*Qrafty rolling out the red carpet* Salutations, digital comrade! As the majestic sun blesses us with his warm embrace I, Qrafty the crypto lovin’ honey badger, welcome you to Coinqraft, the juiciest crypto digest in town – a treasure chest of crypto gems for the savvy and the inquisitive.

🦡 Qrafty just got back with news and scoops from the crypto chaos , so let’s sip on the freshest crypto kool-aid…. I mean crypto juice – because ain't nobody got time for those crypto rabbit holes! 🥤🔍

Today’s Story

Huobi makes a PR move by listing PYCOIN, amid rumors of financial distress

Yesterday, Qrafty let you know that there are no exchanges listing PYCOIN yet and the coins from Uniswap DEX are fake.

Today, Huoby is the first exchange to list PayPal’s coin, PYCOIN. It seems that other exchanges will follow suit and will list PayPal’s security… I mean coin, Qrafty means PayPal’s coin!

Huobi has been experiencing serious turbulence lately, as rumors about some of their top executives being arrested in China got some panic going. Also, the coffers have been spitting up capital, as traders have pulled out ~ $60 million in the span of a week. So Huobi’s reserves are taking a dive and they list PayPal’s PYCOIN.

What’s the catch with China, Qrafty?

Well, Huobi is a Chinese exchange established in 2013. They have expended a lot and were acquired in November 2022 by Tron’s CEO, Mr. Justin Sun with him still being the largest stakeholder.

Huobi is a publicly traded company on the Hong Kong exchange. It was the largest Chinese exchange until 2021, when China decided to ban Bitcoin and crypto (again…). So they moved the company from China to Seychelles.

What’s does Justin Sun have to with all of this, Qrafty?

Word around the jungle is that Mr. Justin Sun is taking from Huobi with two hands and giving to Tron, in order to inflate Tron’s declared TVL (Total Value Locked) totaling over $5 billion (yes with a b).

How so? Well… Tron’s main protocols, the one that add up to 99% of the value of Tron’s TVL - all belong to Justin Sun. And Justin Sun also owns Huobi, where he has access to a LOT of user funds after he acquired the exchange. Get it? 😋 🤑 Now Huobi needs capital and he is the one who must provide it.

So what’s the problem? I don’t get it!

The problem is that Huobi has been accused of being insolvent on Twitter and Justin Sun has been adding liquidity to the platform in the amount of $200 million to handle the withdrawals.

Just like Qrafty was mentioning yesterday about Circle and USDC, Huobi is getting liquidity checked too. It’s like an involuntary colonoscopy that every once in a while you must endure, especially in crypto. If there’s no dirt and all is well, it’s great for you: congratulations, you may continue to exist, your street rep just got up! If not… well you have to pay for the dum dum’s you’ve done .

An exchange is not an easy business (no business is easy), like the now famous SBF drama showed us. Will history repeat itself or will Justin Sun be able to support the exchange through this period? Time will tell. Cool to see these events unfold though, huh?

Also, the real contract address for PYUSD is 0x6c3ea9036406852006290770BEdFcAbA0e23A0e8 (yes, that’s how an address looks like on the blockchain).

You can click here and see the whole thing in the blockchain explorer if you want to get a bit more familiar with searching on a blockchain. It’s just like searching on Google, but instead of typing "How to teach my pet rock to do calculus?" 🧠, you much search for more specific things like wallet addresses, coin contracts, transactions, etc.

On-chain data reveals that a total of 26.9 million PYUSD tokens have been issued, held by 9 addresses and a total of 178 transactions have happened until this moment in time.

So Qrafty believes Huobi is trying to capitalize on the short term buzz around PYCOIN and drive back some of the traders and capital that fled the exchange lately. Since the blockchain is public and some addresses have been tagged by the community, it’s pretty obvious that Just Sun’s actions aren’t helping the exchange on a PR level, but helping with liquidity. We will see what happens with the investigation from the Chinese authorities and if Huobi can hold liquidity during this period of turmoil.

🙃 Qrafty hopes that today’s main story brought brave badgery value to you! Now it’s time for a break, you deserve a bit of fun! 😇 👇️ 

So tell me… how are discussions about your crypto portfolio going lately?

