This Could Cause The Crypto Market Reversal!

It’s been a tough year for us crypto investors. Hodling is easier said than done when each new crypto company collapse brings about fresh lows.

However, there could be some hopium on the horizon.

Next year, a number of crypto market catalysts could cause prices to start to recover. These range from the potential legalisation of crypto in certain jurisdictions to more dovish moves by central bankers.

Today, I will be taking you through 10 of the top catalysts that you need to watch out for next year. I will explain why they are bullish, as well as examine the likelihood of them occurring.

You can watch that video here

📊 My Personal Portfolio 📊

USDC 39.84% | ETH 26.61% | BTC 25.18% | ATOM 4.03% | DOT 1.68% | RUNE 1.32% | MATIC 1.30%

📈 Guy’s Forward Guidance 📈

In just a few days’ time, it will be 1 month since FTX and Alameda Research collapsed. I suppose time flies when there's a lot of FUD flying around and there is in fact no shortage of it. This has left many traders on edge, extremely distrustful of nearly all centralised exchanges. All eyes seem to be on KuCoin, as of late. That’s because the exchange has been offering suspiciously high yields on Bitcoin, Ethereum, and USDT.

This has led to speculation that KuCoin is trying to attract user funds to plug a hole, but so far everything seems to be fine. Meanwhile, Binance temporarily paused withdrawals on Friday following a hack of Ankr (not to be confused with Terra’s Anchor Protocol). I’m sure the withdrawal pause spooked lots of crypto holders, given that not everyone is convinced that all exchanges are solvent, even with proof of reserves.

Because governments love protecting retail investors so much, some have started to announce that they will be introducing special taxes on cryptocurrency gains. The EU is expected to publish a crypto tax proposal this Wednesday. For context, many countries in the EU currently have very low taxes on crypto gains. In Germany for example, crypto gains that are held for more than one year are not taxed at all.

Although details about the EU’s upcoming crypto tax proposal are yet to be published, I suspect they won’t be far off from the 26% tax on crypto gains currently being discussed in Italy. That’s especially because Portugal, formerly a crypto tax haven, recently announced it would be introducing a 28% tax on such gains. (Un)fortunately for crypto holders, there probably won’t be very many gains to declare this year.

While crypto taxes aren’t necessarily a form of regulation, this sudden interest in taxing crypto seems to have its roots in all the scrutiny around FTX and Alameda. The anti-crypto regulation rhetoric really seems to be ramping up in the United States, with the chair of the CFTC going as far as calling crypto a threat to national security. This is a noticeable change in tone from just a few weeks ago, which suggests that some serious regulation is coming.

It’s not just the government that’s been scrutinising crypto either. Some of you may have seen the news that Apple forced the Coinbase Wallet to stop allowing the transfers of NFTs. This is because Apple demands a 30% cut of all NFT transactions from the apps it supports. I expect to see more moves like these in the coming weeks. A timeless classic is search engines and social media platforms suppressing crypto results and stopping crypto ads.

The last thing I want to touch on is a little further out, and that’s the upcoming payout of over 140 thousand BTC to creditors of the Mt. Gox cryptocurrency exchange, which went down in 2014. (In)famous Mt. Gox CEO Mark Karpeles actually appeared on the UpOnly podcast last week to discuss this, as well as the FTX-Alameda situation. He said payments to Mt. Gox creditors should start in late January or early February. Expect to see some sell pressure…

🇺🇸 The Old Guard vs. The New Blood 🇺🇸

Lately I’ve seen a lot of chatter on Twitter about a war in crypto. Not a war on crypto, a war in crypto. As with most wars, there are two factions fighting. I’ll refer to the first faction as the ‘Old Guard’. This includes crypto exchanges like Binance, crypto companies like Blockstream, and crypto projects like Tether. The ‘New Blood’ includes crypto exchanges like Coinbase, crypto companies like Digital Currency Group, and crypto projects like Circle.

As far as I can tell, most members of the Old Guard put crypto philosophy above cash profits. Take Binance for example. If you watched our video about BNB, you’ll know that Binance got all of its initial funding from an ICO, and has not received any VC money. Because Binance has no strings attached, the exchange is free to do whatever it wants. Luckily, Binance CEO Changpeng Zhao is pro-crypto, and the exchange's actions arguably reflect his ethos.

By contrast, most members of the New Blood put cash profits above crypto philosophy. An easy example is any premined cryptocurrency that has been heavily backed by Wall Street investors. Some of these crypto projects have used on-chain censorship. Most of these crypto projects claim to be decentralised, but aren’t. All of these crypto projects have seen their earliest investors make unbelievable profits at the expense of the crypto community.

The war between these two factions has likely been raging for years, but it seems to have escalated over the last few months. The most visible battleground has been the blatant competition between stablecoin issuers. This is to be expected, given that most stablecoins are backed by US government debt and interest rates have been rising for the first time in years. This gives incredible power to stablecoin issuers, particularly in a crypto bear market.

