The Pomp Letter

To investors,

Coinbase reported their earnings yesterday and beat Wall Street’s expectations on almost every metric. Here is a quick breakdown:

* Revenue - expected was $1.85 billion, but actual was $2.23 billion

* Adjusted EBITDA - expected was $961.5 million, but actual was $1.15 billion

* Verified users - expected was 63.1 million, but actual was 68 million

It shouldn’t be a surprise that Wall Street expectations were off. A study showed that “the median Wall Street forecast from 2000 through 2020 missed its target by an average 12.9 percentage points.” This is nothing new.

What is surprising though is that Coinbase’s business posted such great financial numbers in the middle of a significant market downturn. Remember, bitcoin was trading at $58,900 on April 1st and ended the quarter at $34,855. Not exactly a walk in the park from a volatility standpoint.

This serves as a good reminder to investors that exchange businesses benefit from volatility, regardless of which direction it occurs. The drop in price for bitcoin and other cryptocurrencies was the main driver of the outperformance of Coinbase’s performance. The volatility leads to the media talking about the assets more. It creates more organic conversation among users as well. These two forces opens the door for an exchange to acquire more users than normal as people look to buy or sell as price moves.

Additionally, the increased user acquisition, combined with the increase in trading volume of retail users, eventually creates significant outperformance on revenue. These high revenues are largely driven by high exchange fees for the retail user base, which now tops 68 million registered users. Over time I would expect that increased competition in the market will lead to lower and lower exchange fees that Coinbase and others can charge.

In order to combat the eventual decrease in fees, Coinbase is working to increase their user base and expand into other product lines. They have done a great job capturing a significant portion of the institutional custody market and appear to be seeking a similar strategy with decentralized finance features. It remains to be seen how well these centralized exchanges will stand-up to the increasing competition from decentralized offerings in the industry, but it is hard to see traditional Wall Street organizations running to use decentralized protocols before becoming a customer of Coinbase or other centralized platforms.

It would be irresponsible when evaluating Coinbase’s future prospects to not mention the most important aspect of the business — the macro tailwinds. Coinbase has to continue to build a great company, but it is more likely that the macro environment will be the greatest driver of growth or contraction in the coming decade.

First, the crypto industry is just getting warmed up in my opinion. We have reached over 100 million users across the world, but it appears that adoption is only accelerating as we reach mainstream audiences. The users traditionally start with buying and holding bitcoin, but eventually move into the various other assets and features.

Second, the institutionalization of the industry will serve as a big plus for Coinbase, who is obviously trying to position themselves as the institutional leader within North America. As more of these large financial institutions enter the space, they’ll be using everything from the prime brokerage to the custody to staking, etc.

Lastly, the macro economic outlook couldn’t be more attractive. We have low interest rates, big appetite for continued QE, high inflation, and a population that is waking u to the need to push further out on the risk curve to protect their wealth. This tailwind will push more and more people into the crypto industry, which nicely positions Coinbase as one of the greatest benefactors.

The July inflation numbers were reported today and CPI came in at 5.4% for the second month in a row, along with core inflation coming in at 4.3%. It is insane to think about these as the official numbers, while knowing that the true inflation metrics are likely much higher. The average American has very little choice but to seek out investments as the only way to protect their purchasing power and grow their wealth.

Overall, Coinbase continues to be an excellent business. I’m impressed with Brian Armstrong and the executive team’s ability to execute. They continue to grow their business and adapt to the changing environment. I’ve had financial exposure to the business from the private market and continue to hold majority of those shares today.

It will be interesting to watch the business over the remainder of the year, but I wouldn’t bet against this team or company. Hope you all have a great day. Talk to you tomorrow.

-Pomp

SPONSORED: Unstoppable Domains allows you to replace cryptocurrency addresses with a single, easily-readable name like mine, Pomp.crypto. Instead of worrying about getting 1 character wrong in a long string of random letters and numbers, get your own Unstoppable Domain here.

THE RUNDOWN:

Jack Dorsey Says Bitcoin Will Unite the World: Twitter and Square CEO Jack Dorsey, a noted superfan of Bitcoin, claimed on Monday that the cryptocurrency will eventually unite the world. On Monday afternoon, an amendment to the Senate’s infrastructure package that would have expanded the government’s involvement in cryptocurrency was blocked. Shortly after that, Dorsey tweeted that “#Bitcoin will unite a deeply divided country. (and eventually: world).”

PNC Bank Is Planning a Crypto Offering With Coinbase: Coinbase said Tuesday it’s working with PNC Bank, the fifth-largest bank in the U.S., on a previously undisclosed crypto project. “In recent months, we have formed partnerships with industry leaders including Elon Musk, PNC Bank, SpaceX, Tesla, Third Point LLC, and WisdomTree Investments,” Tuesday’s shareholder letter read. When asked by CoinDesk, Coinbase declined to elaborate. Read more.

Coinbase Rakes In $1.9B in Transaction Revenue in Q2, Beating Estimates: Coinbase posted $1.9 billion in transaction revenue in the second quarter, in its second-ever earnings report as a public company. Analysts had estimated the exchange would post $1.57 billion in transaction revenue. The U.S.’ largest cryptocurrency exchange grew to 8.8 million monthly transacting users (MTUs) and 68 million total users in the quarter, versus analyst estimates for 6.7 million monthly users and 62.8 million total users. The exchange’s take rate – or retail trading revenue divided by retail trading volumes – was 1.24%, up from 1.21% last quarter. Read more.

US Senate Sends Infrastructure Bill to House: The U.S. Senate passed its bipartisan infrastructure bill to the House of Representatives Tuesday after a 69-30 vote. The bill, which dedicates $1 trillion to infrastructure improvements over the next 10 years including roughly $550 billion in new spending, drew controversy from the crypto community due to a “pay-for” that anticipates raising $28 billion from a broadened crypto tax provision. Read more.

Bitcoin Mining Company CleanSpark Acquires Second Data Center: Nasdaq-listed bitcoin mining company CleanSpark has acquired a second data center in the U.S. state of Georgia for $6.6 million. The 87,000-square-foot facility is located in Norcross, 33 miles from the company's current operation in Atlanta, CleanSpark announced Tuesday. Read more.

LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE

Anthony Pompliano breaks down the most recent analysis of the infrastructure bill, including how crazy the governance process is, why bitcoin is good for business, and what is going to happen next.

You can watch more segments like this every day on our new live show, The Best Business Show, which is streamed on YouTube each day from 11am-1p EST.

LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE

Podcast Sponsors

These companies make the podcast possible, so go check them out and thank them for their support!

* Exodus is an absolute game changer in the crypto wallet space. With over 100 assets supported, one-click built-in exchange, Trezor hardware wallet integration and 24/7 customer support, this is a no brainer for both newcomers and crypto heavyweights. Download Exodus on desktop, iOS, and Android using my code http://get.exodus.com/pomp

* Cosmos is building the Internet of Blockchains, marking a new era of interoperability, scalability, and usability. The free flow of assets and data between blockchains with bridges to Ethereum and Bitcoin will unleash the potential of DeFi, NFTs, and much more. Dive into Cosmos at cosmos.network/pomp

* OKEx is a leading crypto exchange known for providing the most options for crypto traders and investors. Whether you want to trade spot, futures, options or swaps, OKEx gives you institutional-grade tools and a best-in-class trading engine. The platform offers credit and debit card funding options and supports 40 different fiat currencies, including EUR, CAD, GBP, TRY, INR and RUB, to name just a few. You can invest, trade, and earn yield, all within one place at okex.com. OKEx is not available to customers in the United States. 

* Choice is a new self-directed IRA product that allows you to buy Bitcoin with tax-advantaged dollars, while still holding your private keys. You can go to retirewithchoice.com/pomp to sign up today.

* Unstoppable Domains makes crypto easier by replacing your address with [AnyName].crypto. They allow you to send and receive over 70 cryptocurrencies, including BTC, ETH, and LINK with a single blockchain domain. Go to unstoppabledomains.com and get [YourName].crypto to make your crypto life easier.

* BlockFi provides financial products for crypto investors. Products include high-yield interest accounts, USD loans, and no fee trading. To start earning today visit: http://www.blockfi.com/Pomp

* Crypto.com allows you to buy, sell, store, earn, loan, and invest various cryptocurrencies in an user friendly mobile app. Join over one million users today. You can download and earn $50 USD with my code “pomp2020” when you sign up for one of their metal cards today.

* Public Rec is on a mission to make comfort look good. Their fan-favorite Flex Short is the ultimate crossover short you’ll need all summer long. From the beach to the gym, this quick-drying short has you covered. Comfort starts with a better fit. Free shipping. Free returns. Visit www.publicrec.com/pomp and use POMP at checkout for 10% off!

* Circle is a global financial technology firm that enables businesses of all sizes to harness the power of stablecoins and public blockchains for payments, commerce and financial applications worldwide. Circle is also a principal developer of USD Coin (USDC), the fastest growing, fully reserved and regulated dollar stablecoin in the world. The free Circle Account and suite of platform API services bridge the gap between traditional payments and crypto for trading, DeFi, and NFT marketplaces. Create seamless, user-friendly, mainstream customer experiences with crypto-native infrastructure under the hood with Circle. Learn more at circle.com.

* Gemini is a leading regulated cryptocurrency exchange, wallet, and custodian that makes it simple and secure to buy bitcoin, ether, and over 30 other cryptocurrencies. Offering industry-leading security, insurance and uptime, Gemini is the go-to trusted platform for beginner and sophisticated investors alike. Open a free account in under 3 minutes at gemini.com/pomp and get $20 of bitcoin after you trade $100 or more within 30 days.

* Revolut is a finance app in the US and UK, that say they're the simplest way to access crypto. Sign up today at Revolut.com/pomp and make 3 card transactions to get $15, which you can exchange for any tokens Revolut supports. As usual, when you move your money from fiat to crypto your capital is at risk. See T&C's for details. Revolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, Member FDIC. Cryptocurrency services provided directly by Paxos Trust Company, LLC.

* Did you know nearly 338 million dollars worth of NFTs were sent last year? And in 2021 that number is growing faster than ever. Looking to make your first NFT? Check out NEAR’s fast, scalable, low-cost, open-source platform. Learn why NEAR is the infrastructure for innovation at near.org

* Amber - Invest, trade, swap, and earn crypto with Amber App, where new users can receive 16% APR on BTC, ETH, and USD Stablecoins! Click here to sign up now.

* LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp

You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren’t finding this valuable.

Nothing in this email is intended to serve as financial advice. Do your own research.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit pomp.substack.com/subscribe

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To investors,

The world of politics has been focused on the infrastructure bill as it has been debated over the last few weeks. The most surprising thing to the incumbent political class has been how quickly and effectively the bitcoin and crypto industry were able to mobilize.

Whether we are talking about phone calls, tweets, or traditional lobbying efforts, it feels like the industry went from 0 to 100 in a matter of days. This was possible because the industry has an incredibly engagement online community that isn’t scared to voice their opinions. Additionally, there has been incredible wealth generated in an industry that went from $0 to about $2 trillion in market cap in a little over a decade.

When you combine wealth and engagement, you have a recipe for action. The surprising thing in my opinion has been the response from the incumbent political class though. There are still a good portion of them, both elected officials and those who generally operate around them, that seem to believe this is an anomaly. They are utterly befuddled by what is happening, yet they seem to think that the crypto industry will move on to something else once this bill is voted on.

As you probably guessed, I tend to think that this conclusion is inaccurate. First, it is very clear that the bitcoin and crypto industry will continue to lead to more innovation, economic production, jobs, and technological progress. This is going to happen regardless of whether the United States wants to participate or not.

Second, it is estimated that approximately half of the Forbes 400 list will come from this industry when bitcoin hits somewhere between $175,000 and $200,000. That is an incredible amount of global wealth that is concentrated in a single industry. Those people, just like the disruptive industries before them, will eventually become larger players in the political arena — they won’t be able to avoid it. The policies and decisions that are made in Washington DC will have an effect on their businesses, their wealth, and their freedom.

Lastly, there is an entire generation of citizens that have grown up with a disdain for the incumbent system. They watched the horrific events of 9/11 get leveraged into two forever wars in the Middle East, while simultaneously expanding the surveillance capabilities of the nation state. Shortly thereafter, the same generation watched as their parents and loved ones were decimated by the global financial crisis. The government bailed out corporations and large financial institutions, but left the average citizen out to dry.

This millennial generation has record low levels of trust in the mainstream media and in the government, but rather than simply complain about these challenges (as previous generations have done), the young people have gone out and built a better system. The media’s power has been significantly weakened by the advent of social media platforms, podcasts, and technology companies like Substack. The legacy financial institutions are on the brink of losing significant power with the advent of bitcoin, stablecoins, and decentralized financial applications.

This is the difference between the generations. This is the difference between the political class and the technology industry. One is focused on building. On action. The other is focused on advocating and complaining. There are politicians who have spent their entire careers complaining about the financial system, yet in less than a decade the technologists were able to simply build a better one.

That framework is important to understand because it is ultimately playing out in nearly every facet of our lives. The doers are making progress at a faster rate than the talkers. When this occurs, the talkers have no tools in their toolbox to compete. They simply attempt to use their words to complain about what the new class of doers have chosen to pursue.

Now this brings me back to the political arena. The folks in Washington DC are being woken up abruptly to this new class of doers. As an example, FTX founder Sam Bankman-Fried was one of the top two donors to Joe Biden’s Presidential campaign last year. Another example is that the relatively unknown and outsider industry has been able to effectively stop all progress on a $500+ billion infrastructure bill as the nation’s elected leaders debate the specific words used in less than 3 or 4 paragraphs.

This type of activity and results led me to tweet the following yesterday:

Before long, someone tagged Twitter and Square CEO Jack Dorsey with the insinuation that maybe one day he would run for President. While most people already would have thought that to be unlikely, Jack’s response was perfect:

This got me thinking. Not only is Jack correct, but the initial framing of the conversation completely missed the mark. Bitcoin doesn’t need anything. It simply is what it is. But maybe the rest of the world needs bitcoin? My response to Jack was an attempt to put clarity around this idea:

Read that again — Bitcoin doesn’t need Presidents, but Presidents need Bitcoin.

As I’ve thought about this framing more and had the opportunity to sleep on it, I feel that it really codifies an important idea. The legacy system is headed in the wrong direction. It may be able to survive for a few more decades, but it won’t last forever. At some point, the incumbent players will need bitcoin more than bitcoin needs the incumbents. Many, myself included, would argue that we are already at this point. But even if you disagree on the current situation, it would be hard to argue that we aren’t headed in that direction in the future.

With that said, my thought related to a bitcoiner becoming President does not necessarily mean that a pseudonymous account with laser eyes on Twitter will successfully run for the highest office in the land. It is more likely that a sitting President, or an existing politician that will eventually run and win, becomes a bitcoiner. I don’t think the current administration is going to be the group that picks up the flag and runs with it.

But I do think that someone like Miami mayor Francis Suarez could be a great example. He is an existing politician who understands how to navigate the often confusing and complex landscape of democratic rule. He has an important and unique view on the importance of technology and freedom, including how those two things can reinforce each other. And Suarez has shown the propensity for action by openly and publicly talking about bitcoin, building Miami into the bitcoin city, and finding ways to embrace the technology to build a better world for his citizens.

Francis Suarez may or may not run for President one day. He is just one example. You could also look at other Bitcoin proponents in political office such as Senator Lummis or Congressman Davidson. Maybe they run for President. Maybe not. But someone, at some point, will run for President of the United States and embrace bitcoin. The industry is growing too fast and the adoption is proving to drive such a pervasive uptake in populations that it feels inevitable.

The crazy thing about this scenario is not that the sitting President of the United States will be a bitcoiner. That would imply that the man or woman in that position would be a savior or leader of the bitcoin movement. Instead, it is more likely that the President of the United States will be in a position where it is essential for the country to embrace the technology. The President will need bitcoin more than bitcoin needs the President.

Now before you roll your eyes and think I’m crazy, there is precedent for this already. The President of El Salvador is a bitcoiner. He has laser eyes on Twitter, has introduced legislation to make the digital currency legal tender in his country, and is working to bring bitcoin mining and other activities to his people. There are many other politicians, both in the United States and abroad, who are self-identifying bitcoiners (laser eyes and everything!). And of course, there are sitting Senators and Congressmen in the United States who have invested material portions of their net worth in the asset.

As an investor, I always try to think about the macro trends and where the world is going. It feels like this past week was an inflection point in the adoption and awareness of bitcoin. There were Senators openly advocating and explaining what bitcoiners have spent years stating on various social media platforms:

We still have a lot of work to do, but this feels like an important milestone. Washington DC has finally come to realize how important this technology is, how engaged the community is, and many of the current politicians are coming to terms with the idea that history will be unkind to those that oppose technological progress.

As you all know, I hate politics. I’ve written more about politics in the last two weeks, than every other time combined since I started this letter in 2018. I’m looking forward to getting past this debacle and getting back to what I enjoy — analyzing the progress of the digital currency, the economic and social ramifications, and the promise of ushering in a better life for billions of people globally.

That brings me to my final point — don’t overlook the fact that bitcoin’s price has been appreciating rapidly over the last few days, while the politicians debated words on a piece of paper. True bitcoiners know that the words don’t mean anything. There is a decentralized system that no one controls. The United States can choose to be friend or foe, but it won’t ultimately matter. The bitcoin network will continue producing block after block after block of transactions. That is exactly how it should be.

Hope each of you has a great start to your week. Talk to everyone tomorrow.

-Pomp

BONUS: We are running our 6th cohort for the Bitcoin and Crypto Training Course starting Tuesday August 10th. Graduates have already been hired at Coinbase, BlockFi, Gemini, Kraken, and many other great companies. Want to increase chances of being hired? Apply here: 

https://pompscryptocourse.com

THE RUNDOWN:

2 Senators Propose Exemptions to Crypto Tax Reporting Required by US Infrastructure Bill: U.S. Senators Mark Warner (D-Va.) and Kyrsten Sinema (D-Ariz.) on Saturday updated their amendment modifying a crypto tax reporting provision in the Senate’s landmark infrastructure bill. The original amendment, introduced late Thursday, would exclude cryptocurrency miners who are involved in validating transactions on distributed ledgers and companies that are selling private key hardware or software wallets. Read more.

Washington Wakes Up to Crypto Influence Amid Infrastructure Fight: An intense infrastructure bill brawl between Bitcoin advocates, Congress and the White House has revealed a new power player in Washington that’s starting to find its footing: the cryptocurrency lobby. The industry was first caught off guard when lawmakers and the Biden administration targeted it with new tax rules tucked into the bipartisan Senate infrastructure bill announced last month. But it fought back with a vengeance, showing that startup digital trading platforms and other firms could rally a small army of recently requisitioned trade associations, lobbyists and public relations experts to put up a real defense. Read more.

Bitcoin ATMs coming to gas station, retail chain Circle K: Buying cryptocurrency will be as easy as fueling up and grabbing snacks after a new deal to install bitcoin ATMs in a nationwide convenience store and gas station chain. New Yorkers will soon be able to fill up the gas tank and buy cryptocurrency after gas station chain Circle K announced a deal to install bitcoin ATMs. Read more.

The Sacking of a Crypto Mecca (longread): The creator of America's crypto mecca: Ian Freeman saw cryptocurrency as a kind of moral crusade against the belligerence of the US government. He is best known as the host of Free Talk Live, a libertarian talk radio show syndicated to 185 radio stations across the country. His show became a gathering point for the early Bitcoin community, turning the small town of Keene, N.H, into a crypto mecca. In March, federal law enforcement raided the crypto oasis, tearing it down and arresting six people. The story is much more complicated than it seems. Read more.

LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE

Anthony Pompliano breaks down the most recent analysis of the infrastructure bill, including the importance of bitcoin, the political class’ awareness of the new industry, and where we go from here..

LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE

Podcast Sponsors

These companies make the podcast possible, so go check them out and thank them for their support!

* Exodus is an absolute game changer in the crypto wallet space. With over 100 assets supported, one-click built-in exchange, Trezor hardware wallet integration and 24/7 customer support, this is a no brainer for both newcomers and crypto heavyweights. Download Exodus on desktop, iOS, and Android using my code http://get.exodus.com/pomp

* Cosmos is building the Internet of Blockchains, marking a new era of interoperability, scalability, and usability. The free flow of assets and data between blockchains with bridges to Ethereum and Bitcoin will unleash the potential of DeFi, NFTs, and much more. Dive into Cosmos at cosmos.network/pomp

* OKEx is a leading crypto exchange known for providing the most options for crypto traders and investors. Whether you want to trade spot, futures, options or swaps, OKEx gives you institutional-grade tools and a best-in-class trading engine. The platform offers credit and debit card funding options and supports 40 different fiat currencies, including EUR, CAD, GBP, TRY, INR and RUB, to name just a few. You can invest, trade, and earn yield, all within one place at okex.com. OKEx is not available to customers in the United States. 

