The Wolf Den #1037 - C’mon, Do Something...
Boredom is no reason to lose money.
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In This Issue:
C’mon, Do Something…
Bitcoin Thoughts And Analysis
Legacy Markets
Lido’s Marketshare Decreased… It’s A Good Thing
Bitcoin Index Options Are Coming
Basenames Are Here
Industry Standards Are Developing
Institutional Money Floods Crypto! Mark Yusko Explains the Big Shift
C’mon, Do Something……
This is how I feel everyday looking at my portfolio.
Here's the edited version with improved grammar while preserving all the quotes:
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Unfortunately, being known as ‘The Wolf Of All Streets’ and authoring the coolest newsletter in this space, ‘The Wolf Den,’ doesn’t exempt me from the same portfolio woes every other common investor faces each day.
Over the past few months, the only individuals pulling in a consistent profit in this market are lucky meme coin gamblers and a handful of highly skilled traders who also hit a bit of luck.
We're all the guy above standing with a stick, hoping for something to change.
The frustrating aspect of all this is that the market hasn’t rewarded investors who remained steadfast to their strong convictions because it hasn’t made any decisive moves. However, strong conviction has helped protect against losses. Bulls and bears alike have been stuck in the same boat as the market erratically ranges, throwing everyone else overboard who lacks a plan.
After reading what I just wrote, don’t mistake the previous paragraph as implying that conviction is no longer needed. On the contrary, conviction pays its highest dividends when the going gets tough, not when the market is on easy mode. When the tailwinds pick up, everyone will profit, but those with conviction will reap the greatest rewards.
Looking at the Bitcoin chart, it’s clear that we haven’t seen significant upward progress in the past seven months. On February 28th of this year, Bitcoin surged to the low $60,000s, and since then, we’ve been stuck in a $20,000 range. Today marks the seven-month anniversary of this boorish hell.
That said, when a breakout occurs—with clear strength and conviction—my Bitcoin price target is around $90,000 to $100,000, and that’s just where the party gets started. This bull market is going to make $10,000 moves look easy—the problem is that a lot of investors simply cannot wait.
In the meantime, this is the common line of thinking I keep hearing about:
“So, if I can sell this coin, at this specific time, to enter into another coin, at this other specific time, then flip back to the other coin at the right time…”
This thought process plagues the mind of impatient crypto investors. The inclination to move funds toward a shinier object or irrationally cut bait with a frustrating investment is equally pervasive in the depths of the bear market and the heights of the bull market.
As the image above portrays, there’s a persistent urge to just DO SOMETHING to help your portfolio improve. Don’t let the intrusive thoughts win.
That being said, if there are bad investments and trades that you are emotionally attached to, it’s never too late to cut the losses and move on. Realizing that you are making an emotional decision is half the battle. What will get you killed is trying to make the jump from one boat to another and back with perfect timing.
Over the past seven months, Bitcoin has oscillated through waves of euphoria, boredom, and disappointment. Until this channel definitively breaks, it’s impossible to predict if bigger, more bearish waves are on the horizon (and September is historically the worst month). So, if you’re confident in what you own, all that’s left is a little patience.
If you are considering cutting bait with an asset, then truly cut bait with it based on a strong investment thesis. Moving from a random shitcoin to Bitcoin for the long haul could be a good idea for your portfolio, but not if you are planning to jump back in the second both coins move again. You are extremely unlikely to time the move properly, and there’s likely no need to ever own that other asset in the future.
Plenty of underperforming altcoins will eventually return to or establish their glory days, but there's still some storm left to weather. As for the other 98% of altcoins, they’re just patched-up vessels destined for a permanent shipwreck if things take a turn for the worse.
If you are strongly considering moving weak assets into stronger assets, now is the time to get serious. There’s no need to attempt to time it perfectly—do what is best for your portfolio sooner rather than later, regardless of the market.
Before signing off, I want to briefly touch on the ongoing Solana vs. Ethereum debate. These two coins are competing for the #2 and #3 positions in a market where it’s not a winner-takes-all scenario—a simple fact many seem to forget.
Given the dynamics of market caps and asset sizes, there’s a high likelihood that Ethereum underperforms compared to Solana for the rest of the bull market. This could happen even if ETH is the only other asset with an ETF, leads in tokenization, RWA, and stablecoin activity, drives Base to new heights, and dominates DeFi development.
The cycle has spoken:
Solana = More Risk + More Return
Ethereum = Less Risk + Less Return
This might be a hot take, so feel free to disagree, but if Solana hadn’t experienced such a significant price surge against Ethereum, 99% of DeFi enthusiasts would probably still agree that Ethereum is the future of web3. The truth is, both of these assets are winners this cycle, so stop panicking and start stacking. Q4 of this year and Q1 of next are going to be epic (I hope).
Bitcoin Thoughts And Analysis
Here is my analysis for today.
Bitcoin is $60,000. Give or take 10K here or there, this is the same price that it has been since March.
Calm down. The market will give us something eventually.
