MAJR News 056
Bitcoin breaks $50k again, Bitcoin Miners aren't selling their BTC holdings, MassMutual looking to bring bitcoin to RIAs, Brazil to adopt bitcoin as legal tender, Bitcoin mining goes nuclear in PA
@popsicleillusion
MAJR NEWS BRIEF
Videos
George Gammon interviews Jason Burack co-founder of financial education startup company called Wall St for Main St and they discuss stagflation, China, Evergrande and the Cantillon Effect.
Top Stories
BITCOIN
Bitcoin Rises to $50K, Next Resistance Around $52K-$55K
Bitcoin (BTC) continues to show signs of bullish price action breaking previous resistance level of $50k again. Technical analysis sees rising support levels below $50k and new resistance at $52k and $55k. The RSI (relatives strength index) on the daily chart is not overbought yet which could suggest increased price action in the short term. While, traditional markets have been slipping with worries around Evergrande, stagflation and a Fed taper, bitcoin seems to showing bullish resistance. If BTC breaks $55k there’s not much in the way before returning to new all-time highs, $65k.
Marathon Digital, Hut 8 Mining Building up Bitcoin Reserves
The two largest publicly traded bitcoin mining companies in the US, Marathon Digital and Hut 8 Mining are no longer selling their mined BTC for cash to pay down expenses, but borrowing against their BTC holdings. In previous years, miners essentially set the price floor by having to sell some of their mined BTC in order to maintain operations. Now, bitcoin has a robust financial service business that provides loans against collateralized bitcoin. Marathon secured a $100 million revolving credit line from Silvergate Bank. Between the two companies they have mined about 12,000 BTC. This is important for the entire market, as bitcoin miners no longer need sell their bitcoin which would increase the overall liquid supply, but now holding all their BTC is in their best interest and is the new business model.
MAJR Take: This should have a dramatic effect on price moving forward. Bitcoin is an accumulation game and it’s land grab for businesses who understand that this the new global game.
MassMutual-owned fintech launches new service for RIAs to manage clients’ Bitcoin
Fintech startups like Onramp Invest have new competition in an accelerating race to provide financial advisors access to digital assets like Bitcoin. Flourish, a fintech Mass Mutual Life Insurance Company acquired in 2020 to provide RIAs (registered investment advisors) with cash management services and other financial products, has a new solution to allow independent advisors and their clients secure and compliant access to the Bitcoin market. RIAs control nearly $97 trillion in AUM. This will be slow to move into bitcoin and crypto, but it eventually will and this news is only the start.
Brazil Set To Adopt Bitcoin As Its Legal Tender
Brazil, the 9th largest economy in the world today is setting up to adopt bitcoin as legal tender. A bill that will regulate bitcoin as a means of payment is being finalized and is expected to go to vote in the next couple days. The bill has widespread government support and is already aligned with the president of the Chamber of Deputies, meaning that there are few barriers to its approval. In a recent poll, 48% of Brazilians want bitcoin adoption.
Bitcoin Price Jumps After Powell Says U.S. Has No Plans to Ban Crypto
Last Thursday, Fed Chair Jerome Powell was asked about his plans to ban bitcoin and crypto from the House Finance Service Committee following China’s most recent and stricter ban on crypto. Powell stated there was “no intention to ban them.” However, he did say that “stablecoins are like money market funds or bank deposits that sit outside of the regulatory perimeter and it’s appropriate that they are regulated.” Bitcoin and digital assets jumped in price following the hearing.
More on Bitcoin
MMA Legend Jorge Masvidal becomes the first promoter to award fighters Bitcoin
Construction begins for the new nuclear Bitcoin mining facility in Salem Township
‘Not Just Bitcoin’: Bank of America ‘Bullish’ on Ethereum, DeFi and NFTs
CRYPTO
Axie Infinity Rolls Out Staking Program, Shakes Up Gaming Business Model
Axie Infinity (AXS) is the hottest game in crypto and perhaps in the entire gaming space. The crypto game uses a play-to-earn (P2E) business model transferring close to 90% of all revenue to it’s players and the game’s treasury, which will eventually be fully controlled by token holders. The game makes revenues from players buying verifiably rare digital creatures called Axies and other digital goods such “power-ups” and land, all of which are NFTs (non-fungible tokens). Players are rewarded in the game currency called Smooth Love Potion (SLP), which is a liquid token on the market that increases with more user adoption. The game has been in the headlines all year because it’s churning out revenue and gaining users, on track to do $2.7 billion annualized revenue (Activision pulls in ~$8B) and has over 1.85 million daily active users (DAUs), up 4,768% since April. It’s now back in the headlines because it rolled out staking services and airdropped over $60 million of tokens to early adopters.