From where I’m standing, the reason why everyone has been talking so much about this war in crypto over the last couple of weeks is of course because of FTX. If Sam Bankman-Fried’s opinions on crypto regulation didn’t make it clear enough, he was part of the New Blood. He wanted to see crypto integrate with the existing financial system. This is something that CZ is not a fan of, and it’s something he pushed back on, so to speak.

Assuming my framing of these two factions is correct, then it begs the question of how and when the New Blood will retaliate to what was ultimately an offensive by the Old Guard. An easy target seems to be Tether, especially since Binance said it may do away with USDT the same way it did with USDC. (Hey, these alliances aren’t always cosy.) In case you didn’t notice, Tether’s downfall would benefit both Binance/Paxos’ BUSD and Coinbase/Circle’s USDC… at the expense of everyone else.

Alternatively, the New Blood could target the Old Guard through regulations. This would be the less destructive path for everyone involved and it would kill two birds with one stone, as the New Blood is working hard to influence regulation in the US and EU. At the same time though, the Old Guard has made significant gains in almost every other country. This is simply because these other countries are sick of the status quo the New Blood represents.

Whatever the case, it’s clear that this crypto war is escalating, and there will be more casualties before it’s over. Your only protection from being collateral damage is to self custody your crypto. Do it ASAP.

👁 On-chain Identity 👁

At the recent 2022 Web Summit, Cardano founder Charles Hoskinson stressed the importance of decentralised identity products - specifically ones that facilitate allowing regulated entities such as crypto exchanges to verify ownership of self-custody wallets.

Now, I can already picture some of our more privacy-valuing audience shuddering in disbelief at the mere suggestion of such a feature. I did too… until I dug deeper to understand why it was important and what it really meant.

Allow me to explain.

In an ideal world, every crypto user lives and breathes Satoshi’s vision of a decentralised monetary system. One which provides users with an alternative financial asset, a corresponding decentralised financial ecosystem, and a hedge against centralised monetary systems that are often controlled by a small group of rich and powerful individuals.

Realistically, however, most users are only able to access this decentralised monetary system through centralised crypto exchanges that are regulated by different countries. While most countries have traditionally maintained a somewhat neutral position on cryptocurrencies, recent events, such as the fall of FTX and the rampant increase in DeFi hacks, have pushed them to proactively define their positions.

In addition to realising the need to adopt on-chain investigative tools, many countries and regulatory bodies have introduced regulations for virtual assets. These include the licensing of virtual asset service providers, as well as the imposition of transactional limits and disclosures for citizens and residents that are using said virtual assets.

Notably, Hoskinson points to the adoption of the Financial Action Task Force’s “Travel Rule” by countries around the world as one that could be a cause of concern for the decentralised finance ecosystem. Specifically, the travel rule requires regulated entities to “hold, and transmit required originator and beneficiary information immediately” for transactions over a certain threshold.

And, let me tell you, this is definitely a valid concern.

Just recently, Switzerland announced that it was implementing a similar rule for its citizens. Now, considering the difficulty in sourcing and verifying the identity information of self-custodial wallets, centralised crypto exchanges could be left with no choice but to restrict the movement of your crypto off their exchanges.

And if the recent FTX collapse hasn’t already made it clear, self-custody of your crypto assets should be a fundamental practice when you’re intending to be a part of the decentralised financial system. This is why, as Hoskinson states, decentralised identity protocols are crucial for ensuring your access to self-custodial wallets, especially in the face of increasing regulation. Integration of decentralised identity protocols with centralised exchanges will allow users to securely and seamlessly verify the identity of self-custodial wallets.

However, that isn’t all. Decentralised identity or on-chain KYC also has other merits, including providing access to features such as decentralised credit scores, effective on-chain governance, interoperable social media data, issuance of government documents and more.

While decentralised identity might be a relatively nascent concept, it is definitely something more developers will be paying closer attention to in the coming months.

🔥 Deal of The Week 🔥

This Bear market is no doubt a testing time for everyone. That’s why it’s even more important to make sure that you are getting the best bang for your sats!

At the Coin Bureau, we have negotiated some of the best deals and promos that we can get for you guys. That includes exclusive discounts for hardware wallets, trading software, trading fee discounts at exchanges and much more!

So, be sure to visit the Coin Bureau deal page to get yourself a better deal and ultimately save yourself a stack of Satoshi’s.

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🔮 Video Pipeline 🔮

  • Best Mobile Crypto Wallets: My Top 5 Picks
  • Harvard study: Central banks should buy BTC
  • SBF DealBook Interview: What he said…
  • Jerome Powell’s speech: Bullish for crypto?
  • Digital ID: Everything you need to know!

🏆 What's New At This Week? 🏆

Coinbase vs Kucoin Review 2022: Which is the Better Choice?

KuCoin vs OKX 2022: Which Exchange is BEST?

OKX Earn Program: Solid APYs, but What about the Risks?

That’s all for this week.

I want to once more thank every single one of you for your support during these market conditions! Every video you watch, comment you make and like you give is deeply appreciated.

Guy your crypto guy

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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