About 2 weeks ago, we saw the highest CPI inflation print in 40 years. It was coming in hot at over 6.8%.
However, do you really believe that? Do you really believe it’s “only” up 6.8% at a time when home prices are up 15%, gas is up 61% and beef is up 20%?
Do you really trust that the statisticians and data scientists in the government are calculating your cost of living correctly when you see prices up way more than the “official” figures?
If you are skeptical, then you have a right to be…
The reality is that the CPI inflation rate that so many people place importance on, could be severely undercounting the actual inflation rate. Some estimates have it undershooting the mark by as much as 10% or more.
It’s actually one of the biggest financial ruses hidden in plain sight. And in my video today, I am going to show you exactly why. From methods of determining the “average” consumer basket, to the way in which they adjust averages, from assumptions around substitution to methods of collection. It’s flawed to the core (no pun intended).
You can watch that video here
📊 Portfolio Update 📊
Still no changes to the portfolio this week. I have, however, moved over a bunch of stablecoin that I had been lending out back into my main portfolio (UST & USDC). This will remain as dry powder should the best entry opportunities come my way.
When it comes to assets that are on my radar, I am particularly interested in Land tokens & virtual real estate. I talked more about this in a recent video of mine. This is mainly because of the utility that could come from building a potential Coin Bureau University in the Metaverse for example. Perhaps a project for 2022 😉
For now though, the portfolio is:
ETH 30.95% | BTC 21.65% | SOL 13.36% | DOT 8.77% | ATOM 4.01% | HNT 2.85% | PAXG 2.80% | FTM 2.64% | UST 1.99% | RUNE 1.92% | ADA 1.92% | MATIC 1.80% | USDC 1.68% | INJ 1.37% | AR 1.27% | LINK 0.82% | XDEFI 0.21%
📈 Thoughts on Market 📈
It’s been another tough week in the crypto market, and that’s for one reason: macro economics, AKA big picture stuff. Before I break down each factor affecting the crypto market, here’s a quick pro tip for you: if you see that the stock market is crashing too, it’s safe to assume that whatever is causing the crypto crash is not specific to crypto.
The first macro factor at play last week was the Federal Reserve’s decision to reduce its money printing because of all the inflation it’s been causing. Originally, the Federal Reserve was going to do this over an 8 month period, but following record inflation numbers for November they will be doing it over a four month period, with the first interest rate increase scheduled for 2022.
As I’ve mentioned many times before, reducing asset purchases will increase interest rates which will have big ripple effects throughout the economy. What’s interesting is that both the crypto market and the stock market rallied after the announcement, suggesting it was already priced in. I will be doing a video on the impact of rate hikes next year so keep your eyes peeled for that.
The second macro factor at play seems to be the delay of the 3 trillion dollar Build Back Better bill which was expected to be passed by the end of the year. It’s now looking like it won’t be passed until early next year. What’s interesting is that this seems to be the announcement that caused the crypto market and the stock market to dip again late last week.
This makes a lot of sense because even though that 3 trillion dollars is supposed to be spent on “human infrastructure”, I reckon a decent chunk of this de facto stimulus will somehow end up on Wall Street. Even just a small portion of that massive money pile would probably be enough to prop up the markets in the absence of the Federal Reserve’s constant asset purchases.
One of the only crypto specific factors that I could find for the dip we saw late last week was the SEC’s decision to delay two spot Bitcoin ETF applications, including one by Grayscale. The decision dates have been pushed back to February next year, so mark your calendars. If you’re wondering why a spot Bitcoin ETF is so important, you need to watch this video ASAP.
Another crypto specific factor that could be playing a role is Huobi, one of the most popular cryptocurrency exchanges among Chinese crypto investors. Huobi announced in September that it will stop onboarding new Chinese users and boot existing users off the platform by December 31st. As that date approaches, it’s possible that some investors are cashing out, crashing prices. I’ll be doing a deeper dive into what comes next for the crypto market in tomorrow’s weekly crypto review, so keep your eyes peeled. Spoiler: it’s looking pretty damn good 😉
🧃 Juicy Survey 🧃
This week I finally managed to finish reading that Messari crypto forecast report (video dropping in the next few days). It was super insightful and that’s because I am keen to see what some of the biggest crypto companies have to say about the crypto market next year. The latest predictions I managed to pull up come from the one and only Andreesen Horowitz AKA a16z which is basically the largest VC in crypto.
A16z’s 2022 crypto predictions are based on a survey of over 2,200 voters in the United states, and it concerns crypto politics. It starts off by saying that 20% of Americans hold cryptocurrency, and nearly 80% of voters would vote for a pro crypto politician over an anti-crypto politician. I guess Elizabeth Warren will be losing her podium soon enough then, and good riddance!
Anyways, the key takeaways from a16z’s survey are that basically everyone, regardless of their age, race, gender, or political affiliation, is pro crypto, so much so that 22% said that crypto attitudes of their constituents will play a “significant role” in how they vote during the 2022 midterm elections.
Moreover, 80% of Americans have a favourable view of cryptocurrency. This is because they see the value in controlling their own data, preserving privacy, protecting against totalitarian governments, and self custody / control of their own assets. Not surprisingly then, 70% believe that the US government should understand crypto before it starts to regulate it.
