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Guess what I discovered?
Since the beginning of this year, at least 100 subscribers got cut off from this newsletter because their banks blocked their charges.
From a few people I talked to, it sounds like some banks flagged my newsletter as a risky purchase because it’s related to cryptocurrency (though certainly some people told their bank to block the charges because they didn’t want to subscribe anymore).
I’ve lost a lot of money because banks don’t like crypto. If your bank ever cuts off your subscription, email me mark@markhelfman.com so I know what’s going on.
But enough about me and banks. Doesn’t this market feel better when the prices go up?
Given the conditions I talked about in Friday’s altcoin market update, it’s possible this recent rally is a short squeeze, where speculators get liquidated in a way that pushes prices up.
Sometimes, these things pump the market for a heartbeat and then we go back to the start, sometimes these things mark a true shift in trend. We’ll see in the coming days and weeks.
In Monday’s update, I talked about the massive flow of stablecoins to exchanges since mid-January and a persistent stack of “buy” orders across all exchanges over roughly the same timeframe.
As of one week ago, money was getting ready to buy, not necessarily buying yet.
Perhaps that short squeeze caught a lot of these people by surprise? They planned to buy at lower prices, then changed their mind once the price started to run and bought higher than they had planned?
In my next update for paid subscribers, I’ll have some data about this.
In any event, we don’t need a short squeeze to send the price of bitcoin up or down 10% in any day or 30% in any month (30% to 60% for altcoins). That’s normal volatility. Welcome to crypto!
Scroll down for some interesting news and content.
Some of you have asked about Altcoin Insights, my research service.
When I closed Altcoin Insights on February 15, 2021, I extended all subscribers one year forward and kept that date as the subscription end for all new members. As such, I will close the service on February 15, 2022.
Watch this video to learn why I’m closing the service and one concern about the structure of altcoin funding now compared to when I started the service in 2020.
Altcoin Insights subscribers: on February 15, 2022, you will get a report with my updated thoughts and expectations about each recommendation, as well as a list of key news sources that you can follow to keep up with developments. Also, I will keep access to the reports open through November 1, 2022, though I will not update the recommendations.
For those who never subscribed to Altcoin Insights, I’m happy to give you the list of recommendations and the report on the same terms as everybody who already subscribed. Out of fairness to them, you will pay the same price as they did. Contact me directly using one of these methods (don’t reply to this post).
Please note, while I will occasionally add new altcoins in my Altcoin Reports and will definitely post updates about the wider altcoin market regularly, I do not plan to make specific altcoins a focus of this newsletter moving forward.
While I certainly understand this may disappoint you, I hope you’ll stick around a little longer to see how things go.
Last week’s poll asked “When will bitcoin's price make a new all-time high?”
20% said before April 1, 2022
45% said between April 1, 2022 and September 1, 2022
35% said after September 1, 2022
Only 20% think bitcoin’s price can’t go up 66% in two months? Ye of little faith.
What’s my answer?
We shall see. All of those timeframes seem reasonable.
That said, I would not be surprised to see bitcoin’s price hit $70k before April 1, 2022. Outside of selling from institutions, some OGs and whales, and a lot of tourists, this market is very strong.
Of course, those people make up a significant portion of the market. Have they stopped selling yet? And if so, when will bitcoin’s price go high enough for the rest of the market to think it will keep going up?
Nobody knows so let’s not get ahead of ourselves with gloomy predictions or supercycles. We’ll have to see how people’s behaviors change as bitcoin’s price moves up or down.
I’m sticking to my plan.
Any price above $19,000 and below $150,000 fits into bitcoin’s “normal” range of prices.
In Win For Crypto Stakers, IRS Offers Refund on Untraded Token Rewards
Bottom line: US tax authorities said one couple does not have to pay taxes on their staking rewards until they move them. This may set a precedent for all stakers. The couple is taking their case to court anyway.
My take: expect more of these cases. Until policymakers create a regulatory framework that makes sense for crypto, the courts will have to intervene.
Why we care: US regulatory system is more nuanced and complicated than most people think. While you never want to dismiss bad laws or ideas—it’s better to advocate or vote—keep in mind that a lot can change from the first draft to enforcement.
I answered some reader questions about NFTs and money laundering, Ethereum, altcoins vs bitcoin, and churn among altcoin projects.
China banned cryptocurrencies, but it’s going all in on NFTs
Bottom line: China will let people mint and trade NFTs on its permissioned, centralized blockchain. This means NFTs will not trade freely or move to secondary markets, but will be available to businesses and creators who keep them on China’s Services Network.
My take: people in China still buy and sell crypto despite the ban. Do you think they won’t buy and sell NFTs outside of China’s blockchain? How long until they wrap their NFTs and sell them on OpenSea or any of the other marketplaces on other blockchains?
Why we care: one more reason NFTs might end up as crypto’s killer app and the gateway for adoption. Assuming NFTs have the popular appeal we think they will, the Chinese government has essentially mainstreamed Web 3.0—and I’m not sure they or their citizens realize it yet.
Watch this Coindesk video for some ideas on how investors should balance the risks involved with DAOs.
On the one hand, when you participate in a DAO, you put your trust in group of anonymous people who have no interest in your welfare. At the same time, code and community matter far more than founders and leaders. Where do you strike the balance?
Note, I do not endorse the Syndicate platform, I just think its founder raises some interesting points in this video.
On a closing note, I need suggestions for good podcasts. Any ideas?
Relax and enjoy the ride!
Weekly Rundown - February 6, 2022