Why are crypto platforms going bankrupt? Is your crypto safe?

Sa. Sam.

Foreign welcome to another episode of the Market Report. I am your host Benton. And we are joined yet again by a resident experts, Jordan finiseth. Marcel Peckman is back this week and we have Sam Borgia as well. Jordan uses a background in psychology and human behavior to spot those emerging trends in the crypto markets. Sam Borgi is a business editor at Cointelegraph where he brings a decade of experience in economic analysis and financial market writing. Marcel Peckman applies his 17 years of experience trading derivatives options and futures to the crypto derivatives markets. Guys, another interesting week in crypto. And yet here we are again. Everyone's still standing. I see we got some smiles on the faces this week. What's going on? Jordan kick us off this week, man. How we feeling?

I feel the same as I did last week. I mean nothing's really changed. Crypto winner is going to go on forever. So it's like just stick in for the long haul. Find the tokens you want to accumulate. Dollar cost average, that's just my opinion. And just kind of realize that this is a long term game we're playing here.

Have you been getting outside, Jordan? That's a real question.

Oh, every day, man, every day.

Good deal. Sam, what's going on this week? How we feel about things?

Well, Jordan mentioned crypto winter, right. And I'm from Canada. It's winter nine months out of the year. So I'm used to winter. You know, you can, you're gonna have to do a lot more to get get me down at this point. But as Jordan mentioned, there's really no changes in market sentiment, no changes in expectations. We're still status quo. It's a pretty mediocre market out there. And yeah, again, remind yourself why you're in it in the first place. If you're not prepared to hold for a longer term to realize your investment thesis is probably not the the market for you, let's put it that way.

Exactly right. Got to have those diamond hands and conviction behind what we're doing here. Marcel, glad to have you back this week. What's your take? Where are we at this week? Anything changed? From what you see, I think the.

Biggest change is that everybody is trying to look for a scapegoat. And right now it seems that the BTC Maxis are the ones. So they are the one responsible for Voyagers and Celsius and Terra Luna. So okay, if you need a scapegoat, beat the BTC Maxis. But it's not our fault. You gotta learn to hold your own keys to hold your own coins. Even if you hold altcoins, don't give it away for a meager 5% or 10% yield per year, hold your coins. That's the most important message.

All right, you heard it here first from our panel of experts. We got a super exciting show this week. We're going to be diving into some big headlines talking about the Euro dollar parity this week, which is going to be interesting. I know the CPI reports coming out tomorrow, the 13th from the Fed. So that should be interesting. A lot of people are speculating around this. Is it going to be higher than what we saw last month or lower? We're going to talk about that and dive into this. But first things first. We have our Market Roundup, the weekly roundup video here to dive into what's happening around the Twitter sphere. And I want to shout out to all of our loyal viewers that are watching and tuning in from around the globe. Tell us where you are tuning in from. We'd love to have you here every and we appreciate you being here. Great show lined up for you. So let's go ahead and jump into Our weekly roundup for this week. Saw another slight this week all the way up to about 22 for, for Bitcoin. But now we're hovering back around 20k. Is this the price floor? You saw the headlines. People are buying Cardano. They're maybe some trouble with Ethereum. Some price breakdowns may be imminent. We're going to talk about that today and dive into it. But if you haven't liked and subscribed, go ahead and do so now. YouTube Cointelegraph we're here Tuesdays, 12pm Eastern for the market report. Don't forget we're going to be giving away a $100 worth subscription to Markets Pro. Drop your Twitter handle in the chat at the end of the show. We're going to select our winner for the Markets Pro subscription. This is just free money for you all. Make sure you drop your Twitter handle in there and you can make a trade that could potentially pay for itself and be a huge win for you. So make sure you stay tuned all the way till the end of the show today where we will select that Markets Pro winner. Adrian, do we have memes today? But we're going to jump into memes. First things first here. All right, beautiful. Let's see what we got here. BTC price, the Tower of Pizza. Let's see. Crypto expert. That's. That's about right. All these, all these experts. We all got Speculations.

And I see myself there. I'm calling the 47,000 bottom for Bitcoin. That's me.

That's good meme. Dad, why is my sister's name NFTs? Because she was our second biggest. No problem. That's a good meme right there. Love it. What's the next? Yeah, that's about right. Trying to continue. We saw the headlines there. Weekly roundup banning USDT bitcoin can never be banned. Let's be real, start buying NFTs. Did you take both of them? These are good memes. These are really quality, quality memes. This week, shout out to Adrian Danilo for. For picking these out this week. Yeah, saw this one. This is a good one. That's great. Good memes. Good memes. All right, classic memes for you guys. This week, shout out to Adrian Danilo for picking those out. Quality, quality memes. I'm gonna check the chat real quick, see who's tuning in. Rich new designs back. We got Jackson here. Dinesh, thanks for tuning in. Luciana, friend of the show. Marcus, Adrian and quotas, thanks for tuning in today. Love having you here. Pop your questions in the chat as we kind of skim through some of these articles that we're going to touch on in our next segment. If you have questions, our panelists of experts will answer them. And we'll be hawking this chat throughout the show. So make sure you drop your comments, your thoughts, your questions in there and we will take a look at them here. PR throughout the show. But next I want to get into some of the biggest headlines on Cointelegraph.com this week. First and foremost, we have bitcoin risk new lows as 20k looms amid dollar euro parity. So Danila, if you wouldn't mind just pulling up this article real quick, I want to quickly highlight Arthur Hayes came out with some comments and herald the start of the fiat currency doom loop with the USD euro parity we're going to dive into. What does this parody actually mean? This week we saw bitcoin kind of rebound a little bit and then it started to lose some steam over the last 48 hours and now we're hover around what now. Many folks and experts in the field are calling the support level of 2300 if we break this. What does this mean? I want to also highlight another quote here. So fire charts saw some bid liquidity in close range, but it may not be enough if price falls below this trend line. Prepare for new lows. This seems like a very stark Outlook. But first I want to go ahead and start this article out with what is the significance of this USD reaching parity with the euro? Sam, our macro expert here, why don't you kind of break this down and tell us why is this significant? Does this actually mean and how will it impact the crypto markets?

