The Wolf Den #1050 - This Needs To Be On Your Radar

Options are coming.

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In This Issue:

1. This Needs To Be On Your Radar

2. Bitcoin Thoughts And Analysis

3. Altcoin Charts

4. Legacy Markets

5. Did Base Go Down?

6. Celestia Raises $100M

7. Continue To Ignore These Rumors

8. Polymarket May Launch A Token

9. The Untold Stories Of Crypto's Biggest Influencers | Mario Nawfal, Scott Melker & Cointelegraph

This Needs To Be On Your Radar

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There's a lot to unpack this week, but let's start by catching up.

Since my last update, several major developments have hit the headlines: Kamala Harris has spoken about digital assets for the first time, MicroStrategy made another huge Bitcoin purchase (which I’ve already covered), the SEC approved options for a Bitcoin ETF, rumors are circulating that major U.S. banks are preparing to offer Bitcoin custody services, the Fed cut rates by 50 basis points, and BlackRock released a Bitcoin-focused research report.

Let’s dive into Kamala Harris's statement first. I know reactions to this will vary depending on your political views, so I’ll stick to the facts, share my take, and aim to keep things as objective as possible.

Here’s her quote, in the proper context:

“To build that opportunity economy, I will bring together labor, small business, founders and innovators, and major companies. We will partner to invest in America's competitiveness, to invest in America's future. We will encourage innovative technologies like AI and digital assets while protecting consumers and investors. We will create a safe business environment with consistent and transparent rules of the road.”

This statement was made during a fundraiser at Cipriani Wall Street in Manhattan on September 22nd. It’s her first public comment on crypto. Now, what does it mean? Has she changed her stance? Is she testing the waters? Or is this simply a strategic move to appeal to voters?

While we can’t know for sure, it feels reminiscent of when Trump began speaking positively about crypto and Bitcoin at Mar-a-Lago. Harris briefly mentioned digital assets and quickly moved on without providing much detail. It came across as more of a passing reference than a carefully thought-out position.

Has Harris spent a significant amount of time considering this issue? I doubt it. Following the old adage, 'watch what they do, not what they say,' this seems more like an attempt to secure a few votes or gauge the public's reaction rather than a serious commitment. Harris had the opportunity to address crypto concerns directly at the Bitcoin conference but chose not to engage. Over the past four years, she and Biden have passively presided over the industry's decline. So why should we expect her to prioritize it if re-elected, when she hasn’t during her current term?

Of course, people can change their views—we saw it happen with Trump—but Kamala Harris doesn’t appear to be there yet. There's no substantial evidence indicating a shift in her stance or policy on crypto. Trump is still miles ahead of her on this issue, no contest.

Moving on, the SEC recently approved Bitcoin options for IBIT. I’ll touch on this briefly, but I won’t pretend to be an expert in this area. There are plenty of seasoned professionals with decades of Wall Street experience who can provide more in-depth analysis.

From a Twitter account...

1. These will likely be VERY popular

The one thing we know about from BitMex, FTX and then Binance, is that people love leverage. The reason Arthur Hayes is worth so much is not his crypto-clairvoyance, as is his invention of the Bitcoin "Perpetual", which allowed "degens" to make speculative leveraged bets.

Options on IBIT are better, for the most part, than Perps. They can't be manipulated by BitMex, for example, to wick up or down and cause artificial "liquidations" because, in Hayes words, "Daddy needs a new Ferrari". They are regulated, and there is a separation between the casino and the option vendor -- unlike BitMex which played both roles.

FTX grew overnight to fill BitMex's shoes. It became much, much bigger. Then Binance copied and pasted, and Binance BTC (and later ETH etc..) perps exploded there.

Without even getting into BTC Futures, let's just stop here and hold on to this idea that these options are likely to be massively popular.

2. Long IBIT call options allow people to capture the upside of Bitcoin with limited downside.

I know we have been in a sideways market for 6 months, but at some point we will break out. The power law suggests Bitcoin will do a 6-8x or more in the next 4 years (one standard deviation up from 200K trendline). You can play this by allocating a few percentage points of your overall capital into longer dated calls. 

This is a very efficient way to add some "alpha" to your portfolio without embracing full Bitcoin maximalism. I think for more traditional players, it will be an attractive play.

3. Selling IBIT call options will be a fantastic way to generate yield. 

For many all-in-maxis, the idea of "living off yield" is attractive. By moving part of their stack to IBIT, they can now do this. Just sell out of the money call options, harvest the premium, and in the case of a massive rally, accept the fact they ‘chose rich.’

New buyers will also love this "yield" option. People like Raoul Pal have been seduced by ETH's staking yield. This is better. Both sides of the call options market will find ready takers.

4. Put buying will be attractive as we scale new heights.

Bitcoin will eventually go up, a lot. And instead of liquidating at the end of a perceived "cycle", people may decide to get "protection" by buying puts. Others, suffering FOMO, may use this put selling for targeted buying.

