One of the defining aspects of 2023 was the maturation of regulatory frameworks globally. Various jurisdictions took decisive steps toward clearer guidelines for cryptocurrency exchanges, initial coin offerings (ICOs), and decentralized finance (DeFi) platforms. Increased regulatory clarity contributed to a more secure and institutional-friendly environment, attracting traditional investors to the market.

The DeFi sector experienced exponential growth, surpassing expectations in 2023. The emergence of innovative protocols, yield farming mechanisms, and decentralized exchanges (DEXs) contributed to the sector's prominence. However, challenges such as smart contract vulnerabilities and regulatory scrutiny highlighted the need for ongoing development and risk management within the DeFi space.

Institutional interest in cryptocurrencies reached new heights in 2023. Established financial institutions and corporations increasingly added Bitcoin and other digital assets to their balance sheets. The development of crypto-based exchange-traded funds (ETFs) in certain jurisdictions provided institutional investors with regulated exposure to the market, contributing to overall market legitimacy.

• El Salvador's Bitcoin investments are in the black. El Presidente has shown he has diamond hands.
• Hardware wallet provider Ledger had experienced a pretty malicious hack.
• Bitcoin price breaks through $45k, days ahead of ETF approval.
• These 3 coins came back from the dead in 2023.
  
• Michael Saylor's Microstrategy buys 14,620 Bitcoin for $615 Million USD.
  
• Spot Bitcoin ETF decision by the SEC could be out by January 3
  

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Another great month for crypto draws to a close while the world outside makes less and less sense. Bitcoin is more than money, it is personal freedom. Bitcoin doesn't care about who you are and where you come from - It is for all of us so get on the lifeboat

November saw old chapters closing and a feeling that a new Bull run is all but a certainty. It is great to see Bitcoin acting as a flight to safety in an uncertain world hitting 18 month highs as the rest of the crypto market also woke up.

So much is happening and we will break it down for you here.

In the good old days (2 years ago), restaurants would sometimes raise their prices and to do this they would reprint their menu with the new prices. These days restaurants can't keep printing menu's all the time so its faster and cheaper to just put a sticker over the menu. Its a little further evidence that inflation might be an issue. Whether you want the Noodle Soup or the "Special Box" you may have found your cheap local take away is not as cheap as you remember.

Inflation (CPI) numbers out of the US came through lower than expected (3.2%) in October giving investors some hope that the tightening cycle (interest rate rises) may be close to an end. The fastest ever interest rate rises have had a huge impact but have yet to crush the US economy. Inflation has reduced but inflation is still persistently high. Household savings have evaporated and many people are hanging on for dear life, hoping that things improve and interest rates start to reduce again.

Official prices are a whole lot higher than this time last year in the US but importantly most commentators don't give much respect to official CPI. Official inflation is seen as roughly half of the real inflation rate people are experiencing on the street. That would mean real inflation is closer to 6% which is historically very high and would explain why restaurants are changing prices so fast.

In Australia, the new RBA governor raised rates again despite the palpable pain indebted households are feeling. The RBA said inflation "...is still too high and is proving more persistent than expected.....". In April last year the official interest rate was 0.1% and is now 4.35%. We're up 43.5x. It's widely expected that there will be a pause in December even though there was no pause at the same time last year.

The entire economy sits teetering on the edge at the whim of the RBA. The central bank is using the power given to it to try and reduce the inflation caused by all the COVID era money printing. It's not really how monetary policy is designed. But let's see what another country is doing about their Central bank and Monetary Policy.

Once one of the world's richest countries, Argentina is a shadow of its former self. As the old Argentine saying goes "Abundance breeds arrogance" and the wealth of the past created arrogance and set in place decades of socialist policies leading to multiple sovereign defaults and a currency that is so mistrusted that people spend it as soon as they get in and save in something a lot more trustworthy. 

Argentina is the world record holder of sovereign defaults with a an incredible 9 of them. It is also the largest current borrower from the International Monetary Fund (Egypt is #2, Ukraine #3).

In comes Javier Milei, a former football star and what traditional media describes as a right wing radical. He has swept into power promising to be different and to close the Central Bank of Argentina within a very short period.

How can a country exist without a central Bank? Very easily and prosperously. Little known San Marino has no national currency yet has a higher GDP per capita than Australia, New Zealand, UK or Germany. 

