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In This Issue:
Easy Come, Easy Go
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
BlackRock Crosses $1B In Net Flows
Tether Is Expanding
Political Changes Are Happening Fast
SunPump Flips Pump.Fun
Who Should Invest In Crypto ETFs? Will Solana ETFs Be Approved? Insights From Bloomberg Analysts!
Easy Come, Easy Go
One of my all-time favorite movie scenes comes from Martin Scorsese’s iconic film, The Wolf of Wall Street—the very inspiration behind the branding you've all come to know and support: The Wolf Of All Streets.
Almost every scene in The Wolf of Wall Street is legendary, but one of my absolute favorites, which happens to align with the direction of this newsletter, is the “Steve Madden IPO” scene.
In this scene, Jake Hoffman, portraying Steve Madden, nervously pitches his shoe company, Steve Madden, to Jordan Belfort’s ruthless army of stockbrokers—and totally bombs his big moment. Jordan Belfort, sensing the pitch's lackluster reception, snatches the microphone and delivers an electrifying, albeit unethical, sales pitch that ignites a fiery passion within everyone in the office for this fledgling shoe company.
“Steve's power is that he creates trends. You understand, artists like Steve come along once every decade. I’m talking Giorgio Armani, Gianni Versace, Coco Chanel, Yves Saint Laurent.”
The crowd's excitement builds.
“We should be on our hands and knees right now, getting ready to…”
The anticipation intensifies.
“I want you to deal with your problems by becoming rich.”
Absolute chaos ensues.
“I want you to go out there and ram Steve Madden stock down your clients' throats until they [explicit] choke on it, until they choke on it, and they buy a hundred thousand shares.”
This IPO scene is pivotal because it implies that the entire team at Stratton Oakmont becomes disgustingly wealthy from selling shares of this unknown, emerging shoe company. The key takeaway? It didn’t really matter which company was going public or what the product was—Belfort's team was going to make a sh*t ton of money regardless of the circumstances.
If there’s any year that brings this kind of backdrop to mind, it’s 2020.
(Yes, I know the film was released in 2013—just let me have my moment here.)
2020 was unlike anything I have ever seen in my lifetime.
After the initial fear of COVID subsided, it felt like everyone—and I mean everyone—was cashing in. It was as if Steve Madden stock was falling from the sky, right into our laps. Stock traders, crypto enthusiasts, NFT collectors, virtual real estate brokers, Twitch streamers, OnlyFans models, Pokémon card collectors, Airbnb hosts, drop shippers, TikTok creators, and even toilet paper resellers found ways to make a big buck.
It got so out of hand that collecting unemployment became more appealing than working for a living. Incredibly, there were even reports of deceased individuals cashing in on stimulus checks from the IRS. After COVID, the line to get into Gucci stretched for over an hour, filled with people who had never set foot in the store before. It didn't matter whether you were employed, unemployed, side-hustling, or even deceased—there was easy money to be made.
We were all living on the 90th floor of Stratton Oakmont, on the brink of generational wealth.
Maybe you know where I’m going with this, but if you don’t, here’s a hint: easy come, easy go. The truth is, the Dogecoin millionaires, SPAC sensations, and Teslanaires—most of them handed it all back as easily as they earned it.
Here’s a list of some stocks that captured the world's attention, only to drop the floor out from underneath everyone, delivering a gut-wrenching blow that still stings to this day:
PayPal (PYPL): +277%
Square (SQ): +664%
DraftKings (DKNG): +624%
Moderna (MRNA): +681%
Zoom Video Communications (ZM): +864%
Peloton (PTON): +867%
Etsy (ETSY): +923%
Penn National Gaming (PENN): +3,704%
And here’s how these stocks did after the hype died down:
PayPal (PYPL): -76.91%
Square (SQ): -73.64%
DraftKings (DKNG): -52.55%
Moderna (MRNA): -80.79%
Zoom Video Communications (ZM): -89.31%
Peloton (PTON): -98.05%
Etsy (ETSY): -81.43%
Penn National Gaming (PENN): -85.49%
These figures are based on current prices.
