The Wolf Den #1061 - This Is What Conviction Looks Like
Lieutenant Dan, I got you some ice cream.
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In This Issue:
This Is What Conviction Looks Like
Legacy Markets
Uniswap Announces Layer 2
The SEC Sues Cumberland
Ethena Selects BUIDL
The FBI Has Been Accused Of Copyright Infringement
Institutional Investors Are Betting Big On Crypto, Here Is Why
This Is What Conviction Looks Like
If you've been on Twitter lately, you’ve likely seen the devastating aftermath of Hurricane Milton across Florida. The storm has upended millions of lives, reducing small businesses to rubble and sweeping away homes. The death toll is heartbreaking, and I can’t even bring myself to look at the numbers. Despite this immense tragedy, the storm wasn’t as bad as many feared.
Hurricane Milton was a meteorological anomaly for many reasons, but today, the focus is on one individual who went ultra-viral: “Lt. Dan.” This daring sailor anchored his 20-foot sailboat directly in the path of a Category 5 storm in Tampa Bay and chose to stay put, confidently braving the elements. As the storm neared, so did Lt. Dan’s internet fame, drawing attention from local authorities and national media alike.
To understand the gravity of this, you need to know that Tampa Bay is notorious for dangerous storm surges during hurricanes. When Hurricane Helene struck the panhandle—275 miles north of Tampa—I remember seeing people kayaking down flooded roads in the bay area. The flooding was immense. Worse, debris from previous storms made these flooded streets even more hazardous, with loose materials becoming potential projectiles in winds over 100 mph.
Lt. Dan didn’t care.
When asked if he would wear a life jacket, his response was: “Hell no.”
When asked why he wouldn’t evacuate: “The safest place in the world to be is my boat.”
Luckily, the storm made landfall as a Category 3, though that’s still no small thing. Thankfully, Lt. Dan survived, and his boat was unharmed. For those wondering where he got his name, movie buffs will appreciate this: Lt. Dan bears a physical resemblance to Lt. Dan from Forrest Gump.
Why focus on a man who refused to leave his boat in the path of a catastrophic storm? It all comes down to one word: conviction. Conviction is what it takes to weather any storm—whether it’s a physical one like Milton or a psychological one, like what we’re seeing now in the crypto market.
Lt. Dan didn’t have a luxury yacht, didn’t wear a life jacket, and he’s missing half of his left leg. But what he did have was an unshakable belief in himself and his plan—and that made all the difference. Just to be clear, this isn’t about glorifying danger or recklessness. It’s about conviction—the kind that drives people to stand firm in the face of overwhelming odds.
Sadly, not everyone who “rides it out” will be as fortunate as Lt. Dan, who came through unscathed and gained global media attention. For many, the choice to stay behind in the face of danger can lead to tragedy. But one thing remains clear: conviction is essential for real success. It’s a critical ingredient, and there’s no substitute for it.
If your crypto plan has been to coast until October, expecting everything to fall into place, I hope you’ve got some resilience and financial runway left. There’s no such thing as a guarantee in this space, and there could be an even bigger storm brewing if the wrong people get elected—you get the point.
Now, some of you might see Lt. Dan’s boldness as reckless and a bad example. I’m not here to debate that. The truth is, it’s people like him—fearless pioneers who refuse to back down—that drive progress and shape modern civilization.
The Lt. Dans of the world push the needle of progress forward.
For the beliefs of this community to spread like wildfire, we’ll need bold individuals willing to sail against the current, to come out on the other side of the storm stronger and unshaken. That kind of courage and conviction will inspire others and move this movement forward.
I hope this story brings you some inspiration. It’s been a long week here in central Florida, dealing with both the preparation and aftermath of the hurricane. Thankfully, things should start returning to normal next week. Enjoy your weekend, and if the sun is out, get outside and soak it in. Legacy markets are looking strong, and crypto will play a serious game of catch-up when its time comes.
Legacy Markets
S&P 500 futures remained steady on Friday, driven by strong third-quarter earnings from U.S. banks, including JPMorgan Chase and Wells Fargo, which rose 2% and 3% premarket. Bank of New York Mellon also exceeded profit expectations, boosting market sentiment. However, Nasdaq 100 futures slipped by 0.3% as Tesla shares dropped 6% after its Cybercab robotaxi launch underwhelmed investors. Attention now shifts to upcoming U.S. inflation data and potential Federal Reserve actions, while European markets held steady and Chinese equities faced pressure ahead of potential fiscal announcements from Beijing.
