The Wolf Den #632 - You're A Maximalist
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In This Issue:
You're A Maximalist
Bitcoin Thoughts And Analysis
Legacy Markets
Moving Averages
Silvergate Bank Is In The Crosshairs
Celsius Wins Approval To Distribute Bonuses
Ledger Unveils Their Newest Wallet
My Recommended Platforms And Tools
You're A Maximalist
Everyone is a maximalist. While our maximalism comes in different shapes and sizes and to varying degrees, each of us is overly passionate about a certain belief system or asset.
If believe that you are the one in a million unicorn who is not a maximalist, then give yourself a pat on the back.
But you don't get a prize. Sorry.
Cryptocurrency maximalism is the belief that one particular cryptocurrency, such as bitcoin, is the best and most important in the market and that all other cryptocurrencies are inferior or unnecessary. Proponents of maximalism argue that their chosen cryptocurrency has the strongest technology, the most secure network, and the largest and most active community, and therefore is the best choice for investors and users.
Maximalism exists in every crypto community, and can be seen in laser eyes, .ETH usernames, and PFPs.
Maximalism is a controversial topic in the cryptocurrency world, as many people believe that the market is diverse and that different cryptocurrencies serve different purposes and have different strengths and weaknesses. Critics of maximalism argue that it is misguided and overly simplistic, and that it ignores the potential value and usefulness of other cryptocurrencies.
But maximalism is not all bad.
Maximalists have been largely responsible for the early success of crypto. The most serious maxis are passionate and devoted, ready to die on our hill, refusing to capitulate to outside threats. Maximalism that isn’t toxic can be a net positive for the crypto space.
But this seems to be the exception, not the rule.
Let's dig a bit deeper into both the positives and negatives of Bitcoin maximalism.
Bitcoin Has The Lowest Risk
This tenet helps protect newcomers. Investors that get their start in crypto through a meme coin or cartoon NFT often skip the most important step - understanding Bitcoin and where the technology began. Holding some Bitcoin is essential.
Investing is all about trade-offs. Bitcoin is the safest and carries the least risk. In my opinion, Ethereum has the second lowest level of risk but more upside than Bitcoin with regard to price. The idea is that the further one ventures down the crypto list, the more risk they are taking on.
All Altcoins Will Fail
Bitcoin maximalist will often be quick to tell you that “every altcoin will fail.” This statement is true most of the time. But the times that it is wrong really matter.
Harboring this belief will protect the majority of investors that are looking to get rich quick by purchasing high-risk crypto... while simultaneously preventing others from having the opportunity to build life-changing wealth on coins that are still relatively safe. Defending the position that only Bitcoin will succeed is extremely difficult.
Bitcoin Is The Only Store Of Value
Bitcoin might be the “best” store of value, but it certainly isn’t the only one. Others exist, such as art, real estate, metals, and rare cars. Bitcoin is a once-in-a-lifetime innovation that will disrupt traditional finance - but it’s not the end-all-be-all.
Bitcoin Is The Base Layer
“Bitcoin is like investing in the internet.” Have you heard this before?
It simply is not a valid comparison, although I appreciate the idea that investing in a technology at the beginning can be wildly profitable.
Bitcoin isn't the base layer. Blockchain is. There are a lot of meaningful ways that we can put this technology to use. Bitcoin is an application of blockchain.
Ethereum is a better corollary for the internet, because Ethereum is responsible for a more robust network, birthing endless companies, coins, and projects.
Ethereum maxis, you may now rejoice.
Bitcoin Price Drops Slower In A Bear Market
It also rises slower in a bull market. Investing in Bitcoin will protect your capital relative to other coins, but it can also hinder portfolio growth when the market is pumping.
Cryptocurrency maximalism is a divisive topic. Ultimately, the decision of which cryptocurrency to invest in or use is up to the individual, and it is important to do thorough research and consider all options before making a decision.
Maximalism got us here, but evolved thinking will bring the masses. Bitcoin will not succeed as a one-man army. Stepping outside of Bitcoin is undeniably financially riskier, but the path to financial freedom was never going to be easy.
Bitcoin Thoughts And Analysis
WEEKLY CHART
I am grasping at straws to analyze this sideways price action. The week started bullish, with price breaking above the local highs from the past few weeks at $17,130. However, that now remains resistance and is the line worth watching on the weekly close - but less important still than $17,592.
Bottom line, nothing is happening.
Legacy Markets
"US equity futures dropped with stocks as weak Chinese trade data compounded concerns about the health of the global economy.
Recession fears were palpable in the bond market, where demand for longer-dated bonds drove a yield inversion to a four-decade extreme, sending 10-year rates below those on 2-year notes by the most since the early 1980s. The Federal Reserve rate decision and inflation data due next week loom as pressure points for a market governed by central banks.
