Bitcoin Market Analysis (August 12, 2022)

[Yesterday's resumption] According to data released yesterday, the US PPI fell for the first time in more than two years in July. PPI is the producer price index or product price index. The ratio of the prices of production factors such as steel, lumber, electricity, and oil that cause demand in the current period to the price in the base period and the product of constant commodity types and weights. Objectively speaking, this CPI/PPI is not directly related to stock prices. It’s just that people generally believe that CPI/PPI rises (too high), which is generally a superficial feature of the economy’s overheating (overheating) (excluding special reasons), and the state will introduce relevant policies to curb the excessively rapid economic growth (for example: raising interest rates, increasing reserves rate, etc.), which will affect the amount of funds in the stock market, resulting in changes in stock prices.

Judging from the CPI data released on Wednesday night, the Fed has achieved preliminary results in fighting inflation, but the market trend is not in line with it. Gold prices and U.S. Treasury bonds have fallen, and the U.S. stock market has achieved a V-reverse. According to the original logic, inflation has declined. The Fed The expectation of rising interest rates will decrease simultaneously, which is good for the three assets of gold, U.S. Treasury bonds and the U.S. stock market, but the market changed after 23:00 last night. The market trend is still relatively complicated at present. This is not the dovish official of the past. San Francisco Fed President Daly said that it is not ruled out that the Fed will raise interest rates by 75 basis points for the third consecutive time at the September FOMC meeting, and will pay close attention to the non-agricultural and CPI data in August. Daly insisted that the federal funds rate should rise to just below 3.5% by the end of the year, while dismissing investor expectations that the Fed would suddenly start cutting rates next year.

Gitcoin will launch Gitcoin Passport, a Web3 identity system, where users can collect credentials from different authenticators, such as Bright ID and Proof of Humanity. By aggregating multiple credentials in one place, Passport distributes trust among multiple entities, and applications that integrate with Gitcoin Passport do not need to rely on middlemen to verify user identities.

Celsius' creditors intend to take action to block the sale of mined bitcoins and press the company over "possible misconduct by Celsius and its insiders." The committee of creditors has moved to block Celsius from attempting to sell some of its mined cryptocurrencies during a bankruptcy hearing on Aug. 12, and they also filed a statement saying Celsius CEO Alex Massin Skye's assurances to customers were "empty and false promises."

MakerDAO co-founder Rune Christensen said in Discord that MakerDAO may choose to sell all of its USDC exposure in the protocol, a move that could trigger a decoupling of DAI from the U.S. dollar and needs to be prepared for that scenario. According to Makerburn data, 80% of the collateral assets behind DAI are currently Stablecoin and 60% USDC. As previously reported, Buterin replied to the proposal: “This seems like a risky and terrible idea. Once ETH falls sharply, the value of the collateral will fall sharply, but the CDP will not be able to liquidate, so the entire system will face becoming a fractional reserve. risk". Rune Christensen cited the recent U.S. Treasury Department sanctions on crypto mixing service Tornado Cash as a reason to consider the switch, and the sanctions are more severe than he initially thought. Following the sanctions, Centre, the consortium behind USDC, froze USDC funds in Tornado Cash wallets.

After OFAC sanctioned TornadoCash, a series of chain events were fermenting. In the past few days, the crypto community is rethinking what is a real stablecoin. The over-centralized USDC has led to many project parties. Being implicated and passively fulfilling sanctions, whether DYDX or Maker, there are still many projects that will be more or less affected by the consequences of sanctions. Everyone has to rethink, so everyone starts to talk about algorithmic stablecoins again. Everyone must pay close attention.

Blockworks said the ethereum merger will take place around September 15th or 16th. It is reported that according to the content released by the core developer of Ethereum, Tim Beiko, the Epoch of the Ethereum main network Bellatrix fork is 144896, the time is about 19:34 on September 6, and the main network TTD (Terminal Total Difficulty) is 587500000000000000000000 (will transition to PoS). network), but may change before the client is released.

Binance Labs has revealed a strategic investment in Web3 infrastructure provider Ankr Protocol. Ankr is a Web3 infrastructure provider that enables the use of decentralized applications and wallets as well as crypto-based games by connecting them to the blockchain where they need to communicate.

The United Nations Conference on Trade and Development (UNCTAD) released Policy Brief No. 102, “How Cryptocurrencies Disrupt Domestic Resource Mobilization in Developing Countries,” stating that while cryptocurrencies can facilitate remittances, these same digital technologies may also be less identifiable by their ownership of offshore flows to achieve tax evasion or avoidance. In this way, they may dampen the effectiveness of capital controls, a key tool for developing countries to maintain their policy and fiscal space and macroeconomic stability.

Recommended policies include:

1. In order to improve taxpayer compliance and combat tax evasion, tax authorities should clearly define the legal status of cryptocurrencies and require cryptocurrency exchanges, e-wallet providers, and decentralized finance platforms to report the total amount of all corporate and personal accounts. inflow and outflow.

2. Given the rapidly evolving nature of cryptocurrencies and their ecosystems, there is an urgent need for countries to agree to and implement a global tax cryptocurrency regulation that takes into account the needs and challenges of developing countries and gives them adequate representation.

3. In addition to global tax harmonization, a comprehensive information-sharing system on cryptocurrency holdings and transactions is required, for example through a common reporting standard. Such measures would support countries to detect capital control escapes and impose taxes.

These three recommended policies are also critical to the effectiveness of the other two initiatives:

1. While cryptocurrencies may facilitate remittances, given the negative socioeconomic impact of these private digital currencies, countries should consider taxing them higher than other financial assets to discourage holding and trading of cryptocurrencies.

2. Countries should redesign their capital controls to include flows channelled through cryptocurrencies. Alternatives include imposing a financial tax on cryptocurrency transactions and limiting individual trading volumes on cryptocurrency exchanges. Additionally, central bank digital currencies can be designed to allow capital-controlled operations. The effectiveness of these controls can be compromised if new digital alternatives are not adapted.

According to the market performance and information classification since August, the current market is mainly dominated by the hot spots of the Ethereum upgrade, such as the relatively strong trend of ETH, and LDO, ETC, etc., which are closely related to the ETH upgrade. Welcome, if it is reflected to the market level, that is two words, pull the plate. Apart from this hot spot, there are no waves, but the following sectors should also be noted, the stable currency track, the market may further promote some high-quality calculations due to the event of USDC freezing sanctioned addresses, which requires continuous attention. In addition to the stablecoin track, that is the football track. Because the World Cup is about to start in November, the market will definitely start hyping it about a month in advance. Everyone should pay attention to this.

[Bitcoin market analysis] The market has barely pulled the market for about 2 days, but so far it has not been able to stand at 24,000. From this, it can be seen that the market is as weak as ever. Yesterday, BlackRock launched a private letter. Failing to keep the market carnival, it can be seen that this market is still weak and weak, and it has always been a trend of adjustment in the form of advance, three retreats and two, which is why I have been talking about giving the market enough patience these days.

At the 4-hour level, the lower support is around 23400 and 22000, and the upper resistance is around 24700 and 28000. Based on the effective standing of 24,000, if the 4-hour level is effective and firm, the market will directly meet the 28,000 or even 30,000 mark, otherwise it will continue to adjust.

[Risk Reminder] Digital assets fluctuate greatly and the risks are extremely high. Please participate with caution, put an end to the full-cow stud, and refuse loan leverage.