Crypto Newsletter: Mar 11th '22
Bitcoin, Ukraine, Crypto Investing Club and Startup Incubator
This newsletter is focused on current events in the crypto space, sharing projects and people I find interesting, and serving as a resource for upcoming crypto events; locally here in Colorado and also larger events across the U.S.
Howdy crypto-heads! For this edition I want to cover recent Bitcoin price action, my thoughts on the Ukrainian gov utilizing crypto, the big kick-off for the Denver Crypto Club investors group and a call-to-action for all blockchain founders!
Bitcoin being boring
Ukraine invasion and crypto
Denver Crypto Club kick-off
Calling all crypto founders!
1. Bitcoin grazing on the range
Lately it’s been tough for me to really care about the price action of cryptocurrency, including Bitcoin, for two primary reasons:
There are more important things going on in the world.
I’ve been spending too much time on crypto Twitter and the constant arguing/shilling is bumming me out.
With that being said I know y’all want an update so it’s going to be a pretty basic one…
For all of 2022 Bitcoin has been ranging around in a bearish pennant. For more pro trader tips like this join my paid Discord - only $694.20 per minute!
Cheekiness aside I just read this excerpt from the Blockware Intelligence newsletter and it rings true to me (for context they’re talking about the last week from Mar 4th to 11th);
“Gold and oil/gas continue to dominate, as discussed here for the last 4 weeks. These commodities appreciating, alongside bond yields, is a potentially dangerous situation for risk assets like tech stocks and cryptoassets. Rising yields and commodities suck capital from the equity markets into those sectors of the market that are perceived as safer during this type of macro environment.”
I touched on the above sentiments previously but they are definitely worth reiterating - when Wall St. goes “risk-off” it is likely that cryptocurrency takes some type of hit.
Right now I believe crypto is in a bearish trend that is likely to continue into Q2 of this year as inflation keeps rising. I’m hopeful that March and April will be the worst of it so we can recover some by summer, but at this point with the ongoing conflict in Ukraine, dumping stock markets and announcements of prolonged “transitory inflation” from the government this thinking seems like a 50/50 probability at best.
Also of concern right now are the thin order books across many cryptocurrency exchanges. When there isn’t deep liquidity it takes far less money to move the market, making violent moves in price increasingly likely. If these sudden spikes or drops cause leveraged traders to get liquidated this can also lead to further volatility.
For myself I’ll be keeping some funds in stable coins (USDC, DAI, etc) to buy any sudden dips as I think it’s more likely we make a flashy move down than up, especially when we break out of the bearish pennant Bitcoin is in right now.
2. Ukraine vs. Russia
Full disclosure - I’m a fanboy of Ukraine’s president Zelenskyy as he seems to be a helluva leader and I think Russia’s invasion is completely wrong. There are very, very few scenarios (I can’t even think of one) that justify causing death on this scale and regardless of Western provocation and atrocious foreign policy this aggression from Putin’s Russia needs to stop immediately so that people on both sides can stop suffering.
This is not a political newsletter however, so I want to talk about the use of cryptocurrency by Ukraine and Russia and why I believe crypto has entered a new phase of adoption and utility.
Ukraine & Crypto
Starting around February 26th the country of Ukraine has been accepting donations in cryptocurrency. To date they’ve raised nearly $100 million dollars and are spending it on non-lethal supplies like petrol, food and bulletproof vests for soldiers.
In addition to the official donation addresses there have also been plenty of charitable organizations and even a DAO organized in part by a member of Russian activist/musical group Pussy Riot supporting civilians in Ukraine. As all of this money pours in via crypto from around the world it is amazing to hear the Ukrainian leadership praising crypto and it’s potential as an economic breakthrough.
So what does this mean for the future of cryptocurrency? To me it feels like global society is evolving and now has a new tool to quickly deploy funding at an unprecedented level anywhere in the world.
Crypto donations to Ukraine mark the first time in human history that global resources are being deployed at such a large scale and high speed.
The precedent has now been set for anyone, anywhere, to contribute towards an ongoing conflict and support people from individuals all the way up to the level of federal government. With the ability of social media to make us feel like we’re on the ground, crypto donations offer an easy, rapid way to actually make a real difference and feel like you’re part of the struggle from thousands of miles away (and in truth you are). This is groundbreaking in my opinion and I see it ushering us into a new era of human coordination.
