As we all know, I am a fan of institutional investment reports. Hey, each to their own. And, a few days ago, I came across one of the most comprehensive and insightful reports so far this year.
This was a recent report by Ark Invest which went through some of their biggest ideas for 2023. Everything from crypto to AI. Molecular diagnostics to space travel. It covered nearly every spectrum of the investing landscape.
The report was so comprehensive that it clocked in at 153 pages. Delicious.
Fear not though, I’ve read it so you don’t have to. Today, I will be taking you through some of the most important parts of the report and explaining exactly what they mean for the year ahead. I also have some thoughts on what this means for you and your portfolio.
You can watch that video here.
📊 My Personal Portfolio 📊
USDC 36.37% | BTC 28.67% | ETH 28.26% | ATOM 4.79% | DOT 1.90%
📈 Guy’s Forward Guidance 📈
coming in higher than expected. Crypto’s correlation with the stock market also seems to have declined in recent days. This tells me that the crypto-specific factors are in control, but the crypto factors are bearish too. The only thing keeping the crypto market afloat is peculiar inflows from institutional investors via USDC. The list of buyers includes Tron founder Justin Sun.The crypto markets seem to be ignoring the bearish macro factors, such as the CPI and PPI both
This makes me wonder whether institutional investors are trying to create some exit liquidity with the little retail speculation that’s left in the crypto market. The crypto fear and greed index has been flashing greed lately. The crypto headlines and the comments sections to our videos suggest the greed is there. Meanwhile, on-chain analysis shows BUSD being cashed out at an accelerated rate, and whales dumping alts.
Institutional investors creating last-minute exit liquidity would make sense given that the crypto industry is experiencing what some crypto policy experts are calling a ‘carpet bombing’. The scariest part is that so far this regulatory crackdown has been confined to the United States. This has led to speculation that other jurisdictions will follow suit, notably the UK. Unaccountable international organisations are also in the process of posting their crackdown recommendations.
Binance is at the centre of the storm in this regard. In case you missed the memo, Paxos was ordered to stop issuing BUSD (though it’s still possible to redeem and remains fully backed). Binance has since been looking for alternatives, and there’s speculation that the exchange might be using TUSD as an interim replacement, given that it is similarly trustworthy. If this is true, it will be interesting to see how US regulators react. More on that shitshow in a moment.
Another crazy Binance headline that came out was the news that Binance.US transferred 400 million dollars to a firm controlled by Binance CEO Changpeng Zhao. This is concerning because CZ had insisted last year that Binance.US was a fully independent entity. As such, the recent transfer could lead to more regulatory scrutiny of Binance.US. As for why the transfer was made at all, my guess is Binance’s plans to settle existing lawsuits with US regulators.
Make no mistake, Binance settling with US regulators would be extremely bullish, because it means that Binance would be safe from further US scrutiny (in theory). However, the problems seem to run deeper than they appear, because there are reports that Binance is looking to exit the US entirely, a claim that CZ has denied. Now consider a scenario where Binance continues to face scrutiny despite the settlements, and Tether’s USDT reserves in the US are seized.
This brings me to…
💵 The SEC’s Stablecoin Reasoning 💵
To recap, the Howey Test is used by the SEC to determine whether an asset is a security. An asset is a security if it meets the following four criteria: you buy it with money, the price of the asset is the same for everyone buying, you have an expectation of profit, and the expectation of profit is coming from an identifiable third party. Typically it’s the fourth criterion that determines whether a crypto is a security or not. When it comes to stablecoins however, it’s the expectation of profit.
For context, any asset that’s considered to be a security by the SEC must register with the regulator, or else face massive fines and of course delistings from any exchanges it exists on. It’s one thing if an altcoin like XRP gets delisted. It’s another thing entirely if a stablecoin like USDC gets delisted. Well, SEC chairman Gary Gensler has said some stablecoins are securities, even though there is no expectation of profit to be had from holding a stable asset.
Or is there?
You might have noticed that the SEC has finally sued Terra co-founder Do Kwon. The SEC is arguing that Terra’s various assets are securities, and this list includes the UST ‘stablecoin.’ Why? Well, the simple answer is that Do Kwon created an expectation of profit for UST by creating an ecosystem of dApps for it, such as the now infamous Anchor Protocol, which offered high yields. There are concerns that the SEC will use the same argument with other stablecoins.
This ties into the SEC’s upcoming lawsuit against Paxos. To recap, the SEC has issued Paxos a Wells Notice, meaning that Paxos has 30 days to tell the SEC why it shouldn’t be sued. Note that in 80% of cases where a Wells Notice is issued, the SEC has sued, regardless of the response. As with Do Kwon, the SEC is alleging that BUSD is a security. As was discussed in a recent episode of the On The Brink podcast, this could be to do with the BUSD that was wrapped on BSC.
This brings me to the third way the SEC might justify a crackdown on a stablecoin. As crypto policy analyst Adam Cochran explained in a Twitter thread, the fact that stablecoins are backed by securities (US government debt) means that they are securities by extension, even if there is no expectation of profit. Moreover, there’s an expectation that a stablecoin will maintain its peg despite its volatile backing because of the efforts of a third party, specifically stablecoin issuers.