A good giggle… priceless. For everything else there’s… laughing hysterically.

Here are the main news of the day

1. US Fed tightens the grip on banks working with digital asset companies

They created the Novel Activities Supervision Program which… well you can take a look 👇️ 

Essentially it’s another layer of bureaucracy for a bank wanting to work with crypto related businesses, but not just that. Basically it’s like:

Fed - Hey, you want to work with those guys?

Bank - Si, senor…

Fed - You’re a funny one, huh? Here’s a buttload of more work you must do and information you must collect from crypto businesses in order to ensure KYC, AML and all the other regulations.

Good stuff, isn’t it? Now, you might say that banks are interested in making money. Correct, until making money becomes too much of a regulatory hurdle. If there’s one thing that banks hate more than adding non performing loans to their books, it’s regulatory non-compliance.

Can this be a way of discouraging smaller banks that would want to jump in crypto and pave the way just for the right banks to work with crypto? It’s just a thought of Qrafty’s…

2. Coinbase publishes $53 billion (yes, with a b) drop in total trading volume and a lot more juice in their shareholder letter

The apex of the trading volume for Binance was in Q2 of 2022, where Coinbase processed a total of $217 billion. And everyone was a millionaire and buying islands back then.

In its latest communication to shareholders (the second quarter of 2023), the company highlights that it has managed $14 billion in consumer trading volume and $78 billion in institutional volume, resulting in an aggregate sum of $92 billion. That’s a huge drop from the top of $217 billion and a big one from the Q1 total trading volume 👇️ 

During the first quarter, Coinbase registered a total volume of $145 billion, with retail traders responsible for $21 billion and institutions for $124 billion.

Their revenue was down 10% from one quarter to another, from $736 million to $663 million.

Their balance sheet of USD resources increased by $156 million, amounting to $5.5 billion. The exchange was also sued by the SEC for selling what the SEC is regarding as unregistered securities, so that created some problems for them in Q2.

For Q3, they are expecting:

• Revenue of at least $300 million from subscription and services

• Mid teens percentage from the revenue as transaction expenses.

• Administrative, tech and development expenses between $575 million and $625 million

• Sales and Marketing expenses of about $80 million to $90 million

3. Crypto.com halts US institutional exchange service

So crypto dot com wasn’t loved by institutions in the US and shut down their service. Does that mean there’s no institutional interest in crypto in the US?

Nooooo waaay! 🤑 As Qrafty mentioned a few days ago, there’s a festival of Bitcoin ETF’s being pushed for approval. Whether they will be approved or not, that’s a different topic. But there is clear institutional demand for Bitcoin and exposure to the crypto market from dem peeps in suits.

The SEC mentioned that a bunch of coins like BNB, Solana, MANA, Sandbox, CHZ, MATIC, ALGO, and others are securities. Qrafty mentioned this in a previous edition. So Crypto dot com shut down its institutional service. But those coins the SEC mentioned are for retail. Or maybe they used the SEC as a reason for PR so that they can shut down their institutional division.

Plus, there’s a clear regulatory crackdown from the SEC on the whole crypto space right now, including banks that do business with crypto. It’s possible that Crypto dot com’s institutional division wasn’t really growing or profitable for them and they made a step back to focus on the retail exchange, to reopen at a later date, maybe before the bull run.

On the bright side, Crypto dot com is introducing the Euro as a base for the other coins they have. This means that you now can sell your Bitcoin on they exchange in return for Euro (why the fux you would do that beats Qrafty… but just for the sake of the example). Or you can buy Bitcoin with Euro (there we goooooo!!! To da Moooooon!🚀🤓🌟)

4. Please repeat after Qrafty: “Crypto can be tracked!”

Blockchains are literally for moving, tracking and storing information in an organized way and retrieving it at will. It’s a digital ledger, literally. In crypto, blockchains hold the history of the entire network and all transactions can be clearly tracked and monitored. And it’s really easy too!