Well, I think it's significant because it shows you just how weak the Euro has become. If you take a look at the US dollar index dxy, it compares the the US dollar against the basket of currencies, but mostly the Euro. You know the Euro has the highest weighting of more than half of the dxy. So we're seeing that the US dollar has been rising substantially over the past six or seven months and the DXY just hit multi decade highs above 108 I believe. So what this shows is that you know, Europe is screwed in a lot of sense. You know, this war in Ukraine and the Russia spillover effect in gas prices, oil prices. A lot of economies in Europe are really vulnerable to what's happening, especially Germany, which is the economic engine of the Euro. I believe they recently posted a trade deficit if I recall correctly, which is not unlike Germany. So overall it just shows that everyone is piling into the US dollar. So it's probably the best of the worst fiat currency to hold these days as investors continue to look at it as a, as actually being a risk off asset. So that's the perception I think, that the Euro right now isn't doing too well because of that and it's going to be interesting to see how much further it falls and whether the dollar is going to start losing some steam moving forward. We'll have to wait and see.

And also in this article it got brought up something about the yield curve control. So central banks would now have no option but to adopt yield curve control, sparking the disintegration of the currency which could ultimately leave Bitcoin on top as the new global standard. What does this, what does yield curve control mean and can you kind of break that down for us?

So when, when central banks do yield curve control, it's basically when they target a long term interest rate and then they go ahead and they buy and they sell as many bonds as necessary to hit that target. So it's not necessarily the safest strategy. I don't know what the ramifications of that are going to be. Regarding whether it's going to be a boon to Bitcoin, I'm not quite sure yet. You know, we've been talking about how Bitcoin is supposed to succeed during these, you know, perilous times. We haven't seen that yet. In fact, the best hedge seems to be, you know, holding cash. Believe it or not, as crazy as that sounds, you know, if you decided that you wanted to, if you were concerned about inflation at the beginning of the year, you know, if you held dollars, you would lose what, 9% of your purchasing power. But if you bought bitcoin, you'd be down a lot more than that, which is the ironic thing about all that. So in the short term, it really hasn't served as an inflation hedge. People are still piling into cash as a haven asset. I don't think this is sustainable in the long term, but for now, that seems to be the paradigm in terms of bitcoin adoption. I guess it's happening behind the scenes. The long term Hodlers are still here, but I don't see bitcoin fulfill filling any of that need or, or filling any of that niche anytime soon as being any kind of haven assets. So I'd be skeptical about those narratives. I know I've learned my lesson not truly pile myself into that kind of narrative. So you have to wait to see for the, for what's going to happen over the next six to 12 months.

Marcel, you've been biting your lip here. Go ahead and jump in. I want to hear your thoughts and takes here.

No, I just want to highlight that gold as well hasn't been really serving as a store of value in the past months or weeks, has touched $2,000, but quickly dropped to $1,700. So even gold, which used to be the safe haven in the past, is not working right now. So I kind of agree with Sam. As crazy as it seems right now, holding US Dollars cash seems like the best option in the past six months. I don't know why or how, but it is.

The truth is that, is that what the world has come to is that now we have to, we have to hold cash in order to hedge anything, you know, Marcel. So I'm also curious to learn, like what your take is. Why do you think gold has not held its value? What in the market may have kind of dissuaded people from kind of piling into that as the hedge.

I think is the flight quality. When investors are afraid, they don't think about returns. They think about what is the safest asset. Because when you buy gold, you don't really get the physical bars, so you don't know if the gold exists or if the bank that is holding the gold is going to continue existing or not. So when investors fear that the imminent collapse or a global crisis is coming their way, they want US Treasuries because they know the US government will not default on them. They want US dollar bills or in a bank account or cash at home because they know that money, that value will not disappear. Because they've been trusting the government for the past hundred years and it has, has been working so far. So maybe for the next six months it's going to be still the best option, but surely not for the next two or four years because we know that US government will continue to print money out of the crisis. There's the only solution. So it will devalue everybody who has been holding cash. But for now, for the short term, it has been working.

And Jordan, Arthur Hayes mentioned this doom loop. What does this doom loop mean? And I guess I'm curious to hear your take about the macro environment, the US dollar to, to Euro parity as well. What does that mean for crypto?

Well, I think what they're alluding to is just like the unprecedented nature of what we're like the whole global economic system is going through right now and I don't think there's anybody alive really that's really gotten to experience like the breadth of different headwinds that the market's facing. But the US dollar has basically turned every other fiat currency into an algorithmic stable coin that we're all like, we know those don't work. It's not going to work long. I saw that meme. I'm like, that's perfect because it has turned all these fiat currencies into algorithm stable coins. It kind of makes us crypto people feel better because like, oh, they can't even get this right. Like we can't get it right. They can't get right. Nobody gets it right. It's just a system that's kind of running. But we're coming to the end of the previous economic like system, we're going into a new system and nobody knows how to respond to this. Everybody's like, gold, bitcoin, the dollar, I don't know. Because nothing's really working because everything is starting to fail. Which just means like, yeah, like, grab your seat folks, because it's going to be a bumpy ride for the whole global economy for the next decade.

