CC#022 - August 2022 Performance Snapshot

Crypto takes a holiday-ish.

Market Update

August was a more settled time for cryptoassets, with not a lot happening from a price perspective. However, beyond the prices, the market psychology was wary and focused on the battles between regulation, autonomy and the looming Ethereum merge.

Optimism around the merge enabled the psychology of the market to bounce back out of the fear territory and into more optimism, with bitcoin briefly reaching a monthly high of around $25,000 before dropping back below $20,000 by the end of the month.

The narrative behind the drop was centred on regulation, with a privacy-centric smart-contract platform called Tornado cash dominating the news for all the wrong reasons.

On the 8th of August, the US Treasury sanctioned Tornado Cash, affectionately known as a ‘crypto mixer’, on money laundering charges. Tornado cash enabled anyone who wanted to obfuscate a cryptocurrency transaction using a similar process to Tor. Its principal purpose was to facilitate privacy, but it was being misused for crime.

According to the indictment, of the seven billion dollars processed by Tornado cash since 2019, $1 billion had been linked to crime.

Crypto investors weren’t surprised by the sanctions against Tornado; more than the US government arrested innocent developers rather than the criminal end users. The developers were regular programmers and privacy advocates using tornado cash for legitimate reasons, not crime. It’s like Tim Burners-lee being arrested after inventing the internet because his work enabled the endemic operations of filesharing via The Pirate Bay.

Naturally, the war between privacy advocates, regulators, and crime rages. Crypto enables users to do whatever they like with their money, which includes crime. Regulators would do well to remember that regulation itself is not a panacea for eliminating financial misconduct.

Unfortunately, it’s an ongoing narrative within the world of financial technology, and there will always be another Tornado cash operation for regulators to target and add to the scapegoat narrative that cryptocurrencies are ‘dirty’ or ‘crime-ridden’ when the traditional world of finance make crypto seem like an economic convent, by comparison.

Portfolio Highlights

This month saw the launch of masternodes as a service (MAAS) for TradeAssist members. This is effectively equivalent to venture capital, using crypto, where a single project is picked and backed with a specific amount of capital ($20,000) by an investor. Using this method, investors can practice crypto essentialism by ignoring 99% of the crypto market and focusing on the 1% with the highest demonstratable potential.

Two projects are currently offered as masternodes. Syscoin and DefiChain. Both have demonstratable potential to provide an investor with ten times their invested capital (around $20,000) in around two years.

Using the masternode model, investors can also take custody of their capital via their own private wallet, earn a yield of hundreds of dollars a month to invest (and compound their returns) and own a part of the infrastructure of crypto by running a server facilitating cryptocurrency transactions for users 24/7/365.