Crypto News: Market Dip, Merge Risks, Regulation, CBDCs & More!

[Music] Welcome to the coin bureau weekly crypto Review here are this week’s top Headlines in the crypto news [Music] Mind the dip the crypto market wipes out An entire month of gains in a matter of Days after a barrage of bad news is this The end of the recovery rally or just Another correction Ethereum concerns as the merge Approaches some eath holders start to Worry about ethereum’s centralization And censorship resistance how can these Issues be addressed Stablecoins in the spotlight polkadot’s A carla stablecoin is exploited and husd Loses its peg while tether and circle Reveal more details about their reserves What does this mean for the crypto Market Tornado cash continued The fallout from the sanctions against The controversial privacy protocol Rumbles on as other crypto projects Start to be affected why is crypto Privacy so important Cbdc acceleration nigeria colombia the European union and the united states all Provide more details about their Dystopian digital currencies when will They all be rolled out And a closer look at last week’s top Performing cryptos and where they’re

Headed next all this and more in just a Moment Good morning afternoon or evening thank You for tuning in my name is guy and What you’re about to see is educational Content not financial advice you can Find any topics you’re looking for using The timestamps in the video timeline and Now for today’s top stories Last week the total crypto market cap Fell by 20 with many altcoins losing a Lot more the crypto dip arguably began On tuesday which makes sense given that The crypto market is highly correlated To the nasdaq tech stock index If that didn’t give it away the nasdaq Also began to dip on that day As to why the nasdaq was dipping the Answer appears to have been concerns Around the quarterly earnings reports For some of the largest big box stores Namely walmart which revealed that Although it had crushed expectations for The third quarter it was nonetheless Starting to see consumer weakness If you watched our recent video about The recession you’ll know that the u.s Recently entered a technical recession Following two consecutive quarters of Negative gdp growth Some economists are waiting on more data To make the declaration and the warnings In walmart’s earnings is one such data Point

Then another kick to the markets came on Wednesday when target another u.s retail Giant reported a massive loss in profits Due to an overstock of supply Basically target purchased a lot of Stuff thinking that people would buy but Discretionary spending is down because Of inflation leading to an overstock Now if you’ve been watching the charts You’ll know the real dip the dip of the Dip if you will came on thursday That’s because the jobless claims in the United states came in well below Expectations which would normally be a Good thing but in the current financial System It’s the worst news in the world that’s Because the federal reserve is tasked With doing two things keeping inflation Under control and ensuring that Employment is strong Confirmation that employment is strong At least on paper gives the fed the Wiggle room it needs to keep raising Interest rates to fight inflation lo and Behold one of the fed’s officials came Out shortly afterwards to confirm that The central bank would continue to hike Interest rates aggressively in september Leading to a massive dip across the Board as investors price in future pain Then as a poisoned cherry on top sec Chairman gary gensler published an Opinion piece in the wall street journal

Which confirmed that the infamous Regulator will continue to crack down on The industry never mind the possibility Of celsius starting to sell some of the Btc its mind as part of its bankruptcy Process So this begs the question of whether Last week’s dip was a correction or the Beginning of new lows So far it looks like it was a standard Dip and we’ll know for sure later this Week when a bunch more macro factors Occur that could make or break the Crypto market Now if you’re subscribed to my weekly Newsletter you’ll already know what These factors are if you’re not Well you’ll have to stick around until The end of the video to find out Now another reason why the crypto Markets have been on edge lately is Because of concerns around ethereum’s Decentralization and censorship Resistance after it transitions to proof Of stake in mid-september Although ethereum’s beacon chain has More than 416 000 validators liquid Staking protocol lido finance coinbase And kraken collectively control more Than 50 percent of the eth being staked And if you include finance it’s over 60 Percent Now this makes ethereum’s beacon chain More centralized than it appears to be

