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The Past Week
Binance, the largest exchange in the world, is coming under intense scrutiny for its practices. Essentially, it has operated in a number of countries without express permission. Changpeng Zhao, CEO of Binance, likened these events as to that of the car. Regulations were created along the way and due to crypto being so new, it seems that he is in the same mindset that Zuckerberg was when creating Facebook - “move fast and break things.” While this may be okay when developing software, when it comes to people’s wealth things are a little different.
Currently, Binance is facing pressure in the UK, Japan, Thailand, Singapore, Cayman Islands, and others. Most recently, the European Union’s Single Euro Payments Area (SEPA) has halted payments to Binance and Barclays has stopped payments to Binance through use of credit or debit card. This is what happens when you think crypto is strong enough to go against governments. It seems like the recent issues that it is facing stems from it’s early days. The company seemed to regularly butt heads with local regulators wherever it went, or maybe did not go?, while instead it should have worked with them.
Take a look at Binance.US, which licenses Binance’s brand and technology. They recently hired Manuel Alvarez, a former commissioner at the California Department of Financial Protection and Innovation (DFPI), as its new chief administrative officer. Probably because of the recent headlines from Binance. Compliance should be at the forefront of crypto right now as governments grapple with how to proceed.
On the flip side we have Coinbase. Unlike Binance they vetted the coins on their platform and didn’t make everyone available (although this may change). They too made headlines in Japan, although this was due to entering the market - AFTER completing registration with the local watchdog. Regardless of what the purists think, they will not be able to shake government regulation.
Crypto is coming for investment portfolios, so why continue to fight a losing battle? We understand the appeal of decentralization and that can still happen. You can still put choices into the hands of the people. Regulation isn’t ALL bad, having mechanisms in place to help those who are taken advantage of, prevent fraud, and have something in place to stop bad actors is good.
Comment and let us know what you think.
Not actual news, but apparently there is a crypto nightclub coming to Mykonos? If this isn’t the top for Shiba coin I don’t know what is. (I did try to google this and there is nothing online yet…).
What else:
Over $13 billion has now been staked on Ethereum 2.0 (businessinsider)
Ark bitcoin ETF disclosure reveals planned fee of 0.95% (financialtimes)
Ether Could Overtake Bitcoin as Store of Value, Goldman Sachs Says (coindesk)
South Korean Prosecutors Indict Former Bithumb Chairman (coindesk)
Limited capacity, logistics to slow Chinese bitcoin miners' global shift (reuters)
Ecosystem Comparison: Bitcoin vs. Ethereum vs. Stablecoins (chainalysis)
UFC Partners With Crypto.com (bitcoin)
Cryptocurrency Operator Circle to Go Public (WSJ)
Russia to Introduce Rules for Confiscating Crypto: Report (coindesk)
Most Institutional Investors Expect to Increase Crypto Exposure by 2023: (coindesk)
Bitcoin Draws More Scrutiny From Regulators Worried About Fraud (WSJ)
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 first thing that I have noticed over the weeks, looking at the percent of responders, is that less people are followers are selling. Markets seemed to stabilize, probably after seeing that BTC didn’t collapse after getting kicked out of China. Although, investors seem to be taking a cautious approach - the poll for bullish vs bearish had 48% bullish and 52% bearish. Further confirming that - ownership seems to be flat, with the majority of responders holding at 54%, vs 23% for buy and 23% for sell.
Next week will have 4 weeks of data so we will see how things changed over the month.
Data:
BTC: 1,681 total votes; 517 buy, 638 hold, 526 sell
ETH: 1,573 total votes; 612 buy, 611 hold, 350 sell
ADA: 1,392 total votes; 337 buy, 479 hold, 576 sell
LINK: 1,278 total votes; 228 buy, 516 hold, 534 sell
DASH: 1,186 total votes; 169 buy, 476 hold, 541 sell
FMA People’s Crypto Portfolio:
SPY is looking pretty great right now as our portfolio falters a bit more, down to -12.9% since inception, though mostly flat over the past week. The general market as measured by the S&P 500 is up 5.0% in the same time. But patience is a virtue as we wait for the next boom in crypto, more than likely spurred on by a random Elon tweet. BTC is down to -39.3% since portfolio inception. None of our holdings are really doing that great as Cardano is the only one still positive, up over 20%. Now might be a great time to start taking a look at some new up and comers that can really benefit strongly from a market upswing. At the end of the day, it will be you all that vote on the portfolio entrants and exits, so you can’t blame us for the poor performance (as you know, our crystal ball is accurate every single time…not). Speaking of which, take a look at the portfolio chart below and then read on to our crystal ball section.
Looking into the crystal ball:
So far our predictions about the market slowly inching upwards to the end of the year have been true. This could be reversed on poor economic data, but we think most metrics will outperform given the accelerated reopening in the USA. Economic data is less likely to surprise as high expectations keep the bar for outperformance high. As far as the portfolio goes, our thinking was that this portfolio would serve as a venture portfolio, with most cryptocurrencies negative or flat and one 10x multiplier would save the portfolio. At the same time, we are trying to stay away from pump and dump schemes and shitcoins. We remain patient and hopeful that a rebound will come before the end of the year.
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!