Weekly Update August 1st

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So markets seem to be pumping into oblivion following Powell’s surprise dovish forward guidance last week. Even Luna’s getting a 30%+ move to the upside… Madness. Many are saying ‘’Not another FOMC for AGES! We could pump all the way into that event!’’ Utter rubbish if you ask me… The fed said they will become more data dependent and they ARE STILL RAISING RATES! I genuinely think they messed up last week and they didn’t mean to pump the markets and upset there now short buddies on wall st.

Check out Kashkaris comments after the event…

Bonda are also anticipating inflation will be down to 2.9% a year from now… unless I’m drastically missing something this seems insane to me. I don’t see how inflation can come down this aggressively. I know I’ve highlighted demand destruction has been insane with over 17tn wiped from stocks bonds and crypto but I think we are still yet to see how ‘’sticky’’ inflation remains and so far we’ve had ZERO evidence there’s no stickiness. I don’t know how we can print over 40% of the money supply and return to standard levels inflation this quickly.  

For me the main focus is on just a few areas – Inflation, Jobs and housing data. We NEED to see inflation coming down, unemployment rising and housing coming down hard.  

The moment we get a hot reed from any of these areas the bear market rally is over.

On the agenda this week (Only highlighting the most important areas)

Monday

-ISM Manufacturing and prices – Need to see this continue to faulter and we need to make sure prices paid are showing signs of inflation coming down.

Tuesday 

-JOLTS – Jobs openings – NEEDs to come down

Fed Evans speech – Going to see if he talks down OR talks up the market. I imagine based on my comments above they talk down the market this week.

Wednesday

-US housing data – Needs to weaken further and I think it will

-US Manufacturing data – Needs to weaken further and I think it will

-US Business activity – Needs to weaken further and I think it will

Thursday

-US Jobs data – Needs to weaken further

-Fed Master speech – Going to see if he talks down OR talks up the market. I imagine based on my comments above they talk down the market this week.

Friday

-More Jobs data – Needs to weaken further

Very important to keep an eye on this data this week, if we don’t get what we want then people will start pricing in more aggressive policy from the fed = Markets go back down. The data could however play in our favour and pump markets further this week. 

My views on this current move - Markets got incredibly pessimistic even after a major capitulation event in crypto. Many… to many are hedged with shorts via leverage / the options market. I think the move we have seen so far has been fed induced (for the wrong reasons) and we are getting a squeeze. I feel much of this pessimism still remains and that could fuel a further move higher but moves are also looking a bit exhausted. I dont think there’s much risk reward here on longer term swing plays so I’d only recommend tight plays and scalps. 

Federal Reserve Raises Interest Rates by 0.75%

On Wednesday, the Federal Reserve raised interest rates by 0.75% taking its benchmark rate to a range of 2.25%-2.5%. Chair Jerome Powell did say that there would be a point where the fed starts to slow hikes in order to assess their impact. Stocks/Crypto reacted very positively to the news, after leaving the door open to lesser hikes in the September meeting stating that it would depend on the data going forward. Inflation has run riot in early 2022 with the commonly reported figure of 9.1% annual inflation. The fed is aiming for inflation to be around 2%.

Ethereum Developers Announce Goerli Merger for August 6-12. The Final Test Before Ethereum Transitions to PoS

Ethereum devs completed the tenth mainnet shadow fork on July 27 - it went off without a hitch. Developers are now eyeing the final test before Ethereum fully transitions from Proof of Work to Proof of Stake with The Merge on September 19 2022. To save you the technicalities, the Goerli network will merge with Prater, allowing individual stakers to run testnet validators. After years of work to bring proof-of-stake to Ethereum, we are now well into the final testing stage: testnet deployments!

Coinbase In Hot Water as the Crypto Exchange is Being Investigated by US Securities and Exchange Commission

Coinbase has had better weeks. The SEC is investigating Coinbase with a probe into whether the firm improperly let customers trade digital assets that should have been registered securities. Coinbase could “face very substantial fines” or potentially be required to register as an exchange in the US as a result of the investigation. Coinbase has come out publicly stating outright they do “not list securities” and are happy to work with the SEC to once again clear up the matter whilst also stating that the SEC has given no actionable framework for digital asset securities… maybe a slight contradiction there.

FTX & SBF go on a Buying Spree

Last week, FTX and Alameda Research - two firms founded by Samuel Bankman-Fried (SBF) - offered to buy out the insolvent crypto brokerage Voyager Digital. The move was dubbed as a “low ball offer” and “incredibly opportunistic” as the firms offered to buy Voyagers assets and loans but effectively was a way for FTX to acquire customers at nearly “zero cost”. FTX recently also acquired the troubled crypto exchange BlockFi as well Canadian trading platform Bitvo. It was also reported that FTX was in talks to buy South Korean Exchange Bithumb. SBF making mad moves sweeping up in the crypto space - don’t hate the player?  

