These Things NEED to Happen For Crypto To Succeed!

The total market cap of crypto is a little over one trillion dollars and that should serve as a timely reminder of how early we are in the journey. That there is still a long, long way to go on the road towards crypto reaching its full potential is both reassuring and a little daunting. We are still only in the foothills.

There’s a lot that needs to happen before we can be in sight of the summit of Mount Crypto and it’s going to take a coordinated effort from a number of different groups of people. And yes, that includes you. So, boots on and listen up.
 In today’s video, we go over the main areas in which crypto needs to make progress before it can begin to rival other asset classes. Make no mistake, progress is already being made every single day - don’t let the current sideways price action and low market sentiment fool you into thinking otherwise. But, the harder we strive now, the faster we’ll reach our destination.  

You can watch that video here.

📈 Crypto Market Forecast 📈

There’s lots to look out for over the next few days. And, as you might have guessed, there will be no shortage of macro and crypto factors that could move the markets. For starters, we have the Fed’s interest rate decision this Wednesday. This decision will be significant, because it will include a Summary of Economic Projections (SEP). This will effectively inform the markets about how the Fed is likely to change interest rates over the next quarter. 

This ties into the next macro factor, and that’s rising long-term interest rates in the US. Rising long-term rates seem to be the reason why both stocks and crypto saw a slight dip on Friday. Believe it or not, the reason why long-term US interest rates went up seems to be because of the European Central Bank’s recent interest rate decision. Jessica will explain why in tomorrow’s weekly crypto review, so stay tuned for that. 

Another macro factor to watch relates to US politics. Congress is reportedly on the brink of a shutdown. That’s simply because US politicians can’t agree on government spending. As the term suggests, a shutdown involves a temporary discontinuation of non-essential government services until politicians can come to an agreement regarding spending. The effects a shutdown could have on crypto are admittedly unclear, but still something to watch. 

On the crypto side meanwhile, all three potential market-moving factors relate to regulatory scrutiny. The first factor is one that came out of left field, and that’s the CFTC’s sudden scrutiny of DeFi, particularly DEXes. The CFTC recently charged three DEXes for illegally offering derivatives trading, and has started to ramp up its anti-DeFi rhetoric. This is a bigger deal than you might think, because derivatives DEXes are some of the biggest DeFi protocols out there. The CFTC’s move could shake the whole niche. 

At the same time, the SEC has continued to target the crypto industry, namely the NFT niche. Some of you may have heard that the Stoner Cats NFT collection just got served. This could foreshadow enforcement actions against larger NFT collections. The worst part is that SEC chairman Gary Gensler has been completely unfazed by the unprecedented pushback: in a recent hearing he doubled down. We’ll be summarising that hearing later this week. 

From our perspective though, the most significant crypto factor to keep in mind this week is the continued regulatory scrutiny of Binance. Some of you may have seen that the Binance.US CEO recently resigned, along with other top executives. Now the SEC is claiming that the exchange isn’t cooperating with its ongoing investigation. Note that the SEC recently filed documents under seal, which some believe could be evidence of a criminal probe. 

Meanwhile, large crypto transaction trackers like Whale Alert have identified tens of millions of dollars of ETH being sent to exchanges. This presumably signals an intention to sell, and it would explain ETH’s continued weakness against BTC. When you combine this with the scrutiny of DeFi; the suggestion from Coinbase CEO Brian Armstrong to fight back, and concerning comments by Consensys CEO Joseph Lubin, it doesn’t paint a pretty picture. 

The silver lining is that BTC is up for the month. For context, September has historically been a very bad month for BTC. This could mean that BTC has broken the historical trend, or just that the shakeout has yet to occur. Given the factors noted above, it’s likely that the probability of outcomes is tilted towards the latter. Then again, all it would take for crypto to pump would be a bullish catalyst of some kind, and there are lots of those out there too. 

🤫  Privacy Pool Debate 🤫

This week, much attention was drawn to a recent paper co-authored by Ethereum founder Vitalik Buterin.

The paper, which focuses on a novel privacy-enhancing protocol called ‘Privacy Pools’, suggests a ‘practical equilibrium’ may be attainable for the co-existence of blockchain privacy and regulatory compliance.

This solution, if really ‘practical’, would be significant in filling the void left by the US government’s sanctioning of Tornado Cash – the largest on-chain privacy tool for crypto transactions on the Ethereum blockchain - last year.

To achieve this, the paper suggests a modification of the existing operational blueprint of crypto mixers. Specifically, in the context of the paper’s case study ‘Privacy Pools’, this modification comes in the form of something called “association sets.”

To explain it simply, we must first understand how existing crypto mixers work.

Currently, crypto mixers like Tornado Cash, anonymise user funds through the use of ‘universal anonymity sets’ - basically, all deposits are mixed together in one large pool indiscriminately. This obscures the origin of funds, but also contaminates the entire pool with the inclusion of illicit funds.