Overall, if i could summarize, I think these options are going to become quickly indispensable. They will supplant, to some extent perps. Unlike derebit and other exchanges, they will be fully open to US citizens. 

It's going to be wild.”

What also is important to note about the approval is the following: (the first sentence below).

The general consensus is that this approval is a positive development, and I fully agree. Sooner or later, more issuers will get the green light, and Ethereum will be next in line. It may take time and growing demand, but this is a HUGE step in the right direction of Wall Street joining this space.

Speaking of BlackRock, let’s now address BlackRock’s research report titled, “Bitcoin: A Unique Diversifier.”

I captured a few highlights below:

For an old-school financial advisor with decades of experience at BlackRock and a traditional mindset, this is probably a lot to take in. The concept of a “global, decentralized, fixed-supply, non-sovereign asset” with “risk and return drivers that differ from traditional asset classes and are fundamentally uncorrelated over the long term” represents a major shift from conventional thinking. Some will grasp it intuitively; others may not. Either way, everyone at BlackRock is now learning about Bitcoin, and the rest of the world will gradually follow suit.

I appreciate this point because it underscores that Bitcoin doesn’t fit neatly into the traditional 'risk on' or 'risk off' asset categories. If Bitcoin is truly uncorrelated, then this framework simply doesn’t apply. I’ve always referred to Bitcoin as a ‘risk on’ asset, but I’m starting to reconsider that perspective. This shows that even BlackRock understands Bitcoin’s unique nature and is influencing the thinking of even the most seasoned experts.

Above is a helpful clarification on ‘risk’ if we are to bring it into the conversation—spoilers are below.

BlackRock continues to set the industry standard, not just with its innovative financial products, but also through its investment philosophies and analytical strategies. I’m bullish on BlackRock and its growing involvement in crypto.

Next on the list is BNY Mellon, the largest custodian bank in the U.S., reportedly receiving SEC approval to offer institutional crypto custody services. This news came out during a Wyoming public hearing, where Senator Cynthia Lummis' general counsel revealed that BNY Mellon was granted a "variance" from the SEC’s Staff Accounting Bulletin (SAB) 121. This bulletin had previously been a significant roadblock for banks entering the crypto custody space.

How this will play out for other banks remains to be seen, but it’s a development I’ll be closely watching as more information comes to light.

And let’s not forget the 50-basis-point rate cut—the largest in the past four years—which many Wall Street experts didn’t see coming, but Polymarket did. Historically, 50 bps cuts have led to weaker performance in major indexes and higher unemployment, but I wouldn’t bet on that happening now. It’s crucial to remember that today’s market dynamics are entirely different from what we saw 20 years ago, or even 5 or 10 years ago. For example, when the Fed cut rates by 50 basis points in 2020, the market rallied. Bears might point to specific data that aligns with their narrative, but there are no hard rules here.

Alright, we’re all caught up! In the news section below, I’ve compiled the latest updates to keep you fully informed. And don’t miss tomorrow’s newsletter—I’ll be sharing some stories you’ve never heard before.

Bitcoin Thoughts And Analysis

DAILY CHART

So close. As you see, Bitcoin came within ~$200 today if making the first higher since March. A break above the $65,000 level would finally break bearish market structure and give us a series of higher lows and highs. That’s what we want.

Price did close above the 200 MA yesterday, which is being tested as support. That said, we want something much more convincing then a slight break. This could easily settle in back down below.

This is simple - we want to start seeing candles closing above $65,000.

Altcoin Charts

Altcoins continue to break out across the board. I shared SUI, RUNE, OM and CORE on thewolfofallstreets.com two weeks ago, and they’ve all broken out. There are opportunities everywhere at the moment. Here is an example…

DOT/USDT

This one has not broken out yet, which is why it is worth watching. Things are ramping up into descending resistance - a break above on volume should send this flying.

Trading Alpha is showing a big grey arrow, grey dots and a break above the track line. This is heating up.

Once again, this is not something to buy yet - if it breaks the line and stays above, then you consider getting long.

Legacy Markets

• US Futures Drop After S&P 500 Record; SAP Tumbles: Markets Wrap

US stock futures dipped after the S&P 500 recorded its 41st record close of the year, with futures pointing to a 0.2% decline. Europe's Stoxx 600 also fell slightly, and SAP SE dropped 4% as US officials investigate potential overcharging by the company. Traders are seeking new catalysts following last week's Federal Reserve interest rate cut, while China's recent economic stimulus measures have had limited impact outside Asia. European central banks, including Sweden's Riksbank, are making moves to lower rates, with expectations that the European Central Bank may follow suit.

US consumer sentiment data was weak, raising concerns about a labor market slowdown, although Nvidia boosted the S&P 500. Swaps traders now predict further rate cuts from the Fed by year-end, with more clarity expected after Fed Chair Jerome Powell's comments and data on the Fed's preferred price metric later in the week.

In China, stocks rallied for the sixth consecutive day following aggressive monetary easing by the central bank, which included a record interest rate cut on one-year policy loans.

