Politicians force the Inflation Reduction Act through the Senate.
Ethereum layer 2 protocols outperform Bitcoin.
And the US Treasury adds Tornado Cash to its blocked list.
My name is Bryan.
And this is your nightly crypto news wrap-up.
Let's get it!
Bottom line, Andrew, on this is,
does it make the United States of America more competitive in the G20 or less competitive?
There is no question to that outcome.
Less competitive.
The whole idea about corporate taxes is corporations create jobs for people.
In America, 65% of jobs are created by small business.
And look.
Whether you're a billion-dollar-income business or you're not,
the more you tax, the more you suck out of the system,
the less jobs are created, the less competitive you are.
This is a very bad policy for corporate competitiveness.
And you really want to stay in the middle of the pack of the G20
in terms of corporate tax, where we are right now.
This slowly grinds it up.
We ran around the world telling everybody 15% was a great idea.
- Nobody followed us. - Yeah.
We did it to ourselves.
We hurt ourselves.
It's a self-inflicted wound.
Bad policy!
Inflation Reduction Act
In a Frank Underwood style of politics to turn the money printer back on,
yesterday, a $750 billion bill ironically dubbed the Inflation Reduction Act
was essentially forced through the Senate.
What I mean by that is 50 Democrats said yes,
50 Republicans said no,
and Kamala Harris broke the tie.
The bill will go down as the largest climate investment in US history
and backs Biden's goal to cut carbon emissions by 50% by 2030.
Good luck before midterms, right?
Wink Wink
This also gives Medicare the power to push back against the drug companies
to negotiate and lower prices.
Don't get me wrong.
I'm not against helping the climate.
I'm not against affordable health for Americans.
And frankly, turning the money printer back on will pump crypto.
But how they pushed the bill through and how they're paying for it is problematic.
CNN reports that the bill will raise over $700 billion in government revenue in the next 10 years.
But at what expense?
The bill is said to be paid for by a 15% minimum tax on large corporations
who make a billion or more per year
and they're scooping an additional 1% tax on stock paybacks,
which doesn't seem like much,
but that alone will raise $74 billion.
I have to side with Mr. Wonderful on this one.
To reinflate now when we're supposed to be hiking interest rates to fight inflation is counterproductive.
Also, sucking the money out of the businesses will hurt a lot of people's jobs
and will make us less competitive in the G20.
The bill is set to be voted on by the House on Friday before Biden can sign it into law.
And considering the House Democrats have majority, it's basically a done deal.
Is the sentiment of the bill already affecting the charts?
Let's pass it over to Frankie Candles for a market watch.
Thanks, Bryan!
Shout out Meta Money!
Alright, guys. Let's jump in and do a little market watch here.
We've got Bitcoin coming in at $23,807.
Up about 2.7% on the day!
We've got Ethereum coming in at $1,774.
Up about 4.5% on the day
Guys, we have seen a little bit of a pump here on Bitcoin.
Now, I want to bring you guys over to the chart
to show you guys some key levels that I am watching currently.
Now, as you can see, we are barely holding this daily level at about $23,850.
Now, this is a crucial level that we need to hold.
If we start breaking this level and start moving lower,
the next level I am looking down to is going to be this daily area of support at about $23,320.
Now, I do think we could potentially see a little bit of a pullback here
because we are printing a red dot on Market Cipher B on the 4-hour timeframe,
which does typically bring us down just a little bit.
And we also have money flow coming out on the lower timeframes on Market Cipher.
So keep an eye on that.
I do think we can get a little bit of a pullback here.
If you guys want to follow me,
it's Frankie Candles on YouTube or @Frankie_Candles on all socials.
Back to the news.
Thanks, Frank!
As the media focuses on post-Merge Ethereum hardforks,
I want to focus on what the traders are looking at,
where the big money is and the gains are being made.
The Ethereum layer 2s.
While most crypto assets are still trading 50% to 70% below all-time highs,
ETH layer 2 Optimism has pumped over 440% from top to bottom since the middle of July!
Essentially, Optimism (OP) uses data compression techniques to speed up ETH transactions
while simultaneously lowering the cost.
Now that Optimism fights to get back above the $2 level
since hitting its new all-time high last week of $2.24,
this brings up our next topic.
The scaling wars.
Ethereum's most popular layer 2 Polygon,
who recently helped Coca-Cola drop a digital collection,
has had a notable pump in its own right.
MATIC has rocketed up over 200% since its June low
and is now fighting to regain the $1 level.
Now, unlike Optimism, Polygon uses zero-knowledge (zk) rollups
which will soon be compatible with the EVM to help scale Ethereum.
Just last Friday, Vitalik Buterin himself predicted
that the zk-rollups will outperform the optimistic rollups in the scaling wars.
He believes that zk-rollups are faster,
and since they will soon be compatible with the EVM,
they will win the long-term run.
Just because zk-rollups might win in the long haul though
doesn't mean Optimism won't continue its recent uptrend.
Its market cap is just over $450 million.
And if it had the same market cap as MATIC,
it would be worth over $33.
Keep an eye on Ethereum layer 2s as we move forward
with price action massive gains incoming.
It's hard to say I didn't see this coming,
but late this morning,
a story broke saying that the US Treasury is prohibiting Americans from using Tornado Cash.
Tornado Cash is essentially a mixing service used to clean dirty laundry
and conceal transaction history.
The ETH and USDC addresses related to Tornado Cash
have been added to the specially designated Nationals List.
Meaning that if you live in the States, you can no longer use it.
Yes, this is a hit to those who heavily involved in DeFi,
but the Treasury claims that it's been used to launder over $7 billion since 2019.
And that's a threat to national security, right?
Now that hacking groups will have to search for another way to steal,
in the meantime,
let's hope that the crypto space will be a safer place to interact.
Alright, guys. That's all I got for today.
I'm Bryan.
See you next time.