* Choice is a new self-directed IRA product that allows you to buy Bitcoin with tax-advantaged dollars, while still holding your private keys. You can go to retirewithchoice.com/pomp to sign up today.

* Unstoppable Domains makes crypto easier by replacing your address with [AnyName].crypto. They allow you to send and receive over 70 cryptocurrencies, including BTC, ETH, and LINK with a single blockchain domain. Go to unstoppabledomains.com and get [YourName].crypto to make your crypto life easier.

* BlockFi provides financial products for crypto investors. Products include high-yield interest accounts, USD loans, and no fee trading. To start earning today visit: http://www.blockfi.com/Pomp

* Crypto.com allows you to buy, sell, store, earn, loan, and invest various cryptocurrencies in an user friendly mobile app. Join over one million users today. You can download and earn $50 USD with my code “pomp2020” when you sign up for one of their metal cards today.

* Public Rec is on a mission to make comfort look good. Their fan-favorite Flex Short is the ultimate crossover short you’ll need all summer long. From the beach to the gym, this quick-drying short has you covered. Comfort starts with a better fit. Free shipping. Free returns. Visit www.publicrec.com/pomp and use POMP at checkout for 10% off!

* Circle is a global financial technology firm that enables businesses of all sizes to harness the power of stablecoins and public blockchains for payments, commerce and financial applications worldwide. Circle is also a principal developer of USD Coin (USDC), the fastest growing, fully reserved and regulated dollar stablecoin in the world. The free Circle Account and suite of platform API services bridge the gap between traditional payments and crypto for trading, DeFi, and NFT marketplaces. Create seamless, user-friendly, mainstream customer experiences with crypto-native infrastructure under the hood with Circle. Learn more at circle.com.

* Gemini is a leading regulated cryptocurrency exchange, wallet, and custodian that makes it simple and secure to buy bitcoin, ether, and over 30 other cryptocurrencies. Offering industry-leading security, insurance and uptime, Gemini is the go-to trusted platform for beginner and sophisticated investors alike. Open a free account in under 3 minutes at gemini.com/pomp and get $20 of bitcoin after you trade $100 or more within 30 days.

* Revolut is a finance app in the US and UK, that say they're the simplest way to access crypto. Sign up today at Revolut.com/pomp and make 3 card transactions to get $15, which you can exchange for any tokens Revolut supports. As usual, when you move your money from fiat to crypto your capital is at risk. See T&C's for details. Revolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, Member FDIC. Cryptocurrency services provided directly by Paxos Trust Company, LLC.

* Did you know nearly 338 million dollars worth of NFTs were sent last year? And in 2021 that number is growing faster than ever. Looking to make your first NFT? Check out NEAR’s fast, scalable, low-cost, open-source platform. Learn why NEAR is the infrastructure for innovation at near.org

* Amber - Invest, trade, swap, and earn crypto with Amber App, where new users can receive 16% APR on BTC, ETH, and USD Stablecoins! Click here to sign up now.

* LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp

You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren’t finding this valuable.

Nothing in this email is intended to serve as financial advice. Do your own research.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit pomp.substack.com/subscribe

To investors,

Will Clemente breaks down this week’s bitcoin situation using on-chain metrics to separate the signal from the noise. You can follow Will on Twitter or sign up for his email by clicking here. Here is Will’s analysis:

Hope all is well, and you had an awesome week. Bitcoin showing some strength, but now we watch for the follow through over the next week. We’ll look at key levels to watch for as well as patterns to keep an eye on from an on-chain perspective. Hope you enjoy, have a great weekend! Let’s dive in. 

Here’s some key takeaways from this week: 

* Bitcoin still consolidating below resistance at the top of a multi-month range 

* Every cohort in net accumulation, retail leading the way

* Both qualitative and quantitative measures of supply shock/shortage showing strong upward trends

* On-chain activity still quiet, less transactions but bigger sized transactions

* Market trading in a state of profit, got the bounce off 1 in SOPR we wanted to see

* Dormancy has almost fully reset

* Broader trend of miners still in accumulation

What to watch for: 

* Could still see another retest of mid-range between $35K-$37.5K, but unlikely imo

* $42,000 Range breakout/On-chain volume cluster breakout 

* $45,000 200 Day Moving Average 

* $48,000-$50,000 Key price structure technical level, Overhead supply (breakdown level from distribution), round psychological number

* $53,000 On-chain price model “mean”, has been a pivotal price level historically 

* Potential hash ribbon buy signal

* Are long-term holders dumping hard on the first bit of exit liquidity they get? 

* Would like to see SOPR stabilizing above 1

* Want to see on-chain activity pickup, Mempool fill up 

First up let’s take a look at URPD, basically an on-chain volume profile. This shows the amount of BTC moved at different price levels. We’ve now carved out this large zone of re-accumulation between $31K-$42K; 21.71% of Bitcoin’s money supply has now moved here. 2.61% of Bitcoin’s money supply has moved at $39.5K alone; making it the largest single bar of volume since $3.8K. Watching $42K and the 200-day moving average at roughly $45K for resistance on a potential move up.

Next up we have what I labelled as top/bottom models. This looks at the Top price model (a variant of the all-time moving average of Bitcoin), Delta price (realized price – average price), Realized price, the mean between Top/Delta price, and lastly the mean between realized price and the average between Top/Delta. Overlaying these all together, we see that price has always hovered between top price and delta. 

Market price going below realized price is a great signal to start accumulating heavily in macro bottoms. This is because price is below the average price investors paid for their coins; meaning the market is in capitulation by definition. Reaching the orange and red lines have marked historical overheated/euphoric price levels. Market price going above the yellow mid-line has historically been a key level for Bitcoin to confirm a strong bull market trend. In 2013 price went vertical after breaking through, bear market began after breaking below. In early 2017 served as resistance, before switching to support propelling us into the final latter phase of the bull market. Also was the level that the dead cat bounce got rejected from in 2018. Served as support in January 2021, marked the major drawdown in May, and now I would like to see us get back above that yellow line for confirmation. Currently sits at roughly $53K.

Accumulation has continued, which we can look at in several ways. In blue, Illiquid Supply Shock Ratio, which compares the movement of coins from liquid (weak hands) entities to illiquid (strong hands) entities. In purple, Exchange Supply Shock Ratio, which compares the amount of supply held on exchanges relative to overall circulating supply. Both of these are trending strongly upwards, with price lagging behind. I still am patiently waiting to see these massive multi-month-long divergences get fully priced in. Also, worth noting that the Illiquid Supply Change RSI is also in a macro buy zone, just chose not to include it this week to save some space. 

When we look at who exactly is buying by size, almost every cohort is in strong accumulation. In particular, the little guys have really caught my eye. This metric takes a ratio of all the entities on-chain with less than 10 BTC and dividing that by overall circulating supply. What you get is essentially a representation of how much supply retail holds on a relative basis. This has hockey sticked upward since late May. This along with new all-time highs in net user growth illustrate healthy network adoption/distribution. 

Note: net user growth is trending up, while the number of new entities is trending down. This means that the number of “dormant entities” is decreasing at an even greater rate than the number of new entities. To me this shows that the users coming on the network are staying. 

On a similar note, let’s look at the dynamic between short and long term holders that we’ve been watching for a while. Long-term holdings continue to increase while short-term holdings continue to decrease. This means two-fold: short-term holders are aging past the 155-day (5 month) threshold, short-term holders are the ones that are doing most of the selling. Pairing this with metrics like CDD, Dormancy, SOAB, and ASOL all tell a similar story. 

Long-term holders now have over 66% of supply, short-term are now down to nearly 20%. Before the main bull run began in October, long-term holder supply reached just over 68%.  

Next up we have dormancy flow, created by David Puell. This looks at market cap in comparison to annualized dormancy (measured in USD) on each given day. Dormancy is coin days destroyed adjusted for volume. Highlighted below (March 2020 counts too) you can see each time the metric dips near the green box a macro bottom is signaled. We have just bounced off the green box, a nearly full reset of dormancy flow. This is partially trending down because of decreased volume, thus less overall coin days being destroyed, but signals that the age in the coins being sold have been young. So once again, new market participants have been selling while long-term investors are scooping up coins. 

Next up we have aSOPR, SOPR adjusted for outputs with a lifespan of less than an hour. (filters out the noise) This looks at the amount of profit held by the coins trading in the market. Last week we noted our breakout above 1 back into a state of net profit, but mentioned we wanted to see the metric stabilize above 1 or bounce off 1 on a price drop. We got a decent little price drop after getting rejected from 42K, of which the metric did in fact bounce off 1 as we were watching for. Would now like to see some stability above 1 for confirmation. 

Nothing has changed with miners, broader trend still in accumulation, actually ticking up a bit this week.

The main bear case for Bitcoin from an on-chain perspective is the big drop off in transactional activity. We’re still a rut looking at things like the Mempool, number of transactions, active addresses, etc. Would like to see these things pick back up, which I personally see as lagging indicators to price. If we get a breakout towards some of the targets mentioned at the beginning of the letter, would want to see some increased activity in these metrics. 

That is it for today’s analysis. Hopefully you found this helpful. I highly suggest you subscribe to Will Clemente’s email where he breaks down on-chain metrics multiple times per week: Click here

SPONSORED: Amber Group is a leading global crypto finance service provider operating around the world and around the clock with a presence in Hong Kong, Taipei, Seoul, and Vancouver. Founded in 2017, Amber Group is committed to combining best-in-class technology with sophisticated quantitative research to offer clients a streamlined crypto finance experience.

The platform now services over 500 institutions and 100,000+ individual investors across the Amber Pro web platform, the Amber App, as well as their 24/7 trading desk. To date, Amber Group has cumulatively traded more than $330 billion across 100+ electronic exchanges, exceeding $1 billion in assets under management. In 2019, Amber Group raised $28 million in Series A funding led by global crypto heavyweights Paradigm and Pantera Capital, with participation from Polychain Capital, Dragonfly Capital, Blockchain.com. 

Click here to sign up now.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit pomp.substack.com/subscribe

To investors,

The infrastructure bill that is currently making its way through the government has a lot of crazy things in it. This isn’t exclusive to this specific piece of legislation. The document is over 2,500 pages in length, which means that it is impossible that any politician has personally read the entire thing.

