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Our portfolio is set for the next two weeks and crypto is on a tear.
Over the past week our portfolio peaked, up +70%, until BTC plummeted taking the rest of the market with it on the first day of it becoming legal tender in El Salvador. People are attributing this to the famous saying of “Buy the rumor, sell the news.” but we also saw the market becoming over confident. Funding rates were creeping towards levels seen back in May (when crypto was +$50k). At the same time, people saw this as a repeat of what happened then too - a surge of options put buying occurred pre drop.
Given that President Bukele is a millennial, he obviously bought the dip.
El Salvador has a total of 400 BTC and is the first country to have BTC on its balance sheet. Overall a very interesting time, but at the same time the roll out has faced trouble. Citizens have had issues accessing their wallet, withdrawing money, and some are not even getting the promised $30 for obtaining the wallet. Others complained that Bukele is focusing too much on BTC and not enough time addressing the actual needs of the people. Keep your eyes posted to see how this plays out because it will determine what other countries will do going forward.
In the US we are seeing some fights play out in the crypto space as well. The SEC issued a Wells Notice (a formal way the SEC alerts a company that it may press charges against a company) about Coinbase’s yet to be released Lend program. Coinbase seems to be surprised that a loan is a security, but what do you think?
Also interesting to notice is company insiders and investors selling $250M in stock over the last month. Obviously they will need to at some point to make a return, but what is interesting is Coinbase issuing a statement defending the sales. So, take that as you will.
The last thing we want to touch upon is FOMO with crypto, NFTs, etc. Just be careful and try not to get wrapped up in the craze on Twitter/Discord/wherever. Only put in what you can afford to lose.
What else:
SEC Threatens to Sue Coinbase Over High Interest Crypto Product (decrypt)
The Metaverse Is Coming, Companies Need to Prepare (coindesk)
Moody’s Wants to Get Its Head Around DeFi (coindesk)
OpenSea bug destroys $100,000 worth of NFTs, including historical ENS name (theblockcrypto)
As More Consumers Bank With Crypto, Washington Sounds the Alarm (coindesk)
Inside the cult of crypto (financialtimes)
Mastercard to Acquire Crypto Tracing Firm CipherTrace (coindesk)
FMA People’s Crypto Portfolio:
What a wild ride it has been. We’ve significantly outperformed both BTC and the S&P 500 thus far, driven on by Cardano and Solana. Our new addition is up nearly 90%, so kudos to those of you who voted. LINK is the only negative performer in our portfolio outside of Bitcoin. Overall, our portfolio has directionally traded in tandem with Bitcoin but with larger run-ups.
In other economic news, talks of raising the U.S. corporate tax will, in my exceptionally unqualified opinion, directly impact the market. Most corporations who are large enough already have tax efficient offshore operations setup. However, smaller companies will have no way to avoid the changes. We’re also keeping an eye on the tech industry in expectation of increased regulation. In the meantime, let’s relax and enjoy the ride.
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!