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BTC – China FUD Keeps Entertaining, Increases Volatility

China came out with much more detailed and coordinated “Ban on Illegal Crypto Activity” as they called it. We present to you simplified five key takeaways from the announcement. While this was published on Sep 15th, the detailed content was issued Sep 24th together by National Development and Reform Commission (NDRC) & and the Central Bank at the same time, with very detailed content. key takeaways as follows:

  1. Classify virtual currency “mining” activities as eliminated industries i.e. higher electricity prices for these industries
  2. 10 institutions participated this time, including strong departments such as the Supreme Court, the Ministry of Public Security, and the Administration of Foreign Exchange – Intense crackdown ahead?
  3. It is clearly stated about Bitcoin, Ethereum, and Tether, especially the global “stable currencies” – preparation of massive roll out of e-yuan IMO
  4. Increased risks for domestic staff in China of foreign exchanges – classified as illegal financial activities, including marketing promotion, payment and settlement, and technical support

What does this mean for Crypto – The future is decentralised

China Takeaway – China is after everything that they cannot control – tech, education, and real estate. So it’s not just crypto. To curb slowdown risks, the PBOC has increased liquidity in the markets. This should actually benefit Bitcoin and crypto. Volumes from Chinese oriented exchanges should move elsewhere to decentralised exchanges like DyDX, Uniswap and more users for Metamask, along with traffic to non China top exchanges like FTX vs Binance, Huobi, and Okex. All these coins have been pumping over the weekend.

Technical – BTC needs to hold the 21day MA around 42K, but a bearish structure is developing. That said, most bearish news has been absorbed and if BTC holds the key 42K level and moves towards 47K, we could very easily flip towards the 50K’s from there.

TradeFi Macro: Powell mentioned poison pill “Tapering” again but the market almost ignored it and DOW rose 1%+. FED said it might start tapering in November. I always look at the bond market for medium to longer term clues. There is too much noise in the short term. Looking at bond yields – the market thinks that perhaps FED is right with tapering. That means we are expecting economic growth in spite of rising Corona cases once again. That will lead to higher consumer prices which means higher inflation. FED will have to come out and raise interest rates if that happens and the market is expecting that now that is why shorting the bonds i.e. higher yields. 10 Y yields are at 1.41/1.42 and rising since last month. It’s a risk on move – that the economy is going to do much better from here on. Couple that will trillions printed so far, and you’ve a macro bull market for few quarters ahead

On Chain – BTC sits between two large clusters of volume. with some short term resistance just above $43K.

Open Interest – As we have said before, this mini crash based on China FUD has been actually healthy vs previous drops in May which was largely driven by over leverage and greed. leading to a cascade of liquidations. This one was quite decent, controlled and only driven by macro uncertainty and China

Overall, before China, it seemed that market had found some support but the risk of a correction is not off the table. However Q4 is still looking bullish unless all other regulators start to attack simultaneously (unlikely)

DeFi Weekly – Arbitrum, Indian projects grow

  1. @1inch comes to @arbitrum
  2. @ShapeShift_io ‘fairdrops’ FOX to DeFi users
  3. @harvest_finance integrates with @coin98_wallet and @stakewise_io
  4. @0xPolygon offers $2 million bug bounty
  5. @bollyheroes, that is building an Indian Bollyverse, to launch its public sale on 30th Sep with only 250 Legend NFTs

NFT, Gaming, Metaverse: XXXXXX

1 – TIME’s NFT collection sells out in one minute, bot activity suggested – there was a catch. See below:

  1. Sorare launches legend NFTs in move beyond fantasy football
  2. JPEGD to offer DeFi-style NFT-backed loans
  3. @larvalabs Hoodie Punks bought for 350Ξ & 290Ξ –
  4. Artblocks.io – see below, a great article from Zeneca

Top 5 Best Reads: Web 3.0, Arbitrum, China

  1. Architecture of a Web 3.0 application
  2. The Ultimate Yield Farming Guide at Arbitrum
  3. Twitter adds Bitcoin tipping option
  4. China declares Cryptocurrency transactions illegal
  5. The Evergrande Train Wreck

Follow Smart Money: To Metaverses (NFT, gaming, social), DEX’s & Crypto Infra

  1. Crypto asset management platform Cobo bags $40M Series B
  2. Coinfirm Raises $8 Million in Series A Funding
  3. Sorare scores $680M funding led by SoftBank to grow its NFT sport portfolio
  4. BitClout creator launches ‘Decentralized Social’ blockchain with $200 million in funding from a16z and others
  5. Amberdata, a crypto-focused data startup, has raised $15 million in a Series A funding round led by Citi
  6. Orca, a decentralized crypto exchange (DEX) on the Solana blockchain, announced $18 million in fresh funding led by Polychain, Placeholder, and Three Arrows Capital.

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