There are 14 countries in total that don't have their own legal tender and a further 67 countries that have a pegged currency (Not really a separate currency). Of these countries there are already several South American nations and most notably El Salvador who became the first country in the world to adopt Bitcoin as legal tender. By all accounts El Salvador is experiencing somewhat of a renaissance as a result. Tourism is booming and crime statistics have improved drastically. The nation is prospering and Argentina's Millei will be looking closely at this experiment. Will Argentina become the worlds second nation to adopt Bitcoin? 

Binance is still the world's largest centralised exchange by volume. In recent times though, things have not gone to plan with Binance effectively closed to several countries including Australia and Canada due to legal issues in the US. This month Binance finally reached a settlement with US authorities. As part of the settlement, CZ the founder and CEO of Binance will be stepping down and paying a personal fine. Binance will pay an enormous $4.3 Billion USD in fines. There are other undertakings also but from a market perspective what you need to know is this will likely ensure Binance's survival worldwide. It's closing another chapter in crypto and allowing the market to move on. Binance will be weaker for some time but it will now be able to build.

On a related note authorities have gone after Kraken also. Unlike Binance, Kraken is seen as a good player in the crypto space. They were the first major exchange to complete a proof of reserves and don't list questionable coins and projects. However they have not escaped the ire of US regulators which are feeling litigious recently. The SEC has sued Kraken, accusing it of illegally operating a securities exchange without registering. 

Kraken intends to fight the charges saying the charges are "incorrect as a matter of law, false as a matter of fact, and disastrous as a matter of policy"

In the wider Crypto market many coins are starting to heat up. RUNE is performing really well. Solana (SOL) in particular has made a nice run reaching levels not seen since May last year. SOL had a tough time during last years FTX debacle as FTX was a large holder and investor. The recent  success of Solana is due to several factors including having previously been oversold and heavily shorted. The shorts are now dissipating and Solana's positive aspects are being recognised including several promising projects choosing to build on Solana. Analysts will be watching Solana's progress to see if December can be as good as November.

• Changpeng Zhao has agreed to plead guilty to violating U.S. Anti-Money Laundering requirements and step down as the CEO of the Binance crypto exchange. Settlement is worth $4.3 Billion USD.
  
• Blackrock has also filed for Ethereum (ETH) spot ETF.  This is the a major vote of confidence to the #2 crypto asset.
  
• The Ethereum (ETH) staking platform Blast witnessed a surge in its total value locked (TVL) metric, surpassing $500 million. As of the latest update, users have deposited more than $570,000,000 into the Blast contract.
  
• Newly elected Argentine President Javier Milei has affirmed his dedication to closing the country's central bank, Banco Central de la República Argentina (BCRA), dispelling speculations of a potential reversal on this key promise. The government asserts the non-negotiable stance on shutting down Argentina's central bank, emphasizing its pro-Bitcoin position.
• Eric Balchunas, a senior ETF analyst with Bloomberg moved markets by asserting that a Bitcoin Spot ETF was 90% likely to be approved by Jan 2024.

If you enjoyed this Rake Review, feel free to open an account and gain access to more proprietary research and work with your very own dedicated crypto broker.

October (Uptober as its come to be known) was an incredible, action-packed month and Bitcoin led the crypto markets to prices not seen for well over a year hitting $35,000 USD. Interest in Bitcoin and crypto more broadly is up and greed is starting to beat fear. So much is happening and we will break it down for you here.

Spreads are the difference between the buy price an the sell price you get when you convert one currency to another. For years remittance providers and banks have been getting away with huge spreads while telling customers there are "zero fees". How that can be legal is actually mind blowing. Clients have been getting fleeced sending money to their relatives abroad. But is this system going to last and is there a competitor that will force remittance providers down the same path as Radio stars and DVD rentals?

Our cover image shows a shuttered Western Union in a healthy shopping strip in Melbourne. Another closed outpost where people used to waste money and no longer do. But at least Western Union is legitimate you say? Not so, in 2017 Western Union admitted anti-money laundering and consumer fraud violations and forfeited almost $600 Million USD. Last month the US Justice Department sent $40 Million to 25,000 clients of Western Union across the globe. In fact, if you used Western Union to send money to a scammer between January 1, 2004, and January 19, 2017, and you did not already file a claim, its not too late.

WU's full 2022 revenue declined 12% on a reported basis. Results that should worry long term investors. Operating margin was also down by over 10% but still high at 19.8%. That seems high for a business converting one currency to another. There just has to be a better way.

