Crypto loses battle in DC but is well-positioned for the war; Recap of weekly price performance; BTC Surpasses 200-Day SMA; Update on EIP-1559; Key data points suggest we are early in this upward trend; The future of gaming lies in crypto
Crypto loses battle in DC but is well-positioned for the war
Last week, we covered the infrastructure bill under deliberation in the Senate due to a crypto provision that was snuck into the bill at the eleventh hour. To recap: the bill had cited a $28.0 billion "pay-for" sourced from tax revenue paid by crypto brokers. This was not a novel concept for the crypto industry, as reputable centralized brokers do, and will continue to, pay the appropriate taxes and meet whichever regulatory requirements Uncle Sam decides to bestow upon them.
The area of concern was related to the broad definition of “broker" used within the bill, which left many in crypto circles to believe that this leaves parties such as wallet developers, miners, and node operators subject to the same tax reporting requirements as centralized brokers. Such requirements would not only be unnecessary (considering said parties are not, in fact, brokers) but would also be entirely impractical as many of the aforementioned entities are individuals or small businesses that do not have the time or resources to file the requisite paperwork to meet said requirements. Consequently, this leaves the door open for possible future regulatory determinations by the SEC and IRS that could render these entities incapable of ...Reports you may have missed
BTC AS A POSSIBLE STRATEGIC RESERVE Last week, we discussed the rising political tailwinds affecting crypto. Despite events earlier in the year that might have suggested a changed stance from the Democratic Party, the political divide over the issue has grown stronger. The GOP has become the party that is undoubtedly more favorable to the industry. The attempted assassination of former President Trump, juxtaposed against a Democratic Party seemingly in...
Gox Wallet Movements Still Present a Risk, But Macro & Politics Keeps Us Allocated Here (Core Strategy Rebalance)
DISCUSSING THE SUPPLY CONCERNS On balance, macro conditions have moved in our favor thus far in early Q3. We have received soft jobs numbers and softer ISM reports, and cooler inflation figures, which have sent rates and the DXY lower. Unfortunately, the mere reveal of imminent sales from the German BKA and the solidification of the Mt. Gox disbursement timeline were not enough to put a bottom in for bitcoin....
LESSONS FROM OPEC We have witnessed a significant market panic partially related to formerly locked BTC hitting the order books. The major sources of supply include:Mt. Gox – 141,686 BTCUS Government – 8,100 BTCGerman Government – 50,000 BTC At current prices, this would equate to over $12 billion in supply. This threat, combined with an inhospitable macro backdrop (rising DXY, higher rate expectations, hawkish Fed), has brought BTC down to...
LDO Risk/Reward Looks Good Here, Immediate-term Macro Picture Still Uncertain (Core Strategy Rebalance)
FLOWS AND SENTIMENT STILL SUBDUED Last week, we received a better-than-expected CPI print, but the DXY continued to move higher due to global weakness and a hawkish Fed. We discussed the risks appearing in the metrics we use to gauge sentiment and flows. The overall lack of follow-through in the crypto market was evident. Volumes, net ETP flows, the Coinbase discount, stablecoin market cap trend, and search interest for key...