Privacy Pools’ ‘association sets’, on the other hand, are customisable anonymity sets in which whitelisted users can choose which sub-pool of deposits and withdrawals they want to mix with based on their preferences and needs.

For example, there can be an association set of “deposits from Australia”, or one of “deposits from Kraken”, or “deposits from non-OFAC sanctioned addresses”, etc. Through the inclusion of such association sets, the paper argues it would be possible for users to verify their ‘dissociation’ with illicit funds by generating a zero-knowledge proof that shows the withdrawals were made from a whitelisted association set.

In other words, an alibi to show that your funds weren’t hanging out with a bad crowd.

This is certainly an interesting concept, but I’m sure this has left you with questions on how this mechanism fares in different situations, say for example when the wallet address of an attacker is identified after they’ve deposited funds into the protocol.

Unsurprisingly, the authors of the paper have attempted to address as many of these situations as possible. If you’re feeling curious, we’d recommend you give the paper a thorough read yourself.

As such, the paper has already received appreciation from many key leaders in the crypto industry. Fred Ehrsam, the co-founder of Coinbase and Paradigm, called it the “most important tool we have to address regulatory challenges while maintaining privacy on public blockchains.” Ryan Selkis, the co-founder of Messari, described it as “News of the Year.” Dan Finlay, the co-founder of MetaMask, offered to help the paper’s authors receive grant funding from the MetaMask Grants DAO in exchange for a ‘snap’ extension of Privacy Pools for the browser wallet.

However, the paper also has its critics. Notably, Dan McArdle, Messari’s other co-founder, stated that Privacy Pools was only a near-term solution we could be “sorta-happy” about. Haseeb Qureshi, the managing partner at Dragonfly Capital, also expressed concern about the solution presented via Privacy Pools not being “enough to pass the bar established by the DOJ.” Zcash founder Zooko Wilcox stated that the protocol was an “attempt to comply with the principle of Guilty Until Proven Innocent.”

While arguments from both sides of the debate have their own merits, it’s undeniable that Privacy Pools do provide a necessary, albeit short-term, solution for privacy-conscious crypto users to exercise and defend their right to privacy on the blockchain.

💸  Coin Bureau Club 💸

Eagle-eyed Coin Bureau fans will have noted the recent release of our new subscription service, Coin Bureau Club. Whether this is the first you’ve heard of it, or you’d like to know more, here’s the skinny.

We made our name covering altcoins and we enjoy nothing more than diving deeper into a crypto project than anyone else is willing or able to go. The problem is, as we’ve grown, it’s become more and more problematic to do altcoin reviews through our YouTube channels. So, we decided to create an entirely new, standalone platform where we could once again provide this sort of coverage for our most dedicated fans.

Coin Bureau Club is that platform and it’s where we’ll be posting a brand new altcoin review every week. But, that’s not all. Subscribers can vote for which altcoin project they’d like us to cover the following week and they get access to our exclusive research feed. This is where Guy, Head of Research Dan, CEO Nic and other members of the Coin Bureau team share their thoughts and insights on the market, altcoins and much else besides. Think of a CBC subscription as a ticket into Coin Bureau’s inner sanctum. So far, we’ve covered XRP and Tron and polling for next week’s review is looking pretty tight…

We’re also going to be adding new features in the coming months. Early subscribers will not only get to have their say on what those features will be, they’ll also get membership at early bird rates that won’t be available for long.

Coin Bureau Club is the next stage in our evolution and we’d love to welcome you inside. Don’t worry, it won’t affect the content you know and love elsewhere, but it will enable us to bring you even more of what makes Coin Bureau so special. 

👉 Try out the Coin Bureau Club with a 30 DAY MONEY BACK GUARANTEE!

📊 Personal Portfolio 📊 

BTC 36.79% | ETH 29.87% | USDC 18.68% | USDT 7.47% | USD 3.77% | ATOM 2.36% | DOT 1.05%

🔮 Video Pipeline 🔮

  • The Bitcoin War: Has the takeover begun?
  • Gary Gensler's Crazy Hearing: What he said!
  • The Financial System Is Rigged: Here’s Why!
  • Congressional Insider Trading: How The Elite Do It!
  • Crypto Exchange News: The Good, Bad & Ugly

🏆 What's New at This Week? 🏆

TOKEN2049 - Sets Record With Over 10,000 Attendees

How Bitcoin has Evolved from Satoshi's Original Vision

8 Best Tron DApps 2023: Top Projects on TRX!

Best Ethereum Wallets: Top 10 Options for Secure ETH Storage!

SwissBorg Thematics Review: Invest in Crypto with Ease!

How and Where to Stake Ethereum

Cardano Use Cases: How ADA is Shaping the Future

dappOS: The Intent-Centric Operating Protocol

📖 Quote of the Week 📖

While it’s often easy to rely on crypto friends and influencers for “hot crypto picks”, nothing compares to Doing Your Own Research (DYOR). The skills you learn from researching different projects will provide the best long-term returns. 

“Know what you own and why you own it” - Peter Lynch

Team Coin Bureau

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 Turner

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.

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