Bitcoin Just had the Worst Month in Its History
Michael Spencer
A.I. Writer, researcher and curator - full-time Newsletter publication manager.
Coinbase Selling Data on Crypto and 'Geotracking' to ICE
If you enjoy Web 3.0 content, please join my Newsletter on substack about it that I'm growing out,?here.
https://cryptobullsbears.substack.com/subscribe
Bitcoin lost 38% of its value in June, 2022.
Hey guys,
What’s new in the Crypto Winter?
Bitcoin in June, 2022 officially had its worst month on record. All that means is it dropped a lot. The headlines kind of boast about this. Bitcoin just finished its worst month in the 12 years that it’s been available on exchanges,?losing more than?38%?of its value in June as of Thursday afternoon, June 30th.
Coinbase Tracer, the analytics arm of the cryptocurrency exchange Coinbase, has signed a contract with U.S. Immigrations and Customs Enforcement that would allow the agency access to a variety of features and data caches, including “historical geo tracking data.” That is quite unsettling! Coinbase already did massive layoffs but this data sharing means it’s not very appealing.
ICE is now able to track transactions made through nearly a dozen different digital currencies, including Bitcoin, Ether, and Tether. Watchdog group Tech Inquiry reported the new details about the three-year contract with the U.S. Department of Homeland Security. Crypto, no justice!
In the EU they might be taking crypto regulation a bit more seriously though. The European Commission, EU lawmakers and member states hammered out an agreement on reforms Thursday.
What is MiCA?
The new law, known as Markets in Crypto-Assets (MiCA), is the first attempt at creating a comprehensive regulatory framework for digital assets in the region. EU lawmaker Stefan Berger said the rules will “put order in the Wild West of crypto assets.”
When Silicon Valley companies like Coinbase, think they can displace Binance or FTX, it’s funny. So admittedly is watching their stock tank. Binance can burn its coin, but what can Coinbase realistically do? Sell our data apparently. The Intercept initially reported the news.
Crypto is still a great place for money laundering and pump-and-dump frauds like ICOs or NFTs. EU officials on Thursday secured an agreement on what is likely to be the first major regulatory framework for the cryptocurrency industry. That’s what China said when it launched its CPDC, although a “first” in the world.
So even as FTX swoops in to likely buy BlockFi for as low as $25 million, In August 2021, Coinbase sold a single analytics software license to ICE for $29,000, followed by a software purchase potentially worth $1.36 million the next month, but details of exactly what capabilities would be offered to the agency’s controversial Homeland Security Investigations division of were unclear.
According to the Intercept, a new contract document obtained by Jack Poulson, director of the watchdog group Tech Inquiry, and shared with The Intercept, shows ICE now has access to a variety of forensic features provided through Coinbase Tracer, the company’s intelligence-gathering tool (formerly known as Coinbase Analytics).
领英推荐
High fees and sharing data is not a good sign for Coinbase’s future. I just don’t see how they will compete with Binance or FTX and a few others in the long-run. After how they fired so many employees already in 2022, their reputation has truly suffered. But don’t blame Bitcoin, it’s leadership that makes decisions not some crypto Gods.
Bitcoin on Thursday fell below $19,000 as the world’s largest digital currency remains under pressure. Bitcoin’s price has lost 40% in the last month and 60% in the last six months. The downward spiral is and will take out more parts of Web3. It’s not just a reset, good companies that deserved to survive simply won’t make it.
Censorship and data sharing under the guise of rule of law? If America cared about rule of law it would actually regulate the crypto sector. Coinbase markets Tracer for use in both corporate compliance and law enforcement investigations, touting its ability to “investigate illicit activities including money laundering and terrorist financing” and “connect [cryptocurrency] addresses to real world entities.” This is all that blockchain and privacy based tokens were supposed to help us get away from.
Crypto exchange FTX is close to finalizing a term sheet to buy BlockFi and a deal is expected to be signed by the end of this week. It comes after FTX provided a $250 million emergency line of credit to BlockFi. Just acquire Robinhood while you are at it.
Investors are also worried about rampant inflation which is forcing global central banks to raise interest rates. Contrary to what we were told that Bitcoin would be a hedge against inflation, the supposed nascent asset class seems entirely correlated with the NASDAQ 100 now in mid 2022.
Photo by André Fran?ois McKenzie on Unsplash
June in Bitcoin’s Prism
Bitcoin just finished its worst month in the 12 years that it’s been available on exchanges,?losing more than?38%?of its value in June as of Thursday afternoon.
Ether, the world’s second-biggest cryptocurrency by market capitalization, ended the same period down by about 47%. Altcoins not named Bitcoin or Ether, were of course way more volatile and even worse off - all simply tethered to Bitcoin’s price like a house of cards. What happens to a high-risk speculative asset that isn’t tethered to anything but supply-demand manipulation and perceived value?
Under MiCA in the EU, Stablecoins like tether and Circle’s USDC will be required to maintain ample reserves to meet redemption requests in the event of mass withdrawals. They also face being limited to 200 million euros in transactions per day if they become too big. Meanwhile Circle, FTX and others are showing signs of monopoly power in crypto with their own increasing their influence.
The Walled Gardened Banks of Crypto
Circle’s Euro-based stablecoin is about to launch, and it doesn’t seem decentralized at all. Circle Internet Financial, issuer of the dollar-pegged stablecoin USD Coin (USDC), is launching a new euro-pegged stablecoin Euro Coin (EUROC) on June 30th. Developers can already integrate with the Euro Coin smart contract, and institutional users can access EUROC on the launch date upon creating a free Circle account.
It sounds like crypto kingdoms are forming if I am to be honest! As Circle’s second digital currency, EUROC is designed to adhere to the same regulatory and operational standards as USDC, namely its full-reserve model and principles of trust, transparency, and security. Euro-denominated reserves will be held in custody of leading US financial institutions subject to US regulations, initially Silvergate Bank.
If Bitcoin is a wild-wild west of pump-and-dumps ad-infinity, how is Web3 ever supposed to build anything sustainable? It just doesn’t make sense and outside of DeFi, and some more enduring aspects of NFTs (a very small minority), it’s hard to see the real innovation or even the real products, utility and viable future profitability of these business models.
Watching Coinbase, FTX, Circle and others operate, is like watching a natural selection of a kind of crypto mafia. What else could you call it when Bitcoin is King, Savior and Commander?
Thanks for reading!?
If you enjoy Web 3.0 content, please join my Newsletter on substack about it that I'm growing out,?here.
https://cryptobullsbears.substack.com/subscribe
Strategic Compliance Professional Specializing in Analytics and Regulatory Alignment
2 年I'm not a technical investor, I don't think the shape of the chart actually means that much. But Bitcoin's chart is informative, if you look at its historical price and then zoom in to reveal the shape of each era. When you do that, you see a price that booms and then resets on a cycle, where each cycle has had a higher high and a higher low than the previous one. This current boom and reset, from that perspective, just looks like the normal performance of Bitcoin over its entire history, rather than something historically different than what came before. June 2022 ~ Feb 2018 ~ Apr 2014 (or possibly Jan 2015)
Generalist
2 年Still far to go!