What a week! Did you see DOGE go crazy? I hope that dog doesn’t dump on you.
Also, make sure you get the monthly issue.
This week, bitcoin’s price broke out of a falling wedge formation on long-term trading charts. Paid subscribers, we talked about this at the beginning of the month. It’s a bullish pattern, so people are getting bullish.
If you’re trading the market, you should have already placed your bets. We don’t trade so we only need to take this under advisement in light of everything else going on in the market. I’ll have another update this week.
Check your inbox for the October 25, 2022 market update and my first Buy/Sell/Hodl alert in a long time.
That update covered five altcoins, some interesting shifts in HODLers, new addresses, and the location of stablecoins, as well as some notes about my plan. The alert speaks for itself.
Scroll down for a poll and other content you may enjoy. BTW is it too late to buy a tungsten cube?
Miner capitulation ala 2018 is highly unlikely
In last week’s rundown, I highlighted a report from Coinshares warning of a potential liquidation event for miners.
Arcane Research published some research that argues the opposite, namely, miners have enough money/credit and not enough bitcoins to crash the market, and they have none of the political concerns that led to a destructive capitulation in November 2018.
Read the report for more details.
Heidi from Crypto Tips pointed out a problem with the “only 21 million bitcoins” myth.
InsuranceFI
Blockworks newsletter argued the case for higher bug bounties and incentives for “bad guys” to wreck protocols. The goal: make DeFi as robust and resilient as possible as soon as possible, at the expense of some protocols (and the money of people who use them).
It’s an interesting question: can we regulate ourselves better than our governments can?
I’d love to see the US create a safe harbor or financial innovation program for cryptocurrency, something like DARPA or the NSF’s exploratory grants or some other way to fund experimental, high-risk research in financial engineering.
In other words, governments should encourage and reward people who try to hack, steal, and manipulate markets as a means to stress-test crypto protocols before releasing them into the wild. Do this within a regulatory framework in a controlled or simulated environment for the first few years, until the projects and communities can work out the kinks.
For a while, I’ve talked about bonds, most recently in an article “Bonds, Bitcoin, and Cash” (which you can get as an NFT on Mirror).
Bonds are having their worst year in a generation (some say in a century). As a result, you’re getting the best deal you’ve gotten in years. Plus, now that governments have raised interest rates, you can finally get some yield for the same risk you take holding your government’s money.
Meanwhile in Markets published a nice article comparing stocks vs. bonds. As strange as it might seem, the calculations worked out more favorably for bonds.
TL;DR—
Once you factor in changes in inflation, cost of living, and purchasing power over time, stocks do not perform nearly as well as people think. In fact, at today’s prices, bonds are a better investment.
Read the article for a deeper, more fulfilling examination of the topic. Here’s a key takeaway:
As investment-grade bonds begin generating real income after years of negative returns, the market comes back to normalcy where investors have options to swap out overvalued equities with safer fixed income.
What does this mean for crypto?
Should equities continue to lag behind other assets in the coming years and crypto continues to grow, Aunt Sally and Uncle Morton will soon look at their 60/40 portfolio and wonder why it’s barely growing while bitcoin goes up, let’s say, 30% each year, on average.
While 30% is a massive letdown for most people in crypto and below bitcoin’s historical growth rate, it’s a great return for any “normal” investment.
Add in a US regulatory and legal regime that gives Wall Street a way to make money with crypto. Mix that with general frustration at the way governments have managed money in recent years.
You might get a whole lot of people who look at crypto as a viable alternative to the legacy financial system.
Job Corner
Gainium | Content Writer | Link to position
Brave | Senior Software Engineer | Link to position
Binance | Product Intern | Link to position
Zerion | Senior Product Designer | Link to position
Protocol Labs | Senior Editor | Link to position
Rabithole | Product Manager | Link to position
OpenSea | Blockchain Data Scientist | Link to position
Aptos | Business Development Lead (APAC) | Link to position
Most of these job listings come from the ToolsForCrypto newsletter.
Relax and enjoy the ride!
Weekly Rundown - October 30, 2022