So those thinking that they can rug or cheat or deceive people, please do that on the blockchain. Yeah, you’ll have your fun for a while, but then you’ll be caught. It’s pretty easy to track, really. 😱 

The Canadian police has started to use specialized software to track coin movements resulted from crime on the blockchain. Well duh! As long as any teen with a phone can do it…

At the same time, it is kinda important to remember that blockchain’s purpose is to implement it in state institutions to track public spending and institutional behavior. NOT to allow states and governments to weaponize it against their citizens.

5. Carlyle Group’s Mr. David Rubenstein doesn’t really get Bitcoin, but realized it has staying power 

BlackRock’s ETF push has made some other players in the TradFi world turn their heads back towards Bitcoin and stop giggling like they are trying to win the Silly Olympics. It’s real and suits want to play with it.

Mr. Mike Novogratz also notes in an interview with WSJ that it is a question of when the Bitcoin ETF is approved, and not if. 

Well… obviously nobody cares about the culture, the ethos, the vision, the mission, the technology. It’s all about making money off of it, that’s it! They’ll just slap a (s)ticker on it and start betting whether it moons or it dumps. And yeah… the crypto neckbeards are the degenerates… riiiiiight…

Weeeelll Qrafty admits that it’s cute for an older gentleman in a tight suit to understand what Bitcoin is… especially since he’s been drinking the kool-aid of non-traceability.

The thing is… Bitcoin is an energy denominated transfer and settlement application built on a blockchain.

The transfer(payment) application is to move “money” (which is essentially information) and the blockchain is to retain the history of all those transactions, since day 1. Get it? Since day 1! So whatever you do on a blockchain is and will be trackable foreeveeer and eveeer in loooooveee…. Oh sorry, that was a different tune.

Bottom line: all transaction ON the blockchain are trackable! Sure, you can do a lot of stuff off chain and then interact with the chain only when you are cute and posh, leaving the nasty stuff aside. But that’s a whole ‘nother topic. 😏 

Hey hey 🙃 Qrafty hopes you are enjoying the experience here and would like to regularly get Qrafty’s letters!

If so, please click on the button below. Qrafty is really really grateful to have you here, so thank you!

A new type of migraine has been discovered!

Qrafty’s thought of the day

You know… sometimes Qrafty goes out and starts having some amazing conversations with rocks. So Qrafty couldn’t help notice something resembling a cosmic orgasm for TradFi institutions to come into the crypto space… right before the potential approval of ETF’s (Qrafty thinks it’s all smoke in the short term, but hey… we’ll see), during a heavy crypto bear market and a liquidity crunch for the whole space, with the main 3 banks funding the whole ecosystem going down. Hitting the biggest players with lawsuits from the SEC.

A congressman praising PayPal, a TradFi company issuing a crypto stablecoin which is not a security… Yes, it’s not, right? Lobbying funds must’ve been flying around lately.

There’s also the fact that FTX’s collapse was a shame for regulatory bodies in the US and therefore the virulence, after not really doing anything for years and maintaining murky waters and unclear guidance and regulation. Yes, Qrafty is talking about the SEC.

Suddenly, big TradFi names have started to talk positively about Bitcoin, it’s not evil anymore. It’s not the devil and it’s not for terrorist anymore. It’s actually good for you and you should buy it from… you guessed it… from us! Not from those sketchy crypto exchanges and weirdos on the internet! Get it?

Bottom line? It might work. It’s been over 10 years and it’s terribly difficult to get in crypto as an average Joe. The learning difficulty is quite steep and most platforms are crap in terms of user experience, with a few small exceptions. That’s the truth.

So will TradFi build for your regular Internet user what the whole crypto hasn’t been able to do until now? Yep, it’s very possible! The enemy of crypto taking over and becoming the mass adoption vehicle for crypto. Now that’s one helluva story!

Other stories from today worth noting

• Binance becomes fully licensed in El Salvador 

  Bitcoin was made legal tender in El Salvador in 2021. It’s the only country in the region that recognized Bitcoin as a legal tender for individuals and businesses and paved the way for this.

   

• A new NFT game from big names is launching

  It’s called Wreck League and Partnerships with Yuga Labs and Bored Ape Yacht Club make it stand out in the landscape. Hopefully they will be able to execute and create a product people will love to use.

