The Wolf Den #624 - Giving Thanks For Bitcoin
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In This Issue:
Giving Thanks For Bitcoin
Bitcoin Thoughts And Analysis
Legacy Markets
Consensys Updates Their Privacy Policy
I Am Speechless
Harvard Study Endorses Bitcoin
Why Ernst & Young Is Already All In On Crypto | Paul Brody, Global Blockchain Leader At EY
My Recommended Platforms And Tools
Giving Thanks For Bitcoin
There’s nothing quite like Thanksgiving dinner.
As the family reunites and dinner is served, awkward conversations begin that are bound to ruffle some feathers. Some are lighthearted, while others quickly turn into aggressive interrogations about bad financial advice from the past year. Someone inevitably cracks a joke about crypto.
Ah, the holidays.
If you were lucky enough to be spared this dreadful experience, then have no fear - it will happen before the year is out.
Here's what's coming for you.
It goes something like this: your parents want to sell everything they own, your crazy aunts and uncles want to know when to buy, and your nieces and nephews already "know" which meme coin and NFTs will pump next. Lucky for us, grandma can't hear anything. But there is little doubt that she would share her input about the "scams" if we turned up her hearing aids.
Luckily, I already spent the past two weeks answering every question imaginable, so there wasn’t much left to discuss. For those of you who have yet to brave the gauntlet, let this intro be your guide.
Some questions are impossible to answer, while others require a 100,000 word essay and a degree in computer science to explain. But if you want to take control of the conversation, I suggest you lean into the topic of price. Normally, I wouldn’t recommend this, but we can all agree that low prices are the reason that we are being mocked in the first place.
Let’s put 2022 in perspective and serve up some facts.
My first idea this year was to go on CoinMarketCap and record Bitcoin’s historical price on each Thanksgiving. I then compared the gains/losses year over year. Halfway through the painstaking process, it occurred to me that someone else likely had this idea before. A quick Google search proved my intuition correct.
Finbold.com beat me to the punch. If you want to see the figures they collected, you can see their work HERE.
Their numbers were sourced from CoinMarketCap and don't take into account daily highs or lows. They are a rough average.
Thanksgiving, 2022 - Bitcoin’s price = $16,565 - (-72%)
Thanksgiving, 2021 - Bitcoin’s price = $58,927 - (+214%)
Thanksgiving, 2020 - Bitcoin’s price = $18,764 - (+162%)
Thanksgiving, 2019 - Bitcoin’s price = $7,150 - (+78%)
Thanksgiving, 2018 - Bitcoin’s price = $4,015 - (-54%)
Thanksgiving, 2017 - Bitcoin’s price = $8,771 (+1,086%)
Thanksgiving, 2016 - Bitcoin’s price = $739 (+125%)
Thanksgiving, 2015 - Bitcoin’s price = $328 (-13%)
Thanksgiving, 2014 - Bitcoin’s price = $376 (-54%)
Thanksgiving, 2013 - Bitcoin’s price = $813 (+6,401%)
Thanksgiving, 2012 - Bitcoin’s price = $12.51, (+402%)
Thanksgiving, 2011 - Bitcoin’s price = $2.49 (+789%)
Thanksgiving, 2010 - Bitcoin’s price = $0.28
Let’s discuss what these numbers mean.
First, for the past 3 Thanksgivings, (not including 2022) we have been blessed with positive price increases. Prior to our last down year, 2018, the crypto gods bestowed upon us a +1,086% increase.
Thanks to our inevitable recency bias, it’s easy to forget how fortunate Bitcoin holders have been. There's usually a lot to be thankful for.
The second observation is that the years of massive increases and decreases are slowly coming to an end. Volatility will continue, but 4-figure percentage increases in price are becoming increasingly less likely. On the same note, we can reasonably expect major decreases to smooth out over time. Nonetheless, we can still expect Bitcoin and crypto to be more volatile than other major asset classes.
There are a lot of people predicting that Bitcoin will “range for the next couple of years.” I doubt that will be the case. FTX certainly set us back, but Bitcoin has always mounted a comeback and FTX is just another roadblock in Bitcoin’s path to global adoption.
Finally, looking at the past 12 Thanksgivings, Bitcoin has had 4 down years and 8 up years. If history is any indicator of what price will do, there is a 2x greater chance that we see growth by next Thanksgiving vs. a decrease in price. This is extremely basic math, but simple is often better. And I like Bitcoin’s odds.
Investors have the memory of goldfish, which is why markets trend up over time and bad news is forgotten. We have overcome, Mt. Gox, the Bitfinex hack, the fork wars, and more. Yes, we are liable to make similar mistakes, but Bitcoin will always overcome.
Don't think about this Thanksgiving. Think about Thanksgiving in three years. Or in ten. The price will likely be dramatically higher and you will be quite happy that you own some Bitcoin.
