The Wolf Den #1032 - The Best Is Yet To Come
Be patient.
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In This Issue:
The Best Is Yet To Come
Bitcoin Thoughts And Analysis
Legacy Markets
VanEck’s Ethereum Layer-2 Valuation Prediction by 2030
Solana ETF Denied At The Door
Is RFK Jr. Dropping Out?
This Is Why TRX Is Pumping
Democrats Ignore Crypto! What Does This Mean for Bitcoin?
The Best Is Yet To Come
Following a strong start to the year, Bitcoin has faced a series of unpredictable (and frustrating) price fluctuations after Q1.
In April, Bitcoin dropped 14.76%, only to reignite optimism in May with an 11.07% gain. However, June wiped out most of those gains with a 6.96% decline, followed by a modest 2.95% recovery in July. Now, August has disappointed yet again with a 7.54% drop so far.
If Bitcoin were a roller coaster modeled after 2024, the ride would go something like this: a tall climb, a steep drop, a medium climb, another sharp fall, a small lift, and then another plunge—thrilling for all the wrong reasons.
Did you know that dating back to 2013, the three worst months for Bitcoin, in terms of average returns, are June, August, and September? Guess which one is next on the calendar...
Unfortunately, it’s September.
Since 2013, the average returns for these months are as follows: August +1.84%, June -0.35%, and September -4.78%.
August's average can be misleading because it’s technically the third worst month, but this figure is skewed by the exceptional +65.32% gain in August 2017. Excluding this outlier, the revised average for August drops to -3.93%, positioning it close to second place behind September.
For September, there are no notable outliers in the data—it’s just consistently bad. The worst September return was -19.01% in 2014. Given that most Septembers show significant losses, recalculating the average without this year wouldn’t substantially alter the overall trend. September usually sucks.
Looking at the past, this suggests we aren’t out of the woods yet. With Bitcoin currently bouncing around the $58.5k to $60k range, a 5% drop in September could take Bitcoin to the $57k to $55k range. Another month of choppy action, and my gut tells me most of the shaky holders will have been washed out of the market.
The good news is that if prices follow historical patterns (they never do perfectly), it will be clear skies ahead after September. October happens to be the second-best month in terms of Bitcoin performance, and November the first. Let’s say Bitcoin starts October at $55k—let’s see where it goes from there.
October averages a +22.90% increase, which would take Bitcoin to $67.59k. November averages +46.81%, pushing it to $99.27k. December is +5.45% → $104.68k, January is +3.35% → $108.18k, February is +15.66% → $125.12k, March is +13.42% → $141.94k, April is +12.98% → $160.37k, and May is +7.94% —> $173.1k.
This progression carries us through to next June, when the summer months typically start to slow Bitcoin's momentum. Beyond that, predicting whether the bull run will persist becomes difficult due to the uncertainty that far out. It’s also important to note that I began with a conservative estimate of $55k and didn’t factor in the potential for positive outliers in these calculations.
Given that we are in the later stages of a bull market, I anticipate with high confidence that we’ll see a few upside surprises over the next 6 to 12 months. With a few strong months, Bitcoin could easily exceed $200,000 if the right conditions align. This, of course, hinges on a favorable election outcome, kept promises, continued interest from Wall Street, and the rise of a compelling global narrative—likely government adoption—that sparks a retail trading frenzy.
After all, the next Bitcoin conference is in May, perhaps the perfect timing for a cycle top.
For those who prefer to analyze Bitcoin by quarter, let’s look at historical performance for insight. Historically, Q3 has the weakest average returns at just 5.52%, buoyed by a few strong quarters in past years. In contrast, Q4 has been the strongest, with an average gain of 88.84%, followed by Q1 at 56.47% and Q2 at 26.89%.
If you’re an Ethereum holder, patience will be key. Historically, Q1 provides the highest average returns at +92.75%, followed by Q2 at +66.84%. This pattern aligns with the general market trend, where gains for other assets often lag behind Bitcoin, benefiting from spillover effects. Ethereum should see some gains in the last quarter of this year, but brace for more ups and downs as Bitcoin shines first.
One idea gaining traction that I find compelling is the notion that alt season won’t truly begin until Bitcoin decisively crosses the $100,000 mark. This aligns well with January, if we follow historical growth patterns (refer to the data above), as it’s also Ethereum’s second-strongest month. By then, both retail investors and institutions will have little doubt that crypto has solidified its place as a staple in the financial landscape.
It’s going to be a bumpy ride until the election results come in, which might be the start of things turning around. In the meantime, we can expect less news, continued infighting, and ongoing frustration. The silver lining is that the longer this drags out, the greater the potential rewards for those who stick it out. If we brace for a rough September, the worst that can happen is we come prepared.
We’re almost there—think in terms of months as your shortest time frame.
The best is yet to come.
Bitcoin Thoughts And Analysis
Clear rejection at the blue 50 MA - again. There’s nothing happening here. Anyone else excited for summer to end and fall to begin?
Legacy Markets
Stocks drifted as investors await key signals on potential interest rate cuts, with focus on upcoming U.S. jobs data and Federal Reserve meeting minutes. European markets saw modest gains, while U.S. equity futures showed minimal movement. The yield on 10-year Treasuries remained flat, and the dollar paused its recent decline.
Anticipation is building ahead of Fed Chair Jerome Powell's Jackson Hole speech, which could influence the future direction of markets. Bond traders are betting on a Treasury market rally, expecting that a cycle of Fed rate cuts may be near. Analysts suggest that Wednesday’s data could reveal weaknesses in the U.S. labor market, potentially justifying aggressive rate cuts.