Earlier this week, I sat down and tried to read some of the document. It was quite hilarious because even after reading some of the sections, I still didn’t know what it was saying. Additionally, we found sections that included the removal of invasive plant species, $1 billion for an organization that is overseen by a politician’s wife, and what appears to be authorization for the US government to purchase marijuana to be used in studies of the impact of driving high. Seriously…you can’t make this stuff up.

Buried within the infrastructure bill is another concerning topic — there is a drastic increase in the government’s surveillance capabilities related to the bitcoin and cryptocurrency industry.

As you all know, I rarely care about politics. I don’t identify with any political party. It all generally strikes me as confusion of motion with progress. I choose to focus on bodies of work that are more quantifiable, along with less reliant on the bureaucracies of a government. With that said, this is one of those situations where politicians are willing to change their mind if they hear from people in their districts.

The intricacies of this legislation is beyond the scope of this letter, so I suggest you read this article that does a great job outlining what is happening: Click to read here

Once you are up to speed on the issue, it brings up the most interesting part in my mind. We are likely going to find out which technology is truly decentralized and which is not in the coming months and years. There are a lot of folks who continue to market their work as having decentralization, but yet they can censor transactions, ban users, and generally act in a centralized manner.

That is unlikely to stand the test of time. Regulators are beefing up their scrutiny of the industry. There will be more legislation in the future. The technology that has true decentralization will survive. The technology that is centralized will not survive or it will be heavily impaired. This is the difference between the creation of rules and the ability to enforce them. As I constantly remind people, jaywalking is illegal in NYC but everyone still does it. The police couldn’t possibly enforce the rules.

Going back to the current infrastructure bill, I am not a fan of telling anyone what they should or shouldn’t do. We all live in a free country where you have the right to participate (or not!) in the democratic process. If you’re interested in contributing 5 minutes of your time, you can call your local representative by following the instructions here: Call your senator

Otherwise, remember that the people building decentralized technology have the tailwinds of a digital economy. The more we digitize, the more decentralization becomes important. No individual or organization needs to have so much power. The trends of automation will usher in a new era that is marked by collective governance of systems, along with full transparency and programmatic, immutable systems.

Hope each of you has a great day. I’ll talk to you tomorrow.

BONUS: We are running our 6th cohort for the Bitcoin and Crypto Training Course starting Tuesday August 10th. Graduates have already been hired at Coinbase, BlockFi, Gemini, Kraken, and many other great companies. Want to increase chances of being hired? Apply here: https://pompscryptocourse.com

-Pomp

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THE RUNDOWN:

A16z, BlockTower, Alameda Back $12.5M Round for TrustToken: TrustToken, operator of decentralized finance lending protocol TrueFi and stablecoin TUSD, has raised $12.5 million in a new funding round. Blocktower Capital, Andreessen Horowitz (a16z) and Alameda Research led the round by purchasing TRU, TrueFi’s native token, according to a company statement. TrustToken said it would use the proceeds to expand its team and TrueFi’s operations. Read more.

Grayscale Hires David LaValle to Be ETF Head: Digital asset management firm Grayscale Investments has hired David LaValle, the former CEO of index provider Alerian, to be its ETF chief, according to Grayscale CEO Michael Sonnenshein. LaValle is Grayscale’s first hire for its ETF business following the posting in the spring of several job listings by Grayscale for ETF specialists. Read more.

Uruguayan Lawmaker Proposes Bill to Allow Crypto to be Used for Payments: A senator from Uruguay has introduced a bill to allow businesses to accept cryptocurrencies as payments and regulate their use within the South American country. The bill, which was presented on Tuesday by Sen. Juan Sartori, seeks to provide “legal, financial and fiscal security in the business derived from the production and commercialization” of cryptocurrencies. Read more.

Lionel Messi NFT Collection Set for Launch: Argentinian soccer legend Lionel Messi is to be commemorated by a non-fungible token collection for the first time. Widely considered to be the greatest player of his generation, Lionel Messi, 34, will be celebrated in an authenticated NFT collection, dubbed "The Messiverse," which will be available from 21:00 UTC Aug. 20 on blockchain platform Ethernity Chain. Read more.

British Fashion Brand Burberry Releases First NFTs: Luxury fashion brand Burberry has launched its first non-fungible token collection in partnership with Mythical Games. The latest luxury brand to embrace NFTs, Burberry will feature its items via Blankos Block Party, a game with digital vinyl toys known as Blankos that live on the blockchain. Read more.

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I really enjoyed this conversation with Emmanuel. Hopefully you enjoy it too.

LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE

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You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren’t finding this valuable.

Nothing in this email is intended to serve as financial advice. Do your own research.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit pomp.substack.com/subscribe

To investors,

Will Clemente breaks down this week’s bitcoin situation using on-chain metrics to separate the signal from the noise. You can follow Will on Twitter or sign up for his email by clicking here. Here is Will’s analysis:

Hope all is well. After weeks of following the strong divergence between on-chain investor behavior and price, it looks like we are finally starting to see that translation into price action. As we were watching for in last Friday’s letter, we got a short squeeze on Sunday evening that liquidated over $110M in shorts within minutes. 

This added momentum to a rally that now has given the market 9 straight green daily candles. 

Let’s dive into some of the developments from this week. As always, here’s some high-level takeaways: 

* Very strong outflows from exchanges

* Continued miner accumulation

* Continued accumulation from “strong hands” (entities with little selling history)

* Every major cohort adding except for 100-1K BTC (sideways) 

* Some profits taken during the rally over the last few days, young coins mostly (likely from this range)

* On chain activity (active addresses, transfer volume, etc.) is still overall flat 

* Supply is trading in profit again

To start, let’s look at a metric that follows the broader context of accumulation in the Bitcoin market. This indicator I created runs a 365-day stoch RSI over the 30-day net change of illiquid supply. 30-day net change meaning the difference between illiquid supply today and this date last month. I use this to follow the wave of “supply shock” brewing underneath the market. You can see in the RSI what I’m referring to by the “wave” of supply shock; highlighted by the green arrow. This supply shock propelled the bull run higher in late 2020. Looking at it now, this has not only started printing a buy signal, but the rate of change from the sell signal in May to now is quite impressive. To me this indicates that the momentum from this wave of supply shock is strong.

Just for kicks, here’s the metric back tested in 2017/2018. Buy signals don’t come often, but when they do, they are very accurate in a broader context. 

Important note: The data used below for illiquid supply, exchange balances, and supply held by different cohorts is all one day old. I have never done this before in the newsletter, but I feel that it’s appropriate because of the following: On Thursday there were massive reported outflows from several exchanges, including over 108K BTC from Kraken; showing their balance has dropped down to 62,859 BTC. I am highly skeptical of these flows, which effect other entity related data including illiquid supply. I suspect it is just end of month routine internal shuffling that will be picked up in a few days by Glassnode’s heuristics. Hope you understand, would rather be on the safe side and not spread data that likely needs to be updated. We’ll have confirmation by the time we speak again next week, as Glassnode is looking deeper into the flows.

So, we’ve looked at the supply shock in a broader sense, but now let’s take a more real time look at this movement of coins from “weak” to “strong” hands. To do so we’ll use liquid supply ratio, showing another uptick. After tracking this re-accumulation process since May, it is now almost fully complete. Supply shock is at levels that previous priced Bitcoin at 50K-60K.

Exchange balances have taken another drop, once again showing accumulation: down 66,655 BTC this week. As mentioned, this is excluding data from Thursday. 

This drop in exchange balances has triggered a buy signal in the exchange flow Bollinger bands. This follows large moves in exchange flows: when massive inflows occur selling is assumed, when massive outflows occur accumulation is assumed. With this framework we can create buy/sell signals based on when the metric breaks out of the bands in either direction.

The market is taking some profits on this rally though, realizing up to $2.4B in net realized profit on Tuesday. This isn’t alarming imo and is to be expected after we’ve sat at the bottom of a range for weeks. But just to do some further investigation, I find it prudent to look at the age of the coins being sold. If we see strong profit taking from older coins fading every bounce looking for exit liquidity that’s not ideal. So, here’s what can be found upon further investigation. 

Looking at the average age of the coins being sold, this continues to go sideways, with the broader multi-month trend still clearly down. We actually had a downtick in the age of coins sold on Tuesday, coinciding this with the $2.4B of profit realized means those coins were likely newly bought in this range, not experienced market participants. 

And to just go a step further, here’s the spike on Tuesday of coins being spent between 1 week and 3 months old. (within this 30k-40k range) No major coinciding spike from older cohorts. 

On a similar note, this recent rally has increased the percentage of total supply in profit from 65.82% on the 20th to 82.58% at the time of writing. The last time the percentage of supply in profit was this high Bitcoin was priced at nearly $50k. This is inadvertently another way to note how many coins were re-absorbed in this 30k-40k range, as coins had to be last spent at lower prices for that to be true.  

A last note on profit taking, here’s SOPR (spent output profit ratio), adjusted for Glassnode’s entity clustering. This shows the market is once again trading in a state of net profit. Would like to see this indicator stabilize above 1 (black line) or bounce off 1 on a price correction to get bullish confirmation. 

Miners continue the heavy accumulation that we’ve been tracking for almost 2 months now. After the drop in hash rate and a massive difficulty adjustment, the miners still on the network are very profitable. This is because the amount of hash competing for block rewards is much less. 

Lastly, on-chain activity is still overall pretty dead. Would like to see an increase in the number of transactions, size of the mempool, and continued (since Jun 27th) increase in active addresses to gain confidence that network activity is as bullish as accumulation activity seems to be. 

That is it for today’s analysis. Hopefully you found this helpful. I highly suggest you subscribe to Will Clemente’s email where he breaks down on-chain metrics multiple times per week: Click here

SPONSORED: Amber Group is a leading global crypto finance service provider operating around the world and around the clock with a presence in Hong Kong, Taipei, Seoul, and Vancouver. Founded in 2017, Amber Group is committed to combining best-in-class technology with sophisticated quantitative research to offer clients a streamlined crypto finance experience.

The platform now services over 500 institutions and 100,000+ individual investors across the Amber Pro web platform, the Amber App, as well as their 24/7 trading desk. To date, Amber Group has cumulatively traded more than $330 billion across 100+ electronic exchanges, exceeding $1 billion in assets under management. In 2019, Amber Group raised $28 million in Series A funding led by global crypto heavyweights Paradigm and Pantera Capital, with participation from Polychain Capital, Dragonfly Capital, Blockchain.com. 