I mean, Everett said in chat here right now, cash is not trash. I know, it's, it's crazy to kind of to, to be saying that out loud because forever we've Been saying cash is trash. So interesting times ahead for sure. Now I want to kind of lastly touch on the cpi, which is going to come out tomorrow. Purely speculating here, there's been rumors that it could potentially come out higher. Sam, what have you heard and what have you kind of been able to dig into about what could potentially come out of the CPI report tomorrow?

Well, haven't they more or less preemptively told us what's going to happen by giving us that warning? Basically, they're trying to deflect all blame, which is, you know, typical what we've been seeing for the past, I don't know, six months. You know, inflation is the fault of everyone except the actual culprit, which is, you know, expansionary monetary policy, expansionary fiscal policy. So it seems like I listen, I was predicting a while back that June would see peak CPI. And I think now the consensus forecast is around 8.8% from what I've seen. So it looks like the CPI print for June is going to be higher than it was for May, which is kind of shocking, but it would actually feed into my thesis that we peak sometime in June and then the CPI might moderate in the second half of the year. Still extremely high, but maybe not as high as it was earlier in the year. And it's shocking that gold has underperformed so badly in this environment. I mean, gold has become the ultimate coin, hasn't it? Usually, you know, one of the primary factors that drives gold higher is the level of real interest rates. So rates are rising, but inflation is rising much faster. You'd expect the gold to perform well in this environment, but it hasn't. So as, as Jordan alluded to earlier, things are breaking right now and it's very difficult to look at conventional portfolio management and then apply that to what's happening now. The 60:40 portfolio is dead as far as we're concerned. So it's all a matter of how much damage the Fed can do before it decides to pivot and shift course. I expect that probably will happen sometime next year.

Very good. And our other headline that we have this week is going to be talking about Bitcoin's potential bottom. Is there still room for Bitcoin to fall out? So the capitulation ongoing, but market's not at the bottom yet. According to Glass Node, one of the big quotes was Bitcoin. Wealth is being distributed from weak hands to strong hands due to ongoing capitulation from retail investors and miners, signaling that the bottom may be close. So guys, I want to hear Thoughts here? What do we feel like? Is there a bottom approaching? Are we near the bottom? How do you all like to assess this? As we all know, it's very, extremely hard to time the bottom. But what are you kind of seeing in the environment and what kind of indicators do you like to use to tell you what is could potentially be a bottom? Jordan, why don't you kick us off here?

I don't try and pick bonds, man. I do, like I said, I talk about it like a broken record dollar cost averaging. Just because like under $20,000, it's a good bitcoin. If it ever eventually goes up to $100,000 or over that, are you gonna really matter or care too much if you got it at 15,000 or 20,000? I mean some people might, but.

There'S.

Just so much going on in the world right now, I don't think anybody knows what's gonna happen. And the best you can do is just kind of try and pick a game plan, stick with the assets you think are gonna, are gonna that you like long term and kind of go with them. Do you want to hold the dollar for a long time? Because that whole system is sinking ship. So yeah, I just kind of dollar cost average. I don't try and expect to pick bottoms. We see the on chain data showing that it's like people with less than 1 bitcoin and people with over what like 10000 bitcoin or a large number of. Yeah, 10, 000 bitcoin. So to me that means that retail is finally getting interested in like somewhere in the background there's some big ass institutions like accumulating because they know what's coming down the feet in the future. So on the sly they're kind of somebody big players are accumulating all these tokens that the weekends are dumping. So I just try and like stay in and dollar cost average.

We saw an absolutely just massive green candle on, on Bitcoin on July 8th and I was cautiously optimistic. But I knew kind of in this environment we would see that short term correction. So even though we saw some green volume there for a couple days in a row, it looks like the selling pressure is still in. Marcel, when we're kind of talking about this capitulation still, we're walking through miners also selling off their bitcoin, which is something we haven't really touched on. Is that something you monitor at all? Is how quickly miners are kind of like getting out of that asset? Or is that anything that you use as an indicator to Signal a bottom.

Well, Benton miners produce 900 bitcoins per day. So I don't think that number compared to what's traded on exchange every day makes a difference. Even if they sell, okay, we're gonna sell the whole monthly production. So I don't know, 4000 bitcoins like they did in the past. We're gonna sell it in two days? Yeah, sure, maybe can drop from $24,000 to $21,000, a 10% drop. But it's not what makes a six month winter crypto winter as we've seen right now. Or it's not what causes the bitcoin price to drop from $45,000 to $20,000. So what's happening is that there's a lot of uncertainty. Investors hate that. They don't know if exchanges are solvent. They don't know if the contagion effect from Three Arrows Capital is behind us. They don't know if there will be a global economic crisis in the traditional markets. So whenever there's uncertainty, there's the flight to quality movement. So they move out of risk assets. And right now bitcoin is considered as a risk asset. And even gold is starting to be interpreted as a not so safe asset because you cannot really hold it. You don't know if the bank that holds the gold is going to survive the crisis. So investors, at least investors are starting to question, is the dollar safe? Is the gold safe? Should I be buying bitcoin right now? So the first movement you do on a potential crisis is, okay, I'm going to cash out, I'm going to US dollar. And then when your mind is a little bit more clear, you start to thinking, okay, so what assets do I think that are worth holding out during a crisis? Is it Amazon, is it Google, Is it Volkswagen bonds like they pay me every month a little bit, or is it bitcoin? I think that over the next 12 months, some investors, not all of them will see that, well, holding treasury gives me a negative yield because of inflation. So I get, okay, I get 4% yield, but inflation is 8 or 9 or 6 or whatever. But they're losing money. So they start progressively start buying bitcoin little after little. And this compounds. So I think it's going to take at least 12 months for this decoupling so we can find a bottom.

I mean.

