Weekly Update August 8th

August 08, 2022

Welcome to our Weekly newsletter!

Markets running wild…

Let's first discuss last week and those job numbers.

So we had a super hot jobs report coming in at a whopping 528k jobs added with expectations we would see around 250k – So a huge upside surprise.

Initially, we saw the market sell-off – Mainly algos reacting to the headline number then we witnessed dip buyers showing up and traders pulling back on shorts – Causing the market to snap right back to the highs of the day. RIP for anyone who attempted to trade that action on Friday. The result even had me taking premature profits on some longs… fml.

But digging into the jobs report deeper we can see this is the same BS we had last month.

Long story short the print came in higher due to a major increase in ‘’Multiple job holders’’ NOT an organic healthy rise AGAIN. Hardly healthy if you ask me.

The jobs print now has people saying we won't see a recession with job numbers like this… but looking under the hood you know what’s really going on. How long can they keep playing this game? – Likely once the midterms are over.

But look, the market is like a giant oil tanker - it can take time for it to move and adjust so we just have to roll with it and as I said in my last update continue to play long side plays within crypto until something breaks. You just have to set the SLs and be agile.

BTC looks primed to continue higher here and maintains the HL HH structure. This only really breaks down below 22400 so that’s the level to keep an eye on. The upside target still remains in the 28k – 32k region.

On the stock side, It’s a really simple/clean chart so I highly recommend using this to dictate your crypto plays.

  • SPX – 4200 – Call wall resistance

  • SPX – 4100 – Initial support

  • SPX – 4075 – Crucial support – If broken likely a test of 4000

  • SPX – 4000 – If this level breaks then expect a more prolonged downside… and fast

As a group, we’ve had some great success on the calls over the last few weeks with the likes of FIL (over 100% in a matter of days) and AVAX (Up nearly 25% from entry!) so we will continue to try and milk this for all its got and as we climb higher on equity indexes, I’ll be focussing more and more on making bank on the downside! LFG 

Solana Exploited with Thousands of Users Affected

Once again this week, there were more unneeded protocol security concerns centred around Solana. Over 7000 wallets and nearly $10million in cryptocurrency was stolen from users of Solana’s digital wallets such as Phantom and Slope. According to several affected users, funds were simply drained from wallets despite being disconnected from web browsers and without signing malicious transactions. The exact cause is unconfirmed but it is believed to be a private key exploit tied to the mobile software wallet Slope.

Coinbase Announce Partnership with BlackRock

Coinbase have announced a deal with the world's largest asset manager BlackRock. The deal will give BlackRock more seamless access to digital markets, more evidence that the number of traditional investors dabbling in crypto is on the rise. The first token available will be Bitcoin, but others may be included later. Joseph Chalom, the global head of strategic ecosystem partnerships at BlackRock said “Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets”.

Uniswap due to Test Turning on the ‘Fee Switch’

This has been a long debated topic within the Uniswap community as to whether the protocol should turn on the ‘Fee Switch’. By doing so, a portion of swap fees would be allocated to the DAO-controlled Uniswap treasury. The ‘Fee Switch’ would mean that based on current volumes over $150million in protocol revenue would be returned to the treasury which the DAO controls. However the risks are also significant. Firstly, implementing the protocol fee would mean less fees would be available for the current liquidity providers who fund the various pools. Trading fees are used to offset impermanent loss and the reduction in LP rewards may cause a systemic risk towards liquidity and market share of volume should liquidity providers withdraw their funds. The counter argument is that at some point UNI token holders need some sort of returns on their investment as well.

Nomad Bridge Hacked for $190m

Not for the first time this year a cross-chain token bridge has been exploited with devastating consequences. The total value of cryptocurrency lost totaled over $190m. The thing which made this exploit even more incredible was that it wasn’t only an isolated party which received all of the funds. The nature of the exploit meant that anyone who could observe the blockchain could copy the culprit's transaction, change the receiving address to their own, and steal funds for themselves as well. Ultimately this once again calls into question the inherent security and suitability of cross-chain bridges given that this has been just one of many 9 figure exploits in the last 12 months.

Microstrategy’s Michael Saylor will step down as CEO

Bitcoin evangelist and hero Michael Saylor will step down as the CEO of Microstrategy and instead become executive chairman. The move came after the company reported a second-quarter loss of about $1 billion, but moving into the new role will set him up to focus more on the company’s bitcoin acquisition strategy. Pretty certain this was all he was doing before… but regardless best of luck Michael!

South Korean VC firm ‘Hashed’ confirm losing $3 billion in LUNA collapse

Hashed CEO Simon Seojoon Kim confirmed in a recent Bloomberg interview that the company had indeed lost more than $3Billion in the LUNA collapse back in May. Hashed had purchased around 30 Million LUNA tokens back in the $25million venture round raise back in January 2021 - according to Simon, Hashed held their tokens all the way down. Hashed will continue investing into the crypto space and said “In the tech sector, there’s no such thing as a portfolio that guarantees success, and we make our investments with that in mind. We believe in the community’s [crypto] growth, and that has never changed”.

Some of the main tokens unlocks happening in August 2022

Sandbox with a huge unlock! Good information to consider if trading these names

  • Polygon ($MATIC) - 640M Tokens (6.4% of the supply) - 1 August 

  • Ethereum Naming Service ($ENS) - 4.5M (4.5%) - 8 August

  • Moonbeam ($GLMR) - 22.5M (2.25%) - 11 August

  • Sandbox ($SAND) - 390M (13%) - 13 August

  • Lido DAO ($LDO) - 53.1M (5.31%) - 14 August

  • Apecoin ($APE) - 7.34M (0.73%) - 17 August

  • Illuvium ($ILV) - 238,000 (3.4%) - 31 August