News Updates September 17, 2022

1. White House OSTP department analyzes 18 CBDC design choices for the US

The technical analysis of the 18 CBDC design choices was made across six broad categories — participants, governance, security, transactions, data and adjustments

As directed by the President of the United States, Joe Biden, the Office of Science and Technology Policy (OSTP) submitted a report analyzing the design choices for 18 central bank digital currency (CBDC) systems for possible implementation in the US.

The technical analysis of the 18 CBDC design choices was made across six broad categories — participants, governance, security, transactions, data and adjustments. The OSTP foresees technical complexities and practical limitations when trying to build a permissionless system governed by a central bank, adding:

Helping policymakers decide on the ideal US CBDC system, the OSTP report highlighted the implications of including third parties in the two design choices under the ‘participants’ category — transport layer and interoperability. For governance, the report weighed various factors related to permissioning, access tiering, identity privacy and remediation.

Other important factors OSTP wants policymakers to consider include cryptography and secure hardware (for security), signatures, transaction privacy, offline transactions and transaction programmability (for transactions), data model and ledger history (for data) and fungibility, holding limits and adjustments on transactions and balances (for transactions)

The technical evaluation for a US CBDC system highlighted the report’s inclination toward an off-ledger, hardware-protected system. Upon the launch of a US CBDC, the report will eventually highlight the various trade-offs policymakers decided to make when finalizing the design choices.

 *White House publishes ‘first-ever’ comprehensive framework for crypto*

On Sept. 8, the OSTP recommended monitoring and regulation while weighing the environmental and energy impact of crypto assets in the US.

The related OSTP report highlighted that crypto assets use approximately 50 billion kilowatt-hours of energy per year in the U.S., which is 38% of the global total, while adding:

The report further noted the high energy consumption of proof-of-work (PoW) staking in crypto assets.

2. Bitcoin Monthly Stats: Cost Basis, Long-Term Holders, And The Cyclical Bottom

In this month’s The Bitcoin Monthly, ARK Invest focused on Ethereum and the Merge. As a side dish, they did publish some premium and review-worthy stats that we’re about to cover. Never mind the market, the Bitcoin network keeps producing block after block regardless. The stats that this whole activity produces can be critical in understanding the market, though.

That’s where ARK Invest’s The Bitcoin Monthly comes in. The publication defines itself as “an “earnings report” that details on-chain activity and showcases the openness, transparency, and accessibility of blockchain data.” So, the data we’re about to cover is The Bitcoin Monthly’s reason to be. 

 *The Bitcoin Monthly: 200-Week Moving Average And Investor Cost Basis*

* After closing above its 200-week moving average in July,1 bitcoin’s price reversed and slipped below it in August. Currently at $22,680, the 200-week moving average now seems to be resistance.”

The center couldn’t hold. The price’s recovery was short-lived. Markets are red across the board and bitcoin is no exception. At the time of writing, bitcoin trades at $19,874. For those keeping score, that’s just below last cycle’s all-time high of $20K. Something that shouldn’t happen, but a few degrees of error are always understandable. 

* Bitcoin currently trades above investor cost basis at $19,360, its strongest on-chain support level (…) Importantly, throughout bitcoin’s history, trading at investor price usually marks a bottoming process.

Times are tough, but bitcoin still trades above investor cost basis. The Bitcoin Monthly clarifies, “Investor price is calculated by subtracting the cost basis of miners from the general cost basis of the market.” As we see it, The Bitcoin Monthly is calling the bottom. They didn’t say it in those exact words, but they certainly insinuated it. 

 *The Bitcoin Monthly: Short-Term Holder Vs. Long-Term Holder*

* The short-term-holder (STH) cost basis is approaching its longterm-holder (LTH) cost basis ––an event that has marked cyclical bottoms in the past. (…) Since the end of July, the difference between short- and long-term holders’ cost basis has shrunk from $5,840 to $2,500”

The Bitcoin Monthly sees it as a sign that “the market typically is capitulating and shifting back to long-term participation.” Bitcoin’s consolidation process might be ending soon. We could stay for a while in the bottom area, though. That has happened before. The point is, all of the indicators The Bitcoin Monthly highlighted this month point in the same direction. To the bottom.