But glassnode indicated that miners still hold about 66,900 Bitcoin. And they're saying that the next quarter is likely to remain at risk of further distribution unless coin prices recover meaningfully. Does that 66,000 Bitcoin mean anything or is that kind of like a drop in the bucket?

If that happens in a week or a couple of weeks, yes, it surely can. Definitely. It surely can make bitcoin price go sub $15,000. But I don't think there's a set price that the miners have to. Okay, so now we're forced to up because some miners have the cost of mining below $0.02 per dollar so they can withstand a tougher winter. And the miners that are paying, I don't know, 5 cents, 6 cents at their cost of energy costs. So yes, they're being forced out of the game, but I don't think that it's gonna happen for the 66,000 to be sold at a single week or two weeks. So that's not a concern right now.

This article also indicated that we could potentially be towards the tail end of what is this bear market. Sam, what is your take? Are we out anywhere near out of the woods or near a bottom and potential markets right now?

Well, that's a good question. I think as Jordan mentioned, timing bottoms is notoriously difficult. I mean there are some indicators out there. The pie cycle bottom and the pie cycle top have shown to be somewhat more reliable. For me, what I look at is I look at market timing in the four year cycle. It was always my expectation that Bitcoin would probably bottom sometime in Q3 or Q4 of 2022. Now of course I was expecting a much higher peak. You know, last year we didn't get that. So for me, looking at the four year cycle, we're probably coming up to a bottom in my opinion, either in Q3 or in Q4. And actually given the fact that bitcoin is highly correlated with stocks and it has been since the Corona crash, I think we're probably gearing up for a very volatile and very ugly fall. September, October are usually really negative month for stocks. There's a seasonality factor in place as traders come back from, you know, summer vacations. September, October hits the fan those months oftentimes. So I think if you see that in the equity market, if you see another sharp decline, September, October as the Fed hikes again in the summer, you could see bitcoin follow suit. And I'm expecting there to be a bottom sometime there. So that would be my expectation before we can start to see a recovery. So there's a perfect cocktail of factors that are leading us to potentially a bottom sometime toward end of the year, especially as the risk assets, the traditional Risk assets are going to be vulnerable to a pullback given the macroeconomic backdrop, given the Fed, and given all that's happening in monetary policy, that's my expectation moving forward.

Excellent insights from all of our experts here on the panel today, and we appreciate you sharing your thoughts. Jordan, you got, you got something to say here?

Yeah, I just had a crypto winner insight after surviving the last one. Like, don't chase a token that pumps. If we're in the middle of crypto winner, even if it's a legitimate pump, it's gonna come back down because there's nothing going to be sustaining it. If the token you like and it pumps, put on the patient cap, wait till it comes back down to the price it was before the pump, and maybe buy it there. But. And if you want to play the trading game, get a token. If it pumps, sell it, and if you want it, buy it back.

With.

I, I recently did that with RLC. Like, it went from a buck to buck 26, and I'm like, it's a crypto winner. Sold it. It already back, fell back to a dollar. So, like, do not. If, like, I, I understand the huddle nature, but if you're trying to increase your stack, don't get so attached to hodling when a pump comes, especially because the human psychology is once a coin starts pumping, that's when we want to jump in. Don't fall for it. It's crypto winner, folks. It's going to come back down. All right. You got to get a clear indication that the whole market is moving higher before you want to start buying and holding any coins. So just. That's my opinion, not investment advice. But.

Yes, I did. If you just kind of look around the entire market, there has not been a significant amount of volume, you know, on, on really any of these coins, including Bitcoin. With the exception of a few days out of the last couple months, it's mostly been all cell pressure. So definitely great advice, which is not financial advice from Jordan there. And once again, these are all the express opinions of each individual panelist. They are not the broad, sweeping statements of Cointelegraph. We appreciate everyone that's tuning in right now because we got crypto tips coming in next. But I saw some folks drop their Twitter handles in the chat earlier. Don't forget, we're giving away $100 worth of a subscription to Markets Pro here at the end of the show. If you have questions for our panelists, we're going to have another segment a little bit later talking about the bankruptcy contagion, Celsius 3ac Terra. What's going on with that? We're going to dive into that. We had a special report from our very own Giovanni. We're going to dive into that a little bit later. So make sure you stay tuned and have your questions ready about the contagion and everything you want to know. Our guys are going to answer it for you. So next things next, let's get into our quick crypto tips for this week.

Foreign.

Folks, you heard Jordan talk about his strategy. You gotta stick to the cryptos that serve a purpose. There are literally thousands of cryptocurrencies you can trade, but many, if not most of these won't ever amount to anything. Although you may get lucky and make money trading any crypto. If you're looking to build long term wealth, you'll have to invest in cryptos that have staying powered. Read the white papers on any cryptos you plan to invest in to see how they are tied to the blockchain, what their utility is and how they are better, cheaper, faster than any of their competitors. This is the best way to filter out long term winners from losers. Another great place to go is their GitHub to read through their documents. If you're a coder and you can read code, make sure you check what these folks are building. I always recommend to check the social accounts as well. So those are kind of three big areas you want to dive into when you're looking at assessing a project for the long term. Is this project going to be around five to 10 years? Now that's what you got to ask yourself. And that is our quick crypto tip for this week. And lastly here let's make sure you like and subscribe our Coin Telegraph YouTube channel because we are here. You want to see all of our pretty faces? We're here 12pm on Tuesday, so like and subscribe Cointelegraph YouTube. I know Marcel has some exciting stuff for us to dive into. He's going to be talking about funding rates here with USDT and Tether. What does this mean for the crypto markets? Marcel is going to tell us. So let's go ahead and hand this over to Marcel. He's going to dive into this right now.

