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- 🌐 From dump, to pump (a crypto story)
🌐 From dump, to pump (a crypto story)
PLUS: Will BTC ETFs be the only ones ever approved in the US?
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Sup, nerds!
Here’s what you’re getting in today’s edition:
Terms used in this edition (click for an explanation, or ask Web(GPT)3!):
Blockchain, wallets, smart contracts.
💅 This is cool:
In one sentence: The crypto forensics firm Elliptic is using AI to detect and deter money laundering on the Bitcoin network.
If there are two things we know to be true, it’s:
Everybody hurts, sometimes. (Thank you R.E.M.)
Every cool new technology will eventually snitch on its users
To that last point:
Blockchain snitched on us by making all of our transactions public, smartphones snitched on us by sharing our data w Google and Facebook…
And now, right on cue:
AI is snitching on us.
Why is this in our ‘This is cool’ section?
Because in this very specific use-case, AI is being used to deter bad actors from transacting on the Bitcoin network.
(That said, the contents of this article could also fit under the title of ‘This is concerning’).
Here’s what’s happening:
The crypto forensics firm Elliptic is using AI to detect Bitcoin money laundering.
How does it work? According to Elliptic:
“A deep learning model is used to successfully identify proceeds of crime deposited at a crypto exchange, new money laundering transaction patterns and previously-unknown illicit wallets."
Translation:
“It’s proprietary. All you need to know is it uses AI to catch bad guys.“
Here’s what’s concerning:
Using AI to track/deter money laundering is one thing, but given that all major blockchains have years-long transaction histories just sitting out in public for anyone to see/train a complex machine learning model on…
There’s a good chance this kind of AI model could be used to identify and mine the data of everyday crypto users, eroding their financial anonymity/privacy in the process.
Not great.
🥇 Want the news before anyone else?
🔎 This seems important:
In one sentence: After the Fed kept interest rates steady, the crypto market went on a spending spree, pushing BTC from $56.5k to $59k, ETH $2.8k to $3k, and SOL $118 to $136.
“Here’s to hoping that as you read this, the price is sky rocketing as market players take the opportunity to buy up BTC at a discount.”
That’s how we finished this section in yesterday’s edition.
Famous last words. Around the time we published, Bitcoin hadn’t skyrocketed, but instead dipped to $56.5k (down from $60k).
Good news is:
That gap was mostly covered a few hours later, when Federal Reserve chair Jerome Powell hit replay on the same speech he’s been giving for months now:
"We're holding interest rates at their current levels, as inflation is still hotter-than-expected. We might cut rates later this year, idk tho."
…and weirdly enough, the market loved it!
(Mostly cause there was an underlying fear that the Fed was going to raise rates).
Once those fears were abated, the crypto market went on a spending spree — pushing Bitcoin back up to $59k, Ethereum up to $3k (from a local low of $2.8k), and Solana up to $136 (from a local low of $118).
Bad news is:
We’re not out of the woods yet.
These price movements were short term reactions to scheduled news events — the market’s overall fear & greed index is still hovering around ‘neutral,’ and threatening further moves down into ‘fear’ territory.
In which case, we might all have to hurry up and wait.
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🔪 Let's dissect this:
In one sentence: Michael Saylor says that Bitcoin is the only crypto asset that’s going to be approved for sale in the form of a spot ETF in the United States; and he might just be right.
“It’s pretty clear that Bitcoin is the only crypto asset that’s going to be approved for sale in the form of a spot ETF in the United States.”
They’re the words we heard from MicroStrategy (MSTR) founder and Executive Chairman, Michael Saylor, yesterday during their quarterly earnings call.
That statement may end up being true; but it also needs to be taken with a big ol’ grain of salt.
Why? Well, did we mention that MSTR holds 214,400 BTC? That’s ~$13B USD worth at today’s prices.
But regardless of any bag-bias, Saylor might end up being correct…
Bitcoin is the original cryptocurrency - it’s slow and inefficient, but boy if it ain’t secure!
We know there’s a lot of discussion about price fluctuations for BTC (heck, we’ve literally referred to it’s value in USD in this article already) but BTC’s real unique value proposition is nothing to do with the fact that it could go up in value.
(That’s a bi-product of it’s actual value proposition).
BTC is unique because it’s simply the oldest, most secure, store of value that exists in crypto.
Sure, people are trying to build smart contracts on top of the Bitcoin network and some have even proposed rollups.
But honestly, none of that really matters. Ask any Bitcoin maxi and they will tell you that BTC is like digital gold.
It’s important for the world to have alternative currencies to the US dollar because, as Jerome said yesterday, “inflation is still hotter than expected” and that’s probably to do with the fact that more USD can be printed at any time.
Unlike Ethereum, Solana, or any other altcoin, Bitcoin has one main objective: to be a digital store of value.
And to that end, Michael Saylor might just be right about it being the only crypto spot ETF ever approved in the US.
Let’s reassess in a few years 👴
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BTC ETFs, Explained
👇 Other stuff you may have missed
💡 Vitalik Buterin Talks Ways to Make Zk Proofs More Efficient
📊 Federal Reserve Holds Policy Steady, Says Progress on Inflation Has Stalled
👀 Aave Labs Debuts V4 Roadmap in Series of Governance Proposal
💰 Bitcoin Miner Riot Platforms Reports Record $211M Q1 Net Income
🇦🇺 Australia Gears Up for Bitcoin ETFs: ASX Leads the Charge
Alright, that’s it for today!
Love to the family,
P.S. Want to learn how to research and value cryptocurrencies? We have a framework that does just that .
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