Have a happy holiday season and enjoy your family. I will see you Monday.
Bitcoin Thoughts And Analysis
WEEKLY CHART
I have not written a newsletter in a week, and price is currently within $100 of the last time I did.
Very exciting, right?
Price is holding support at $16,218 on the weekly, with three wicks below but no candles closing under the line. That is at least encouraging.
That said, I believe that this is a very good time to be averaging into Bitcoin for the long haul. Price may drop further, but I am quite confident that we will be trading higher in the not-so-distant future. Even if that takes a year, it won't matter.
16K Bitcoin is a dream for believers.
As a trader, this asset is completely avoidable for now.
Legacy Markets
"US equity futures and European stocks fluctuated as investors assessed prospects for less-aggressive central bank tightening and weighed China’s latest move to stimulate its economy as Covid-19 infections rise.
Some of the main moves in markets:
Stocks
Futures on the S&P 500 rose 0.1% as of 6:23 a.m. New York time
Futures on the Nasdaq 100 were little changed
Futures on the Dow Jones Industrial Average rose 0.2%
The Stoxx Europe 600 was little changed
The MSCI World index was little changed
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro was little changed at $1.0404
The British pound was little changed at $1.2101
The Japanese yen fell 0.6% to 139.41 per dollar
Cryptocurrencies
Bitcoin was little changed at $16,528.22
Ether fell 0.3% to $1,192.61
Bonds
The yield on 10-year Treasuries advanced two basis points to 3.71%
Germany’s 10-year yield advanced eight basis points to 1.93%
Britain’s 10-year yield advanced five basis points to 3.09%
Commodities
West Texas Intermediate crude rose 2.1% to $79.56 a barrel
Gold futures rose 0.4% to $1,768.10 an ounce"
Consensys Updates Their Privacy Policy
Many Web 3.0 firms have began collecting users' IPs due to tougher regulations.
MetaMask has been a juggernaut in the cryptocurrency wallet space since 2016. It is known for its ability to interact with the Ethereum blockchain and other decentralized applications.
This might not be the case going forward.
Consensys, the creator of MetaMask, has updated their privacy policy in a not-so-privacy-friendly way.
According to the update, if a user has Infura as their RPC provider, then their IP address will be collected when sending a transaction. If an Ethereum node or other third party is used, then the IP address will not be collected.
It is normal for IP addresses to be collected across the internet by major platforms. This update isn't a big deal for users that are not concerned about privacy. But if you do care about privacy, then this is your warning.
PayPal, Twitter, Google, and your bank have known your IP address since you started using their services. Plus, VPNs aren't as reliable at protecting your IP address as you might think. If someone wants your address, they probably already have it.
Another major concern is that collecting IP addresses opens the door for users to be doxxed.
According to the Consensys privacy update, the reason for the update is “KYC, AML, affiliates, business deals, and platform optimization.” Considering the evolving landscape of privacy policy and TOS updates we have seen this year, this change ranks lower on the list. But it's worth noting.
I Am Speechless
Sam Bankman-Fried is a headline speaker at the New York Times DealBook Summit in less than a week... and I am at a loss for words. Sam should probably be behind bars, not on stage as a paid speaker.
Let’s look at the description of Sam that the NYT has listed on their site.
“Sam Bankman-Fried is a 29-year-old American investor, entrepreneur and philanthropist. He is the co-founder of FTX US, a U.S.-based cryptocurrency exchange and is also the co-founder of FTX.com, a non-U.S. cryptocurrency derivatives exchange.”
The NYT is clearly turning a blind eye.
How about the cost to attend the conference? That’s $2,500.
This story continues to evolve with absurdity after absurdity. I dare not speculate as to what is going on here, but it's clear that SBF remains a media darling and that the odds of him paying for his crimes are slim to none - and slim just walked out the door.
Harvard Study Endorses Bitcoin
CAMBRIDGE, MASS.— Bitcoin was invented to circumvent the world’s central banks, so the idea that those banks would start buying Bitcoin in bulk ranks somewhere from counterintuitive to far-fetched.
A fifth-year Harvard PhD candidate with an extensive background in global finance published a paper encouraging banks to hold Bitcoin. Written by Matthew Ferranti, the study explored how Bitcoin can act as a hedge against sanctions risk for banks.
Here's the premise.
From 2016 to 2021, countries at a higher risk of facing U.S. sanctions increased their gold reserves at a faster rate than other nations. If gold becomes harder to acquire, Bitcoin is the next viable option.
Let's be honest. This is unlikely to happen anytime soon, if ever. But it's still a compelling idea.
Why Ernst & Young Is Already All In On Crypto | Paul Brody, Global Blockchain Leader At EY
Paul Brody is Global Blockchain Leader At Ernst & Young. In this interview, Paul explains why Ernst & Young is building a crypto business, and what role this big 4 accounting firm wants to play in the world of crypto.
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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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