And this is just stocks—most, if not all, of the ‘hyped’ markets once viewed as easy money have fallen from grace. Card stores aren’t as profitable as they once were, luxury car dealers are struggling, paper towels and bottled water are back in stock, NFTs are ‘dead’ (don’t shoot the messenger), nobody actually cares to own virtual real estate, and crypto has been meh since those glory days.
This is the moral of the story: heightened speculation and FOMO are recipes for disaster, unwinding as fast as they grow. If you’ve been in crypto through more than one cycle, you’ve probably seen this play out or have been tempted at some point. If you haven’t yet, beware—falling into these traps is all too easy.
I believe this level of greed will resurface when Bitcoin breaks above $100k, which I argued for yesterday (if you haven’t read that article yet, it’s worth a look—it’s going to happen). When that time comes, we’re likely to see spillover effects into smaller coins on a massive scale, creating the illusion that everyone’s getting rich overnight and that making money in crypto is easy again.
One day, we’re going to wake up and realize we’re inside of Stratton Oakmont—here’s why.
Did you know that it’s not until the 64th largest coin that market caps start exceeding $1 billion? What I’m getting at is that during a large Bitcoin breakout, Bitcoin will effortlessly add tens of billions of dollars to its market cap in minutes. Now, imagine what happens when that money spills into undervalued altcoins and projects. There will be a moment—when, I can’t say—where it’s pure mayhem.
It’ll feel like easy money, as if all you have to do is dial the phone, read a script about Steve Madden, and make a fortune. But as the saying goes: easy come, easy go.
When this time comes around again, it won’t end well for those who jump in late, have no plan, and are only chasing short-term gains. Post-COVID times didn’t treat those prepared to play the long game poorly—as long as their decisions were calculated. Actually, the opposite. Bitcoin has held up well since then, major tech stocks have performed solidly, real estate valuations have remained fairly strong, and plenty of brick-and-mortar businesses with long-term strategies have found solid footing.
What you’ll notice is that these aren’t overnight investment opportunities.
There’s plenty of evidence that investors who think in terms of years, not month-to-month opportunities, are doing just fine. I bring this up because we’ve been in a crypto drought for a while now, and when the euphoria starts creeping back in, it’s going to be tempting—don’t fall for it.
Until the market does something, most of these newsletters will continue to paint the long-term picture. It may sound redundant, but I’m trying to build the mental models inside all of you that can withstand the disaster, carnage, greed, and chaos that inevitably come our way—the good, the bad, and the ugly.
For many of us, the grand finale will be years in the making. I can’t wait to be there. Just remember: easy come, easy go.
Bitcoin Thoughts And Analysis
The 50 MA (blue) has been strong resistance since price bottomed.
Every move stifled. Can it break today? That is all I am watching for the moment.
Altcoin Charts
I am starting to feel more interested in altcoins again. As the summer comes to an end, I am hopeful that we will see some really nice setups in the coming weeks. Many look quite bottomed and like they are breaking out, but I am keeping the charts quiet for now until I am more convinced. If we get an “alt season” there will be plenty of time and opportunity. Wick shared quite a few ideas here, using Trading Alpha to give you a hint of what I am watching.
Legacy Markets
Global stocks are nearing an all-time high as traders anticipate the Federal Reserve's first interest-rate cuts in over four years. The MSCI All Country World index inched up by 0.2%, close to its record from July 16. Europe’s Stoxx 600 index also rose, driven by a 3% increase in Deutsche Bank's shares after the bank predicted a third-quarter profit boost. Expectations for US rate cuts have lifted markets, which had slumped earlier in August due to recession fears. Investors now await Fed Chair Jerome Powell's speech at the Jackson Hole symposium for more clues on a potential September rate cut. Meanwhile, 10-year Treasury yields remained steady at 3.81%, and the dollar traded flat. European economic data showed mixed results, with strong French services growth contrasting with signs of a slowdown in Germany and moderate growth in the UK.