The statistic that stuck out to me the most was that almost three quarters of those surveyed said they had done their research before buying. I’m a bit skeptical of this because there are lots of surveys which suggest the exact opposite. That said, the Coin Bureau has grown exponentially over the last year, and I reckon that’s going to result in some fairly educated folks!
If you’re wondering where the prediction is in all of this, it’s basically that pro-crypto politicians will be the ones who win in next year’s US elections. There seem to be a lot of them on both sides of the aisle these days, but I can’t help but notice that Democrats seem to have a deeper desire for control when it comes to crypto regulations. Watch this video and let me know what you think.
In any case, it’s clear that we’re going to see some reasonable crypto regulations come around. Let’s just hope that it’s not too late by the time they do…
🖼 Institutional NFT Frenzy 🖼
On Friday, I talked about the increasing institutional trend towards NFT assets. As I alluded to in my telegram post, one of the most interesting of these was the BitWise NFT Index Fund. This is a collective investment vehicle that holds NFTs from the 10 most valuable NFT collections and you can read more about the mechanics in this Tweet thread.
It’s a great concept that will allow institutions and “accredited” investors exposure to these collections in a diversified manner. Moreover, it takes away some of the risks that these guys would have to face should they buy and store NFTs individually.
This move by Bitwise is not the first. There are a number of other moves being made by institutions including:
- Arca: The asset manager, which has an AuM of $500m is launching a $30m fund focused on investing in NFT assets. They have already managed to raise $11.4m from 68 investors. It will invest in assets including in-game items, collectibles, art & virtual real estate.
- Osprey Funds: The Crypto investment firm is launching a new entity called “Osprey Alpha LLC” that will offer institutional investors exposure to NFTs. According to Osprey Funds CEO, they estimate that over time these funds could see hundreds of millions of dollars spread across them.
- Meta4 Capital: An NFT exclusive fund that is looking to raise $100m from a16z. They have already invested in a number of rare NFTs including punks & Apes.
- Defiance ETFs: A new fund to track the performance of NFT assets and infrastructure providers.
There are of course many others that I have not mentioned here. The point is that in 2022, I think there will be a flood of capital into this space.
This is actually a really bullish sign for NFT assets in my opinion – even more so than when they first started moving into cryptocurrencies in 2019 / 2020.
This is because of the fact that NFTs cannot be denominated the same way that fungible tokens can. It’s a lot harder to fractionalise these assets. This is especially the case with the PFP NFTs. Yes, there are platforms that are looking to tokenise NFTs but that would produce tricky questions around securities. In fact, SEC commissioner, Hector Peirce, has even said that fractionalised NFTs could be considered securities.
The only other options are these collective vehicles like Bitwise that will allow accredited investors to buy a stake in a fund that holds these assets. However, it still doesn’t change the fact that these NFTs cannot be split among funds like you can easily do with fungible crypto.
So, this inherent quality of a NFT means that the pressures of growing demand and a limited supply is likely to have that much more of an impact on the price. This is especially the case for those NFT collections in the “blue chip” bucket.
As we roll into 2022, I will be looking to make more investments in the space and will of course keep you guys constantly updated with these moves.
🔥 Deals of The Week 🔥
🦾 Automate Your Portfolio Management: If you have been in crypto for a while, then you’ll know how time consuming it can be to manually dollar cost average every month. Or rebalancing that portfolio so you don’t become overweight in particular cryptocurrencies.
Sure, you can do that manually. But most people I know just don’t have the time to check, reculalate and buy / sell every single day. This can then lead to over / underweight portfolios that are skewed one way or another.
The good news is that you can automate all that with a tool like Shrimpy! In addition, Shrimpy offers spot trading, portfolio tracking, trading strategy automation and smart terminal trading too.
Even better for those that want to manage their portfolio in a smart way, I have been able to secure a deal that gives you an exclusive 30% OFF! Just sign up via my link and you’ll get that deal.
👉 Sign up to Shrimpy & Get 30% OFF!
🎅 Last Minute Stocking Fillers: The most wonderful time of the year is coming up and I am sure that most of you will looking forward to spending time with your families. But if you are like me, then you might struggle for gift ideas and are keen to spread the word about crypto.
Orders placed at my store go towards supporting the channel and keeping the elves working at the Coin Bureau workshop over the festive season. So, thank you to everyone that chooses to support our mission to bring you guys the best crypto content we can 🙏
My top crypto gift choices:
- Ho Ho HODL T-shirt – $30
- HODL Candy Cane T-shirt – $30
- Bitcoin Sweatshirt – $65
- Love Gains Gym Vest – $25
- Bitcoin Roller Hoodie – $65
🔮 Video Pipeline 🔮
- Messari crypto report: The Complete Overview
- Biggest Ponzi Scheme Ever!
- Stellar XLM update: Still out of this world?
- Crypto tracking companies: What you need to know!
- Coin Bureau portfolio update: Our moves!
- Fed Taper: What it Means For Crypto!
🏆 What’s New At CoinBureau.com This Week? 🏆
✅ Karura: THE all-in-one DeFi hub of Kusama
✅ FTX US Review: Crypto Trading for US Investors
That’s about all I have time for this newsletter. Everyone at the Coin Bureau wanted to take this opportunity to wish you all a very merry Christmas!
Also, if you want to tune into my Christmas message then be sure to follow me on my socials! I’ll release that at a mystery time on Xmas day ☃️
Thanks again for all your support.
Guy your crypto guy