The Wolf Den #1091 - The Second Inning
Or the 7th?
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In This Issue:
The Second Inning
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
NGRAVE Has A Black Friday Sale!
Tornado Cash Prevails
Indexes Are Coming
These Headlines Are Misleading
Uniswap Sets A New Monthly Record
The Second Inning
I step away from this newsletter for a few days, and suddenly, the world of crypto has gone into overdrive. Here’s what you missed:
Brazil's Congress is shaking things up, proposing legislation to create a national Bitcoin reserve. The plan? Allocate up to 5% of the country's international reserves to Bitcoin. Bold move, Brazil!
Over in Vancouver, Mayor Ken Sim is throwing his weight behind Bitcoin adoption, floating the idea in a city council meeting just days ago. Could this be Canada’s next big crypto hub?
Morocco, once known for its blanket crypto ban in 2017, is reportedly planning to do a complete 180. Is the Kingdom warming up to Bitcoin?
Metaplanet is adding more Bitcoin to its stash because apparently, there’s no such thing as too much BTC.
The IRS—yes, that IRS—might find itself being audited... by DOGE? Okay, someone’s having fun with the headlines, but crypto Twitter is loving it.
Meanwhile, SOS, a publicly traded Chinese company, is making its own Bitcoin play, stepping into the digital gold rush.
And in a classic Michael Saylor tease, he’s hinting that Microsoft, the third-largest company in the world, might just be “taking the orange pill soon.”
Crypto never sleeps, and apparently, neither should you.
If this were any previous market cycle, I’d take just one of these stories as a glaring top signal. But now, I see them as part of something much bigger—a brewing storm that proves we’re still in the early stages, far from the finish line.
Bitcoin might be hovering around $100,000, but I’m more convinced than ever that Wall Street is still dramatically underexposed to both the asset itself and the broader class. Until Bitcoin and Ethereum are standard components of diversified ETFs and portfolios, we’re playing the early moves of the long game.
And let’s not ignore the elephant in the room: only one country has officially adopted Bitcoin. The journey to $1 million per Bitcoin? It’s not happening without governments buying in. That outcome—what I consider the true endgame—has barely begun to take shape.
I’m not entirely convinced we’re in the bottom of the 7th inning just yet. That would mean the cycle is 77.78% complete, and with 47 days remaining until Trump takes office and Gary Gensler is replaced, there’s still plenty of time before we see even the slightest shift. What Trump signs on day one—and how quickly those changes take effect—remains a mystery. While price often moves faster than legal or regulatory changes, the full impact of these developments won’t be baked into the market immediately.
Take Coinbase, for example. The lawsuit against them is likely to be dismissed, and the SEC may even begin working with the exchange. While price action has started to reflect this optimism, it hasn’t yet accounted for the creative potential Coinbase could unleash once those regulatory shackles are gone.
On a broader scale, I firmly believe the tokenization narrative will come roaring back once it’s clear the SEC won’t stand in its way. This is exactly what I mean when I say prices can’t possibly price in everything ahead of time. Imagine this: you open your favorite crypto exchange or legacy brokerage and see a tab labeled “Tokenized Equities.” You click it and find a sleek, familiar interface where you can buy fractional amounts of TSLA coin, NVDA coin, or MSFT coin—anytime, from anywhere in the world. You can pay with crypto, stablecoins, or fiat, or even borrow to make the purchase. Your transactions are recorded on the blockchain, and the tokenized equities are transferred straight to your crypto wallet.
From there, you can move them to DeFi platforms, trade them across multiple systems, or even swap them for traditional shares through a legacy broker, all seamlessly integrated. These tokenized assets could trade 24/7, globally, and even be further fractionalized. They might be used for rewards, payments, or governance voting, unlocking entirely new dimensions of value exchange and community engagement. The possibilities are limitless, stretching beyond what we can currently imagine.
Asset prices simply can’t account for all of this in advance—it’s too big, too transformative. But once meaningful progress is made, it’ll be a game-changer.
I included this response from David Bailey to Ari Paul, which suggests we’re at most about 22.22% through the current cycle. My gut tells me we’re somewhere in the middle of these predictions, leaning slightly toward Ari Paul’s perspective—but only by a small margin.
One useful historical reference for evaluating this cycle is the time it took Bitcoin to break its all-time high from 2017 and reach a new peak in the next cycle. That journey took nearly a year. Back in mid-December 2017, Bitcoin hit an all-time high in the mid-$19,000 range, depending on the exchange. It didn’t revisit those levels until December 2020, and it wasn’t until November 2021—11 months later—that Bitcoin established a new cycle peak. In other words, it took 11 months from breaking the previous all-time high to setting a new one.