* The supply held by long-term bitcoin holders is 34,500 coins away from reaching 13.55 million– its all-time high. Long-term-holder supply constitutes 70.6% of total outstanding supply.

This one is the most bullish of all the featured stats. To clarify, coins that haven’t moved in 155 days or more qualify as “long-term holder supply.” The tourists and the people with high hopes left a long time ago. And the lion’s share of the bitcoin supply is now in the true believers’ possession. A remarkable situation that doesn’t get mentioned enough.

3. Bitcoin Becomes More Relevant as “Real Inflation” Hits 16%, not 7%: “Rich Dad, Poor Dad” Author

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Prominent real-estate investor and non-fiction writer Robert Kiyosaki, who authored the bestselling book on financial literacy “Rich Dad, Poor Dad”, has taken to Twitter to share why Bitcoin has become more relevant under the current macroeconomic conditions.

Kiyosaki again reminded his audience about his most famous book “Rich Dad, Poor Dad”, which was published 25 years ago, in which he said that “savers are losers”. The book speaks about the importance of financial self-education and studying the sphere of investment. He then repeated one of his frequently mentioned thoughts that Bitcoin, gold and silver have become much more important now than before, because BTC and gold are stores-of-value. He has been tweeting this thesis from time to time since 2020 and the beginning of the pandemic when BTC crashed below $4,000. As for silver, Kiyosaki believes that it is going to gain more value in the coming years, as it is used in the various industries, as well as gold itself. Today, Kiyosaki tweeted, US debt has grown to 100s of trillions of USD. The real inflation is not 7 percent but a whole 16 percent. The recent rises of the interest rates by the Fed Reserve “will destroy the economy”, he adds.

4. Crypto Is Not Part Of HSBC’s Future, CEO Explains Why

Crypto is not part of every banks’ strategy for the future.

HSBC, one of the world’s biggest multinational banks, says they’re not too confident about crypto and thus, will not be offering any service  related to it in the future.

In a recent interview with CNBC-TV18, Quinn confirmed that they will not be treading into the crypto space such as exchanges or trading, not now or ever as they believe that it is not too clearly defined and tested in terms of stability and suitability for a lot of consumers today.

 *HSBC Not A Fan Of Bitcoin*

In May 2021, Quinn has revealed to Reuters his perspective on Bitcoin as unsuitable for payments because it’s difficult to quantify on a balance sheet judging by its high volatility. On the other hand, Quinn sees it as generally an asset class.

He also says that due to the volatile nature of Bitcoin, they refuse to support or promote it as an asset class.

For the same reasons, HSBC is also cautious about jumping into stablecoins. Although stablecoins have some stored value or are backed by the US dollar, it will really still depend on the accessibility, structure, and the organization backing it.

In April 2021, there were some changes implemented in the digital assets policy of HSBC Canada that included the suspension of sales transactions or exchange of products that are related to crypto.

5. Is the Biden Crypto Framework Bullish or Bearish for Crypto Prices?

The administration of President Joe Biden has recently released a regulatory framework for digital assets, but key participants in the space do not believe it adequate.

A fact sheet describing the steps taken to regulate the cryptocurrency industry was made public by the White House on Friday. Despite prior requests for a uniform regulatory framework, stakeholders in the industry have criticized the recently implemented plan, pointing out its many flaws.

The framework intends to "Protect Consumers, Investors, Businesses, Financial Stability, National Security, and the Environment," according to the White House report. However, U.S. Representative Patrick McHenry pointed out that the plan is lacking in a number of crucial respects. 

McHenry claims that the White House reports are an unacceptable surrogate for true "legislative clarity." He further highlighted that the reports concentrate on the risks that digital assets pose rather than recognizing their critical contribution to fostering innovation in the United States.

Besides McHenry, the Blockchain Association excoriated the Biden Administration's regulatory stance. According to Kristin Smith, Executive Director of the Blockchain Association, the United States has lost a chance to solidify its position as a worldwide leader in the cryptocurrency industry with this strategy.

Like McHenry, Smith mentioned that the reports lost sight of opportunities and moved their attention to crypto risks, skipping a chance to offer suggestions for promoting innovation in the industry.