Click here to sign up now.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit pomp.substack.com/subscribe

To investors,

Will Clemente breaks down this week’s bitcoin situation using on-chain metrics to separate the signal from the noise. You can follow Will on Twitter or sign up for his email by clicking here. Here is Will’s analysis:

Hope all is well, and you’ve had a great week. After a sweep below range lows, it looks like price action is starting to reflect some of the trends we’ve been following over the last few weeks; but we’re still not out of the woods yet. In the short term BTC needs to clear $36.5K, $41-42K, and then ultimately get above its 200-day moving average. I personally see getting back above that 200DMA as confirmation of bull run continuation, but others may have different opinions as to what that level of confirmation is. Let’s dive into this week’s on-chain overview. Hope you enjoy!

Key takeaways from this week’s newsletter:

* Still not out of the woods… yet

* RSI sitting beneath 7-month resistance 

* Volatility looks ready for a breakout

* Funding remains negative

* Buyers with little selling history continue to accumulate heavily  

* Miners are accumulating 

* Strong outflows from OTC Desks

* Supply squeeze very much in play 

First up we have a rare appearance from a technical indicator on this newsletter, the RSI. The relative strength index is a momentum tool that helps identify overbought and oversold zones. On the daily, the RSI has been in a downtrend for 7 months. This downward sloping trend line has served as resistance 8 times. At the time of writing, it looks like we’ve broken out above the trend line, but will need to see confirmation at the daily close. Something to keep an eye on for sure. 

Another non on-chain indicator that I have my eye on closely is the perpetual funding rate. This is the mechanism that pegs the perp contract to the index (weighted average price of all major exchanges). When funding is positive, longs are paying shorts to keep their positions open; when negative, vice versa. As a rule of thumb, prolonged positive funding = bearish, prolonged negative funding rates = bullish. We’ve seen mostly negative funding rates since late May, the last time we’ve had prolonged negative funding like this was following the covid crash. Funding being negative means twofold: 1. Sentiment from traders is bearish 2. Spot BTC is being bought more aggressively than futures. Seeing funding stay negative throughout this pump over the last 24 hours shows we could potentially be setting up for a short squeeze. 

There is certainly underlying accumulation going on. Here we have the liquid supply ratio, showing movement of coins from weak to strong hands. Looks like we’re starting a potential third local leg up. We went from slow grind up in the ratio to more aggressive accumulation over the last few weeks. Bitcoin’s supply shock is currently equivalent to levels it was at earlier this year between $50K-$60K BTC.  

Zooming out, we can see how a drop off in the ratio would have helped time the 2017 top and 2018 capitulation during the bear market. We can also see how the lockup of coins squeezed Bitcoin’s price upwards through a massive supply shock in 2020. However, in late May we saw a reversal of that; young whales selling that likely were likely taking a momentum trade or capturing a market-neutral spread between spot/futures. After the tidal wave of coins became liquid, it was stated in the newsletter that the re-accumulation process would take some time. As mentioned in the previous paragraph, this process has gone from a slow grind up to a more aggressive climb recently. 

Next up we have another indicator I created, the OTC Outflow RSI. This is showing the strongest buy signal since July of last year. Looking at OTC outflows/inflows on an intraday basis can get quite noisy, so this shows clear outliers of strong OTC outflows or lack thereof. Essentially, it’s an alternative way to measure buying strength from institutions/high net worth individuals. This has provided some nice signals over the last year, but the reason why I place emphasis on this signal is because of how strong it is. 

Here’s another way at looking at this but measuring OTC outflows against inflows. 

Going deeper on who has been accumulating, here’s a breakdown of each major cohort’s accumulation behavior. I would have added more but, Glassnode only allows me to compare 4 charts at once. Just to preface, I’m using the May 19th capitulation as a starting point for these numbers. Seeing very strong buying from retail, along with buying from mid-sized entities holding between 10-100 BTC; retail +37,266 BTC and octopus/shrimp adding +29,280 BTC. As far as the big boys, dolphins and sharks have actually been slowly selling; reducing their holdings by -17,980 BTC. The number of coins this 100-1K BTC cohort was adding to their holdings at the beginning of this bull market was unprecedented. And lastly the whales with 1K-10K, adding 110,384 BTC since May 19th.

Overall, selling is coming from younger market participants. This can be seen in coin days destroyed/dormancy, but that naturally trends down in times of low volume. So, here’s ASOL: average spent output lifespan. Currently a better way of understanding where selling is coming. This essentially measures the average age of coins being sold. The trend down means the average age of coins being sold are younger and younger. Weak hands. 

Selling has not been coming from miners though. To show this we’ll look at transfer volume from miners to exchanges and miner net position change. As you can see transfer volume to exchanges has been in downtrend since February. Despite a move up during the China mining ban/migration, this continues down showing reduced sell pressure from miners. 

Here’s the miner net position change metric.  This is looking at the 30-day change between miner balance. Looking at the raw balance can be useful, but when you start to see a move in net position change you can confirm that trend in the data. This is once again showing a trend of miner accumulation. 

Lastly, we have one of my favorite charts, UTXO realized price distribution. In other words, it is showing how much Bitcoin is moved at each price level. We are back in the middle of a massive zone of volume after looking over the abyss when we went below $30K briefly. And check out that huge bar of volume sitting at $31,700; the largest since $10,300. 

Hope you guys enjoyed this week’s overview and tune in to tomorrow’s podcast; back to just me and Pomp. Anyway, looks like it’s going to be a fun weekend. Cheers! 

That is it for today’s analysis. Hopefully you found this helpful. I highly suggest you subscribe to Will Clemente’s email where he breaks down on-chain metrics multiple times per week: Click here

SPONSORED: Amber Group is a leading global crypto finance service provider operating around the world and around the clock with a presence in Hong Kong, Taipei, Seoul, and Vancouver. Founded in 2017, Amber Group is committed to combining best-in-class technology with sophisticated quantitative research to offer clients a streamlined crypto finance experience.

The platform now services over 500 institutions and 100,000+ individual investors across the Amber Pro web platform, the Amber App, as well as their 24/7 trading desk. To date, Amber Group has cumulatively traded more than $330 billion across 100+ electronic exchanges, exceeding $1 billion in assets under management. In 2019, Amber Group raised $28 million in Series A funding led by global crypto heavyweights Paradigm and Pantera Capital, with participation from Polychain Capital, Dragonfly Capital, Blockchain.com. 

Click here to sign up now.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit pomp.substack.com/subscribe

This installment of The Pomp Letter is free for everyone. I send this email to our investors daily. If you would also like to receive it every morning, join the 185,000 other investors today.

To investors,

The highly anticipated virtual bitcoin conference was held yesterday. The opening conversation was between Jack Dorsey, Cathie Wood, and Elon Musk. The moderator was Steve Lee, who did a fantastic job moving the conversation along.

Before we dive into the substance of the conversation, it is hard to ignore the fact that we were watching three of the most impressive people in business and finance. Cathie Wood has taken the finance world by storm leveraging actively managed ETFs, which also benefits from a research heavy approach. I’ve had Cathie on the podcast multiple times and each time I am struck by her commitment to transparency and community engagement. Not exactly the standard for a multi-billion dollar money manager.

Jack Dorsey is one of the best entrepreneurs ever. He has built two multi-billion dollar companies between Twitter and Square. As if that wasn’t difficult enough, Jack currently runs both businesses as the CEO. These two companies are in completely different industries and require the ability to navigate seemingly different complexities. On top of his executive duties, Jack Dorsey has also become one of the most visible proponents of bitcoin globally.

Elon Musk needs no introduction. Similar to Dorsey, he runs multiple multi-billion dollar companies. He spent his early career thinking about payments through the creation of PayPal and has recently become interested in bitcoin and various other cryptocurrencies. The big controversy was Musk’s recent comments about bitcoin’s energy consumption and whether there should be concern over the mix between renewable / non-renewable sources.

So what happened yesterday?

This was one of the most interesting conversations I have heard in awhile. Each person brought a different perspective. Cathie understands the institutional investment world better than almost anyone. Jack understands the bitcoin ethos, the internet, and potential impact on developing nations from bitcoin. Elon is much more focused on the technical components of the network. When you combine these three different interests, you get a holistic picture of what is being built before our eyes.

There was a comment at the end that I think ultimately sums up the opportunity though. Jack Dorsey explicitly stated that “my hope is that [bitcoin] creates world peace.”

That is the entire point of this global effort. Earlier in the day, I had explained something similar to Greg Foss in a recorded conversation. Here were my comments:

An entire generation is growing up with the awareness that the devaluation of their currency is leading to an inability to get ahead. People feel like they can’t afford the basics. They have to keep taking on more debt to simply enjoy an average lifestyle. This dire situation is attributable to numerous factors. Wages don’t rise at the same pace as inflation. Our parents were taught to save money, rather than shown why they must invest to keep up. Here are two charts that tell the entire story:

As you can see, people have less wealth and more debt. The devaluation of fiat currencies has made everything more expensive around us. The promise of bitcoin is that we will usher in a new era of sound money. The currency is outside the system. No one controls it. People will once again be able to simply save their way to financial freedom. The money won’t lose value over time. In fact, the purchasing power will increase.

We know that central banks are likely the largest contributor of wealth inequality in the world. Here is Stanley Druckenmiller, one of the best investors on Wall Street over the last 30 years, explicitly stating it:

So when Jack Dorsey states that bitcoin has the potential to usher in world peace, he isn’t very far off. If we fix the money, we have a chance to fix the world. We can lift billions of people out of poverty. We can return to free markets where everyone has an opportunity to build a life of wealth, happiness, and freedom. That is what most people want — to simply build a better life for themselves and their families.

Fix the money, fix the world.

The conversation yesterday pushed us closer to that goal. Watching Jack Dorsey, Cathie Wood, and Elon Musk discussing this technology was incredible. From non-existence 12 years ago to an international stage with the world’s best entrepreneurs and investors. The crazy part? We are all likely underestimating how big this will be.

Hope each of you has a great day. I’ll talk to you tomorrow.

-Pomp

SPONSORED: With the markets swinging wildly this year, the need for diversification has never been more apparent. Vinovest gives investors access to investment grade wines, an asset class that had only been available to the ultra wealthy until now.

Vinovest uses an algorithm to select and manage your portfolio, delivering clients 17.8% average returns in 2020.