If we’re counting from March of this year, when Bitcoin technically set new highs, we’re already about 8 months into a process that historically took 11 months. But there’s a catch: Bitcoin only briefly hit those highs in March before retreating below them until November. If November is the real starting point and we follow the historical 11-month timeline, the cycle could peak around October 2025. Alternatively, if we stick with March, the peak might come as early as February 2025.
Personally, I like the poetic idea of Bitcoin reaching its peak a month or two after Trump takes office—maybe in February or March. That would give the market time to digest and price in the impact of his administration. After that, altcoins could follow suit, setting their highs a few months later. On the other hand, this cycle might not play by historical rules. Factors like regulatory clarity, growing institutional involvement, and shifting macroeconomic conditions could stretch the timeline even further. Right now, it’s anyone’s guess.
What makes this cycle truly unique is the intensity of Bitcoin adoption—it’s the real X factor. If headlines like the ones we’ve seen lately keep coming, and buying pressure builds month over month, there’s no rule that says Bitcoin’s price has to peak on a specific timeline just because it has in the past. Price discovery doesn’t care about tradition—it’s all about supply and demand.
Here’s the wildcard: we’ve never seen a major nation—whether it’s the U.S., China, Japan, Germany, or India—fully embrace Bitcoin or the broader crypto industry. We have no precedent for how the price might react if one of these countries rolled out clear, favorable legislation that encouraged innovation and supported builders, entrepreneurs, and investors. Similarly, we don’t know what would happen if a major nation actively started acquiring Bitcoin. How would that shape global information flow, influence game theory, and affect investor behavior?
We’re standing at the gates of a kingdom no one has ever entered. What lies beyond is a complete mystery. Part of me wants to throw out every shred of history and bias that shapes my thinking and start fresh. But for now, I’ll resist that urge. The X factor is real, but every cycle has its own X factor—that’s the challenge and beauty of navigating this space.
So, stay patient and enjoy the ride. A cycle high is nowhere in sight, and the destination is likely far higher than any of us can imagine.
Bitcoin Thoughts And Analysis
As discussed previously, we had bearish divergence with overbought RSI, giving us a reasonable downside target in the low 90s or upper 80s. Price dropped to just above 90K, as anticipated. Now we have printed the hidden bullish divergence that I was looking for to cancel the correction.
This worked out perfectly. Bullish again.
Altcoin Charts
For those who are new here, I share SETUPS and not SIGNALS. These are ideas that I am watching - if a certain thing happens, then the trade triggers. I am not telling you what to buy or when. I am showing you how I am watching certain charts and what has to happen for me to take a trade.
This is one of my larger positions that I have been trading around all year. This is the setup that I am looking for at the moment.
We already have a clear breakout through descending blue resistance with a retest as support. Now we are AT RESISTANCE (not a buy yet) at .15399. What we want to see is a break and retest of that level as support, with a target around the cycle high at .2788. It can go much higher, but this is the safest first exit. The circle is the trade idea.
My favorite indicator Trading Alpha (Use code '30OFF' for a 30% Black Friday discount) is showing consistent grey dots and an ascending green trackline, giving further confluence to the idea.
Alt season looks very likely, and has basically already started.
As you can see, we are heading into December, when Bitcoin Dominance tends to go cliff diving at this point in the cycle.
Will this time be different? Probably not.
Legacy Markets
U.S. equity futures climbed alongside Treasuries on Friday, as optimism around president-elect Donald Trump's moderated trade policies contributed to the dollar's biggest weekly loss in three months. Contracts on the S&P 500 gained 0.3%, signaling modest increases in post-holiday trading, while the 10-year Treasury yield dropped to 4.21%, its lowest in over a month. The Bloomberg Dollar Spot Index fell over 1%, snapping an eight-week winning streak, as markets anticipated a tempered approach to tariffs under Trump’s incoming administration. The S&P 500 surged 5% in November, its best month since February, fueled by record-breaking inflows of $141 billion into U.S. equities, driven by expectations of Federal Reserve rate cuts and continued economic growth. European stocks remained flat, although miners outperformed on hopes for further Chinese economic stimulus. Meanwhile, euro-area inflation exceeded the ECB’s 2% target, and Tokyo inflation reinforced speculation of a Bank of Japan rate hike, highlighting global monetary policy shifts amid strong investor bullishness in the U.S. markets.