 *The U.S. is ramping up crypto regulatory measures*

Notwithstanding, a few industry experts have expressed satisfaction with the recently published reports. Ben Gray, General Counsel at FinTech firm Paxos Trust Company, commended the U.S. government. Gray noted his pleasure in the fact that the government is putting in efforts to make sure related agencies are enforcing the proper rules.

Cryptocurrency advocate U.S. Representative Jim Himes applauded the Biden Administration for the move. Himes expressed his delight in the fact that there is at least a move towards proper cryptocurrency regulation.

The nine reports came 6 months following President Biden's executive order. The order that the president signed in March received several commendations from industry players. These recent reports have fallen short of the expectations of the broader crypto community.

The United States has recently ramped up its crypto regulatory approaches, as adoption sees a major spike. Nonetheless, the measures have met criticisms rather than acclaim. This is due in large part to the fact that major industry players believe these measures are likely to stifle innovation in the sector.

6. Bitcoin Tumbles Below $20K but is Another Drop Imminent? (BTC Price Analysis)

Bitcoin’s bearish stage seems far from over as the second rebound from the $18K support level turned out into another bull trap. The price is currently attempting to break a critical support level.

 *The Daily Chart*

The cryptocurrency recovered from the $18K level earlier in September after failing to surpass the $24K mark. Yet, the 50-day and 100-day moving averages, seen at roughly $22K, rejected the price to the downside. Bitcoin has also failed to break above the significant bearish trendline, where it has been held below since the current bear market started.

Although the $18K level remains intact, the market structure remains bearish until the price successfully breaks above the mentioned descending trendline and reaches the $24K resistance.

However, according to the RSI indicator, the more likely scenario is still a breakdown and bearish continuation in the short-term, as the momentum is in favor of the bears.

7. Terra (LUNA) Founder Singapore Employment Pass To Expire In December, What’s Next?

That is an important question about Do Kwon, the founder and CEO of TerraForm Labs (TFL).

According to Bloomberg, Kwon’s employment permit, which grants him the right to work and live in Singapore as a foreign executive, will expire on December 7, 2022. 

Kwon has applied to renew his Employment Pass, which gives him the right to work in Singapore and which expires on Dec. 7, according to the report. Kwon applied for an EntrePass — which is meant to allow eligible foreign entrepreneurs to start and operate businesses in Singapore — and was rejected, the Straits Times said, citing Ministry of Manpower records.”

Whether Singapore would allow Kwon to renew his license following the unfortunate incident that occurred in the past few months that prompted South Korea to issue an arrest warrant for the Terra boss. 

If there’s a police case or lawsuit against a work-pass holder or other adverse records like involvement in a scam, Singapore takes those factors into consideration when considering the person for renewal of the pass.”

8. Tired of losing money? Here are 2 reasons why retail investors always lose
A majority of “traders” end up being losers with empty portfolios. Here is exactly why.

A quick flick through Twitter, any social media investing club, or investing-themed Reddit will quickly allow one to find handfuls of traders who have vastly excelled throughout a month, semester, or even a year. Believe it or not, most successful traders cherry-pick periods or use different accounts simultaneously to ensure there’s always a winning position to display.

On the other hand, millions of traders blow up their portfolios and turn out empty-handed, especially when using leverage. Take, for example, the United Kingdom’s Financial Conduct Authority (FCA) which requires that brokers disclose the percentage of their accounts in the region that are unprofitably trading derivatives. According to the data, 69% to 84% of retail investors lose money. 

Similarly, a study by the U.S. Securities and Exchange Commission found that 70% of foreign exchange traders lose money every quarter, and eToro, a multinational broker with 27 million users, reported that nearly 80% of retail investors lost money over 12 months.

The same pattern emerges in every market across different continents and decades: retail traders seldom sustain profitable operations. Still, novice and experienced investors think they can overcome that bias due to ingenuity or mass marketing campaigns from influencers, exchanges and algorithmic trading systems.

Below are the 4 culprits behind the inevitable failure of retail traders. There is no easy solution aside from a long-term mentality and dollar-cost average-based strategy of buying a fixed amount every week or month.