Amazon Doesn't Want Your Crypto

Portfolio Update Week 14: 8/2/21

Welcome to all of the new subscribers! The next poll is going live with BTC on the chopping block. This can be found on our Twitter here: 

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The Past Week

BTC is back on the rise and crypto-companies are beginning to embrace regulation it appears. FTX is cutting borrowing, Uniswap is delisting tokens, and Binance is becoming more compliant. We kept hammering this point with all of you that in order for these companies to succeed they would need to change their business practices. Whenever there is a new technology it begins in the wild-west, but just like the wild-west the rangers had to be dispatched to bring some law and order.

US regulators have been eyeing the space and it seems like they are zeroing in on what can and can’t take place. In a recent blog post, Uniswap Labs said they would be restricting access to tokenized stocks, derivatives, and other products citing an “evolving regulatory landscape.” FTX is also self policing itself in an effort to avoid the regulatory storm. They are reducing the amount of margin trading investors can wager from 100x to 20x. The CEO doesn’t believe high leverage is the cause of volatility, still we believe he is making the right choice.

Even Binance is trying to improve their regulatory compliance (shocker).

  1. They are seeking licenses and approvals for places that have existing legal framework for crypto exchanges. Wow, such foresight.

  2. They are encouraging Know Your Customer (KYC) process.

  3. Limiting leverage over 20x.

  4. Hiring leadership with regulatory and compliance experience. LOL

I am still surprised the company is standing after operating without licenses or approval in multiple markets, but what do I know. A meme coin of a dog made people millionaires, so I guess I am the idiot. Anyway, BTC is back up this week so lets take a look at why.

Optimism was high after the Musk X Wood livestream event and Chinese regulatory worries dissipated. Then came news that Amazon was planning to accept crypto payments after a position for a digital currency project lead. However, any notion of Amazon accepting crypto was crushed when a spokesman denied the rumors. Denying rumors and actually not working on accepting payment are two different things, so there is a chance it happens in the future.

Amazon isn’t the only online retailer who is getting into the crypto space. Shopify is also beginning to allow their e-commerce customers to sell NFTs - interesting. I still don’t want to buy a jpeg but others do and that’s cool. A poll from Gallup is showing the increased interest and allocation towards crypto, so we can expect more and more companies to participate in this new environment. It would be silly of them not to. Even governments are investing or “raising” funds from crypto investors.

Looking at some signals, we see miners accumulating and those that have a history of very little selling - which is good. We also see exchange balances dropping, which indicate individuals taking their BTC off of exchanges to hold - typically a “buy” signal. Overall this is good news for crypto and should indicate a continued rise…fingers crossed.

What else:

A Prehistory of DAOs (gnosisguild)

Tax loophole is helping BTC holders save tons of cash by avoiding federal taxes (cnbc)

40/+1,200 meetings Brooks had as US Comptroller were about crypto (coindesk)

Elon Musk’s Tesla Holds Its $1.3B Bitcoin Position in Q2 (coindesk)

Crypto Companies Huobi and OK Group Dissolve Entities in China (decrypt)

Warren Urges ‘Coordinated and Holistic’ Response to ‘Dangers’ of Crypto (coindesk)

These Are the Most Profitable Ethereum NFT Whales Right Now (decrypt)

~$900M in crypto short positions liquidated as BTC breaks $39K (theblockcrypto)

Cultural Liquidity: The Rise of Cryptomedia (substack)

First BTC Mutual Fund (bloomberg)

Bitcoin’s Hash Rate Rises After China's Miner Exodus (decrypt)

What do our followers think?

Disclaimer: the responses are not apples-to-apples with prior polls and we have no means to verify accuracy of the responses.

The sentiment completely reversed from prior weeks. Given the rally we are seeing in crypto markets, this is not surprising. A majority of people are bullish now, ownership is up, and the majority is signaling they are holding. The one oddity is that responses are down. Maybe you are all just over this weekly poll? We will continue to do it every week because we feel that it gives an interesting insight into crypto.

Data:

  • BTC: 766 total votes; 305 buy, 280 hold, 181 sell

  • ETH: 801 total votes; 324 buy, 328 hold, 149 sell

  • ADA: 680 total votes; 178 buy, 276 hold, 226 sell

  • LINK: 624 total votes; 120 buy, 291 hold, 213 sell

  • DASH: 592 total votes; 86 buy, 293 hold, 213 sell

FMA People’s Crypto Portfolio:

The poll results are in and Cardano will remain in the portfolio.

Good news - the portfolio is almost back to break-even! The broad market continues to march upwards as crypto came roaring back this week. We’re still a long way from our 60% high, but we’re getting there. The delta variant is holding back some additional gains as the CDC backtracks on their mask guidance. More workers are on edge about returning to the office and productivity/hiring is in focus as a result. Positive economic data continues to drive the recovery from COVID-19.

Looking into the crystal ball:

As we look forward, we are hopeful that the rising tide will lift all boats, including crypto. Most folks are concerned that GDP underachieved and inflation increased at a higher rate than previously expected. The bright lining here is that the Fed is still convinced that moving rates higher would harm the economy. The benefits cliff in the USA is coming which would entail millions of Americans losing COVID benefits. We personally believe that this may spur people back to work if allowed to expire. The government may not let that happen however as we can just print more money, right? Inflation concerns aside, we see the market continuing upwards with the primary risk of the delta variant disrupting economic progress thus far.

If you would like to see a live view of the portfolio, you can do that on CryptoCompare.


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We look forward to doing this all again next week, take care!