The Wolf Den #603 - Did El Salvador Fail?
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In This Issue:
Did El Salvador Fail?
Bitcoin Thoughts And Analysis
Legacy Markets
Fidelity To Offer More Ethereum Services
Tesla Didn't Sell Any Bitcoin
Celsius Exec Joins... JP Morgan!?
My Recommended Platforms And Tools
Did El Salvador Fail?
At this time last year, Bitcoin was trading between $40k-$60k and El Salvador was busy making history.
Oh how times have changed.
El Salvador was widely praised by the Bitcoin community for turning to an open-source, inclusive, and decentralized system to issue their "volcano bonds." Instead of looking to the banks or IMF, the sovereign nation decided to attempt an unprecedented experiment. Their billion-dollar bond raise was the first of its kind, slated to happen on a Bitcoin side chain called Liquid Network. Once finished, the money was to be split 50-50 between buying Bitcoin and building a city.
Talk about a top signal in hindsight.
The high-risk, high-reward investment offered a glimpse into the future of finance. The minimum investment was as low as $100 and the plans included special dividends for investors. There was a lot to like.
Was the bond idea over the top? Probably.
How about the plans to build a city in the shape of a coin that offered, “0% Income Tax, 0% Capital Gains Tax, 0% Property Tax, 0% Payroll Tax, 0% Municipal Taxes, and 0% CO2 Emissions?”
Maybe a bit aggressive.
If Bitcoin’s price had continued to rise or had stabilized, then some of Bukele's plans would have likely been a success. In reality, the dream was probably too good to be true, the idea was poorly timed, and Bitcoin price had other plans.
The bond was supposed to be launched many months ago. Now it may never happen. Supporters point to the war in Ukraine and economic downturn as reasons for the delay. Had price continued to rise, the story would likely be different.
Notably, surveys indicate that the people of El Salvador are simply not on board with the Bitcoin experiment. A recent study by the University of Central America (UCA) revealed that “77% of El Salvador’s residents believe the Bitcoin adoption has been a failure. And 75.6% of residents never used digital assets in 2022.” If we are being honest, the citizens probably want and need other problems addressed before a Bitcoin city is built.
Despite the bleak outlook for El Salvador, we all know that progress is only made through failure and experimentation. Plenty of ideas that look brilliant in a bull market look ridiculous in hindsight, or are simply delayed until the price rises again.
Paying our dues and learning lessons is a necessary evil to advance our cause. Emerging markets always work like this.
I still have 0 doubt that countries will find unique ways to adopt Bitcoin, including El Salvador.
Maybe a round city is just a bit premature.
Bitcoin Thoughts And Analysis
DAILY CHART
Look everyone! Nothing has happened!
I would love to share more thorough updates, but there's no point.
Sideways.
Legacy Markets
"US stocks were poised to extend Wednesday’s losses amid rising bond yields, with investors concerned that strong inflation and hawkish monetary policy will further slow the global economy."
Key events this week:
US existing home sales, initial jobless claims, Conference Board leading index, Thursday
Euro area consumer confidence, Friday
Stocks
Futures on the S&P 500 fell 0.4% as of 6:21 a.m. New York time
Futures on the Nasdaq 100 fell 0.7%
Futures on the Dow Jones Industrial Average were little changed
The Stoxx Europe 600 fell 0.6%
The MSCI World index fell 0.2%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $0.9782
The British pound fell 0.2% to $1.1197
The Japanese yen was little changed at 149.86 per dollar
Cryptocurrencies
Bitcoin fell 0.3% to $19,143.19
Ether was little changed at $1,293.53
Bonds
The yield on 10-year Treasuries advanced one basis point to 4.14%
Germany’s 10-year yield advanced five basis points to 2.42%
Britain’s 10-year yield advanced one basis point to 3.89%
Commodities
West Texas Intermediate crude rose 1.7% to $86.98 a barrel
Gold futures rose 0.2% to $1,637.70 an ounce
Fidelity To Offer More Ethereum Services
Bitcoin leads, Ethereum follows.
Fidelity Digital Assets recently made headlines for offering an Ethereum Index Fund for accredited investors.
That news has been overshadowed by the current offering. Custodial and trading services are now opening up for spot Ethereum on October 28th.
Fidelity continues to lead the charge towards mainstream adoption.
Tesla Didn't Sell Any Bitcoin
The crypto community held their breath in anticipation of Tesla's earnings report, fearing that the company might have sold their Bitcoin.
This is a clear sign that we are in the depths of a bear market.
At the end of the day, what Tesla decides to do with their Bitcoin should have minimal impact on the future of the asset. Bitcoin will be globally adopted, regardless of any individual person or company buying or selling.
Celsius Exec Joins... JP Morgan!?
Jamie Dimon, CEO of JPMorgan, is an outspoken critic of crypto, often calling it a ponzi scheme and scam.
His hate for the asset class has not stopped JPMorgan from offering crypto related services to clients, utilizing blockchain technology for cross border payments or generally riding the hype train when necessary.
In head scratching news, Aaron Iovine, who was the head of policy and regulatory affairs at Celsius, is now leading JP Morgan’s digital asset regulatory policy.
Perhaps Aaron is talented and was caught up in the maelstrom of Celsius, but this news still leaves me scratching my head.
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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.
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