In the last few years the amount of value moved by the Bitcoin network has increased significantly. The graph below shows that the amount of BTC transactions is currently at 5 year highs (Thanks to YCharts). Each one can move significant value to anywhere in the world without the need for a remitter at all. What's more you can send 0.1 BTC just as easily as you can send 100 BTC. 

Many Bitcoin naysayers ask about Bitcoin's intrinsic value. The intrinsic value is bitcoins network value. A network that safely and securely moves Billions each day without the need for begging your Bank to release your transaction. If you have BTC - you are truly in control of your funds.

Last month we wrote about SBF's trial finally starting. This month the results are already in. Sam Bankman-Fried (now known as Scam Bankrupt Fraud) has been found guilty on all 7 counts. Sentencing is scheduled for late March 2024 with the once high flying FTX boss facing a maximum sentence of over 100 years.

It's been reported that 78 year old judge Lewis Kaplan was brilliant in cutting through SBF's often convoluted and at times short answers. SBF seemingly tried to confuse the jury of 12 but in the end it did not matter as they found him guilty.

Bankman-Fried was convicted of wire fraud and conspiracy to commit wire fraud against FTX customers and against Alameda Research lenders, conspiracy to commit securities fraud and conspiracy to commit commodities fraud against FTX investors, and conspiracy to commit money laundering.

Unfortunately for SBF's victims this will not help the healing as much as the return of crypto that was sunk into FTX which at current prices is already worth significantly more than it was at the time that FTX declared Bankruptcy. However, this is a positive development in healing and moving on from the darkest chapter of the crypto winter to a new time of growth and building.

We have flagged over several months that Spot ETF approval in the US as the biggest price catalyst in the market. As it were, this turned out to be accurate as rumours of imminent spot ETF approval gave rise to significant market movement in October. 

It all started with a news that BlackRock's spot Bitcoin ETF had been added to the Depository Trust & Clearing Corp's website but later it turned out that this was the case since April and is not uncommon for funds yet to be approved. The price soared and then fall sharply. A pump that made things awkward for Blackrock and the other ETF applicants in front of the SEC. 

However it led to Larry Fink of Blackrock coming out to publicly to say that a rally in the price of bitcoin triggered by a false news report about the approval of a spot ETF served as an example of the "pent up interest in crypto." His comments served to pump the price of Bitcoin on a more sustained level and the price rallied around 30% as shown on the chart below.

It was 15 years ago when Satoshi Nakamoto released the white paper that would give rise to a new monetary system that was not dependent on any authority or issuer - just Maths. Since then Bitcoin has gone from strength to strength spawning a network worth over $600 Million USD and freeing the flow of money. A new industry was born and now the future is bright.

The world economy appears to be balanced on a knife edge. Will inflation keep pushing interest rates up or will the economy collapse forcing an about turn in rates? Australia has changed governors but rates have remained on hold despite printing high inflation suggesting that the RBA is afraid of pushing the economy over a cliff. 

In the US equities are already down significantly. The S&P fell 5% in a fortnight at the end of October as economic fears intensified. There are also fears over the conflict in the Middle-East intensifying. There has been a flight to safety with equities down and Bitcoin up.

All eyes will be on the Fed's next interest rate decision on December 13th.

• The Federal Reserve threatened to sue Bitcoin Magazine over apparel that parodies the Fed's "FedNow" system. Bitcoin Magazine issued a brilliant reply. It can (and should) be read in full here
  
• BlackRock fully behind Bitcoin. Larry Finks comments suggest Bitcoin is undervalued and people are just starting to realise it. 
• Sam Bankman-Fried Guilty on all 7 counts. He will likely spend the rest of his adult life in prison ending a dark chapter for the crypto market and giving hope for the future.
  
• "I don't own any #Bitcoin... but I should." - Stanley Druckenmiller. Legendary investor Stan Druckenmillar appears to support Bitcoin and admits it is being used as a store of value.

If you enjoyed this Rake Review, feel free to open an account and gain access to more proprietary research and work with your very own dedicated crypto broker.

Welcome to another monthly Rake Review as September finally ended and October (The best performing month - historically) can start. We've seen more big news and events and we will digest them for you below. 

Awards mean nothing and this one is no different. Your favourite Crypto Broker has been recognised as: 

Most Innovative Crypto Brokerage Firm 2023 – Australia

The only thing that matters to us is the performance of our customers portfolios and the quality of our service. We shrug this off and keep building a better product for our clients. 

