Weekly Commentary September 1st

ONE TRADING NEWS

Happy Friday One Traders,

Here’s what we’ve seen play out since our last newsletter- it’s been a busy one by all accounts.

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GENERAL MACRO NEWS

Beat from the Street (Tech/Business/Finance/Economy)

According to the latest information, Elon Musk is exploring the integration of  a payment system into X with Wall Street leaders. The system is expected to be an updated version of PayPal and offer low transaction costs. 

The billionaire “continues to have conversations (with) top Wall Street executives on (the) future of X,” noted Fox Business News correspondent Charles Gasparino on X. “Seems to be settling, they tell me, on a new-fangled payment system, (an) updated version of PayPal. It will offer low transaction costs (as opposed to credit cards) and monetize user info.”

Musk has been pretty vocal about turning X into an ‘everything app.' According to a Wall Street Journal report, the plan has been to not just turn X into a ‘super app' but a behemoth financial institution. The best example of a super app is Tencent's WeChat, which claims to have over 1 billion monthly active users. The Chinese app, which Musk has called “great,” is used for messaging, broadcasting, video conferencing, gaming, location-finding, and making digital payments (Securities.io). 

X’s latest announcement is that they are now licensed to store, transfer, and exchange digital assets within the platform and maintain those assets on behalf of its users. X is now well-placed to offer crypto payments services to its 450M active users (Yahoo Finance).

• Evergrande Groups’ shares plunge by over 80% as trading resumed after 17-month halt on the Hong Kong stock exchange (Markets Insider).
• Onlyfans financial report shows that it invested part of its working capital into Ethereum. OnlyFans purchased $19.9 million worth of Ethereum (ETH). However, the value of the purchased Ethereum has decreased, leading to an impairment loss of $8.5 million by November 30, 2022 (Finbold).
• The Justice Department sues Elon Musk’s SpaceX (Justice.gov).
• Major tech entities like Google, Facebook, and TikTok operating in Europe are about to adapt to a profound regulatory transformation targeting online content (MarketsWatch).
  

TradFi Pulse:

On Tuesday, the US Treasury yields pulled back after new data showed a greater-than-expected drop in U.S. job openings for July. US job openings fell to their lowest level since March 2021 as the labour market slows. This provided hope that the Fed might hold future interest rate hikes, however, Powell reiterated that while inflation has declined, it still remains too high and that the Fed is prepared to raise rates further if appropriate. 

Also in the news:

• Annual sales soar as ChatGPT takes off… OpenAI is on track for $1 billion of annual revenue as businesses adopt the technology behind ChatGPT, the generative AI bot that ignited a wave of artificial intelligence investment. (Bloomberg)
• European stocks make small gains ahead of key inflation data (Financial Times)
• The Argentine economy hangs by a thread. So far this year, the peso’s black-market value has fallen by half against the dollar (The Economist)

While things are still all quite uncertain in the global macro environment, it’s very important to zoom out and focus on the big picture. The BIG picture is that crypto wallets grew 40% in 2022, a year when prices fell 75%!

When we plug that into an crypto adoption chart (using the model of past internet adoption growth) the trend is firmly in place to hit 1.2bn users this cycle – and will reach 5bn users by 2030!

As an FYI, ETH has seen much faster adoption rates than BTC. (Global Macro Investor)

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MARKET NEWS (CRYPTO SPECIFIC)

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• The U.S. Treasury Department wants to treat all crypto exchanges and payment processors as "brokers" for crypto tax reporting purposes (Coindesk)
• US-based cryptocurrency exchanges, such as Coinbase Global Inc., would have to disclose detailed information on their clients’ transactions to the IRS starting in 2026 under a new Treasury proposal (Bloomberg)
• The US Government Arrested Tornado Cash Devs on Money Laundering, Sanctions Violation Grounds Over Alleged $1B Moved. (Coindesk) and almost just as quickly, Tornado Cash co-founder Roman Storm is out on bail (Twitter)
• Binance will suspend its crypto debit card services in Latin America and the Middle East from Aug. 25th (Cointelegraph)
• Visa halts issuing new Binance Card while Mastercard ends pact (Bloomberg)
• Mastercard and Binance will end crypto card service in Brazil, Colombia,Bahrain and Argentina (Reuters)
• Tether Leaning on Bahamas-Based Britannia as US Banks Cut Crypto Ties (Bloomberg)

