Weekly Rundown - July 17, 2022

In my June 28, 2022 update, I showed you this parabolic boom in the US dollar vs. bitcoin:

It reminded me of the way bitcoin’s price went parabolic against the US dollar for seven months starting near the end of 2020—only this time, the US dollar’s going parabolic against bitcoin.

Parabolas always break. The question is how high do prices go before they fall and how far do they fall after they do.

Now, the parabola looks like this:

Bitcoin’s price is touching that parabolic trendline.

Does that mean another leg up for the dollar vs. bitcoin? Or does bitcoin’s price finally break the parabola and start to reverse? Either way, how high or low will USD go?

What about the other factors I mentioned in my July 13, 2022 update?

Scroll down for a poll, some info, and a meme you may enjoy.

Note, I’m taking a break from the newsletter from August 1st to 6th. I’ll still respond to emails and DMs during that time.

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Poll: is the four-year cycle still valid?

(In other words, bottom in late 2022, next peak in late 2025, next bottom in late 2026.)

• Yes

• No

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Mt. Gox to crash the market?

Did you hear about the pending distribution of 137,000 bitcoins from the Mt. Gox settlement? Read the repayment procedures letter, which puts the first repayment date at the end of August.

For reference, in 2014 a lot of bitcoins were stolen from Mt. Gox, an early crypto exchange. Investigators recovered some and litigators are now ready to return them to their rightful owners. Recipients can opt to take their proceeds as bitcoin or cash.

Experts disagree on what this means for the market.

In total, those bitcoins are worth about $2.5 billion—enough that if you combined all of the bitcoins into a single wallet, it would be the third-largest wallet according to Top 100 Bitcoins.

That’s not a large amount for a $400 billion asset, but it comes at a time when we don’t see a lot of new money coming into the market.

You can expect most recipients will sell some or all of their bitcoins. After all, if they didn’t need it for eight years, why would they need it now? Especially when the market value is at least 10-20x higher than what they paid for it eight years ago.

Some have already sold to investment companies like Fortress. Others will certainly take cash or HODL their bitcoins.

Interesting times.

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What Coinbase Is Building During the Crypto Winter

Bottom line: Coinbase has several business lines—e.g., custody services, commissions on hosted staking, and its Coinbase Cloud development platform. While the main driver remains the exchange, it has other ways to make money.

My take: not shilling Coinbase, just a look at the bigger picture. Coinbase is one of several businesses trying to build a frictionless, easy-to-use way for people to interact with Web3 platforms, buy/sell/lease NFTs, build/use blockchain dapps, and access all the benefits of cryptocurrency. (And of course, buy, sell, and stake crypto).

Why we care: many crypto businesses do not depend solely on people like us buying and selling speculative financial assets. The question is, how long until crypto sees enough usage before these other business ventures generate strong profits?

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Heard about the Ethereum merge, a big milestone for the transition to ETH 2.0. After the merge, Ethereum’s protocol will no longer use miners to confirm transactions and maintain the blockchain. Learn more on the Ethereum Foundation website.

Coming soon, they say. Hope it works out for everybody. Here’s what I think about it:

Relax and enjoy the ride!