Mercedes Benz Launches Data Sharing Platform Powered by Polygon

This week Daimler South East Asia, part of the Mercedes Benz Group, went into production with its Acentrik blockchain platform - based on a Daimler pilot with AI organisation Ocean protocol for a decentralised data exchange. The idea is surrounded by the fact that AI and machine learning require data (a lot of it). Enterprises are sitting on vast amounts of data without being able to realise this into financial gain. This is what has led to the concept of decentralised data marketplaces where enterprises can buy/sell data. The interesting thing here is that the transactions will take place on the Polygon blockchain and the project will be powered by Polygon.

Crypto security | Protecting your assets

Investors and traders alike are very familiar with the potential possibility of losing money on the markets due price fluctuation, specially in times like this where prices are sinking looking for a bottom to put an end to the bear market. In order to control the losses in this case, a good risk management strategy is the safety net that helps to protect your capital.

Having market crashes is not the only way of losing money, there are other risks that come in hand with just being involved in the crypto space where risk management strategy is of little to no use. But there are a handful of different things that can be done to be protected in those situations.

Since crypto reached all time highs there have been an increasing number of scams that give thieves access to the victims accounts and crypto assets. According to a recent analysis done by the Federal Trade Commission; consumers have lost over $1 billion since the beginning of 2021. Just recently in May, over $300,000 worth of NFTs were stolen from Seth Green, after the actor connected his crypto wallet to a scam website pretending to be a credible NFT project.

Passwords

Probably most of us have heard or even experienced such tragic events, the threat is real and there is no better reason than that to build up an adamant protection against such attacks.

There are some of the same steps, such as creating and using strong passwords that you'd normally use to safeguard any of your other digital accounts/assets. However, there are some unique characteristics that crypto accounts have like seed phases that require additional security implementation. Especially, in actual times when the industry is yet to have the regulatory framework necessary for the retrieval of any stolen and even lost crypto assets, in the future this will probably be not needed at all.

In the next lines, I will cover several and different effective ways to protect your crypto assets such cryptocurrencies or NFTs from being purloined and you will understand why it’s worth taking the time and effort to properly secure your digital assets from being stolen.

Passwords

There are essentially two rules about passwords: Make it as strong as possible and don't forget it.

Even if this sounds very logical, it is usually easier said than done, the combination of those two arguments can be difficult and requires some good balance. To put into perspective why this is harder than it seems at first light, let’s have a look at the following data table:

As you can see, the only fairly good passwords would be those in orange, yellow and green colours. And those require at least 11 characters but with a mix of five different character types, if that's too hard to remember you might try with 14 lowercase letter characters, such a word(s), something as strong as “adamantium” (10 characters) will be compromised in just 4 minutes, while “antifraudulent” (14 characters should take 4 years to crack. Cool ones uh!? 

Here comes the real issue: you don’t want to have just one or two passwords and use them for different things, ideally you want a genuine and unique password for each different use. 

In the end that’re a lot of complicated and unique passwords to remember, which is the reason why considering using a password manager could be a great idea, especially if forgetting your password could lead to losing access to your assets!

Password managers make it simple and secure to store and use your passwords from one place. I strongly recommended choosing devices that come with high level (military) encrypted code storage and two-factor authentication (2FA) for extra security and with protection from dust, fire and flooding. 

PRO TIP: If you decide to choose this option make sure you purchase ONLY directly from the official site and brand new devices. Buy two, use one on a daily basis and store in a safe place a secondary backup device.

Wallets

Your crypto wallet serves as the gateway to your crypto assets. There are two different kinds of wallets, the “hot” and the “cold” ones. The main difference is that hot wallets are software that operate online (always connected) while cold wallets are hardware tangible devices that work offline (unplugged); if you are not familiar with all the other differences between the two, have a look at the next image:

Crypto wallets store the private keys that prove you own your crypto assets and let you buy, sell or trade on blockchains, but don't hold the actual coins or tokens.

The most used wallets are “hot” ones because they're accessible, free and easy to use, while “cold” wallets have to be purchased and requise a minimum degree of understanding, but in general they are affordable and quite intuitive. That’s why in regards to security you may want to consider using a “cold” physical wallet.

A hardware wallet allows you to store cryptos and NFTs on a physical drive that allows you to connect it to the internet to access and then disconnect it afterwards. Hardware wallets are generally more difficult to hack into, essentially because they are offline most of the time but also because a physical interaction such as pressing a button, is required to confirm transactions. So they're the safest option when storing digital assets, especially those of high value.

PRO TIP: Once again; if you decide to choose this option make sure you purchase ONLY directly from the official site and brand new devices.

Seed Phrases

Most crypto wallets have a seed phase for additional security in addition to regular passwords. Think of the seed phrase as a master password that is set up the moment you create or set a new wallet, regardless if it’s cold or hot.