For an investment opportunity uncorrelated to the stock market that has outpaced the S&P 500 over the last twenty years, check out Vinovest to invest today. They are giving Pomp Letter subscribers an exclusive offer to receive a $50 bonus credit if you open and fund an account before August 1, 2021. Click here to get started.

THE RUNDOWN:

Stellar Foundation Eyes Potential Acquisition of MoneyGram: Stellar Development Foundation has contacted MoneyGram International about a potential purchase of the 81-year-old remittance giant, Bloomberg reported on Wednesday. Stellar is partnering with private equity firm Advent on the possible deal, according to unnamed sources cited in the article. Stellar and Advent could decide not to push forward with the acquisition. Read more.

Robinhood Crypto Expects to Pay $30M Fine to NY State Regulatory Body: Zero-fee retail trading platform Robinhood is in hot water with New York regulators, according to its recent S-1 filing. Robinhood Crypto, the crypto trading division of Robinhood, said it expects to pay a $30 million settlement to the New York State Department of Financial Services (NYDFS) after a 2020 investigation “focused primarily on anti-money laundering and cybersecurity-related issues” found the company to be in violation of numerous regulatory requirements. Read more.

Tom Brady’s NFT Platform Autograph Partners with Lionsgate, DraftKings: Buccaneers quarterback Tom Brady is beefing up his NFT platform Autograph with deals to launch movie content with Hollywood studio Lionsgate and sports-related tokens with sports betting site Draftkings. The startup is also adding a slew of big-name athletes to its advisory board, including Tiger Woods, Wayne Gretsky, Derek Jeter, Naomi Osaka and Tony Hawk. Read more.

Almost Half of Family Offices With Goldman Ties Want to Add Crypto Exposure: Almost half of family offices that do business Goldman Sachs want exposure to cryptocurrencies, Bloomberg said. A survey conducted by the investment bank found that 45% of family offices are interested in investing in cryptocurrencies, Bloomberg reported Wednesday. A further 15% of the more than 150 that responded already do so. Read more.

SEC Chair Hints Some Stablecoins Are Securities: Securities and Exchange Commission Chair Gary Gensler said cryptocurrencies whose prices depend on more traditional securities might fall under securities laws. Speaking to the American Bar Association on Tuesday, Gensler said some platforms are offering crypto tokens “that are priced off” securities and resemble derivatives products. In his view, any security-based products will have to comply with trade reporting rules and other laws, he said. Read more.

LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE

Greg Foss is the CFO and Bitcoin Strategist at Validus Power Corp. He has spent over 30 years of his career in various credit markets, where he has managed hundreds of millions of dollars.

In this conversation, Greg and I discuss:

* nation state defaults

* credit markets

* bitcoin

* decentralized central banks

* asset allocation

* flare gas capture mining

* South/Central America

I really enjoyed this conversation with Greg. Hopefully you enjoy it too.

LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE

Podcast Sponsors

These companies make the podcast possible, so go check them out and thank them for their support!

* Exodus is an absolute game changer in the crypto wallet space. With over 100 assets supported, one-click built-in exchange, Trezor hardware wallet integration and 24/7 customer support, this is a no brainer for both newcomers and crypto heavyweights. Download Exodus on desktop, iOS, and Android using my code http://get.exodus.com/pomp

* Cosmos is building the Internet of Blockchains, marking a new era of interoperability, scalability, and usability. The free flow of assets and data between blockchains with bridges to Ethereum and Bitcoin will unleash the potential of DeFi, NFTs, and much more. Dive into Cosmos at cosmos.network/pomp

* OKEx is a leading crypto exchange known for providing the most options for crypto traders and investors. Whether you want to trade spot, futures, options or swaps, OKEx gives you institutional-grade tools and a best-in-class trading engine. The platform offers credit and debit card funding options and supports 40 different fiat currencies, including EUR, CAD, GBP, TRY, INR and RUB, to name just a few. You can invest, trade, and earn yield, all within one place at okex.com. OKEx is not available to customers in the United States. 

* Choice is a new self-directed IRA product that allows you to buy Bitcoin with tax-advantaged dollars, while still holding your private keys. You can go to retirewithchoice.com/pomp to sign up today.

* Unstoppable Domains makes crypto easier by replacing your address with [AnyName].crypto. They allow you to send and receive over 70 cryptocurrencies, including BTC, ETH, and LINK with a single blockchain domain. Go to unstoppabledomains.com and get [YourName].crypto to make your crypto life easier.

* BlockFi provides financial products for crypto investors. Products include high-yield interest accounts, USD loans, and no fee trading. To start earning today visit: http://www.blockfi.com/Pomp

* Crypto.com allows you to buy, sell, store, earn, loan, and invest various cryptocurrencies in an user friendly mobile app. Join over one million users today. You can download and earn $50 USD with my code “pomp2020” when you sign up for one of their metal cards today.

* Public Rec is on a mission to make comfort look good. Their fan-favorite Flex Short is the ultimate crossover short you’ll need all summer long. From the beach to the gym, this quick-drying short has you covered. Comfort starts with a better fit. Free shipping. Free returns. Visit www.publicrec.com/pomp and use POMP at checkout for 10% off!

* Circle is a global financial technology firm that enables businesses of all sizes to harness the power of stablecoins and public blockchains for payments, commerce and financial applications worldwide. Circle is also a principal developer of USD Coin (USDC), the fastest growing, fully reserved and regulated dollar stablecoin in the world. The free Circle Account and suite of platform API services bridge the gap between traditional payments and crypto for trading, DeFi, and NFT marketplaces. Create seamless, user-friendly, mainstream customer experiences with crypto-native infrastructure under the hood with Circle. Learn more at circle.com.

* Gemini is a leading regulated cryptocurrency exchange, wallet, and custodian that makes it simple and secure to buy bitcoin, ether, and over 30 other cryptocurrencies. Offering industry-leading security, insurance and uptime, Gemini is the go-to trusted platform for beginner and sophisticated investors alike. Open a free account in under 3 minutes at gemini.com/pomp and get $20 of bitcoin after you trade $100 or more within 30 days.

* Revolut is a finance app in the US and UK, that say they're the simplest way to access crypto. Sign up today at Revolut.com/pomp and make 3 card transactions to get $15, which you can exchange for any tokens Revolut supports. As usual, when you move your money from fiat to crypto your capital is at risk. See T&C's for details. Revolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, Member FDIC. Cryptocurrency services provided directly by Paxos Trust Company, LLC.

* Did you know nearly 338 million dollars worth of NFTs were sent last year? And in 2021 that number is growing faster than ever. Looking to make your first NFT? Check out NEAR’s fast, scalable, low-cost, open-source platform. Learn why NEAR is the infrastructure for innovation at near.org

* Amber - Invest, trade, swap, and earn crypto with Amber App, where new users can receive 16% APR on BTC, ETH, and USD Stablecoins! Click here to sign up now.

* LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp

You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren’t finding this valuable.

Nothing in this email is intended to serve as financial advice. Do your own research.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit pomp.substack.com/subscribe

To investors,

I have been doing a deep dive on the stablecoin market, which is quickly becoming an important of the crypto industry. Adoption is occurring across various market participants — from individuals to corporations to financial institutions. The technology is drastically more superior than anything else out there, so it feels inevitable that people will begin to leverage stablecoins for a large chunk of transactions.

The folks at Circle have built the fastest growing, regulated stablecoin (USDC). It has increased market cap by more than 50x over the last 12 months or so. Insane. I asked them to put together a guest post about what they are seeing in the market. You can read their response here:

The Growth of DeFi

The emergence of DeFi has been a major catalyst for growth of the entire crypto industry since 2020, attracting media attention and spawning a host of new blockchain-based protocols that are democratizing financial services around the globe.

Total Value Locked (TVL) measures the aggregate value of all digital assets held in DeFi protocol smart contracts, including cryptocurrencies like Bitcoin and Ethereum and dollar digital currencies like USD Coin (USDC). Value locked in DeFi protocols provides liquidity for trading between different tokens, borrowing on-chain, minting derivative assets, and insuring digital and real world products.

At the beginning of July 2021, TVL stood at less than $400 million. In just one year, TVL across DeFi protocols has grown to nearly $50 billion, an increase of more than 100x in that short time.

USDC plays an integral role in some of the largest and most popular DeFi protocols. Dollar digital currencies allow DeFi yields to be denominated in familiar terms, and USDC trading pairs on decentralized exchanges like Uniswap dominate trading volume, with more than $3.2 billion in USDC volume in the last seven days.

USDC is also one of the largest sources of collateral and TVL across the DeFi ecosystem. Of more than $25 billion in circulation, nearly half of all USDC is allocated to DeFi protocol smart contracts, according to data from on-chain analytics provider Glassnode.

Between two of the largest DeFi lending protocols on the market today, Compound and Aave, more than $5.2 billion USDC is locked providing liquidity for borrowers — more than 20% of the 25 billion USDC currently in circulation.

Institutional Investment

Established financial institutions have looked on with great interest; DeFi has the potential to lower fixed costs by reducing centralized technical infrastructure, addresses many pain points of cross-border value transmission, and opens the door to innovative new financial products and services that could unlock additional revenue streams.

In an era of near-zero national interest rates, DeFi yields between 2% and 20% using protocols like Compound Finance are attractive to retail customers and financial institutions alike. 

But interacting with DeFi protocols still requires meaningful technical and subject matter expertise, and relies on critical inputs like smart contract addresses and wallet infrastructure with little customization and few guardrails.

Institutions that capture a first-mover advantage when it comes to DeFi will have a distinct edge over those that arrive late to the party. In addition to gaining valuable experience in a fast-paced industry, institutions early to DeFi will benefit from governance token distributions that in most cases are only slated to remain active a few years after launching.

These governance tokens, used in voting on the future direction and decisions of the protocol, can be sold right away like other digital assets — but could prove more valuable for their stake in decentralized applications that could one day coordinate billions or trillions of dollars in value.

Accessing DeFi is a challenging but critical initiative for financial institutions in the coming years. That’s why Circle will soon release DeFi API, the easiest way to deploy capital into DeFi using trusted Circle infrastructure, right from the Circle Account. Create structured, guided DeFi access for your organization or customers using powerful and simple Circle APIs to reap the rewards of DeFi innovations without the challenges of unhosted wallets and complicated UX interactions.

The Circle DeFi API waitlist is open now. Add your business to the list and be a pioneer of Institutions in DeFi.

