BIG PICTURE
Nobody likes rogue states that oppress their people and sponsor hacking groups to foot their authoritarian bills. But what are you going to do, shut down the internet to prevent it? As ridiculous as that sounds, it’s basically the logic employed last week by the US Treasury’s Office of Foreign Assets Control (OFAC) when they sanctioned a well-known coin mixing service called Tornado Cash.
This and, July inflation numbers are in and judging by the price of bitcoin, ether, and other so-called ‘risk assets’, markets are jazzed. 👐
MARKET FUNDAMENTALS
WTH OFAC: Tornado Cash
- Tornado Cash is an open-source privacy tool for private transactions on Ethereum.
- How does it work? It’s a big ol’ laundry machine wherein all users’ coins go into a pool, are mixed around, and then removed when needed, all previous public-blockchain ‘paper trails’ scrubbed clean.
- Has it been used by North Korea? Absolutely.
- Is it used by countless other human rights organizations around the world to protect donors and recipients from brutal totalitarian retaliation at home or abroad? You bet.
- Does an overwhelming majority of the world’s dirtiest money still get washed through JPMorgan, HSBC, NY Melon, Wells Fargo, Goldman Sachs, Standard Chartered and Societe Generale? One hundred percent. (Well, closer to 98% but who’s counting?)
- Github (owned by Microsoft) was very quick to delete said code and kick the project’s core contributors off their platform.
- Never you worry Microsoft, just like open-source Linux ate your proprietary OS lunch, Web3 is coming for Github. 🖖
Here’s the thing: Code is speech, and protected as such under the first amendment.
- The case was Bernstein v. The Dept. of Justice, the year; 1995.
- Bernstein was a doctoral student who wanted to publish the source code for a cryptography software that he developed, as well as a research paper on it, for peer review purposes.
- Bernstein knew that Cryptography had been of concern to the U.S. government, and inquired with the State Department whether he needed a license to publish his work.
- The State Department’s response: Bernstein’s software was a ‘munition’ under International Traffic in Arms Regulations, and he would need to register as an arms dealer and apply for a license to publish his source code and research paper.
- Bernstein appealed, arguing these regulations infringed on his First Amendment rights.
- This case expanded expression in the United States to include this (but not all) software language.
- Are you or someone you know familiar with case law? If so we’d love to hear from you!
BTC & ETH: Tickety tock; new block, new block.
- BTC’s market cap is up 4.25% WoW
- ETH’s is up 12.75%
- Ether open interest new ATH: $7.5B+ 😱
- BTC open interest is down to $5B.
- Other news, BTC Miner revenue, Hash Rate & Difficulty are all up. This is good.
July CPI Data
- Coming in hot at 8.5% (0.2% less than the expected 8.7%, but still an inflationary environment)
- Einstein famously called Compound Interest the 8th Wonder of the World… But it doesn’t just work in our favour; it, unfortunately, applies to inflation as well.
What’s next?
- Aug 26th – CME bitcoin futures/options expiry
- Sept 2nd – United States Non-Farm Payrolls
- September 13th – July CPI data is released
- September 21st – Next FOMC interest rate decision
Blockchain Futurist Conference was a resounding success!
- NDAX was thrilled to have participated (as a title sponsor no less!) in Canada's largest Blockchain and Crypto conference.
- Our on-the-ground reception in Toronto has been nothing less than humbling.
- We would like to thank the organizers (Untraceable), Sponsors and Partners of the Blockchain Futurist Conference for their tireless work in helping to move the industry forward.
MARKET UPDATES
REGULATORY:
- U.S. Treasury Sanctions Notorious Virtual Currency Mixer Tornado Cash (Their headline!) - U.S. DEPARTMENT OF THE TREASURY
- Arrest of suspected developer of Tornado Cash - Dutch Fiscal Information and Investigation Service
INDUSTRY NEWS:
- Following Tornado Cash, MakerDAO Co-founder Plans To ‘Yolo USDC Into ETH’ - Blockworks
FUNDING:
- Crypto Intelligence Platform Messari to Raise $35M at $300M Valuation - CoinDesk
THE TAKEAWAY
We cannot overstate the gravity of the US Government sanctioning an open-source protocol. More than an excuse to target rogue actors who seek to launder the proceeds of crypto hacks and exploits (none of which, by the way, happen on Bitcoin) via DeFi protocols, it amounts to shots fired across the bow at privacy–for regular citizens, for human rights activists, and for anyone else whose right to privacy has been condemned without any due process (or justifiable cause). We’ll follow this closely for you and keep you abreast.
In other news, this week it’s DCA (Dollar-Cost Averaging) week at NDAX! Please be sure to follow us on socials so you don’t miss the articles, videos, and recaps that are coming your way!
Stay humble & stack sats, friends, it’s onward and up!
BITCOIN TECHNICAL ANALYSIS
BITCOIN’s been consolidating in a range since its recent 6 week high around $31.5K
- Daily, bottoms are forming ‘Higher Lows’, while ‘Swing Highs’ are getting higher.
- But BTC is still experiencing resistance around C$32k.
- If BTC holds its 20-Day Moving Average as support (C$30K)...
- We can expect Bulls to push BTC further up past resistance to C$36K, or–
- If that fails, C$29K is the closest level of support).
KEY LEVELS:
Disclaimer: This blog is not intended to provide investment, legal, accounting, tax or any other advice and should not be relied on in that or any other regard. The information contained herein is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of cryptocurrencies or otherwise.