And if you watched our video about lido Finance you’ll know that this trend of Staking with third parties be they Protocols or exchanges is only likely to Accelerate after the merge is complete This means that ethereum could quickly Become controlled by just a handful of Validators or validator operators once It transitions to proof of stake which Would obviously present a huge security Risk for the crypto project What’s scary is that the potential Security risks of such a setup pale in Comparison to the potential censorship Risks put simply the largest validators On ethereum’s beacon chain could work Together to reverse transactions freeze Wallets and even delete decentralized Applications from the blockchain Now to be clear beacon chain validators Would never do this voluntarily as it Would do serious damage to ethereum and Their eath stakes by extension However this is of little consequence to Governments who are willing to do Whatever damage it takes to see their Laws enforced at the protocol level If this were to happen then it would Make ethereum no different from the Current financial system and it’s Important to note this pressure could Theoretically be applied to just about Every cryptocurrency as even proof of Work miners could be coerced into

On-chain censorship Now for what it’s worth coinbase ceo Brian armstrong has made it clear that The exchange would rather stop staking Eth than be forced to implement laws at The protocol level but would first try And resolve the issue by taking any such Command to court Now heartening as that may be to here it Still doesn’t address the centralization And censorship issue that is staring Eath holders such as myself in the face As the merge approaches And this is why some members of the Ethereum community are going as far as To call for the merge to be postponed Until these issues are addressed Now i can’t say i have the solution to The gradual centralization of ethereum’s Beacon chain given that it’s an issue That even affects proof of work Cryptocurrencies like bitcoin albeit to A lesser degree due to the economics Involved with proof of work As for the beacon chain’s censorship Resistance i reckon the solution is Fairly straightforward slashing Any validator that tries to implement Laws at the protocol level should have Most if not all their stake destroyed Now it’s a draconian solution but it’s Worth it to preserve censorship Resistance in my opinion Then again this draconian solution could

Be exploited by governments to bring Down cryptocurrencies of all kinds It also doesn’t address another issue That ethereum is facing and that’s the Question of future forks which will Apparently be determined by centralized Stablecoin issuers such as circle now The solution on that side is similarly Straightforward but not nearly as easy To accomplish and it involves creating a Truly scalable and decentralized Stablecoin that could serve as a medium Of exchange within the crypto ecosystem Now one of the many crypto projects That’s looking to become the next best Decentralized stablecoin is a polkadot Project called akala which recently saw The peg of its ausd stablecoin fall to Zero after an error in the code allowed An exploiter to mint over 1.2 billion Ausd with no collateral Ironically enough akala responded by Pausing its power chain and freezing the Exploiter’s wallet leading to criticisms That the project is not truly Decentralized something that turned out To be true for many other so-called Decentralized stable coins while akala Managed to resolve the issue by burning The additional ausd It looks like the confidence in its Decentralized stablecoin has been shaken As it has yet to recover its dollar peg At the time of shooting

With some luck they will get that Glaring issue sorted out pronto Meanwhile husd a centralized stablecoin Issued by the hobie cryptocurrency Exchange also temporarily fell off its Peg causing panic in the crypto Community as it was believed to be a More trustworthy stablecoin due to its Centralized nature An husd spokesperson explained Afterwards that the temporary peg Deviation was due to the closure of Certain market making accounts something They had to do to comply with Regulations and with no market makers Around to stabilize husd against other Stable coins husd fell off its peg To huobi’s credit this degree of Transparency is not common among Centralized stablecoin issuers notably Tether which that said has apparently Turned over a new leaf on the Transparency front this is because it’s Hired one of the top accounting firms to Provide attestations for the assets Backing usdt The first of these attestations revealed That tether cut its commercial paper Holdings by nearly sixty percent and if You watched our video about the assets Backing the biggest stable coins you’ll Know that commercial paper is code for Risky corporate debt which makes the cut Good for the trust in usdt

Not only that but it turns out that just Under half of the usdt in circulation is Backed by short-term u.s government debt Something that could result in leniency From regulators in the united states Given that tether is effectively helping To subsidize the government’s spending Through usdt Now if you thought that was crazy take a Second to consider that circles usdc and Paxos’s busd stablecoins are mostly Backed by some form of u.s government Debt The only real difference is that circle And paxos are based in the united states Meaning they are subject to more Oversight than tether The only reason why tether is suddenly Turning to transparency is because Crypto holders see usdc and busd as Being much safer than usdt and for a While this was leading to lots of usdt Redemptions i.e people cashing out their Usdt for actual dollars Over the last few weeks however usdt’s Market cap has been growing again thanks In part to tether’s increased Transparency and the gradual expansion Of its services something that was Ultimately incentivized by the free Market competition of cryptocurrency It’s this same competition that prompted Circle to release what appears to be the First of its weekly breakdowns of the