A seed phase is a 12 to 24 combination word code that allows you to sign in to your wallet on other different devices, but it also can be used to recover your account if you forget your password.

Cool abilities like that are made to reinforce security but come in hand with some major risks that should have all your caution to prevent them. Basically anyone who learns your seed phrase could have access to all your crypto assets stored there, no matter if it’s a cold or a hot wallet. Scary right? But don’t panic, the solution is very simple!

First of all, the worst idea would be to store your seed phrase somewhere online, if you think of it, having the keys to your kingdom in the middle of the most accessible and populated space in the world seems like a terrible decision. It might be convenient for you, but I encourage you to discard the idea.

To be extra safe I might even recommend you to not even copy and paste it, or type it in your devices, not even screen capture it. Hackers are able to use programs that could trace all of that digital information. So how do you do it? Use pen and paper or anything non connected to the internet. Write your seed phase down as it shows up and then store it in a safe place, somewhere very safe! After that you can be as creative as you like to reinforce security even more (check image!)

And of course I encourage you to NOT share it, no matter the circumstances, seed phrases are meant to be private, keep them that way. If a website or a company asks you to share your private keys under any condition, it is most definitely a scam and you should stay as far away from it as possible.

PRO TIP: If your seed phrase is either lost or stolen, but you still know your password, immediately log in to your wallet and generate a brand new seed phrase, then move your assets to a new wallet

Direct Messages

Social Media Platforms

Social Media Platforms

Platforms such Telegram, Discord or Twitter are some of the non official homes of crypto and NFT communities. They are the place where the individuals that belong to certain communities thrive and interact among them and to projects, but it's also where hackers and thieves go to find their victims and compromise their accounts.

As a rule of thumb never trust unwanted messages, especially if they come with any kind of link or file to click and open. Usually those kind of messages come from sophisticated profiles that might look identical to project related staff, but truth is real staff most likely will never DM you first. Triple check who you are talking to, and use verified channels to find the correct websites and never share your screen.

Messages about winning giveaways, receiving “free” money, being invited to a great project, being selected to a secret program, having airdrops, needings your help, etc… are very likely to lead you to lose your assets and fall for scams. Use your common sense and if in doubt verify in the proper channels with the legit and right people. 

Essentially if you get contacted out of the blue about an ‘amazing’ cryptocurrency investment opportunity that just seems too good to be true, then it probably is. Never give away your personal information or login to your digital wallet through suspicious links present in emails because it is mostly likely to be a scam.

PRO TIP: Disable direct messages from people you don't follow or are not your friends

Social Media Platforms

Scammers use ads on social media and even Google search to target crypto enthusiasts. In 2021, bad actors purchased Google ad placements for fake websites that impersonate popular crypto wallets to target people and the scammers were able to steal over $500k worth of cryptocurrency.

Cryptocurrency giveaway scams are promoted on YouTube, Twitter, Facebook, and other social media platforms. These giveaways almost always appear to be from celebrities or famous personnel within the crypto community. In 2021, over $2 million in cryptocurrencies were scammed by Elon Musk Twitter impersonators alone. 

Since there have been many legitimate giveaways on social media as well, it is compulsory that you do your due diligence and research before you engage with them.

DApps and website interactions

As the popularity of crypto grows, so does the use of the walletsto interact with websites and decentralised applications. Even if you decided to trust a giveaway, participate in a unexpected free NFT mint, or you saw a link shared by the staff on their official Discord server think that there is a possibility that those links could lead you losing your assets.

That is why it’s very important to be vigilant. Here is some preventive advice to help you avoid falling for scams in the ultimate instance while interacting with links, websites and DApps.

1. Verify what you’re approving:

2. A big red flag usually is “Set Approval For All”, but when making a transaction, always be sure to verify that the details and permits are correct before approving the transaction. By verifying the details of each transaction, you can help ensure that your assets are not stolen by hackers.

1. Manage infinite approvals:

2. By using revoke.cash, you can easily manage your infinite approvals and revoke access if you feel an application no longer deserves it.

1. Remove unused connected sites:

2. It is important to be aware of the websites that you are connected to. If you are not using a site, be sure to disconnect from it. This will help protect you from potential attacks in which hackers gain access to your data.

1. Lock and unplug your wallets:

2. When you are not making transactions a way to protect yourself from potential attacks is to “close the door” by unplugging your cold wallets or locking the hot ones.

Manage token approvals:

If you no longer want to use a token, you can unapprove it by clicking the “Revoke” button next to the token name on EtherScan. This will help protect you from potential attacks in which hackers gain access to your funds by using your approved tokens.

PRO TIP: Create a wallet to interact with any site and have in it only the funds you might need for the action you intend. And keep your assets in other wallets as storage units where you send your assets but never use it to connect or interact, only do send and receive transactions with the vault.

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