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Binance's BTC and ETH futures market share has continued to fall while OKX's has grown from 18% to 26% this year. (Twitter)

• The Sultanate of Oman announced its plans to invest $1.1 billion in bitcoin mining (Forbes)
• 🐸 A suspicious situation has been reported at the contract address of $PEPE! The 5 wallet approvals required for transfers from main accounts in a multi-signature contract have been reduced to 2. As a result, whales are selling PEPE. $PEPE confirms 16T tokens stolen by former team members, who then deleted accounts. (Twitter)
• Dubai-based crypto exchange BitOasis raises funds from investors including India's CoinDCX, and Wamda and Jump Capital (Bloomberg) | archive
• 🤡 Attorney Kris Hansen, who represents FTX's creditors' committee, said FTX's monthly legal expenses have reached nearly $50 million, with an average daily fee of $1.5 million, which is used to pay the full-time work of hundreds of lawyers, financial advisors and bankers. And every dollar spent on paying legal bills reduces the amount available to pay off creditors (CMC)
• As per the @Bitboy_Crypto Twitter Account, Ben Armstrong aka “Bitboy” has been fired from the Bitboy Crypto Brand. Parent company, BJ Investment Holdings, made the decision due to Ben's relapse into substance abuse. 

📊 Top 7 Token Unlocks in Upcoming Week

The following tokens with the largest unlock amount will be unlocked:

• AVAX ($98.88M)
• BIT ($71.95M)
• HBAR ($60.17M)
• APE ($56.92M)
• UNI ($38.14M)
• TRIBL ($36.86M)
• SUI ($36.29M)
• FIL ($28.55M)
• APT ($25.58M)
• IMX ($22.56M)

Prices (at the time of writing)

• BTC: $27,482 ⬆ from $26,005 last week (+5.68%)
• ETH: $1,720 ⬆️from $1,656 last week (+3.86%)

Dominance:

• BTC: 46.86%
• ETH: 18.16%
• Stables: 9.57%

Market Cap:

• Total: 1.14T ⬆️from 1.09T last week (+4.59%)

Fear and Greed Index

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We’ve seen a slight climb up from 37 last week. There are a lot of things going on in the broader market that may influence the index over the coming weeks and months so we will be avidly watching. One of which is the token unlocks listed above. More notably, is the Grayscale Bitcoin Spot ETF applications (mentioned in the Bitcoin section below).

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Another noteworthy point, is that Famous Investor Michael Burry Of ‘The Big Short’ also recently SHORTED The Market 🤯His investment firm Scion Asset Management has bought put options with a notional value of $1.6 billion - betting against the market.

• S&P 500 puts with a notional value of $890 million.
• And QQQ puts with a notional value of $739 million.
• 93% of his portfolio is short the market.

Meanwhile, the S&P 500 and QQQs have surged so far this year, up 17% and 40% respectively. If he’s right (again) we may see significant change in this Index.

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TRADING HIGHLIGHTS

‍Top 3 Gainers (out of the top 100 by market cap only) - as always, this is not financial advice.

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BITCOIN UPDATES

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Many are eagerly awaiting the Bitcoin price action on the back of the high profile Bitcoin spot ETF decisions, some speculate that is there are approvals for Bitcoin spot ETFs then there could be a subsequent rally in the price.

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The SEC is juggling six #Bitcoin ETF proposals this week, including #Blackrock’s. It could be a wild ride! (Bloomberg) The approval of a Bitcoin ETF would open the doors for institutional investors to have direct access to the largest cryptocurrency by market cap, Bitcoin. A green light from the SEC, as per Grayscale and ARK CEO Cathie Wood, would likely see the Commission approving multiple applications simultaneously (Securitites.io) 🚀 

BREAKING: US Federal Court ruled that Grayscale’s petition for review be granted and the SEC’s order be vacated. SEC must review its rejection of Grayscale Investments' attempt to convert the Grayscale Bitcoin Trust (GBTC) into an ETF. BTC soared 4.1% in one hour! (Docdroid)

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The upcoming Bitcoin halving, scheduled to occur in approximately 8 months, has historically led to renewed interest in Bitcoin and preceded major bull markets (Galaxy).

Once again, time will tell, but we think the next few weeks could be very interesting 🤓

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MEME OF THE WEEK...

Thanks for reading. Have a great weekend 😃

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All the best,

The One Trading team