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We’re In For a Wild Ride

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DDI Crypto Newsletter | Week of August 26 | With Alpha Trades

We’re In For a Wild Ride

It’s a prolonged Alt Season, as in everyone’s looking for an alternative to Dollars and stonks. Banks, governments, and friends are talking about crypto-assets and DeFi. Portnoy got rekked, but will he save Bitcoin from this pullback? Oof, spoke too soon.

The thing is, “down” may be canceled for stonks tomorrow, when Powell lifts the ceiling on inflation. The Fed isn’t even thinking of thinking about “down.” We’re in an “up” shaped economy, Corona-who?​


Message from the Founder

Great “experiments” happen daily at DDI. Our readers might notice some of them, but the majority of those happened behind the scene. Trust that we are fully committed to testing things out and failing forward at the speed of thought.

The developments we work on share the purpose of enabling our members to achieve more with their best. We dedicate ourselves to rolling out tools and concepts that make your expertise shine not just at work but also globally.

Besides DDIChat, which we talked about for some time (launching soon), we also fail extremely fast at inventing the best tool for audience engagement on the content you create. More than that, we even bring our people premium projects in tech, research, investment-related topics.

After all, isn’t that the theme of most of your writing? Few of you would only want to earn from your writing. You will likely be much more satisfied with recognition and rewarded for your outstanding contributions.

Stay tuned, there’s a lot more coming.

– Justin Chan, Ph.D.


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DDI Writer Highlights

In each issue, we like to start by showcasing a few thought-provoking stories from the DDI community. To get your words in front of our subscribers, you’ll need to submit to our leading site, not Medium.com. Submit your best here. ​

Does the Present Pandemic stimulate Industry 4.0?

“To mitigate the challenges posed by this pandemic, many enterprises are enthusiastic in implementing Industry 4.0 technologies.” -Balakrishna V.

 

LIBOR: An Enthralling Saga

“From creating history to becoming history.”
– Devanshee Dave

 

What’s the Hype Surrounding GPT-3?

“With the arrival of GPT-3, it’s certain that extraordinary advancements are occurring in the field of AI.” -Ramandeep Saini

 

Think Global, Act Local: 4 Keys For Startups To Expand Into New Markets

“You are a startup that has done fantastic in your home market. Congratulations. Can you repeat it in new markets? This post focuses on how to think it through, focusing on four critical levers.” -Amit Garg

 

Stock Donations: What To Know

“The benefit is clear: you don’t have to pay taxes, AND the charity receives more money than it otherwise would.” -Alex Chung

 

How to Trade For a Living

“Without a game plan, you’re merely gambling.” -Amol Gharte


In The News

The state of Bitcoin (click the links to see charts): According to Glassnode, Bitcoin addresses with balances over 1,000 Bitcoin reached a record high, signifying accumulation. Another long-term bullish sign is the circulating supply of BTC that hasn’t moved in at least two years is at 44%, higher than it’s been in three years.

The last time crypto-asset exchanges experienced a progressive decline in BTC holdings was before 2017’s crypto bull run.

It may seem like an aside after stats like those above, but Bitcoin’s mining difficulty is also at an all-time high.

Show me the money: Financial services company BlockFi raised $50 million in a Series C funding round to bolster its cryptocurrency offerings.

The company will provide crypto-based interest accounts and loans, with zero-fee trading. It’s also developing a Bitcoin rewards-based credit card. Anthony Pompliano, a famous podcaster in the space, joined BlockFi’s board of directors.​

Ethereum testnet

The ETH 2.0 testnet experienced a series of misfortunes soon after coming online.

Raul Jordan of Prysmatic Labs, an infrastructure provider for the Ethereum Network, wrote a lengthy explanation of how it all went down, and why the schedule for ETH 2.0 hasn’t changed.


Defi

Still unsure what “DeFi” is? Here’s a run-down. If you’re curious about “yield farming,” we suggest this article by Coindesk. If you want to try yield farming yourself, here’s a report for that. ​

The latest moonshot: Aave, a decentralized finance (DeFi) dapp on the Ethereum blockchain, is now first place in the DeFi space for total value locked into a project at $1.45 billion, higher than its rival, MakerDAO. (Yahoo! Finance)

Aave’s run-up may be a tailwind of the project receiving an Electronic Money Institution (EMI) license by the UK Financial Conduct Authority (FCA). The authorization allows Aave to issue digital cash alternatives and provide payment services. (The Block)

We’re mid-bubble: And if you don’t think we’ve been in an “alt season” for a while now, perhaps you haven’t been following the hilarity that is Dave Portnoy, founder of Barstool Sports.

Within a single week of meeting with the Winklevoss twins to invest a pile of cash into Bitcoin and a basket of “shitcoins,” Mr. Portnoy tapped out with a massive loss. After claiming he was out of the game entirely, maybe for good, he’s already suggesting he may “save Bitcoin” after all. (Decrypt)​

Watch out: As the DeFi space continues to heat up, exit scams have begun to climb. Regulators warn that this time around looks a lot like the ICO craze in 2017.

The Fed isn’t satisfied: Not to mention, the IRS has put a query about crypto transactions on page 1 of the 2020 tax return. If anything, that’s a signal of the government taking crypto regulation ever more seriously.

The bigger picture: As regulators turn to DeFi and scrutinize and legitimize crypto-assets in general, there’s bound to be a regulatory crackdown in due time. Now that US banks can legally offer crypto-asset custodial services, financial outfits can’t afford to be unlicensed. Not if they plan to keep up with competition and regulation.