Thank you Benton. So let's talk about Tether, the Stablecoin USDT for a moment. Regardless what you think about the Stablecoin, it is extremely important for crypto markets. Firstly, it holds a 66 billion market capitalization. So even if you consider it a regular coin, it ranks number three with 50% of the value of Ethereum, for example. But more importantly, it serves as a base currency, a base pair exchanges including Bank, OKX and Huobi, essentially it can peg out of the dollar and one can argue it's going to incur losses to the cryptos, but not the exchange themselves. I would personally agree with that. But consider after the Terra Luna, we now know that exchange will suffer losses due to their dependence on the bakers, the ones responsible for 80% of the volumes, such as Three Arrows Capital. So liquidity is the name of the game and someone has to bridge those different exchanges, centralized and decentralized, and ensure the system works. And that's the market makers. So that's why the exchange gives them credits, give them unsecured loans as obscene. So how do we measure the tether stablecoin health? So firstly we compare the price of the Bitcoin at Binance, OKX and Huobi, which is Based in Tether versus the price at Coinbase Kraken FTX US which is based in US$, so not a stablecoin. So Danilo, can you share my screen? So whenever the price of bitcoin in tether is above the price at Coinbase and Kraken, it means investors are not paying a dollar on the stablecoin. A premium of up to 0.5%, half percent is acceptable. And right now, as you can see the chart, tether is not a concern. So meaning the bitcoin price at Binance and OKX is in line with Coinbase, Kraken FTX us, the regular USD markets. So the main indicator of tether health is stable right now, so not a worry. Thank you Danilo. But there's more data we can extract from tether, especially in markets outside of the United States. For instance, the tether price in Chinese Yuan, the CNY currency, should be pretty close to the official foreign exchange rate. So the indicator of the tether in Chinese Yuan should trade at 100% at all times. Danilo, can you share my screen please? So Okiex tracks the tether price in peer to peer markets versus the official currency. It should be trading near 100% at all times and right now it's trading at 99%, meaning investors are dumping the stablecoin tether and heading out with cash. So tether is healthy in Asian markets, but the indicator is telling us that there's a slight selling pressure right now at Tether. Thank you, Daniel Little. So from the previous chart we know that tether is holding up against Coinbase and Kraken markets, so not to worry over there. But in Asian markets there's low demand. So tether is trading at 1% discount. But overall the tether indicators are healthy, so not a concern right now.

So I know we talked about this on pre show, but like, what would, what would mean for like an arbitrager who maybe sees these differences from Asian exchanges to, you know, American exchanges, what would be like a good arbitrage opportunity if that percentage slipped from maybe call it, you know, 0.5 to 3%. Is that, is that where you may look at potentially doing an arbitrage or what. What's kind of like the leverage that you might look at for something like that?

Good question, Ben. So if you're Talking to tether, US dollar, basically the same currency, even a 0.2% arbitrage works. You can buy the price at coinbase and sell at binance and vice versa. Those market makers have flexibility to send. They have even credits at the exchanges so they don't need to buy at the same time. So even a 0.2% arbitrage works if it's tethered versus the dollar. But when we're talking about a different foreign FX such as CNY or Mexican Pesos or Brazilian Reals, you would require for the cost of transaction to cover tax and expenses. So a 1% price difference in foreign exchange markets in crypto is not relevant.

Very good. Jordan or Sam, any questions for Marcel today? And while you're watching today, if you have questions for Marcel, make sure you pop them into the chat now and we will ask them for you. So Jordan, any questions? We'll start out with you.

Is there a reason you think that they're kind of bringing the tetherfoot back around right now? I kind of think they like, I see the exodus or the switch over to USDC a lot more. Maybe they're trying to push people into a more, I don't know, regulated or legitimate stablecoin or setting up a future for a CBDC entry. What do you think is going on? Why the tether flood right now? If, if it looks kind of good in the background?

Yeah, it could be usdc. So the circle behind the fud, like trying to show, yes, we are regulated. So, so the exchanges should move to a regulated stablecoin so we are more friendly with the government and stuff. But the tether FUD has been going on for five years because tether hasn't been able to give a fully audited numbers of their balance. They show some attestation from Lawyers. Yeah, the lawyers attestating that his spoke to our bank manager and the bank manager said we have $66 billion of assets. But an attestation is really different from an audit, especially from a large firm. Tetra has been promising this audit and not delivering for the past five or six years. So until we have that the FUD will continue to circulate. It doesn't matter if USDC exists or not. Tether has a problem of itself because it never have given us a full audit.

Same.

Yeah, well that was the exact question I wanted to ask.

Right.

Because we're seeing the Tether FUD come back. Actually now the stablecoin race is really narrowed. You have circles. USDC is at a $55 billion market cap versus 6,65,66 billion for tether. It's interesting though because Tether did settle with U.S. regulators and they paid a fine and part of that process was they would do the quarterly attestation. So I think that is reviewed by more Cayman. But I just find it odd that they were never really required to produce a full audit or else they would have already. So that's always been an interesting kind of tidbit because they do release their quarterly etc reports and you know, I've covered it, we've covered it at cointelegraph before. So the FUD recently has shifted to the composition of their holdings, you know, the commercial paper, etc. So you really haven't been in crypto unless you've consumed the, the Tether fud. And that's been ongoing for five, six years now. Bloomberg wrote a huge expose on that I think in December of 2017. You know, the sky was falling at that point. But so far behind the scenes, as Marcel mentioned, things seem to be okay.

For now.

So quick question whether or not it's backed. The system is working as I showed the chart. So we can, we cannot argue with that. If the, if the market is paying a dollar for the tether, it's worth a dollar. What, what can we say?