Key events this week:
JPMorgan, Wells Fargo kick off earnings season for the big Wall Street banks, Friday
US PPI, University of Michigan consumer sentiment, Friday
Fed’s Lorie Logan, Austan Goolsbee and Michelle Bowman speak, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 7:17 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 rose 0.1%
The MSCI World Index was little changed
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0931
The British pound was unchanged at $1.3059
The Japanese yen fell 0.4% to 149.11 per dollar
Cryptocurrencies
Bitcoin rose 2.2% to $61,072.14
Ether rose 1.9% to $2,410.99
Bonds
The yield on 10-year Treasuries advanced four basis points to 4.10%
Germany’s 10-year yield advanced four basis points to 2.30%
Britain’s 10-year yield advanced three basis points to 4.24%
Commodities
West Texas Intermediate crude fell 0.9% to $75.17 a barrel
Spot gold rose 0.4% to $2,640.10 an ounce
Uniswap Announces Layer 2
Yesterday, Uniswap Labs announced Unichain, a new Layer 2 network designed to enhance DeFi and liquidity across multiple chains via a superchain architecture. Built on Ethereum, Unichain aims to reduce transaction costs by 95% and offer near-instant transactions with 1-second block times and 250-millisecond sub-blocks, improving market efficiency and reducing MEV losses. The network will also integrate with Optimism’s Superchain for seamless multi-chain swaps. This development is exciting as Uniswap continues to deliver real value, with Ethereum and Optimism being the primary beneficiaries. On the news, UNI saw a ≈ 10% increase.
The SEC Sues Cumberland
The SEC isn't taking its foot off the gas. A few days ago, the agency issued a Wells Notice to Crypto.com, and just yesterday, a lawsuit was filed against Cumberland DRW, a major crypto market maker. The allegations claim Cumberland DRW acted as an unregistered securities dealer by trading cryptocurrencies that the SEC argues are unregistered securities. From the SEC complaint:
“Public statements by the issuers and promoters of the Cumberland-Traded Assets – including statements retransmitted by Cumberland and by the third-party crypto asset trading platforms that Cumberland uses – would have led objective investors to reasonably view the offer to purchase or sell of each of the Cumberland-Traded Assets as offers to purchase and sell investment contracts, which are securities pursuant to the federal securities laws.”
Here’s one example cited by the SEC for you to judge: “At the moment, one of the smaller gainers in the sector, outside of ETH and EOS, has been ATOM. ATOM is up ‘only’ 53% YTD, despite strong fundamentals and a healthy developer community; it’s a name where we expect to see a catchup rally if crypto remain buoyant.” The bad news? Some of the named assets are household names like Polygon, Solana, Cosmos, Algorand, and Filecoin.
But Cumberland isn't going down quietly. They stated: “We are not making any changes to our business operations or the assets in which we provide liquidity as a result of this action by the SEC. We are confident in our strong compliance framework and disciplined adherence to all known rules and regulations – even as they have been a moving target (it wasn’t long ago ETH was claimed to be a security).” Cumberland makes a strong case, and frankly, I don’t see how the SEC can get far with this one.
Ethena Selects BUIDL
Ethena (ENA), the DeFi synthetic dollar protocol behind the $2.5 billion USDe token, has made a strategic move, announcing plans to invest its $46 million Reserve Fund across several prominent tokenized funds and stablecoins. According to a governance forum post, the fund will allocate $18 million to BlackRock and Securitize's BUIDL, $13 million to Sky’s USDS stablecoin, $8 million to Mountain's USDM token, and $7 million to Superstate's USTB. This follows a broader trend of DeFi platforms diversifying into real-world asset-backed tokens to generate yield independent of crypto market fluctuations.
Ethena's shift aligns with the rising practice of leveraging real-world asset-backed tokens like U.S. short-term government bonds, which has helped drive the tokenized Treasury market to a $2.2 billion valuation over the past year. Out of 25 submissions, only four were selected for investment, further signaling legacy financial institutions' growing interest in crypto-backed assets.
The FBI Has Been Accused Of Copyright Infringement
Yesterday, I reported on the FBI’s creation of the NexFundAI token to catch criminals, but now there’s an ironic twist. A pseudonymous developer, ‘cygaar,’ discovered the FBI violated the MIT License by copying OpenZeppelin libraries without including the required permission notice in their smart contracts. Even more, the FBI accidentally doxed some of its own wallets, which could affect ongoing cases. This situation highlights a clear misunderstanding of crypto fundamentals, even within high-profile organizations like the FBI.
Institutional Investors Are Betting Big On Crypto, Here Is Why
I am joined by Noelle Acheson, the author of the Crypto is Macro newsletter, who will share her insights into the intersection of cryptocurrencies and the macro landscape.
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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.