Pomp’s analysis:

These comments from Circle are fascinating because they really highlight the institutional adoption that is underway. When you start thinking about the yield generation that is available in the market today, it is hard to see a scenario where majority of Wall Street institutions continue to sit on the sidelines.

I personally know of numerous multi-billion dollar asset managers, who fancy themselves as ultra conservative, that are beginning to dip their toes in the water. They are specifically looking for risk-mitigated ways to generate 8-12% yields. This has become harder to accomplish in traditional markets without pushing further out on the risk curve. If they can find a few repeatable and scalable strategies in crypto, we should expect them to pour billions of dollars into the market. Time will tell if it happens or not. Definitely worth keeping an eye on it though.

Hope each of you has a great day. I’ll talk to you tomorrow.

-Pomp

🚨 SPONSORED: With the markets swinging wildly this year, the need for diversification has never been more apparent. Vinovest gives investors access to investment grade wines, an asset class that had only been available to the ultra wealthy until now.

Vinovest uses an algorithm to select and manage your portfolio, delivering clients 17.8% average returns in 2020.

For an investment opportunity uncorrelated to the stock market that has outpaced the S&P 500 over the last twenty years, check out Vinovest to invest today. They are giving Pomp Letter subscribers an exclusive offer to receive a $50 bonus credit if you open and fund an account before August 1, 2021. Click here to get started.

THE RUNDOWN:

Goldman Sachs Calls Coinbase a ‘Tactical Trade,’ Predicts Q2 Earnings Beat: Coinbase is positioned to beat the street’s Q2 estimates, according to a new Goldman Sachs memo that labels the crypto exchange a top 25 tactical trade. Citing its brokerage analyst’s “buy” rating for COIN, researchers on the investment bank’s derivatives team said in the client note that the recent parade of negative crypto headlines could – paradoxically – help lead to an earnings beat for Coinbase. Read more.

Fidelity Digital Assets to Increase Headcount by 70%: Fidelity Digital Assets plans to increase its headcount by around 70% in anticipation of growing institutional demand for crypto services. The asset manager's president, Tom Jessop, said the firm is looking to add around 100 staff in Dublin, Salt Lake City and Boston, according to a Bloomberg report Monday. The staff will be used to develop new products and expand beyond bitcoin into other cryptocurrencies. Read more.

‘Space Jam’ NFTs Launched by Warner Bros. and Nifty’s: A series of non-fungible tokens marking the release of “Space Jam: A New Legacy” are to be launched on new social platform Niftys.com in partnership with Warner Bros. The collection features LeBron James and eight Looney Tunes characters from the “Space Jam” sequel ahead of its theatrical release on July 16. Niftys.com has been launched by Nifty’s Inc. with the aim of bringing digital collectibles to a wider audience. It has backing of $10 million in seed funding. Coinbase Ventures, Topps and NBA Top Shot developer Dapper Labs are among the investors. Read more.

US Financial Giant Capital Group Buys 12% Stake in Bitcoin-Exposed MicroStrategy: A division of major U.S. asset management firm Capital Group has conducted a 12.2% purchase of business-intelligence software company MicroStrategy’s common stock. According to a filing to the Securities and Exchange Commission on June 30, Capital International Investors bought 953,242 shares of 7,782,568 outstanding. While the filing was made two weeks ago, Senior Vice President Walter Burkley only signed off on Monday, according to the document. Read more.

Argentinian Crypto Exchange Buenbit Raises $11M to Expand in Latin America: Argentina-based cryptocurrency exchange Buenbit raised $11 million in a Series A funding round led by Libertus Capital, the exchange announced Monday. Galaxy Digital, FJ Labs and Amaiya Management also participated in the round, CEO Federico Ogue told CoinDesk, as did angel investors such as Alec Oxenford, founder of e-commerce company OLX. Read more.

LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE

Peter Schiff is the Chief Economist and Global Strategist at Euro Pacific Capital.

In this conversation, Peter and I discuss:

* inflation

* monetary policy

* gold

* bitcoin

* taxes

* becoming a billionaire

I really enjoyed this conversation with Peter. Hopefully you enjoy it too.

LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE

Podcast Sponsors

These companies make the podcast possible, so go check them out and thank them for their support!

* Exodus is an absolute game changer in the crypto wallet space. With over 100 assets supported, one-click built-in exchange, Trezor hardware wallet integration and 24/7 customer support, this is a no brainer for both newcomers and crypto heavyweights. Download Exodus on desktop, iOS, and Android using my code http://get.exodus.com/pomp

* Cosmos is building the Internet of Blockchains, marking a new era of interoperability, scalability, and usability. The free flow of assets and data between blockchains with bridges to Ethereum and Bitcoin will unleash the potential of DeFi, NFTs, and much more. Dive into Cosmos at cosmos.network/pomp

* OKEx is a leading crypto exchange known for providing the most options for crypto traders and investors. Whether you want to trade spot, futures, options or swaps, OKEx gives you institutional-grade tools and a best-in-class trading engine. The platform offers credit and debit card funding options and supports 40 different fiat currencies, including EUR, CAD, GBP, TRY, INR and RUB, to name just a few. You can invest, trade, and earn yield, all within one place at okex.com. OKEx is not available to customers in the United States. 

* Choice is a new self-directed IRA product that allows you to buy Bitcoin with tax-advantaged dollars, while still holding your private keys. You can go to retirewithchoice.com/pomp to sign up today.

* Unstoppable Domains makes crypto easier by replacing your address with [AnyName].crypto. They allow you to send and receive over 70 cryptocurrencies, including BTC, ETH, and LINK with a single blockchain domain. Go to unstoppabledomains.com and get [YourName].crypto to make your crypto life easier.

* BlockFi provides financial products for crypto investors. Products include high-yield interest accounts, USD loans, and no fee trading. To start earning today visit: http://www.blockfi.com/Pomp

* Crypto.com allows you to buy, sell, store, earn, loan, and invest various cryptocurrencies in an user friendly mobile app. Join over one million users today. You can download and earn $50 USD with my code “pomp2020” when you sign up for one of their metal cards today.

* Public Rec is on a mission to make comfort look good. Their fan-favorite Flex Short is the ultimate crossover short you’ll need all summer long. From the beach to the gym, this quick-drying short has you covered. Comfort starts with a better fit. Free shipping. Free returns. Visit www.publicrec.com/pomp and use POMP at checkout for 10% off!

* Circle is a global financial technology firm that enables businesses of all sizes to harness the power of stablecoins and public blockchains for payments, commerce and financial applications worldwide. Circle is also a principal developer of USD Coin (USDC), the fastest growing, fully reserved and regulated dollar stablecoin in the world. The free Circle Account and suite of platform API services bridge the gap between traditional payments and crypto for trading, DeFi, and NFT marketplaces. Create seamless, user-friendly, mainstream customer experiences with crypto-native infrastructure under the hood with Circle. Learn more at circle.com.

* Gemini is a leading regulated cryptocurrency exchange, wallet, and custodian that makes it simple and secure to buy bitcoin, ether, and over 30 other cryptocurrencies. Offering industry-leading security, insurance and uptime, Gemini is the go-to trusted platform for beginner and sophisticated investors alike. Open a free account in under 3 minutes at gemini.com/pomp and get $20 of bitcoin after you trade $100 or more within 30 days.

* Revolut is a finance app in the US and UK, that say they're the simplest way to access crypto. Sign up today at Revolut.com/pomp and make 3 card transactions to get $15, which you can exchange for any tokens Revolut supports. As usual, when you move your money from fiat to crypto your capital is at risk. See T&C's for details. Revolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, Member FDIC. Cryptocurrency services provided directly by Paxos Trust Company, LLC.

* Did you know nearly 338 million dollars worth of NFTs were sent last year? And in 2021 that number is growing faster than ever. Looking to make your first NFT? Check out NEAR’s fast, scalable, low-cost, open-source platform. Learn why NEAR is the infrastructure for innovation at near.org

* Amber - Invest, trade, swap, and earn crypto with Amber App, where new users can receive 16% APR on BTC, ETH, and USD Stablecoins! Click here to sign up now.

* LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp

You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren’t finding this valuable.

Nothing in this email is intended to serve as financial advice. Do your own research.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit pomp.substack.com/subscribe

This installment of The Pomp Letter is free for everyone. I send this email to our investors daily. If you would also like to receive it every morning, join the 185,000 other investors today.

To investors,

The lack of financial education should be a national emergency in the United States. Only about 50% of states require high schools to teach students personal finance and there are many statistics that point out just how financially illiterate our society is currently:

* More than 53% of adults say thinking about their financial situation makes them anxious (source)

* 44% of adults say discussing their finances is stressful (source)

* About 66% of American families don’t have savings that are equivalent to 6 weeks of expenses (source)

* 78% of adults live paycheck-to-paycheck (source)

* 80% of young people (people under the age of 35 years old) couldn’t answer majority of financial literacy questions accurately (source)

* 54% of millennials are concerned about their student loan debt (source)… there is currently over $1.5 trillion in student loan debt

* Less than 20% of adults feel confident in their savings habits (source)

These are just some of the statistics that highlight how bad the problem has become. There are plenty more. Here is the craziest part in my opinion — most people believe they will never be able to build a life of wealth because they don’t inherit anything and they don’t have a large salary.

While counterintuitive, here is what the data says:

* Approximately 80% of millionaires inherited $0

* 33% of millionaires never made $100,000 in a single year

The truth is that you can build a life of wealth by simply being educated and having a disciplined approach. It is easy to learn, but obviously difficult to execute.

It has become more apparent over the years that our school systems are not going to solve this financial education problem. Rather than waste time complaining about the lack of change, my brothers and I have decided to do something about it.

Today we are launching The Best Business Show, which we hope will become the most entertaining way for people to learn about business, finance, and investing. Simply, it is the business show that we wish we had when we were learning. Here is the announcement video:

The idea here is that we will livestream for 2 hours every weekday from 11am to 1p EST. We’ll explain what is happening in business and investing, why it is happening, how it impacts the average person, and explain various timeless investing principles.

We aren’t journalists. We will leave that important job to the real professionals. We are simply three guys who educated ourselves over the years and have been able to build a nice life through those acquired skills. Now we’re going to share that information with young people by bringing it to them on the platforms that they are already on.

The internet is powerful. We don’t need a cable news network and we don’t need to ask permission from anyone. With just an internet connection, we can create what we believe will become the largest business show in the world. It won’t be easy. It will take a lot of hard work. But it is the single most impactful thing we can think to do in an effort to make an impact on this pervasive problem.