So we saw it looked like Great Britain is coming out with the CBDC for the pound. Is there ever a situation, Marcel, where you see USDC being converted into some sort of cbdc? Would that be possible for the government to do that or does the government have to have their own currency that they start like standalone?

Yeah, the government needs full control for the cbdc, which means they can revert transactions, they can block addresses, they can do whatever they want. So they cannot do that using a public blockchain such as Ethereum So CBDC cannot be converted to USDC or whatever the inverse. They're completely different things. One thing is a cryptocurrency, the other is a cbdc which is 100% centralized. So I don't think that's going to happen.

Yeah, excellent insights. Yeah, yeah. You know, for slave, you know when Slave coin comes into play, cbdc basically you can think of it as, as you know, Jordan, Benton, Sam and Marcel, we all have accounts at the Fed basically and the Fed can turn on or turn off our access to the CBDC because we now have an account basically with the Fed. So when Slave coin happens you'll, you'll, it'll be a very, very different phenomenon than, than stable coins. I think stable coins are actually a really good innovation and their use cases have expanded a lot over the past few years. They were initially conceived as a way to give crypto traders access to liquidity because no one would bank crypto companies. But now they're used for remittances, for payments etc. So yeah, as as Marcel mentioned, two completely separate information, separate things.

Very good. And I see, I'm looking at the chat right now. We have luscious. What are your guys thoughts on Polkadot slash Cosmos and IBC in general affecting the leveling of asset prices across markets? Do these particular projects have an impact at large? Let's see who wants to take this question first.

I don't see them really affecting like the current state. They might like they'll attract it value when more when the market gets kind of bullish again and more people come in. But even I was the other day just kind of thinking like what is the value proposition for a lot of these tones? I love Cosmos especially but what's. Why do I want to hold the token beside from staking what's giving its value? Like newbies don't necessarily ask these questions but the older crypto folk definitely kind of focus on these things and that's why everybody kind of eventually starts consolidating down to the top cryptocurrencies. But I think that they'll have their time in the sun in the next bull run. But even like with Polka Dot especially, I don't know why you need to hold the Polka Dot token when all these other trains operate with their own token and kind of you use the fees for that. So there's a lot of stuff to figure out and how this goes. So I don't know. I think that they will attract value but are they gonna throw off the balance of the market? I Don't think so.

Yeah. I mean you're talking about Polka dot with a 6.4 billion dollar market cap at Cosmos at 2.3 billion dollar market cap. I don't think these are the shakers and movers right now with where we're kind of at. Sam, you had some thoughts to add to that?

Yeah, I mean Polka Dot and Cosmos are the least of our worries right now. Let's put it that way. You know, they're the ones being affected, they're not the ones doing the affecting. So. So we're in a downtrend across the market that's going to affect these projects as well. You could say that they're going to have staying power. I think Polkadot will survive for example, during the next cycle. Other chains may not.

Exactly. I'm very bullish on, on the Cosmos ecosystem thanks to Jordan's enlightenment with interoperability and what they are doing with ibc. I think it is definitely a long haul project but for right now I don't think it's, it's impacting the entire space. That's yet to be determined. All right folks, let's keep this show moving right along here because we have a very exciting segment that we're going to be talking about this contagion, what's been happening, this special interview that we have. We're going to play you a clip in just a few seconds from a special interview from Giovanni where he spoke with Corey Clipston, CEO of Swan Bitcoin, to gather his insights about what's been happening with this contagion. The latest news with Celsius Three Arrows Capital founders have not been seen in three weeks. What's going on? Please go ahead and check out the full video on our YouTube but we're going to go ahead and play you a short clip and dive into some of the nuggets from this video. So Danilo, let's go ahead and run it back here.

I think there's also a really important lesson to hear, a lesson to learn for just crypto fans, not bitcoiners, but, but the, the altcoins, the crypto people is that a lot of the people that you think are super smart were just in the right place at the right time. They actually aren't that special. And they built a lot of these huge companies essentially because of this massive arbitrage of crypto being just outside of the reach of regulation at present. Kind of like online gambling was in the aughts. And so, you know, basically you just have these two factors of short Time to liquidity, which means you can like pump something up and dump it on retail. And then this whole idea of like we can make our own weather, which is kind of like what crypto VCs talk to each other about all the time. It means that unlike with actual securities, these one, these securities that are just outside the reach of regulation today, they can market them willy nilly. They can make trumped up promises about what they're going to be. They're seeing a lot of fortunes made from essentially like unethical would be will soon be criminal activity, but they'll get away with it at present.

All right, folks, we've seen a lot of contagion floating around the space right now. Why are crypto platforms going bankrupt? Marcel, what's your take on what you're seeing kind of right now with all the recent fallout?

It's what I tell what I said earlier. Unsecured loans. When you give money away for a market maker or someone, you believe it's essential for your business. Like for instance, if you are a Voyager or Celsius and you think that 3ac is the best money manager in the world, so you simply send out a billion dollars in Bitcoin, Ethereum or Stablecoin to them and say, okay, manage the money for us and give us like 8% per year and we give away 6% for the clients and we go off with 2% profit. It's very easy to trust someone and do this mistake. And exchanges have been doing this for the past 10 years since they were launched. And we've even saw an exchange lending money with no collateral, with no margin to Roger Ver, for example, which is a big cash founder, prominent figure. This should not happen. This should not exist. So crypto platforms are going bankrupt because they're giving loans, unsecured loans or not, without collateral. So that's why they're failing.

And Jordan, what are some of the biggest lessons to learn from this entire kind of last six months, let's call.

