Fallout Zone: How the Tornado Cash Sanction Threatens The Merge. | by Crypto Conquest | The Capital | Aug, 2022


DAILY CONQUEST 8.16.22 #064

Everything you need to know of today’s fast-moving crypto markets

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Overview

  • Tornado Cash fallout.
  • Markets tumble.
  • Gnosis Safe airdrop.
  • Trading: Stop chasing the crowd.

Good morning Fam,

I’m sure you’ve heard about the sanction of Tornado Cash by now, but new complications have emerged after the controversy landed a developer in jail.

Firstly, US-based crypto exchange FTX has blacklisted L2 privacy-focused Aztec after freezing a user’s attempt to send assets to the chain. So is this the new post-sanction norm?

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Second, its effect is threatening the future Ethereum PoS chain. If the government can censor validators, then it’s not decentralized. When asked if Coinbase would give the choice to comply with sanctions of validators or willingly stop its validator service, CEO Brain Armstrong said it would choose B to shut down the service and not compromise the chain. Let’s hope he sticks to his word.

BTC/USD 1D

Bitcoin (BTC) continues its downward trek. Next stop: 22k support level. Price has concretely broken the upward trend support (green) after two straight daily candles closing below the level. BTC closed the daily candle down -0.65% to $23,191.

High-resolution chart

ETH/USDT 1D

The Ethereum (ETH) chart looks similar to bitcoins. Although, volume is noticeably declining, which sometimes signals a weakness. But today’s candle is off to a bad start. Keep a close eye on the $1750 support. ETH closed the daily candle up 0.70% to $1,846.

High-resolution chart

ETH/BTC 1D

Typically, when markets begin the plunge downwards, bitcoin (BTC) will start to gain on ETH. However, that is currently not the case. Despite the down move, the ETH/BTC daily chart showcases ETH’s recent strength versus its orange companion.

High-resolution chart

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Gemini Exchange staking. The crypto exchange has announced the launch of a new service called Gemini Staking, which allows clients the option to stake assets without leaving the exchange. The firm will initially support Polygon staking but plans to add services for other assets, including Ethereum, Solana, Polkadot, and Audius. Gemini is a fully US-regulated crypto exchange.

Could you keep us in the loop? The US Central Bank is asking all regulated banks to keep them informed of any cryptocurrency activity, according to a letter sent on Aug 16.

Ethereum Options. The CME Group has revealed its plan to list Ethereum options contracts on Sept 12, three days before the merge, post-approval. The firm already offers Bitcoin options and micro Ethereum and bitcoin options.

News Tidbits:

  • Mercado Libre launched a cryptocurrency project in Brazil focused on user rewards.
  • Houbi stablecoin HUSD loses peg.

At the protocol level ⛓

Gnosis Safe Airdrop. The custody protocol confirms the airdrop of SAFE tokens to 21,935 eligible users. A variety of entities use the Ethereum-based service, including Aave, ConsenSys, Synthetic, and various DAOs.

NFT & metaverse update 🐵

  • ApeCoin DAO offered a free NFT marketplace for the third time. The offering party, Rarible, said it would charge fees and require no investment from the DAO.
  • Across The Ages and Immutable X partner to launch P2E collectible card game

My five cents….

Don’t chase the crowd.

After trading options premium for nearly five years before getting into crypto, a few methodologies have served me well in both markets.

One of the ideals, near and dear to my trading strategy, is taking the contrarian view. The contrarian view is trading the opposite side of the crowd. It’s a simple philosophy. Short when markets are up and full of hype. And when markets are down, look for opportunities to dollar-cost-average. The fear and greed index is a great tool for it.

Its simplicity helps me avoid the FOMO and hype that’s ever-present in crypto. (Although I still fall victim on occasion.)

Generally, financial markets are unpredictable in short periods. Add high volatility and crypto is one of the hardest to trade.

Moreover, many retail traders just randomly buy assets they heard about on Twitter. Which leads me to my next point that following crowds is frequently counterproductive, especially if you’re late in the trend. Especially in crypto.

In comes the contrarian view. Many times, opposing the crowd can help you build discipline while you wait for the correct time to enter a trade.

Gabri

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