Key events this week:
ECB publishes account of July rate decision, Thursday
US initial jobless claims, existing home sales, S&P Global PMI, Thursday
Japan CPI, Friday
BOJ’s Kazuo Ueda to attend special session at Japan’s parliament to discuss July hike, Friday
US new home sales, Friday
Jerome Powell speaks in Jackson Hole, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.1% as of 5:15 a.m. New York time
Nasdaq 100 futures were little changed
Futures on the Dow Jones Industrial Average rose 0.1%
The Stoxx Europe 600 rose 0.6%
The MSCI World Index rose 0.1%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.1% to $1.1134
The British pound rose 0.2% to $1.3114
The Japanese yen fell 0.4% to 145.74 per dollar
Cryptocurrencies
Bitcoin fell 0.6% to $60,884.21
Ether was little changed at $2,629.21
Bonds
The yield on 10-year Treasuries advanced two basis points to 3.82%
Germany’s 10-year yield advanced three basis points to 2.22%
Britain’s 10-year yield advanced three basis points to 3.92%
Commodities
West Texas Intermediate crude was little changed
Spot gold fell 0.4% to $2,501.70 an ounce
BlackRock Crosses $1B In Net Flows
BlackRock’s iShares Ethereum Trust (ETHA) has become the first among 11 ETH ETF issuers to exceed $1 billion in net inflows. As of writing this segment, ETHA currently holds over $860 million in net assets, trailing only Grayscale’s mini ether trust ETH at $948.68m and the primary trust ETHE at $4.79b. As far as inflows goes, BlackRock’s ETHA has surpassed surpass the combined totals of the next three highest ETFs, with Fidelity’s FETH at $367 million, Bitwise’s ETHW at $310 million, and Grayscale’s ETH at $227 million. Last point, Grayscale’s ETHE has crossed $2.7b in outflows and probably will hit somewhere around $4.5b before actually ‘ceasing.’
Tether Is Expanding
Tether has announced plans to launch a new stablecoin pegged to the United Arab Emirates Dirham (AED) in collaboration with the Phoenix Group and Green Acorn. This stablecoin will be backed 1:1 by reserves held in the UAE. According to the press releases, the aim is to enhance international trade, remittances, and reduce transaction costs, while providing a hedge against currency fluctuations. The Dirham-pegged stablecoin will join Tether’s existing range of fiat-based tokens which include: USDT, EURT, CNHT, MXNT, XAUT, and aUSDT.
Political Changes Are Happening Fast
Within just 24 hours, the odds of RFK Jr. dropping out this month skyrocketed on Polymarket from 7% to 89%. While I don’t have inside information, one thing is clear: Polymarket has a track record of being ahead of the curve, so I wouldn’t be surprised if RFK Jr.’s exit is imminent. The rumor is that he’s set to drop out this Friday in Phoenix, Arizona—the same night Trump is holding a rally there—which could suggest an endorsement.
Also notable are these two developments: Trump has once again surpassed Kamala in the polls, and Kamala’s team is still rumored to be open to supporting crypto. We’re all entitled to our opinions, but I’m not buying it until we hear the words directly from her. A random, potentially pro-crypto advisor isn’t going to cut it.
SunPump Flips Pump.Fun
The grass doesn’t stay green for long in the meme coin casino. In the past 24 hours, SunPump has facilitated the launch of 7,352 tokens, according to blockchain data from Dune. In comparison, Pump.fun has lagged behind, launching 5,694 new tokens within the same timeframe. Much of SunPump’s recent success can be attributed to SUNDOG, which has hit a $190 million market cap—surpassing MICHI, DADDY, and MOTHER (some of the biggest names from Pump.fun) combined. The meme coin casino serves as a microcosm of the larger crypto space, with everything happening at an accelerated pace and heightened risk.
Who Should Invest In Crypto ETFs? Will Solana ETFs Be Approved? Insights From Bloomberg Analysts!
Bloomberg's Eric Balchunas and James Seyffart join me today to discuss crypto ETFs! Will Solana ET be launched? Who is investing in crypto ETFs?
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.