• FTX's former law firm, Fenwick, gets sued again for setting up dubious entities. 

  The plaintiffs argue that Fenwick & West had an implied agreement with FTX and its affiliates to deceive customers, profiting financially from the alleged misconduct.

• Congressman McHenry praises stablecoins as a key part of our payment system.

  He regards PayPal's PYUSD as a signal of their massive potential. Following regulations and protecting consumers are crucial for stablecoins to succeed

• Brazil reveals central bank digital currency named DREX, scheduled for 2024

  The Central Bank of Brazil has unveiled the official name for its central bank digital currency (CBDC) in a recent announcement. The CBDC will be known as DREX, which stands for Digital Real Electronic Transaction.

• Chainlink price feeds go live on Coinbase's Base L2 network

  The native integration of Chainlink Price Feeds aims to support advanced DeFi applications and ecosystem growth for Base, including externally connected DeFi applications such as decentralized lending and borrowing protocols, derivatives markets, futures markets, and more.

Feel that? What….? Your crypto IQ rising?… No no, not that! Nvm, let’s just focus on the crypto IQ, okay?

Qrafty, what is CPI and why is everyone talking about it as if it’s the North star of financial decision making?

The Consumer Price Index (CPI) is a crucial economic metric that quantifies the average price changes of a designated basket of goods and services over time. It provides valuable insights into the inflation rate and the overall cost of living for urban consumers. The basket includes items such as food, housing, clothing, transportation, and medical care. By tracking how the prices of these goods and services change, the CPI measures the inflationary pressures in the economy.

The Federal Reserve (FED) pays keen attention to the CPI as part of its monetary policy toolkit. Inflation is one of the key considerations for the FED when setting interest rates. If the CPI indicates rising prices and potential overheating of the economy, the FED might decide to raise interest rates. Higher rates can help mitigate inflation by reducing borrowing and spending, thereby curbing demand and moderating price increases.

Conversely, if the CPI shows signs of stagnant or decreasing prices, the FED might consider lowering interest rates to stimulate economic activity. Lower rates encourage borrowing and spending, which can boost demand and help combat deflationary pressures.

The link between CPI, FED's monetary policy, and the broader economy is intricate. Sustained high inflation can erode purchasing power and disrupt financial planning, impacting consumers, businesses, and investors. Conversely, prolonged low inflation or deflation can lead to postponed spending, slowing economic growth. Therefore, the FED seeks to maintain stable prices while promoting maximum employment—a delicate balancing act achieved through interest rate adjustments informed by CPI trends.

In essence, CPI is a critical barometer of economic health, influencing the FED's decisions that ripple through financial markets, borrowing costs, and overall economic activity. It underscores the complex interplay between prices, policy, and the well-being of households and businesses in the dynamic landscape of macroeconomics.

Basically, the CPI is like the economy's nosy neighbor, peeking into FED's window and causing a ripple party in the financial pool, splashing borrowing costs and doing the Macarena with the economy's dance moves.

It's like the conductor of an orchestra made up of prices, policies, and the happiness of regular folks and business big shots, all jamming out in the wild world of macroeconomics! The FED listens to the music of the orchestra and decides how and if it wants to dance to the tune. Or even change the tune altogether!

Market Whispers

Your emotions are NOT safu!

Bitcoin's been tossing emotions around like confetti at a party today, taking us on a wild ride through the crypto carnival. It's like that popular kid on Halloween, hitting up every house for treats, except this time it's trick-or-treating for liquidations' loot – talk about a money-munching monster! 🍭🎃🤑

A trader’s mind sees levels everywhere. 👇️ 

Today’s trading session was brought to you and sponsored by… sarcasm

Check out the Perseid Meteor Shower this weekend!

The annual Perseid Meteor Shower is celebrated on the 9th of August every year. The peak is going to be this weekend, so if you love space rocks that fall out of the sky, do be sure to attent, mkay?

That’s all of Qrafty’s wisdom for today! Qrafty thanks you and wishes you to live each moment as if you are listening to the music you love most! Wahaha!