To be clear, I don’t agree with the SEC’s reasoning here. But, the harsh reality is that the reasoning is logical, even though it’s not rational. That’s good enough for the SEC and the politicians who have been egging on the regulator to crack down on the crypto industry. As Nic Carter explained in his article about Operation Chokepoint 2.0, US regulators are explicitly targeting offshore exchanges with their crackdown. That means going after stablecoins.
And a crackdown on a major stablecoin will make the collapse of UST look like a cakewalk.
🤔 ReFi: DeFi For Good 🤔
painted with the darker tones of finance and society. With countless resources and bad actors often portraying the industry as a den of thieves and an enabler of crime, it can be hard sometimes to stay positive about the future and vision of web3.The world of cryptocurrencies is often
That’s why I figured it was time I covered one area of crypto that is undeniably impactful when it comes to leaving a sustainable and better future. I am, of course, referring to Regenerative Finance.
If this is the first time you’ve heard of Regenerative Finance (ReFi), think of it as the vegan cousin of DeFi.
While DeFi is focused on creating a more accessible and transparent financial system that operates independently of centralised institutions, ReFi is a values-driven branch of finance that seeks to prioritise the well-being of people and the planet over profit. In simpler words, it’s the practice of using money or aligning financial incentives to create a net positive effect on the environment and society.
This is usually achieved by investing in businesses and projects that have a positive impact on society and the environment. Say, for example, projects that focus on developing public goods, efforts towards afforestation and regenerative agriculture or offsetting carbon emissions.
green bonds, community investment funds and impact investing.Both DeFi and ReFi are relatively new branches of finance that have emerged as a response to the failures of traditional finance. However, unlike DeFi, ReFi is not uniquely native to the crypto industry. ReFi exists outside of the blockchain as well, typically in the form of
masked or unverifiable. You are all no doubt familiar with my numerous rants about BlackRock-led ESG mandates for example. This lack of transparency tends to impact the overall mission as entities are often sceptical of claims made by such projects.However, ReFi activities outside the blockchain ecosystem are typically managed by private entities whose results are typically
regenerative crypto economics. Essentially, ReFi projects can use tokens and the public nature of blockchains to guarantee transparency and incentivise the public to actively participate in ReFi activities.This is where Web3 and its promise of a transparent and secure financial layer are uniquely positioned to play a vital role in solving this problem. Gitcoin founder Kevin Owocki calls this nexus
This includes the creation of decentralised autonomous organisations (DAOs) to manage community-driven efforts towards creating and funding sustainable public goods and battling climate change, among others.
KlimaDAO (a climate action-focused DAO), Nori (a voluntary carbon offset marketplace on Polygon), Regen Network (a proof-of-stake blockchain that tracks ecological changes and enables trading of carbon credits), Celo (a layer-1 blockchain with partnerships focused on afforestation and regenerative agriculture), and Gitcoin (a crowd-funding platform for public goods projects).Some of the more notable and popular ReFi projects in Web3 include
I suspect the number of ReFi projects will only multiply in the coming months. This is partly due to the seemingly upbeat mood of the market and partly due to the survivors of this crypto winter realising the need for and importance of sustainable building in web3.
“We want this not because we want crypto to look good for the world, but because we want crypto to be good for the world.”
green pill, Neo.Time for you to choose the
🔥 Deal of The Week 🔥
With all this talk about crypto exchanges getting “debanked”, it’s great to know that there are still exchanges out there that offer a seamless and cost effective fiat-crypto conversion.
The easiest way we’ve found to do that (if you are living outside of the US) is the Swissborg app. Here you can deposit one of 16 fiat currencies and use those funds to buy major cryptocurrencies. Fiat currency support includes currencies like the Euro, Swiss Franc, British pound or Canadian Dollar and more exotic currencies like the Polish Zloty or the Romanian Leu.
On top of that, Swissborg is a great way to cashout that crypto to your bank account. Members of the Coin Bureau team have had withdrawals appear in their bank accounts in just minutes – so no hanging around for days for those funds to land.
Even better, if you deposit €50 or more, then you’ll get up to €100 FREE!
👉 Sign up to Swissborg & top up your portfolio the easy way!
🔮 Video Pipeline 🔮
- Top 5 Crypto Friendly Countries: Where should you go?
- The WEF’s Smart Cities: What you need to know!
- Crypto Crime Report 2023: Startling revelations…
- Crypto Crash Hearing: You’ll want to know this!
🏆 What’s New At CoinBureau.com This Week? 🏆Uphold Review 2023: Is It Safe To Trade On Uphold Exchange? ✅ Proof-of-Work vs Proof-of-Stake: Which is Best?✅
That’s all for this one! As always, the whole team at Coin Bureau would like to thank you for all your support! Without it we couldn’t pursue our passion for crypto content full-time 🙏
Guy your crypto guyDisclosure: 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.