Key events this week:

• ECB President Christine Lagarde speaks, Thursday

• US jobless claims, durable goods, revised GDP, Thursday

• Fed Chair Jerome Powell gives pre-recorded remarks to the 10th annual US Treasury Market Conference, Thursday

• China industrial profits, Friday

• Eurozone consumer confidence, Friday

• US PCE, University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.1% as of 5:37 a.m. New York time

• Nasdaq 100 futures fell 0.3%

• Futures on the Dow Jones Industrial Average were little changed

• The Stoxx Europe 600 fell 0.1%

• The MSCI World Index was little changed

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%

• The euro was unchanged at $1.1180

• The British pound fell 0.3% to $1.3371

• The Japanese yen fell 0.7% to 144.18 per dollar

Cryptocurrencies

• Bitcoin fell 0.7% to $63,803.21

• Ether fell 0.9% to $2,626.56

Bonds

• The yield on 10-year Treasuries advanced two basis points to 3.75%

• Germany’s 10-year yield advanced one basis point to 2.16%

• Britain’s 10-year yield was little changed at 3.95%

Commodities

• West Texas Intermediate crude fell 0.3% to $71.35 a barrel

• Spot gold was little changed

Did Base Go Down?

• Click HERE To View The Tweet

There are conflicting reports on this story, and the coverage has been limited, mostly featuring Solana enthusiasts quietly celebrating the disruption happening on Base. I’m holding off on drawing any conclusions until Jesse Polk provides a full retrospective. That said, if the chain was actually down, I’d be genuinely surprised that it didn’t receive more media attention. Twenty minutes without any block production is significant, and I understand why Solana supporters are calling for fair coverage—especially given the frequent criticism their chain faces.

Celestia Raises $100M

• Celestia Foundation raises $100 million in a round led by Bain Capital Crypto

Celestia, currently the 58th largest cryptocurrency by market cap, has been making notable progress. The Celestia Foundation, which powers this modular blockchain network, recently raised $100 million in a funding round led by Bain Capital Crypto, bringing its total funding to $155 million. Other notable participants included Syncracy Capital, 1kx, Robot Ventures, and Placeholder.

Launched in October 2023, Celestia aims to help other blockchains scale by offloading their data requirements. Its innovative "data availability sampling" technology enables users to verify large blocks without needing to download all the data. Additionally, the team has announced plans to scale Celestia to 1-gigabyte blocks—a significant leap compared to Bitcoin's average block size of one to two megabytes.

If you're thinking about investing in Celestia, it's important to consider the tokenomics. A large portion of the supply is locked and is likely to be sold off gradually over the next three years. While I don't have the exact unlock schedule or details on how much will be sold once unlocked, this generally points to a long-term bearish outlook.

Continue To Ignore These Rumors

• Click HERE To View The Tweets

The rumor mill isn’t letting this one go easily. Here’s the remainder of Blachunas’s tweet: “They will show this to institutional clients upon request but not gonna publish to world bc they get plenty of spam already (eg sanctioned bitcoin, NFTs) and this would only cause an explosion in said spam. Just know that this is not amateur hour, BlackRock has like 500 ETFs which store the holdings w custodians and has been doing this for decades w out a hitch. This is why them and other ETF issuers are trusted by America's advisors so much, they know their clients won't get SBF-ed.”

Coinbase and BlackRock aren’t involved in anything nefarious. In reality, the burden of proof lies more with shady crypto companies and smaller, less established firms—not BlackRock. With decades of experience, BlackRock has earned institutional trust and is known to stand by its word on the assets it holds. Rumors like these are nothing more than cheap shots aimed at gaining an edge, but they end up damaging the credibility of the industry and those spreading them. There are far more questionable entities that deserve scrutiny than Coinbase and BlackRock.

Polymarket May Launch A Token

• Polymarket considers token launch to raise over $50 million: report

Polymarket is reportedly considering a potential token launch valued at over $50 million to help support its crypto betting platform, according to anonymous sources cited by The Information. Investors in the round would receive token warrants, which would grant them the right to purchase tokens if they are launched in the future. These tokens could be used to validate real-world event outcomes, though no final decision has been made, and there’s no guarantee of a token launch. It's actually surprising that so much time has passed and Polymarket still doesn’t have a token. That said, we don’t have any concrete evidence of an official token announcement from Polymarket yet—just rumors.

The Untold Stories Of Crypto's Biggest Influencers | Mario Nawfal, Scott Melker & Cointelegraph

In this panel hosted by Cointelegraph at Token2049, Mario Nawfal and I dive into the wild world of crypto, sharing our personal journeys, challenges, and insights into shaping the future of this fast-evolving industry. From breaking major crypto news live to building the largest shows on Twitter Spaces, we reveal the strategies and challenges that come with influence and innovation. Don't miss out on our candid stories, party tales, and how they navigate the highs and lows of the crypto universe!

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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.