* If you’re interested in checking it out, you can subscribe to the YouTube channel here: https://www.youtube.com/c/anthonypompliano

It would be awesome to see you there each day as we build this :) Hope each of you has a great day. I’ll talk to everyone tomorrow.

BONUS: If you’re really passionate about this, you can purchase a “Day One” t-shirt from our new merchandise store. We’ll only sell these through the month of July, so we’ll always know who was actually tuned in from the beginning! Check it out: Go to the merchandise store

-Pomp

🚨 BONUS: We are running our 5th cohort for the Bitcoin and Crypto Training Course starting tomorrow, Tuesday July 13th. Graduates have already been hired at Coinbase, BlockFi, Gemini, Kraken, and many other great companies. Want to increase chances of being hired? Apply here: https://pompscryptocourse.com

THE RUNDOWN:

USDC Assets to Be Disclosed in SEC Filings, Circle CEO Says: Circle CEO Jeremy Allaire reiterated his pledge to pull back the curtain a little more on the USDC stablecoin a day after he announced plans to take his company public. “Stablecoins are a more powerful innovation than the closed-loop, wallet garden proprietary types of payment systems of the past,” Allaire said Friday on CoinDesk TV’s “First Mover.” “They deserve a greater degree of transparency.” Read more.

Another Large Bank in South Korea to Provide Custody of Crypto Assets: Woori Financial Group, one of South Korea’s largest banking companies, is getting into digital asset custody. According to a report in The Korea Economic Daily, the bank is setting up a custody joint venture with Coinplug, one of the earliest bitcoin exchanges in South Korea and a blockchain financial services provider. Read more.

Single Buyer Apes Into Mooch’s ETH Fund for $5.7M, Docs Show: SkyBridge Capital’s Ethereum fund has officially launched with a solitary investor committing $5.7 million to the vehicle in its first week, new regulatory documents show. It is now the second crypto-specific private fund offered by Anthony Scaramucci’s investment firm. The other, a bitcoin vehicle, disclosed $46.7 million in sales to 170 investors on Friday. Read more.

Sotheby’s Sells Rare Diamond for $12.3M in Crypto: Sotheby’s, the 277-year-old British auction house, sold a rare 101.38-carat diamond for HK$95.1 million (US$12.3 million) in cryptocurrency on Friday in a Hong Kong auction to an anonymous buyer. The auction house said the sale of the gemstone shows that a “milestone was reached in the adoption of cryptocurrencies.” The diamond, dubbed “The Key 10138,” is the second-largest pear-shaped diamond ever to appear on the public market and came from the world-leading diamond company Diacore, said Sotheby's. Read more.

UK Ad Watchdog to Clamp Down on Crypto Marketing: The U.K. Advertising Standards Authority (ASA) plans to tighten its monitoring of crypto marketing. The advertising regulator said it will ramp up steps to identify and remove misleading or irresponsible ads for crypto products, the Financial Times reported Friday. Efforts will particularly focus on online and social media platforms, with companies being warned or required to add disclaimers to their ads. The authority has identified crypto as a "red alert," said Miles Lockwood, the ASA's director of complaints and investigations. Read more.

LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE

Gagan Biyani is the co-founder and CEO of Maven, a new platform for cohort-based courses. He was a co-founder of Udemy, a large online education company, and was co-founder and CEO of Sprig, a food delivery company.

In this conversation, Gagan and I discuss:

* online education

* cohort-based courses

* building a startup

* importance of focus

* scaling platforms

* Bitcoin & crypto course

* what students want from online education

I really enjoyed this conversation with Gagan. Hopefully you enjoy it too.

LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE

Podcast Sponsors

These companies make the podcast possible, so go check them out and thank them for their support!

* Exodus is an absolute game changer in the crypto wallet space. With over 100 assets supported, one-click built-in exchange, Trezor hardware wallet integration and 24/7 customer support, this is a no brainer for both newcomers and crypto heavyweights. Download Exodus on desktop, iOS, and Android using my code http://get.exodus.com/pomp

* Cosmos is building the Internet of Blockchains, marking a new era of interoperability, scalability, and usability. The free flow of assets and data between blockchains with bridges to Ethereum and Bitcoin will unleash the potential of DeFi, NFTs, and much more. Dive into Cosmos at cosmos.network/pomp

* OKEx is a leading crypto exchange known for providing the most options for crypto traders and investors. Whether you want to trade spot, futures, options or swaps, OKEx gives you institutional-grade tools and a best-in-class trading engine. The platform offers credit and debit card funding options and supports 40 different fiat currencies, including EUR, CAD, GBP, TRY, INR and RUB, to name just a few. You can invest, trade, and earn yield, all within one place at okex.com. OKEx is not available to customers in the United States. 

* Choice is a new self-directed IRA product that allows you to buy Bitcoin with tax-advantaged dollars, while still holding your private keys. You can go to retirewithchoice.com/pomp to sign up today.

* Unstoppable Domains makes crypto easier by replacing your address with [AnyName].crypto. They allow you to send and receive over 70 cryptocurrencies, including BTC, ETH, and LINK with a single blockchain domain. Go to unstoppabledomains.com and get [YourName].crypto to make your crypto life easier.

* BlockFi provides financial products for crypto investors. Products include high-yield interest accounts, USD loans, and no fee trading. To start earning today visit: http://www.blockfi.com/Pomp

* Crypto.com allows you to buy, sell, store, earn, loan, and invest various cryptocurrencies in an user friendly mobile app. Join over one million users today. You can download and earn $50 USD with my code “pomp2020” when you sign up for one of their metal cards today.

* Public Rec is on a mission to make comfort look good. Their fan-favorite Flex Short is the ultimate crossover short you’ll need all summer long. From the beach to the gym, this quick-drying short has you covered. Comfort starts with a better fit. Free shipping. Free returns. Visit www.publicrec.com/pomp and use POMP at checkout for 10% off!

* Circle is a global financial technology firm that enables businesses of all sizes to harness the power of stablecoins and public blockchains for payments, commerce and financial applications worldwide. Circle is also a principal developer of USD Coin (USDC), the fastest growing, fully reserved and regulated dollar stablecoin in the world. The free Circle Account and suite of platform API services bridge the gap between traditional payments and crypto for trading, DeFi, and NFT marketplaces. Create seamless, user-friendly, mainstream customer experiences with crypto-native infrastructure under the hood with Circle. Learn more at circle.com.

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To investors,

Will Clemente breaks down this week’s bitcoin situation using on-chain metrics to separate the signal from the noise. You can follow Will on Twitter or sign up for his email by clicking here. Here is Will’s analysis:

Hope all is well and you had a great week. Another week of ranging, although on-chain is showing some interesting developments. Let’s dive in.

Here are the key takeaways from this week: 

* Supply continues to be re-accumulated by entities with little history of selling, this has vamped up heavily

* Exchange flows have returned to a clear trend of accumulation, down -17,794 BTC 

* Hash Rate seems to have found at least a local bottom 

* Grayscale premium getting bid up, but share unlocking on the horizon 

* Finally, an uptick in positive whale activity 

* Stablecoins flowing in

* New all time highs in users coming on the network  

* On-chain activity transfer is dead 

First, let’s take a look at this chart representing the net growth of users, or “entities”, coming on the Bitcoin network. The growth of new users is now reaching new all-time highs, over 50,000 new entities coming on-chain a day.

Next we’re going to break down the re-accumulation that’s been taking place. This trend has done nothing but accelerate this week. There’s a few aspects to this: the amount of supply being replenished from the marketplace, the size of the entities absorbing that supply and the spending behavior of the entities absorbing that supply. We’ll go through this in the previously stated order.

Let’s look at exchange flows. Exchanges are down -17,794 BTC this week. Instead of just showing you the balance on exchanges chart you’ve seen a million times; here’s a variant of it that I created. Using Bollinger Bands, the signal looks at times that coins are either moved onto exchanges heavily or pulled off exchanges heavily. This just flashed the first “buy” signal in over 3 months, giving you another way to see the trend reversal into accumulation. 

Next up we have the size of the entities that have been buying. Retail has been buying heavily for weeks now, but we finally got the uptick in whales that we were waiting for. There were 17 new whales birthed on the blockchain this week, while at the same time the overall holdings of whales increase up by 65,429 BTC. 

Lastly, we have the spending behavior of the entities that are buying. Entities that have a very low history of selling are continuing to absorb more coins from speculative traders, with the liquid supply ratio jumping. This force continues to grind upwards against price. Given no capitulation event, in my humble opinion it is a matter of “when” the re-accumulation process will be finished rather than “if”. Once the process completes the market would experience a supply shock. 

Next up we have the Stablecoin Supply Ratio Oscillator created by Willy Woo, using Bollinger Bands. This current recovery is resembling that of late 2018, March 2020, and September 2020 as well. Stablecoins are starting to flow back in from the sidelines. 

Grayscale’s premium seems to be in an uptrend, another sign of capital starting to flow back into the market. Will be interesting to see how the upcoming unlock affects the premium. Someone like Lyn Alden could probably give you a much better explanation, but from my understanding these are the bull and bear cases I came up with. Bull: Anyone who was long the shares and shorting futures that sells their shares once unlocked will be covering those shorts as well. Bear: If the premium gets sold back down, institutional capital might flow into GBTC instead of spot BTC. 

Hash Rate finally seems to have found at least a local bottom, trending actually slightly upward throughout this week. It’s a long road to full recovery but good to see this possible end to the hash crash. Miners also appear to be accumulating again slightly, adding 1,045 BTC to their balance this week.

Overall, on-chain activity is dead, shown by the number of Bitcoin transactions. If I had to build up a bear case and challenge my own opinion this is one of the charts I would use; however, a portion of this drawdown is likely from people using the Bitcoin network less due to slower block times.

That is it for today’s analysis. Hopefully you found this helpful. I highly suggest you subscribe to Will Clemente’s email where he breaks down on-chain metrics multiple times per week: Click here

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The platform now services over 500 institutions and 100,000+ individual investors across the Amber Pro web platform, the Amber App, as well as their 24/7 trading desk. To date, Amber Group has cumulatively traded more than $330 billion across 100+ electronic exchanges, exceeding $1 billion in assets under management. In 2019, Amber Group raised $28 million in Series A funding led by global crypto heavyweights Paradigm and Pantera Capital, with participation from Polychain Capital, Dragonfly Capital, Blockchain.com. 

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