Legacy Markets
Global equities edged higher as markets eagerly awaited Nvidia's key earnings release, which is expected to show over 70% revenue growth for the current quarter. Nvidia's performance is seen as a major indicator for AI spending in the tech industry, and any disappointment could cause significant market volatility. Nvidia's stock, which has surged 160% this year, is anticipated to experience swings of nearly 10% following the earnings report.
Futures on the Nasdaq and S&P 500 rose slightly, while Europe’s Stoxx 600 gained 0.5%. In other market moves, Nordstrom Inc. saw an 8.3% increase in premarket trading after a positive earnings outlook, while Super Micro Computer Inc. continued to decline after Hindenburg Research disclosed a short position. Meanwhile, Bitcoin fell below $60,000, gold retreated after a recent rally, and Brent crude continued to slide.
Key events this week:
Nvidia earnings, Wednesday
Fed’s Raphael Bostic and Christopher Waller speak, Wednesday
Eurozone consumer confidence, Thursday
US GDP, initial jobless claims, Thursday
Fed’s Raphael Bostic speaks, Thursday
Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday
Eurozone CPI, unemployment, Friday
US personal income, spending, PCE; consumer sentiment, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.5% as of 11:14 a.m. London time
S&P 500 futures were little changed
Nasdaq 100 futures were little changed
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index rose 0.2%
The MSCI Emerging Markets Index was little changed
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro fell 0.5% to $1.1130
The Japanese yen fell 0.3% to 144.41 per dollar
The offshore yuan fell 0.1% to 7.1297 per dollar
The British pound fell 0.3% to $1.3220
Cryptocurrencies
Bitcoin fell 3% to $59,999.01
Ether fell 2.2% to $2,525.91
Bonds
The yield on 10-year Treasuries was little changed at 3.82%
Germany’s 10-year yield declined four basis points to 2.25%
Britain’s 10-year yield declined two basis points to 3.98%
Commodities
Brent crude fell 1.1% to $78.70 a barrel
Spot gold fell 0.7% to $2,507.17 an ounce
Lido’s Marketshare Decreased… It’s A Good Thing
Over the past few years, Lido has grown from an early-stage DeFi project to become the leading staking provider on the Ethereum network. While Lido’s success has been celebrated within the Ethereum community, it has also sparked concerns about centralization risks. With its increasing dominance, there was speculation that Lido could potentially prevent block finalization if compromised or began acting maliciously. Additionally, there were concerns about the risks of censorship and disproportionate influence over network governance.
Fortunately, while Lido has continued to grow this year, its market share has decreased as new competitors have emerged. From January 1st to today, Lido’s share of staked ETH has dropped from 31.7% to approximately 28.55%, despite adding 500,000 ETH. This decline is largely due to the rise of restaking protocols like EtherFi and Renzo, which have captured 4.8% and 2% of the market share, respectively. The Ethereum community seems to be in consensus that this shift is a positive development for the overall health of the staking ecosystem.
Bitcoin Index Options Are Coming
Nasdaq is seeking regulatory approval to launch and trade options on a Bitcoin index, the exchange operator announced on Tuesday. The SEC has not yet approved options based on any individual ETFs linked to spot Bitcoin prices, including Nasdaq’s application to trade options on BlackRock’s $21.3 billion iShares Bitcoin Trust ETF.
I suspect this might not be particularly exciting news for average investors, but I can’t stress how important this development will be for institutions. Institutions need hedging tools for their positions, and without them, they are effectively taking on more risk. Options on a Bitcoin index will unlock a whole new wave of capital.
Here’s a short excerpt from Matt Hougan at Bitwise, “It's important for options on bitcoin to be available for this asset class to be fully normalized. We're missing a part of the liquidity picture that ETF options would provide.”
Basenames Are Here
In yesterday’s intro, I highlighted the incredible news that Coinbase’s L2 network, Base, reached one million daily active addresses. What makes this especially impressive is that it’s happening during a prolonged market slump. What I didn’t get to mention was that Basenames hit 200,000 registrations in under a week. Basenames, or subnames, are an essential on-chain feature that allow users to register human-readable identities on Base, linking them directly to wallet addresses. I’ve long believed this technology is underappreciated in this space.
Here’s an excerpt explaining Basenmaes from base.org/names, “Basenames are a core onchain building block that enable builders to establish their identity on Base by registering human-readable names for their wallet address(es). They are fully onchain, built on the same technology powering ENS names, and deployed on Base. These human-readable names can be used when connecting to onchain apps, and sending and receiving on Base and any other EVM chain.”
Industry Standards Are Developing
A coalition of leading crypto industry players, including Coinbase, Galaxy, Eigen Labs, Figment, and Blockdaemon, have introduced the Node Operator Risk Standard (NORS) certification for Ethereum. This initiative establishes a new benchmark in operational security and risk management for Ethereum node operators, designed to bring institutional-grade trust to Ethereum staking. By providing a reliable, third-party verified standard, the NORS group seeks to simplify the due diligence process for banks and large institutions exploring Ethereum staking.
Institutional Money Floods Crypto! Mark Yusko Explains the Big Shift
Latest in crypto with my favorite Mark Yusko!
My friends from The Arch Public, Andrew Parish, and Tillman Holloway, are joining in the second part of the stream to provide an update on the $10K algorithmic portfolio.
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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.