The optimist in me hopes that future conflicts may be shortened or not happen at all if a government who wants to attack is worried their opponent will garner too much international support and rapid crypto funding from humans the world over.
The cynic in me worries about taking this too far and hopes something like “Mercenary DAO” isn’t created and hired out to the highest bidder paying in anonymous cryptocurrency.
Only time will tell how this all plays out, but as with most things in life it will likely contain a little bit of both…
Russia & Crypto
The main conversation about Russia and crypto within my sphere of people has centered around evading the sanctions being levied against them by various countries.
While there is a very real possibility that crypto is being used to help Russians hide their wealth, actually using whats been squirreled away is another problem entirely. The main issue occurs when attempting to convert crypto into large amounts of fiat outside of Russia - the fact of the matter is that the legacy financial system is going to notice and the blockchain analysis firms are working overtime to track any crypto originating from Russia or tied to sanctioned people. This makes it incredibly difficult to cash out via an exchange like Coinbase or Binance so I don’t see this concern having a large impact on skirting sanctions.
Another argument I’ve heard is that the Russian oligarchs will just anonymize their crypto so blockchain analysis firms can’t track it and then set up shell companies to launder it. While this works in theory, anonymizing your crypto holdings with “tumblers”—wallets that receive cryptocurrency from various accounts and scramble them to conceal origin—are not able to support moving large sums due to liquidity issues and also tend to be rather slow.
Even using the best anonymous cryptocurrency, Monero, the liquidity offered for converting large amounts is not going to cover even a few billion from a single Russian oligarch (XMR marketcap is currently just over $3B).
I think that it is much more likely Russia moves to cozy up to the Chinese financial system as a replacement for the U.S. dollars and Euros they’re now locked out of. This would allow them trillions in liquidity and the ability to evade sanctions by “rinsing” their rubles and other forms of wealth through the Renminbi, which also gives the Chinese economy a bump for facilitating the conversion.
3. Denver Crypto Club kick-off
I am super excited to announce the formation of our crypto investing club!
Legally the club will be a limited liability partnership and structured similarly to other investing clubs for things like real estate and stocks. Dedicated bank account for pooling funds, dedicated crypto hardware wallet and periodic transparency reports will be provided as well.
Here’s how it will work:
Kick-off event on March 17th at Smoky Hills library to sign up interested members and collect required information.
Members agree to put $20 each month into the collective investing “pot”.
If we do not reach our maximum number of members for the club you may purchase additional seats for another $20 per month per seat.
We will meet in-person and/or virtually each month to vote on which investments we want to spend that month’s pot on.
I will execute the purchases or strategies the group majority votes for.
You can cash out your share of the total pot (calculated by how many months you’ve contributed and the returns on those pots) when you’re ready or wait until the end of the term when automatic dispersal occurs.
We will also need to elect a President, Vice-President, Treasurer and Secretary who will attend the meetings. I’ll likely be the President as this is the person who executes the transactions.
If this is something you’re interested in (you don’t have to be a member or join the club to attend) show up to the Smoky Hill library at 7pm on March 17th. Meeting Room A - 5430 S. Biscay Cir., Centennial, CO 80015
4. Calling all Crypto & Blockchain founders!
Next Tuesday there will be a hybrid in-person/virtual event for blockchain business’s at Thrive Co-working in Centennial.
This meetup is being put on by Willenrimer Consulting (I’m a co-founder) which is a b2b firm focused on crypto and blockchain integration for businesses.
There will be a presentation covering the “why” behind crucial areas that startups in this space need to master for achieving success. We will also explain how the blockchain startup incubator we’ve created makes sure you can quickly attain mastery in these areas and take your project from “initial concept” to “full implementation”.
After the presentation there will be breakout rooms for networking and if you come in-person some delicious snacks and drinks!
You can RSVP here for this free event via Eventbrite (sorry in advance if you have to. create an account) - https://www.eventbrite.com/e/blockchain-startup-business-networking-tickets-292879589737?ref=estw
Hope to see you there!
That’s it for this edition, stay happy and healthy and I’ll catch you soon!
P.S. I don’t have a paid Discord, was joke.