Grayscale adds Solana, Uniswap to Digital Large Cap Fund
Grayscale Investments added Solana (SOL) and Uniswap (UNI) to their Grayscale Digital Large Cap Fund (GDLC) which offers traditional investors exposure to 70% of the digital asset market in the form of a security. Grayscale said they added these two tokens because of crypto market themes such as layer-1s, gaming, DeFi and the Metaverse. Other coins included in the GDLC fund are bitcoin (BTC), Ethereum (ETH), bitcoin cash (BCH), Litecoin (LTC), Cardano (ADA), Chainlink (LINK). ETH accounts for more than 90% of the holdings. Solana is a competing layer-1 that’s quickly grown a large developer community and pushed its market cap to $50B. Other layer-1s that could follow suit with Grayscale are Polkadot (DOT) and Avalanche (AVAX).
SEC Subpoenas USDC Stablecoin Backer Circle
Circle, the company behind the second largest stablecoin by market cap, USDC has been subpoenaed by the SEC. Circle says they’re fully cooperating with regulators. Stablecoins have had a target on their backs for a long time given that they’re pegged to $1 US dollar and sit outside of the traditional banking system, therefore seen as potential unregulated threat to markets. Stablecoin companies understand their position and for the most part have been compliant with regulators and transparent about their operations. Stablecoins are widely used in crypto markets for trading given that they ride on the same blockchain rails, but they’ve also been a great asset to drive yield on cash, upwards of 8-10% APY in some cases. This is drastically different that what a bank provides, 0.06%.
More on Crypto
Dapper Labs Took NFTs Mainstream, Now It Wants to Do the Same for DAOs
Axie Infinity developer secures $152M in Series B funding from investors
NFT Trading Volume Hit $10.67 Billion in Q3, Up 700% From Previous Quarter
MACRO
Derby’s Take: Fed Dove Games Out How Rate Increases Can Address Supply Shock Inflation
Minneapolis Fed President, Neel Kashkari feels confident that today’s surge in price inflation is due to supply chain disruptions causing shortages vs. an oversupply of cheap money. He stated that tightening monetary policy and raising short term borrowing rates wouldn’t help bring more goods and services online. However, if price inflation continues to increase and gets out of hand, he’s confident that the Federal Reserve has the ability to raise rates to combat high prices, even with the unprecedent amount of private, corporate and national debt…
MAJR Take: Agree with supply chains causing price inflation, but this guy is full of shit.
Good luck raising rates without destroying all markets.
U.S. trade deficit jumps to record high in August
The U.S. trade deficit raced to a record high in August, boosted by imports as businesses rebuild inventories, the latest sign that economic growth slowed in the third quarter. The trade deficit surged 4.2% to $73.3 billion last month, the highest since the government started tracking the series. When adjusted for inflation, the goods trade deficit increased $1.9 billion to $101.8 billion in August. The report followed on the heels of government data last Friday showing high inflation sharply cutting into consumer spending in July, with a moderate rebound in August. While a surge in household demand for merchandise earlier this year and steady business demand for equipment have left inventories extremely lean, the reopening of the economy is gradually boosting demand for services. At the same time, domestic producers have struggled to ramp up output because logistics bottlenecks have knocked global supply chains out of sync, resulting in backups at ports, a wide range of materials shortages, and soaring shipping rates.
More on Macro
Fed’s Internal Watchdog to Open Review Into Trading Activity
Doomsday Clock for U.S. Debt Ticks, With No Congressional Plan
Treasury to Begin Redistributing Rental-Assistance Money to High-Need Communities
MEDIA
Jason Burack (Stagflation Deep Dive, China, Evergrande, Cantillon Effect)
Bitcoin and crypto adoption is here to stay. Don’t let your friends and family miss the opportunity of a lifetime.
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