Regulation

Sad anarchists look elsewhere

Derivatives exchange BitMEX will now require KYC for all users.

Ontario’s out: Crypto-asset Derivatives Exchange BitMEX closed the door on Ontario-based Traders. Why? Well, the reason’s unclear. BitMEX said the decision was “mandated” by the Ontario Securities Commission. The company already blocks US and Hong Kong-based traders. (Coindesk)

Florida’s cool with it: Binance.US takes the Sunshine State off its “no-fly” list, inviting 12 million eligible traders to the market. OrangeCoin, anyone? Come on, you know it’ll moon. (Coindesk)​

Dirty laundry: A recent study highlighted how up to 98% of trading activity on some of the most popular crypto-asset exchanges might be fake. The researchers are asking CoinMarketCap and CoinGecko to highlight wash trading in their public data.


Eurozone

The EU Commission is developing a legal framework for crypto-assets for as early as Autumn. The proposed framework suggests there be a “sandbox” to serve as a legal testing ground and develop a unified European market for crypto-assets.

Sweden prefers plastic and bits: The Bank for International Settlements (BIS) published a report about the development of CBDCs worldwide, and Sweden is in the lead for scrapping physical cash. (Decrypt)​

China

China is trialing digital currency and electronic payments in Beijing, Tianjin, Hong Kong, Macau, and other regions. ​

​In a policy paper published on August 25, the Party restated its strategic vision to use blockchain tech, AI, big data, and 5G in developing a nationwide digitized social security system.

Complaints on the blockchain: Beijing has also partnered with Huawei to develop a blockchain governance platform. The project initially aims to improve municipal responses to virus outbreaks and make it easier for citizens to appeal city rulings and check for road and utility issues.

Ambitious plans: While details around the official launch date for the digital Yuan isn’t official yet, there’s a chance the Party will use it during the 2022 Winter Olympic Games in Beijing. (CoinTelegraph)​

Long ways to go yet: Chinese officials dispelled rumors that China was already using the digital Yuan for large-scale transactions, such as real estate purchases. The country is still very much in the low-capital, alpha phase of testing.​

Capital flight: A report by Chainalysis shows in the past 12 months, over $50 billion worth of crypto-assets has left China. (CoinTelegraph)

Beijing banned direct Yuan conversions into crypto-assets in 2017, sparking the rise of stablecoin Tether as an alternative to fiat. Also, Beijing prevents citizens from moving more than $50,000 out of the country each year.

This news should stoke some flames: The Apple Daily, one of the largest independent newspapers in Hong Kong, published a front-page ad promoting Bitcoin. The headline stated, “Banks, today you’re not ditching me, I’m ditching you.” Two weeks ago, Jimmy Lai, the paper’s CEO, was arrested under National Security Law.

Takeaway: This prior regulation, coupled with rising US-China tensions and the development of a Chinese CBDC, all contribute to the rise of stablecoins like Tether in the region as a conduit for the capital flight.​


When people ask, “How’s Bitcoin work?” we recommend this book.

Bitcoin Basics, Getting Started With Bitcoin, By Ray Buckton

Celebrated as “digital gold” by some and “purely money” by others, Bitcoin means many things to many people. Bitcoin Basics: Getting Started With Bitcoin will help you start your journey with Bitcoin.

This book will help you feel comfortable with the fundamental concepts that make up Bitcoin, whether you seek to be informed or are ready to engage with Bitcoin hands-on. Learn key features of the Bitcoin network, explain how to transfer Bitcoins from one person to another, delve into Bitcoin’s history, and much more.


In other news

This one’s pretty darn important: Federal Reserve Chairman Jerome Powell will deliver a speech tomorrow, which will change how the Fed views inflation. Rumors are this speech will focus on increasing inflation for the sake of a better economic environment.

In this write-up, Anthony Pompliano explains why inflation will not work out well for the bottom 50% of Americans.

What do you think about this story? Please send us your thoughts, and we may even feature your opinion in a piece.


Watch the Show

Our friends at Alpha Trades dive deep on markets, crypto, and the economy throughout the week. Find your Advantage with the freshest episodes:​

Bitcoin Levels to Buy the Dip | What Altcoins to Keep an Eye on

Bitcoin: Rocky week Ahead | Levels to Look Out for Shorts Vs. Longs

Why We’re Shorting Tech | Watchlist: XLK, AAPL, TSLA, XLV, MRVL, COUP, OKTA, TSM

US Stock Market Discussion for Week of August 24, 2020

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Disclaimer

Information provided by the Data-Driven Investor (DDI) is not intended to be utilized in making any financial decisions and is not a solicitation, nor recommendation to buy, hold, and/or sell a particular security or financial instrument.​

Information provided by Alpha Trades, LLC is not intended to be utilized in making any financial decisions and is not a solicitation, nor recommendation to buy, hold, and/or sell a particular security or financial instrument.

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Bradley Stone
Bradley Stone is a content management specialist and professional writer with a focus on building the presence of clients online. Previously a teacher in Thailand and online, he has recently shifted focus toward collaboration with influencers and academics primarily in the fintech and economics fields. Bradley is currently a writer and content manager with Alpha Trades, LLC. He has lived and traveled extensively throughout Asia, North and South America, balancing his thirst for adventure with a keen interest in emerging economic and social trends. Bradley holds a Bachelor’s degree from Appalachian State University. He can be reached at [email protected]

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