Assets backing usdc along with how much Usdc was minted and redeemed as you can See around 1 billion of usdc was Redeemed relative to how much was minted Now these stable coin flows are Significant because they show you Whether crypto investors are simply Fleeing to safety aka stable coins or Whether they’re cashing out of crypto Completely in case that didn’t make it Clear enough last week was all about Cashing out probably because of the Sudden dip Now besides competition upcoming Stablecoin regulations have tether Circle and paxos trying to up their Transparency and it’s anyone’s guess as To whether it will be enough to satisfy The regulators come september when the Stablecoin bill is tabled discussed and Inevitably becomes law Speaking of regulations the tornado Cache saga continues with crypto Lobbying group coin center reportedly Planning on taking the us government Sanctions against the controversial Crypto mixing protocol to court This is because sanctions have only ever Been applied to persons including Individuals and institutions Applying sanctions to open source code On a decentralized blockchain is truly Unprecedented and it’s quickly becoming A much bigger issue than anyone imagined

Case in point even crypto compliance Company trm labs recently admitted that Tornado cache has created a serious Compliance challenge given that tornado Cache users are sending small amounts of Crypto from the protocol to crypto Wallets effectively blacklisting them From d5 and c5 If you watched our recent video about Tornado cache you’ll know that one of The developers behind the project was Also recently arrested while it’s still Unclear as to what he’s being charged With if it is just because he wrote some Code it could set a chilling precedent Could we see other crypto developers Locked up for merely writing open source Code Moreover the developers actually Destroyed the admin keys to tornado Cache way back in 2020 and the protocol Was still technically legal until a Couple of weeks ago this means that Crypto developers could be arrested for Creating a crypto project or protocol After it is retroactively declared Illegal just let that sink in Now to add insult to injury tornado Cache actually had a compliance tool Built in that would let users prove Where their funds came from in the event That the exchange or crypto platform They were sending to were suspicious About where the crypto deposit had

Originated If that wasn’t bad enough it looks like Other privacy oriented crypto projects And protocols are being targeted with The ftx exchange reportedly freezing Accounts belonging to folks who had used A privacy-focused layer 2 for ethereum Called aztec network which is not a Mixer like tornado cache Aztec network responded to the reports With a twitter thread where the team Explained they’re working on a series of Improvements to their layer 2 which will Continue to preserve privacy while Deterring illicit activity i’ll leave a Link in the description if you’re Interested it’s a good read now taken Together these facts suggest that the Folks in power aren’t fans of financial Privacy even when the crypto projects or Protocols are proactive in their Attempts to comply with laws against Illicit finance despite these laws not Having any meaningful impact on illicit Activity whatsoever This means there’s only one other reason Why crypto privacy is under attack and That is control as i recently mentioned On instagram without privacy there is no Financial freedom because if the Individuals and institutions in power Can see your transactions they can and Will punish you You might think the absence of privacy

In cryptocurrency is fine and it Probably is for now As time goes on however and the trend of Government overreach continues you could Find yourself in trouble for making Transactions that were legal at the time Just like that tornado cash developer Who’s now in jail Privacy in crypto will become ever more Important as governments start to roll Out their central bank digital Currencies or cbdc’s and some of them Have launched their dystopian digital Currencies already one of the first was Nigeria last october which launched its E naira cbdc Now this is not surprising given that Crypto interest and adoption seems to be Higher there than in any other country And the government doesn’t want to lose Control of its domestic money supply Nigeria’s central bank recently reported That the e naira had over 270 000 active Wallets which sounds like a lot until You realize the wallet app has been Downloaded over 840 000 times and the Country itself has a population of over 200 million This suggests that the average nigerian Is not that eager to adopt their Government’s currency but that isn’t Stopping nigeria’s central bank from Pressing ahead with its cbdc As to how it will convince the average