The S&P 500’s worst selloff in a month has been sharp enough to reverse the rally that followed Fed Chair Jerome Powell’s comments on a possible downshift in the pace of tightening, leaving the benchmark where it was a week ago just before he spoke.
“Recent economic data has highlighted the uncertainty over the economic outlook and the Fed’s response,” Mark Haefele, UBS Global Wealth Management’s chief investment officer wrote in a Wednesday note. “We expect further volatility and maintain our defensive exposure.”
Strength in US jobs and services is putting pressure on Powell and his colleagues to keep up their aggressive campaign to cool inflation, rather than pivot toward smaller interest rate hikes. That, in turn, is driving worry among Wall Street executives that the Fed will overtighten and tip the global economy into recession.
Read more: Wall Street Chorus Grows Louder Warning 2023 Will Be Ugly
Underscoring their concern, trade data from China showed exports and imports both contracted at steeper paces in November, pointing to sluggish demand.
Key events this week:
EIA crude oil inventory report, Wednesday
Euro zone GDP, Wednesday
US MBA mortgage applications, Wednesday
ECB President Christine Lagarde speaks, Thursday
US initial jobless claims, Thursday
US PPI, wholesale inventories, University of Michigan consumer sentiment, Friday
Stocks
Futures on the S&P 500 fell 0.2% as of 6:11 a.m. New York time
Futures on the Nasdaq 100 fell 0.3%
Futures on the Dow Jones Industrial Average were little changed
The Stoxx Europe 600 fell 0.5%
The MSCI World index fell 0.3%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro rose 0.3% to $1.0498
The British pound rose 0.4% to $1.2180
The Japanese yen fell 0.3% to 137.36 per dollar
Cryptocurrencies
Bitcoin fell 1.1% to $16,808.45
Ether fell 2.2% to $1,228.33
Bonds
The yield on 10-year Treasuries was little changed at 3.53%
Germany’s 10-year yield was little changed at 1.80%
Britain’s 10-year yield advanced two basis points to 3.10%
Commodities
West Texas Intermediate crude fell 0.7% to $73.74 a barrel
Gold futures were little changed"
Moving Averages
I have recently recommitted to updating my blog, which means more educational content for you.
Yesterday I posted this very simple primer on moving averages. Enjoy!
Silvergate Bank Is In The Crosshairs
A bipartisan group of Senators is investigating Silvergate, the bank responsible for the management of FTX and Alameda funds. This news comes on the heels of Silvergate Bank’s CEO, Alan Lane, writing an open letter to the public reassuring them that his bank conducted proper due diligence and never detected suspicious activity with FTX.
Even if the bank did perform all its duties in good faith, there has to be some level of accountability for a failure of this magnitude. Since the collapse of FTX, the bank’s highest-profile client, Silvergate's stock has dropped 50% - on top of its 85% loss on the year.
Celsius Wins Approval To Distribute Bonuses
Celsius has been given permission by a U.S. bankruptcy court to distribute $2.8M in bonuses to their employees as part of its key employee retention program (KERP). The bonus is up to $75,000 for any employee earning in the range of $25,000 to $425,000.
There’s clearly an ethical dilemma. Customers should be the #1 priority, but employees that worked a full year and counted on a promised bonus also have a strong case.
Regardless, it's a done deal. The total returned to creditors will be $2.8M less after distribution. In other news, Celsius is also in the process of selling $18M worth of stablecoins (user funds) to fund operations.
The company has until February 15 to finalize their restructuring plan.
Ledger Unveils Their Newest Wallet
Ledger unveiled the Stax wallet, which offers a touchscreen Bluetooth experience. The main difference between this wallet and Ledger’s previous models is the touch screen, wireless charging, and customizability.
It's nice to see Ledger innovating and improving on their product, at a time when more people are taking custody of their assets far more seriously.
PlanB: Bitcoin Price Can Get To $100,000. Or $1 Million.
Legendary analyst PlanB is back! Is stock-to-flow dead? Did PlanB change his opinion on Bitcoin? Can we achieve a deflationary utopia? Will Bitcoin become a reserve asset? New price prediction from PlanB, why he choses the barbell strategy and his advice to everybody who wants to invest in crypto.
In this episode with PlanB, we discussed:
We will have another bull market
Stock-To-Flow model fail
Being collectively wrong
Level of the contagion
Did PlanB change his opinion about Bitcoin?
Bottom signals
Deflationary utopia
Crypto adoption in Brazil
Bitcoin as a reserve asset
Bitcoin price: $100K-1 million
PlanB message to people: start small
Barbell strategy
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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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