for Order Flow activity and singled out specific hedge funds. If you don’t know what this is, I covered it in my video about Robinhood and it’s one of the biggest sticking points in the battle between retail & wall street.
There was a lot more that happened in this hearing and it was a full two hours long. I will be doing a video summary on it as well as its implications in the coming week – so watch out for that.
❌ Crypto Market Manipulation ❌
One of the biggest misconceptions that I have seen out there is that because crypto is the “Wild West” of financial markets, the same laws that apply to the traditional financial market can’t be applied to crypto. As I mentioned above, the regulators are becoming increasingly active in their enforcement and they are keen to apply their interpretations of securities law to crypto.
For example, cases around crypto market manipulation and insider trading could one day be pursued by the SEC or CFTC. Just this week, the CFTC has been looking into insider trading in the crypto derivatives market around exchange listings.
We also had the case this week of the Open Sea head of product buying collections before they were showcased on the website. This meant that they were trading on inside information. In this case, the company asked for his resignation which seems like the correct course of action. However, I wouldn’t be surprised if somewhere down the line the SEC opens a case.
So, why am I telling you guys this?
Well, I think it’s important to point out that you should completely avoid any sort of “insider groups” or pump and dump channels. Any sort of activity that could be seen as market manipulation or trading on material non-public information should be avoided.
Apart from being ethically wrong, it could one day come back to bite. It may seem relatively innocent at first but every action on the blockchain can be tracked and is permanent. If the regulators don’t have the resources to pursue wrongdoing now, they may in the future. And, there is nothing stopping them investigating market abuse 2-3 years from now.
Irrespective of whether there is a risk from the regulators, it’s important that we as a community root out these practices. That way those same regulators and politicians can’t use nefarious crypto activity as a reason to craft overburdensome regulations.
🔥 Deals of The Week 🔥
Top Rebalancing Tool: Are you a crypto hodler? If so, you would no doubt have come across those situations in which your portfolio percentage balances go out of whack. Therefore, you are going to want to regularly rebalance those portfolio weights.
Here’s the problem though; in order to do that, you’ll need to get your calculator out, transfer coins to an exchange and send that crypto back to your wallet. Even worse, you might be doing that every week given how volatile the crypto markets can be.
What’s the answer? The easy way to do all that is by using a top-notch crypto rebalancing tool like Shrimpy! This tool allows you to automate all that and offers a plethora of other features like copy trading and much, much more.
Also, I’ve been able to get you an exclusive 30% discount on all Shrimpy subscriptions too! So, if you like saving time and saving money then this is probably a deal that you’ll want to look at!
👉 Sign Up To Shimpy & Get 30% OFF!
📈 Crazy Crypto Exchange Deal! Now, one of the most common questions I am asked is: what is the best crypto exchange? The truth is that it all depends on your circumstances and what you want from an exchange. However, most people out there want to pay low fees, at a widely used exchange, which has a huge selection of altcoins.
One option that ticks all those boxes is Kucoin and I have been using the exchange personally in order to pick up some of the more exotic altcoins.
For those that have followed the channel, you will have seen that I was able to secure a VIP level 3 upgrade at Kucoin for all viewers of the channel. However, that offering period lapsed a few months ago. It was taken down to level 2 which had a 44% trading fee discount.
While this was still better than all other deals out there, I was not satisfied. So, I’ve driven a hard bargain over there and I am pleased to say that all NEW Kucoin users that sign up through the Bureau, will get a VIP level 3 upgrade.
To get that normally, you’d need to buy and hold 20,000 KCS tokens. At the current market price, that would set you back a pretty mind boggling $235k.
But, if you sign up under the Coin Bureau, you are eligible for that VIP level 3 tier. The main benefit with this is that you get a trading fee discount of up to 60%!
👉 Sign Up To Kucoin & Get Up To 60% OFF trading fees!
Want to learn more about Kucoin to see if it’s the right exchange for you? Well, I’ve already done a deep-dive covering the in’s and out’s of this exchange. You can watch that ultimate guide to Kucoin here!
🗞️ Crypto News Focus 🗞️
– Crazy Crypto News – The US Homeland Security signs a $1.36M contract with Coinbase!
– Elizabeth Warren – She’s now super concerned with high Ethereum fees and says fees & exchange outages could wipe out small investors. Probably best if she moves onto topics she actually understands
– Binance hires a Europol Investigator – Binance is bringing in the big guns to track down elicit activity on the platform
🔮 Video Pipeline 🔮
- On Chain Analysis 101: What it is & How to use it?
- Ultimate Gemini Review: Best US Exchange?
- Algorand Update: Is there still potential?
- SEC and cryptocurrency: My thoughts on Gary Gensler’s bombshells!
- How to spot a crypto before it pumps?
- Could Evergrande Tank the Crypto Markets?
🏆 What’s New At CoinBureau.com This Week? 🏆
✅ How And Where To Buy OMI: Be Ready for the PUMP!!
✅ Top 10 Crypto Research Tools: Finding The Next 100x Altcoin
✅ Top Play to Earn Blockchain Games with Serious Earning Potential!
✅ Nicehash Review: The Mining Power Marketplace
Now, that’s about all I have time for this week. However, I do want to thank you for continuing to support the Bureau. What I am particularly excited about is that Team Coin Bureau is growing and I am working with some tremendously passionate and smart people.
My vision here is that those extra hands on deck will help us serve the crypto community even better, through creating top-notch crypto content.
Anyhow, I hope you like my latest video and hope you have a great weekend.
Guy your crypto guy