(Apologies for the shameless self promotion :)

SBF (now known as Scam Bankrupt Fraud) will be in court tomorrow for the start of his trial. The once high flying FTX boss will be facing a maximum sentence of over 100 years.

However, news is better for victims of FTX's as more money than expected has made it back into administrators coffers. Markets are pricing in well over a third of funds to be returned to creditors which is a lot more than previously thought given the movement of funds off the exchange in November 2022.

BlockFi the bankrupt crypto lender has also had progress with the managements plan being approved by a large majority. The hope is for some funds to be returned to creditors within 90 days.

Celsius is also fairing better than expected. A possible restart is on the cards which may be the best way forward to recover the most funds.

More good news for Gemini Earn creditors also. The current plan (as hopeful as it may be) is saying that creditors could recover up to 110% of their funds. If that dream happens it would really be something.

Why are we telling you all this? Well, overall these failures in late last year hurt the crypto ecosystem greatly. Now that there is hope of getting funds back, it is highly likely this will act as a bullish lead for crypto markets. FTX in particular is currently keeping a lid on Bitcoin. The court approved all Bitcoin holdings to be sold to recover USD so that FTX administrators can pay back creditors in USD. In turn, that USD could (in large part), flow back into Bitcoin once it is distributed. The only question is when. 

The supply of coins on exchange is historically very low. According to Coinglass, less than 10% of Bitcoin supply is accessible through exchanges. That means the rest is safely put away in cold storage or similar. Available supply is extremely low. 

Look at the green line below. Less than 2 Million BTC is on exchange.

Bitcoin on exchange is now at a 5 year low, despite 5 years of mining adding to the supply. There is significant accumulation going on amongst the whales (large holders) and according to some reports Wall St funds are starting to accumulate a position ahead of launching their ETF's. It's an environment where any demand shock could spark a sharp rise.

While Bitcoin is the leader by Market Capitalisation, it is USDT that boasts the largest turnover (volume). Above, you can see USDT having significantly higher volume than any other coin or token. 

Stablecoins generally tend to have a higher turnover to market cap ratio. 3 of the top 5 coins above are stablecoins. USDT is the current king of the stablecoin market with USDC suffering reputational damage this year but still managing 7 Billion volume in a day. 

The reason stablecoins are so often traded is that the price point they have makes sense to people (unit of account). It is also preferred as a settlement mechanism for large short term transactions because the relative price (by definition) won't move significantly.

It is a useful construct in the short term, but has significant risks, including centralisation risk and regulatory risk. Not to be confused with genuine investments stablecoins are more of a tool, or slightly more useful dollar. Also not to be confused with Central Bank Digital Currencies, which are the devil.

After filing Bitcoin ETF applications along with a swathe of others, Grayscale has applied for an ETH ETF also. Just as a reminder, an ETF allows investors to access crypto through a stock market mechanism. Effectively it allows for the purchase of Crypto without having to take the risk of holding it yourself.

The backlog of US ETF applications for BTC and ETH is getting ridiculous and it seems the SEC are determined to hold the gates for as long as possible while European ETF's have already taken off.

The Bitcoin Halving is just over 6 months away. In April, the amount of BTC released every block will halve lowering supply to hit the market. In the past this has helped put a supply shock into the market and we have seen what can happen to price. Don't get caught short.

• You might've been called a conspiracy theorist if you thought Bitcoin was being held down on purpose by government. News this week confirms your suspicions though. Senator Bob Mendez, known for his anti-Bitcoin stance has been charged with bribery after allegedly accepting swathes of cash, gold and mortgage payments in return for voting against the interests of crypto. 
  
• Microstrategy tops up again. The largest corporate holder of BTC has topped up again with another cheeky $147M USD BUY. 
  
• Aussie Interest Rates on Hold again as the AUD falls against the USD (& USDT)
• The Greyscale discount to NAV has fallen to just 20% as the company becomes likelier to allow redemptions/ get bought / or convert to an ETF.
  
• Stormrake to speak at the ATAA 2023 National Conference at the Sheraton Grand Hotel in Sydney 22 October 2023. This will be live-streamed but if anyone is in Sydney and would like to attend please let us know.
  

If you enjoyed this Rake Review, feel free to open an account and gain access to more proprietary research and work with your very own dedicated crypto broker.