It don't put people on a pedestal. I used to be a therapist dealing with people's internal like we're all faulty humans. All right, I don't care if you're a president or whatnot, we're all going to make bad decisions and like part of our wanting to succeed. We'll like we're willing to offset some of our risk to other people. Like, oh, this person's smarter than me. They know what they're doing. Let me put their money, my money there. But no, they're, they're people too. We're all kind of greedy at times and we get caught up in the FOMO of the situation. Crypto still is new asset class that like is making millionaires but also bankrupting people. So yeah, people put way too much trust in some of these platforms as Marcel mentioned, not even collateralizing some of these loans or something because it trust us so much and we think that we're going to have this blow off top in crypto. So poor decisions, giving people way too much like credit or prestige or thinking that they're not going to mess up in any kind of way is what really gets us here. Nobody can really do anything all that much better than you in a lot of cases. So try and just manage your risk a little bit better and realize that people are faulty. Every person I've ever met is faulty. Don't put anybody on a pedestal because I promise you they got their own in the closet that they don't want people to know about.

We're all humans, man. Sam, how are regulators going to view everything that has happened? And how do you think this fallout with Celsius 3ac, how do you think that's going to impact future regulations?

Oh, this is a regulator's dream come true. I mean, they're chomping at the bit right now. They're going to love this. You know, they're going to love coming in and taking, you know, sweeping regulations across the industry. I think we're going to start to see that. I think that a lot of these different platforms really were. I think the accusation that they were operating basically Ponzi schemes and in a bull market, you know, something like Celsius for example, is, is really good. They'll take your money, they put it into high risk, defy protocols, then they generate yield for you. But what happens during a bear market? This is what happens. So I think they're going to start trumpeting up, up investor protection and I guess they've been using that to block a spot Bitcoin etf, which is a bit ridiculous, but I see more regulations coming into play. I'm not exactly sure how that's going to play out, but you're going to continue to see a major shake up in the industry. For me, the biggest, the biggest, you know, the most surprising element of the past six months is that you saw major crypto blue chips or what were considered major crypto blue chips go under. I mean, Three Arrows Capital was a huge name, you know, and with that example Jordan mentioned, you know, don't put people on A pedestal. You had those guys that actually believe their own hype and they did some ridiculous things during the bear market. Celsius, another major player, you know, multi billion dollar valuation, multi billion dollar raises. You take a look at the terra ecosystem and what it did, and the biggest lesson of course is that, you know, you're in an exponential asset class. Bitcoin and crypto are exponential asset classes. Do you really want to risk it by putting your, your coins in a different platform for 5% yield when you're going to be making thousands of percent over the, over the next decade? Doesn't really make any sense. So self custody is really important and in terms of the US regulatory shakeup, it could really go either way. You know, the only, the only secure. I don't want to even use the word secure, but the safest bet is probably bitcoin and I say it's safe. I'm not saying it's completely safe. Nothing is completely safe. But I expect regulations to, to sweep in over the next foreseeable future.

While we're on this topic of three years capital, Danila, if you wouldn't mind sharing my screen. Jack, I found this really interesting tweet from Jack Nevold, Three Arrows Capital. After they got the loan from, from ftx bought this nft. So this would, this was like part of, I think the, the loan that they got and it was just like how, how is this possible after they got bailed out? And, and so like you kind of see what, what Sam was alluding to is like they were buying their own hype and even after they got the loan from ftx, they were still doing some stuff that was just like highly questionable. So it's interesting times in the space and, and one of the biggest things I think that we can take away from this time is safety and security and understanding how to mitigate your own risk in these types of environments. Defi extremely risky. Know the threats that are out there. There could be exploits, there could be rug pulls, there could be smart contract bugs. Even if you're staking on an exchange or a platform C5 platform, you may not get your funds back. And so what is the best way and best methods to safeguard your crypto in these types of environments? Jordan, why don't you help us out here and give us some safety tips on how to best safeguard your crypto.

Well, if you're just trying to safeguard your crypto, hardware wallets are definitely the easier, the, the safest way to go necessarily. If you do, if you want to huddle like Sam said, you want your thousand percent over the years just kind of put it in a wallet, set it and forget it. I always keep on mentioning go outside, enjoy the sun or do something. If you got a little cash and you want a dollar cost average, dollar cost average, pull it off of that exchange and put it into your cardboard wallet and leave it there until you want to sell it. And like in a few years if you want to sell. That's not investment advice. But yeah, you're not your keys, not your cryptos that used to. I remember when Trace mayor was out there every week trying to pump that and all of a sudden that just disappeared. I think it's. So platforms like Celsius and all this could arise but I think we're all learning the value of like holding on to your funds.

Self custody. Sam, Marcel, any other safety tips that you'd like to emphasize here?

Don't chase yields in this market. You know, don't, you know, you have to look at the mechanics of what's actually being done. Don't aimlessly chase yields. I understand wanting to put money to work, I understand the appeal of passive income. But a lot of these different lending and borrowing platforms were basically Ponzi schemes and they were taking your money, putting them in high risk investments. And yeah, in a bull market that's all great, but when the novelty wears off, you're left holding the bag or you're left unable to withdraw. So be critical of anybody offering you ridiculous yields.

Exactly. Anything else, Marcel?

I just want to remember that even investors at Defi that think that oh no, I can, it's transparent. I can see where the money is flowing. So I'm not gonna lose the money. Yeah, Encore protocol has gone down with Luna and Terra, so I don't think Defi is a safe environment. Yes, you can diversify, you can use a little bit of that. But not more than 20% of your money should be held at DeFi.

High risk for the high rewards in the DEFI environment. As we saw, it's like walking that tightrope. One thing too. It's like hardware wallets versus self custody. Maybe like a software wallet, like an Exodus or a Metamask. Do you guys have any preferences in how you like to store that crypto or what may be the safest way? As we all know, hardware wallets are the tried and true best way to store crypto. But any, any suggestions for audience looking to do some self custody for their crypto? Jordan, any.

