Trader View 4 December 2019

A string of negative headlines has leaned in on BTC… unsubstantiated rumors of CZ being arrested, Binance’s Shanghai office shuttered after a raid, five crypto exchanges leaving China citing regulatory risk, IDAX CEO Lei Guorong MIA and Virgil Griffith slapped with a 20yr sentence (since released, pending trial) as the FBI claims he was assisting North Korea to bypass sanctions with crypto. Practically every crypto presentation alludes to this theme one way or another and removing rent-collecting intermediaries is one of the biggest benefits. Another make-a-case-of-him victim a’la Ross Ulbricht. Additionally, Singapore on the cusp of bringing crypto above ground with the imminent PSA framework — the first to include crypto — and all related transactions tax-free is a striking contrast with the recent ruling against William Zietzke, a petitioner that argued IRS taxing crypto was a breach of financial privacy which didn’t go so well. Land of the free indeed.

Ze Germans wasted no time enacting a bill clearing the way for banks to not only sell crypto directly to their customer base but also custody the digital assets effective 1st Jan 2020. Only the Bundestag (for now) but the street does not expect much if any resistance at the state level. The European Union has already kicked off a multi-year regulatory plan devised to include crypto dealings under the European Banking Authority’s purview (5AMLD) and the latest seems to guide for exchanges and wallet providers to be designated as “obliged entities” while permitting banks to peddle in and custody crypto. HUGE.

More runs on the board: Russia has courted another tier-one exchange Huobi to provide crypto/Ruble pairs as they permit bank transfers to the exchange; IMF reads Georgia as the fourth largest miner of digital currencies and suggests the country to carve out electricity consumed by foreigners and to capture this as “crypto exports”; The Indian government finally (publicly) recognizes the merits in blockchain technology and prepares a “national level Blockchain FrameworkMinistry of Electronics & IT and; even South Africa is jumping on the gravy train as deputy governor of the South African Reserve Bank (SARB) looks to implement rules for crypto 1Q20.

Total network hash power has been extremely choppy oscillating within a 36 EH/h range as miners debate what to make of the upcoming halvening. Bitmain recently dropped their latest and greatest flagship ASIC S17 prices by over 33% overnight in an attempt to drum up demand.

Expect to see those with merge mining capabilities to reduce risk at least partially by switching over to other SHA256 coins.

All the more surprising that $ETH-3.15% has barely flinched following the $51mn Upbit hack. Would’ve thought the marginal holders would’ve reduced exposure heading into the Istanbul Fork slated for Sunday 8 December especially given that just 41% of nodes appear ready for the change but the tape -5% since the mishap. I read this as BAU ebb & flow after hitting the upper end of the Bollinger bands, pulled back and now testing the lower-range.

Bakkt has failed to deliver vs. the hype from debut but some signs they are gaining traction as they clear record daily volume ($42.5mn) & open interest ($6.5mn) figures over the past week. Having said, in the current backdrop where any entity even remotely connected to New York being dubbed a pariah, fat chance they are able to steepen that adoption curve with the existing players and really doubt Kelly Loeffler’s appointment as senator changes much there.

There used to be a time when my sources of news were the pink paper, the journal, and Bloomberg so you can imagine how confused I was when I initially took the leap of faith into this rabbit hole where Reddit, Twitter and a myriad of crypto specialist sources reign supreme. A seal of validation that Reddit is not just for killing time as r/bitcoin amasses 12mn subscribers, effectively becoming the world's biggest online bitcoin community.

A lot of flack given to the British Virgin Islands pursuing a stable coin: BVI~Life. More weapons in the arsenal of criminals and money launderers blah blah blah. I’ve heard you don’t even need to register a UBO to set up an entity in South Dakota, Wyoming or Delaware. If these states were country’s, they would have no place to stand in the global arena but they are with the team that calls the shots… for now.

Common Base CEO, pow.re co-founder. the strait jacket has been removed