Key events this week:
“Black Friday,” the traditional start of the US holiday shopping rush
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.3% as of 7:12 a.m. New York time
Nasdaq 100 futures rose 0.3%
Futures on the Dow Jones Industrial Average rose 0.4%
The Stoxx Europe 600 rose 0.1%
The MSCI World Index was little changed
Currencies
The Bloomberg Dollar Spot Index fell 0.2%
The euro was little changed at $1.0561
The British pound was little changed at $1.2698
The Japanese yen rose 1% to 150.08 per dollar
Cryptocurrencies
Bitcoin rose 2.5% to $97,467.71
Ether rose 0.7% to $3,597.32
Bonds
The yield on 10-year Treasuries declined five basis points to 4.21%
Germany’s 10-year yield declined two basis points to 2.11%
Britain’s 10-year yield declined four basis points to 4.23%
Commodities
West Texas Intermediate crude fell 0.2% to $68.56 a barrel
Spot gold rose 0.8% to $2,660.19 an ounce
NGRAVE Has A Black Friday Sale!
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Tornado Cash Prevails
After a prolonged legal battle, a major victory has been secured for crypto privacy rights. In 2022, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) sanctioned the DeFi crypto mixer Tornado Cash, igniting widespread debate over the balance between regulation and personal freedom. Now, the Fifth Circuit has ruled that these sanctions against Tornado Cash's smart contracts are unlawful—a landmark decision for the space.
Compare this, from 2022:
“Today, Treasury is sanctioning Tornado Cash, a virtual currency mixer that launders the proceeds of cybercrimes, including those committed against victims in the United States. Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks. Treasury will continue to aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them.”
With this, from today:
“Until then, we hold that Tornado Cash’s immutable smart contracts (the lines of privacy-enabling software code) are not the “property” of a foreign national or entity, meaning (1) they cannot be blocked under IEEPA, and (2) OFAC overstepped it's congressionally defined authority. We REVERSE and REMAND to the district court with instructions to grant Van Loon’s motion for partial summary judgment based on the Administrative Procedure Act.”
I particularly enjoyed this part of the decision:
“The use of mixers like the Tornado Cash immutable smart contracts is, well, mixed. For example, law-abiding cryptocurrency users employ mixers to maintain anonymity concerning their net worth, spending habits, and donations to political causes. Mixers can also be used to thwart criminals that would use this information to identify potential victims or set up phishing schemes.”
Indexes Are Coming
We are on the verge of a Cambrian explosion in crypto indexing, poised to provide investors with broad exposure to a diverse range of crypto assets. Once the ETFs mentioned above launch and begin capturing market share, I expect major players like BlackRock, Fidelity, VanEck, and Bitwise to roll out their own proprietary products. These offerings will include a variety of tailored solutions, giving investors targeted exposure to specific segments of the crypto market. Wall Street is going to love this.
In other news, $11 billion crypto asset manager Bitwise is upping its index game. Just a few days ago, they announced they’ve filed to list a Bitwise ETP featuring exposure to both spot BTC and ETH, weighted by market capitalization.
From Bitwise’s CIO, Matt Hougan, “Bitcoin and ether aren’t competitors any more than gold and tech stocks are competitors. So, when investors ask us which is better to add to their portfolio, often our answer is ‘both.’ This fund aims to make that recommendation easy and actionable, providing balanced exposure to the world’s two largest crypto assets. I think it’s going to be a huge hit with investors.”
These Headlines Are Misleading
The claim that Solana has flipped Ethereum in fees misses a critical point: the role of Ethereum's Layer 2 solutions, which generate fees that ultimately flow back to Ethereum. Comparing Solana's base chain to Ethereum's base layer is fundamentally flawed, as Ethereum has deliberately chosen to scale through L2s, while Solana focuses on scaling directly on its main chain. These differing strategies make direct comparisons of fees—or any other metric—misleading. For instance, over the past 30 days, Base alone generated $9.34 billion in fees.
Uniswap Sets A New Monthly Record
Uniswap hit a record-breaking $38 billion in trading volume in November 2024, smashing its previous high of $34 billion set in March. This surge—nearly a 50% increase from October's $20.32 billion—was fueled by activity on Ethereum Layer-2 networks like Arbitrum, Base, and Polygon. Arbitrum contributed $19.5 billion, Base $9.19 billion, and Polygon $4.33 billion, leveraging their scalability and cost-efficiency to drive growth.
Uniswap also solidified its position as a top fee producer, generating $5.44 million in fees across platforms and outperforming major protocols like Tron and Maker. The start of alt season is unmistakably here.
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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.