Nigerian to adopt it i suspect that it Will have something to do with a crisis Of some kind which will involve the Dispersion of emergency funds something That’s been discussed in many cbdc Papers we’ve covered Meanwhile across the pond the colombian Government has announced that it will be Rolling out a cbdc to combat tax evasion This is surprising given that tax Evasion only accounts for eight percent Of the country’s gdp which is certainly A lot but not nearly enough to justify The rollout of such an elaborate system Looking at the colombian pesos value Versus the us dollar presents what is Likely the real reason the colombian Peso has been collapsing against the u.s Dollar over the last decade and the Government doesn’t want to lose its National currency to the u.s dollar or Worse a cryptocurrency For anyone wondering whether this is Some conspiracy well the european Central bank recently said the quiet Part out loud in a working paper about Its upcoming digital euro a cbdc is the Only solution to the quote smooth Continuation of the existing financial System which everyone hates by the one Percent of course who have done very Nicely out of it at the expense of the Rest of us I’ll be doing a video about that working

Paper later this week so keep your eyes Peeled And finally we have the federal reserve Which is not rushing to release a Digital dollar for many reasons Including the fact that dollars are Still in very high demand and that Centralized stable coins like circles Usdc are de facto digital dollars A fed official recently added another Reason not to rush a digital dollar and That’s the upcoming release of the fed Now payment system which quote addresses The issues that some have raised about The need for a cbdc according to said Fed official The fed now payment system is scheduled For release in 2023 and if you watched Our video about the future of the Financial system that the central banks Envision you’ll know that these So-called fast payment systems can act As cbdc’s if they’re paired with a Digital id so be on the lookout Turning to the charts we can see that Btc is still slightly oversold on the Daily and bounced off that strong Support line around 21k Note that 21k was also a strong support Line on the weekly It’s too soon to say whether this Shorter term recovery will continue but Given that the fed’s favorite inflation Statistic will be released later this

Week we could see a huge rally if it Comes in colder than expected if it Comes in hotter however Expect a huge crash Fed chairman jerome powell will also be Speaking at the jackson hole symposium Later this week and the revised gdp Figures for q2 will also be released Later this week too Both of these macro factors could take The crypto market much higher or much Lower You can learn more about the macro Factors affecting the crypto market Using the link in the description Now Last week’s top performing cryptos were Eos chiles tron’s us double d stablecoin Bitfinex’s una said leo exchange token And binance’s busd stablecoin not the Best lineup if i’m being honest So starting with eos it appears to be Rallying on the news of an upcoming Rebrand and hard fork that will make its Blockchain more decentralized the Rebrand is scheduled for this week and The hard fork is scheduled for september I’ll leave a link to the details in the Description if you’re interested so in Terms of price action eos is looking Slightly overbought but still seems to Have some more room to the upside if This momentum continues eos could push Past the two dollar mark in the coming

Weeks which will be likely if the Broader crypto bear market rally Continues Next up we have chiles whose chz token Is rallying on the news that the socios Platform that leverages the chile’s Blockchain for its sports tokens has Received regulatory approval to operate In italy while the blockchain itself Recently underwent a minor upgrade ahead Of a major upgrade later this year The chc token looks fairly overbought on The daily and is struggling to break That 20 cent resistance line on the Weekly if it manages to break this Barrier the next stop is 30 cents but It’ll take some time as there is even More resistance around those levels Then there’s tron’s uswd stablecoin Which didn’t exactly pump it just Regained its one dollar peg which Translated to a large enough increase to Make it one of last week’s top Performing cryptocurrencies yikes As for bitfinex’s una said leo token it Looks like it’s finally starting to come Off its recent highs and is slowly but Surely entering a long-term downtrend This makes sense given that trading Volume is down on crypto exchanges due To the bear market and this means there Are fewer buybacks and burns And last but not least we have binance’s Busd stablecoin which much like tron’s

Uswd stable only came in as a top Performing cryptocurrency because of the Slight fluctuation in its dollar peg Believe it or not but some market makers And wales are making millions from these Fluctuations If you learn enough about crypto you Might just become one of them And that is all for today’s coin bureau Weekly crypto review so if you enjoyed It you know what to do hit that like Button subscribe button and bell icon Too if you’re looking to maximize your Gains during the bear market the coin Bureau deals page is where you should go So you can find the link to that Resource and many others in the Description below Thank you all so much for watching and i Will see you in next week’s episode [Music] You