In Asia, stocks declined after a three-day winning streak, driven by a drop in Chinese tech stocks amid concerns over the country's consumption outlook and disappointing earnings reports. Brent crude continued to fall amid hopes for a Gaza cease-fire, while gold held steady near a record high, supported by expectations of rate cuts and a weaker dollar.
Key events this week:
US Fed minutes, BLS preliminary annual payrolls revision, Wednesday
Eurozone HCOB PMI, consumer confidence, Thursday
ECB publishes account of July rate decision, Thursday
US initial jobless claims, existing home sales, S&P Global PMI, Thursday
Japan CPI, Friday
Bank of Japan Governor Kazuo Ueda to attend special session at Japan’s parliament to discuss July 31 rate hike, Friday
US new home sales, Friday
Fed Chair Jerome Powell speaks at Jackson Hole symposium in Wyoming, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 was little changed as of 8:13 a.m. London time
S&P 500 futures were little changed
Nasdaq 100 futures were little changed
Futures on the Dow Jones Industrial Average rose 0.2%
The MSCI Asia Pacific Index fell 0.4%
The MSCI Emerging Markets Index fell 0.4%
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro was little changed at $1.1123
The Japanese yen fell 0.4% to 145.83 per dollar
The offshore yuan fell 0.2% to 7.1291 per dollar
The British pound was little changed at $1.3028
Cryptocurrencies
Bitcoin rose 0.5% to $59,614.73
Ether rose 0.4% to $2,601.34
Bonds
The yield on 10-year Treasuries was little changed at 3.81%
Germany’s 10-year yield was little changed at 2.21%
Britain’s 10-year yield was little changed at 3.91%
Commodities
Brent crude was little changed
Spot gold was little changed
VanEck’s Ethereum Layer-2 Valuation Prediction by 2030
This article may have been published a few weeks ago, but it’s still worth sharing as the models are focused on predictions for 2030. There’s been plenty of debate about whether Ethereum Layer-2s are cannibalizing the main chain, and you’re free to hold your own view. However, the predictions you’re about to read make it clear that VanEck doesn’t buy into that narrative at all.
“We conclude that Ethereum Layer- 2 landscape is crowded with few winner-take-all characteristics for now.”
“Evaluate Layer-2 blockchains through a lens of developer experience, user experience, & technical capability.”
“Show assumptions behind our $1 trillion market cap base case valuation for Ethereum Layer-2s by 2030.”
“The Ethereum Ecosystem is growing while Ethereum’s share is shrinking.”
“We expect L2 revenues to exceed Ethereum’s because Ethereum cannot match the transaction throughput or user experience of L2s. We also increasingly see a state where the general-purpose roll-ups market is consolidated by a few major players.”
“Accordingly, we see cutthroat competition amongst L2s where the network effect is the only moat. As a result, we are generally bearish on the long-term value prospects for the majority of L2 tokens.”
“Beyond the dominance of a few roll-ups among general-purpose L2s, we forecast a future of thousands of use-case-specific roll-ups. These L2 will be segmented by sector, application, or function.”
In summary, the analysis predicts that L2 revenues will surpass Ethereum’s due to better transaction throughput and user experience, VanEck is bearish on most L2s due to intense competition, and the future will see numerous specialized L2s segmented by sector, application, or function.
Solana ETF Denied At The Door
Supposedly, the SEC raised concerns about Solana's classification as a security with ETF issuers, leading Cboe BZX to withdraw 19b-4 filings. This decision avoided the need for the SEC to make rulings by not submitting forms to the Federal Register. I’m not exactly sure if this means issuers might resubmit or amend filings to argue that Solana is not a security, or this is a pause until there is an outcome via the election. I would say this is a bad sign for there being any hope of approval under the current regime but means nothing if Trump is elected and he keeps his promise of removing Gensler.
It seems VanEck is determined to keep pushing forward, which could pay off if a regime change occurs and they stay ahead of the curve. The tradeoff is that VanEck risks poking the bear (the SEC) and drawing in scrutiny on Solana.
Is RFK Jr. Dropping Out?
During a very recent interview, RFK Jr.’s running mate, Nicole Shanahan, said the following, which might suggest a Trump endorsement: “I think it behooves us to sit and see if we can actually make some real change, and if that is a Unity party, I think that is something that we absolutely owe to the American public to explore.”
At this stage, it’s clear that RFK Jr. is an extreme longshot to win the race, but he remains eligible in all 50 states on the ballot and continues to gain popularity by staying in.
Ultimately it largely depends on whether his campaign donations continue to roll in. If they do, he might stay in the race through the end. If he does drop, a Trump endorsement could potentially land RFK Jr. a cabinet position. Given his understanding of both crypto and politics, he would be a significant asset to the space if things worked out this way.
This Is Why TRX Is Pumping
Did you know that just a week ago, Justin Sun’s DeFi platform, Sun.io, launched SunPump—a clone of Pump.fun on the Tron network that allows users to create memecoins without any coding? Like Pump.fun, SunPump charges creation and trading fees, uses a bonding curve mechanism to ensure liquidity, and carries the same risks of market manipulation.
The timing of the launch couldn't have been better, as the hype around Pump.fun was starting to fade, and sentiment on Ethereum remains low. To meet rising demand, SunPump is expanding server capacity and offering a $10 million incentive program for meme-focused tokens, with a few successful memes already making waves.
Democrats Ignore Crypto! What Does This Mean for Bitcoin?
Noelle Acheson, the author of Crypto Is Macro, joins me today to unfold everything happening in the crypto and macro worlds!
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