Any fixings was my first wallet and I like it because it has such a good range of tokens that it supports and usually they kind of vet the project as they add there. So like good developers know good projects. So any project that's on it, not all the projects on Exodus, but a lot of them are really good choices. And you can actually connect your treasure wallet to Exodus. So that's my go to choice.

Salmon Marcel, hardware, hardware wallet and put it in your doomsday bunker and that should, that should leave you safer, right?

There you go, Marcel.

I think a hot wallet at iPhone or Android works, but you need the steel plate. You need to write down the 12 or 24 words in a steel S plate. So even if your device is lost, you have a backup. So more important than having a hot or cold wallet is having the steel plate for that.

Exactly. The hardware wallets, the paper wallets or the steel wallets. Like Marcel said, always the safest. Even you are even self custody with Exodus or Metamask, there's still risk you'd be fished. You get sent an email, click on the wrong link. So again, those are kind of some of the risks with storing your own crypto. But so important, with great power comes great responsibility. Or did I flip that around and say that wrong? It's all right. Either way, you guys got the point. All right, let's get this show on the road. Here we have the markets Pro segment. We have two coins that we have for you to watch that you should have been watching because the news Quake alerts shot off this week and the Vortex score we saw 100 again this week, folks. So let's go ahead and dive into some of the coins you should have been watching.

Foreign.

T Ontology this week, the Newsquake alert which automates and alerts instantly to to users when market moving events happen. This one shot off Ont saw bump in a price due to a partnership with seller on July 5th when ONT was trading at 23 cents. A Newsquake told markets for subscribers about Ontology's implementation of bridging support via seller network seabridge. The price soon began to steadily rise and then jump to 27 cents. That's an increase of 17.4%. Big gains with those newsquake alerts. Always love to see those. And the other token that we were tracking this week was RGT. This one shot off a 100 on the vortex score. Very, very rare score. A score of 80 or above considered confidently bullish. Conversely, 30 or below indicates historically bearish conditions.

And.

And so what happened? Well, earlier this week RGT saw a steady high vortex score that held a rare 100. Bullish green scores started flashing when the token was trading at 411. Soon after, the price soared to $8.48, a sharp increase of 106%. That is huge. And if you would have had Markets Pro, you would have seen this, it would have been a no brainer. You saw the 100 flash up, you would have been like, holy smokes, I got to get this. So that's the power Markets Pro and that's why we're giving away one month subscription today at the end of the show. So drop your Twitter handle in the chat if you haven't already because we want to give this to you, want to give you the power of Markets Pro in your pocket, on your phone, or on your laptop desktop. So don't forget to do that. And let's go ahead and shift back here if you haven't got your swag. I see Jordan's rocking our shirt. We got Sam with the Cointelegraph show store.cointelegraph.com we got all the crypto swag you could ever want. So make sure you stop by every other week. We're giving away $50 to the Cointelegraph store. So store.cointelegraph.com for all the crypto swag you need. All right, guys, I want to hear some closing thoughts for today. We know, Jordan, we love seeing you going outside, man, but you got to make sure that we are tuning into the market report on Tuesday. So Jordan, let's start off with you. What is your, your final thoughts for today's show?

Yeah, I guess I can go a little different. Remember, bear markets are for building. This is a really good time to get out there, do some deep research into different developing platforms or protocols coming out on the, in the crypto space. The, the emerging sectors. I think personally gaming it's going to do well. It's, it's maintained more of its user base compared to some of the other sectors like D5. So that's what I'm got an eye on. As we talked about before and Sam mentioned social tokens as well might be big in the next cycle. So this is a really good time instead of like looking at your portfolio and feeling bad about it to start getting, getting to work and looking forward, forward to the next cycle and what you might want to start investing in or what sectors you think are going to be good.

But more importantly, always get outside.

Get outside and get some sun for sure.

All right, Sam, closing thoughts. For you today?

Yeah, bear markets are free accumulation. It's just important to know which assets to accumulate. Obviously there's those like Bitcoin that have a much lower risk profile than, than some of the lower, lower cap altcoins. But yeah, be in a position to accumulate if you can responsibly and research emerging sectors, emerging trends that can help you, you know, be at the forefront of the next, the next major innovation in, in crypto and in blockchain.

Excellent insights and Marcel.

Okay, so you all heard the phrase if you don't know where that yield comes from, you are the yield. We've, we've heard this over the past month. So think about it. How can the US Government or any other government pay you yield on the treasures if they don't make money? It begs to question are you the yield?

Exactly right. Great points for everyone. And I will end things today with being optimistic about the gaming space coming into the blockchain world. I think we're starting to see this wave build up. I think potentially next year at some point this will be the big move for a lot of traditional folks to start getting involved with crypto and they won't know it. And that's going to be the best part about that is because the games are going to be so more traditional and used to what the gaming space is used to. Crypto is going to be kind of behind the scenes. So for me, I am keeping an eye just like Jordan on that space and I'm going to be diving deep and researching more and more in the months ahead here. Thank you all for joining us today. I'm going to give away actually. We got to do our Marcus Pro giveaway. Don't let me forget here. I'm going to, I'm going to cruise the chat real quick. It looks like the last person here that did it it was 5am at F1V 3am you are our winner today for the Markets Pro subscription. We appreciate you dropping your Twitter handle in the chat. We hope you enjoy Markets Pro and get some great trades. Checking those vortex words and newsquake alerts. Make sure you get them on your phone so you can track those trades. We appreciate everyone for tuning in around the globe. Huge crowd today. Loyal audience. We love you all and we hope you're going to be here next Tuesday, 12pm Eastern. Until next time folks. We will see you next Tuesday. This has been the Market Report.

Sa.