MAJR News 040
Bitcoin and Ether price confirm positive bullish trend, $30 million of ETH was burned in the first 2 days following Ethereum upgrade EIP-1559, Crypto infrastructure debate reaches possible compromise
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The Investor Podcast Network - Macro investment strategist, Luke Gromen breaks down the factors driving the Fed, reverse repo and the fiscal stimulus - Sovereign debt bubble bursting and 75 million baby boomers retiring.
What Bitcoin Did - Bitcoin on-chain analysts Will Clemente and Dylan LeClair break down the Bitcoin supply crunch and new bull market ramping up.
TOP STORIES
BITCOINBitcoin Holds Support; Next Resistance at $50K
Technical analysis: Bitcoin holds support at $40k and has cleared the important 100-day moving average confirming it’s new uptrend. The relative strength index (RSI) is signaling overbought on the daily charts at 72, however weekly charts the RSI if rising, but is more neutral at 57. Next resistance is at $50k and at the time of writing bitcoin breached $46k, which is the first time since the May crash. The price action over the last two weeks confirms the bitcoin supply short squeeze as billion of dollars in coins were leaving exchanges and going into cold storage causing a supply shock with a thin liquid float available for traders and new buyers.
Bitcoin, Ether Hit Highest Since Mid-May as Sentiment Warms
Bitcoin and Ether are showing signs of life again after making it through the Elon Musk, ESG Bitcoin mining and China crackdown drama. Bitcoin is approaching it’s 50-day moving average which it hasn’t touched since May 26 and ether is over $3k and has once again outperformed its Bitcoin, seeing a fresh surge after it’s recent protocol upgrade, EIP-1559.
CRYPTOAxie Infinity Becomes Ethereum's First NFT Game to Hit $1 Billion in Sales
Axie Infinity, the number play to earn blockchain game running on top of the Ethereum blockchain has crossed over $1 billion in sales. The game uses non-fungible tokens to represent unique digital creators with attributes can used to bread new digital creators or used to battle other digital creators. The more than 1 million daily active users are paid to play the game via it’s in-game currency Smooth Love Potion (SLP) and players are also able to vote on the future of the game using it’s governance token (AXS). Players can also buy digital plots of land, which have been selling for more than $10k.
$30 Million in Ethereum Burned Just Two Days After EIP-1559 Launch
Last week, Ethereum underwent a historical hard fork that changed the blockchain’s monetary policy with regard to it’s native token ether (ETH). The upgrade was Ethereum Improvement Proposal - 1559 (EIP-1559) that burns a portion ether that would otherwise go towards miners for processing transactions. Ethereum is moving away from mining as it transitions to Proof of Stake (POS) and this just one of the many steps needed to fully upgrade to Eth2.0 staking. In the first two days post EIP-1559 upgrade over $30 million ether was burned. When you burn tokens, it means the tokens have been removed from the circulating supply which ultimately makes the tokens more scarce and putting upward pressure on price. Since then Ethereum price has climbed almost 23% and at the time of writing ETH is $3,160.
Circle to Become Full-Reserve Bank Amid Stablecoin Scrutiny
Circle, the company that runs the rapidly growing stablecoin USDC is setting sights on becoming a fully regulated and full-reserve bank which would fall under the Federal Reserve system. Stablecoins have exploded in recent years as adoption has climbed and stablecoins allow for traders to move in and out of crypto positions without going back into fiat. CEO, Jeremy Allaire stated in a blog post that the move to federally regulated bank would bring more transparency into its operations and the funds backing the reserve. He also stated that while there’s $27.5 billion USDC in circulation, he believes there will be hundreds of billions in circulation in the next five years. Their reserve ratio is backed with corporate bonds, commercial paper, and the majority is in dollars. Circle, makes a revenue from the dollars earning interest in their account. Blockchain infrastructure provider Paxos and crypto custody provider Anchorage already operate as federal banks.
MACROPrice of Gold Crashes 6% in Two Hours
The price of gold crashed from $1,800 to $1,690 per ounce on Sunday. It’s lowest since March. This is in contrast to the price of bitcoin which has increased by 3% in the last 24 hrs and is about $46k confirming a new uptrend gaining momentum. The sudden drop could be due to a large liquidation against leveraged traders, investors who borrow money going long gold who ended up getting margin called and liquidated as the market moved against them. Bitcoin’s narrative as digital gold could be starting to sink in with more investors as understand the technology and upside potential.
Senate Reaches Last-Minute Deal on Crypto But Hurdles Remain
Crypto regulation has been on the center stage from Thursday through Monday as Senators wrestle and fight over controversial crypto currency clause in the $1.1 trillion infrastructure bill. The main issue was around the broad and overreaching language defining a “broker” and the reporting requirements they would need to produce for tax purposes. The White House supported definition of a broker would include miners, node validators, developers and wallet providers. If passed, most of the crypto community and industry would be hampered due to the inability to produce this type of reporting given that non-custodial wallets and decentralized technology doesn’t allow for KYC. It would be impossible and ultimately pushing innovation into the shadows or offshore hurting US financial innovation. However, there seems to be light at the end of the tunnel as a possible compromise and change in language is now on the table for a vote.
Treasury Starts Additional Steps to Avoid Debt-Limit Breach
US the debt ceiling was reinstated on Sunday after its two-year suspension during Covid. Treasury Secretary, Janet Yellen is urging lawmakers to raise or suspend the debt ceiling again by October to avoid a default on the nations debt, currently sitting at $28.4 trillion or 136% of US GDP. Yellen is taking steps to avoid the fiscal cliff by pausing new investments in federal employee retirement and benefit plans. The debt ceiling which is a cap on how much the federal government can borrow was established in 1917 and has been raised a grand total of 78 times, mostly under modern republican and democrat presidents. The debt ceiling comes at a time when the democrats are proposing another $3.5-$5.5 trillion spending package on top of the $1.1 trillion infrastructure bill.
U.K. Says Business Closures Surged 43% in Second Quarter
The UK reported a 43% increase in the number of businesses that had to close in the second quarter. The office of National Statistics counted more than 105k business that are no longer registered businesses. The surge is due to the difficulties companies had filing for insolvency during the pandemic.
MEDIAOnline Learning Economics w/ Luke Gromen (TIP367)
Bitcoin On-chain & Macro Analysis with Will Clemente & Dylan LeClair
Bitcoin and crypto adoption is here to stay. Don’t let your friends and family miss the opportunity of a lifetime.
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