The Wolf Den #638 - The Power Of ENS
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In This Issue:
The Power Of ENS
An Important Announcement!
Bitcoin Thoughts And Analysis
Legacy Markets
The Digital Asset Anti-Money Laundering Act
Will Outdated Bitcion Miners Be Replaced?
The Fed Hikes By 50bp
Raoul Pal, Mike Alfred, Lex Sokolin - Today!
My Recommended Platforms And Tools
The Power Of ENS
"Remember that a person’s name is to that person, the sweetest and most important sound in any language" - Dale Carnegie
Names carry symbolic meaning, possessing an innate power and significance. Names have an immense influence on who we are, the opinions we form, and the relationships we have.
Everything has a name and names are everywhere. They are the starting point of every story.
Dale Carnegie’s quote comes from the 1936 self-help book "Winning Friends And Influencing People.” But if Dale was here today, he would likely be a fan of ENS.
So what exactly is ENS?
Taken from the official ENS forum, “the Ethereum Name Service (ENS) is a distributed, open, and extensible naming system based on the Ethereum blockchain.” You may be most familiar with ENS names as handles on Twitter, but they are so much more.
Let’s introduce our new friend, Dale.eth.
ENS is a system that allows users to associate human-readable names like “Dale.eth” with an Ethereum address. So if Dale Carnegie were here today, he would simply create a unique ENS name to allow others to easily identify him.
This allows users to interact with each other on the Ethereum network without having to copy and paste long strings of numbers and letters. It enables users to use a single identity for any Ethereum app, and it is secured through the possession of a corresponding domain key.
Here’s a brief explanation from CoinMarketCap. “ENS is not a company but an open-source project that calls itself 'an open public utility' that belongs to the company.” Essentially, it aims to become a piece of infrastructure as vital to Web3 as DNS is to the internet. Moreover, ENS does not have a single point of failure thanks to blockchain technology and is, by design, more censorship-resistant and secure.
This is very similar to the widely used ‘domain name system’ that quietly runs behind every website and acts as the glue that holds the internet together. IP addresses are mapped to domain names on the DNS system. Ethereum addresses are mapped to .eth names on the ENS system,
Tech jargon aside, this is powerful infrastructure, laying the groundwork for community, trust, communication, and credibility. The internet would not be the same without DNS. Soon we will be saying the same about blockchain and ENS.
Dale Carnegie is smiling down on us.
While we have only scratched the surface of what we can do with ENS, we already see real applications around digital identities, security, interoperability, and data storage. To learn more about ENS, I suggest you click the link HERE.
Lastly, I want to be super clear that this is not an endorsement of the $ENS token. I do not own any $ENS or have any exposure to it.
An Important Announcement!
Revue just announced yesterday that they are packing up their bags and shutting the platform down. No reason was provided, but the assumption is that this is part of Elon Musk's purge at twitter, the owner of the platform.
Fear not, we will continue this newsletter on a new platform - I already started researching alternatives. You don't need to do anything other than sit tight, as I will keep all of you updated. The site doesn't close until January 18 - we will have a solution well before then.
Bitcoin Thoughts And Analysis
DAILY CHART
What a difference a day makes.
Things were looking bullish for Bitcoin yesterday - until the FOMC announcement at 2 PM EST when all hell broke loose across markets. Bitcoin immediately dropped, losing the 50 MA, finding rejection at $18,157 resistance and falling back below the daily open. The candle did close green, but it is an ugly shooting star.
Usually when you see a candle with a massive upper wick in an uptrend, it means that the trend has exhausted and things are ready to head back down. But that will depend largely on today's candle, which bulls wants to dominate. Not the case so far. Candles require confirmation from the next candle.
As you can see, for now, $17,592 is once again support. That's the silver lining. Let's hope that it holds.
Legacy Markets
US equity-index futures and European stocks declined after the Federal Reserve rebuffed expectations for a dovish tilt and said interest rates will go higher for longer.
A global rally sparked by softer-than-forecast US inflation came to an abrupt halt on Wednesday after policymakers signaled a peak rate that was far above market expectations and sought to dispel hopes for a rate cut next year. Chair Jerome Powell reaffirmed the central bank won’t back away from its fight against inflation despite mounting fears of job losses and a recession.
“The Fed was more hawkish than markets had expected,” Jack McIntyre, a money manager at Brandywine Global Investment Management, wrote in a note. “They seemingly still want financial markets to tighten further, which essentially means they want lower equity prices.”
Key events this week:
ECB rate decision and ECB President Lagarde briefing, Thursday
Rate decisions for UK BOE, Mexico, Norway, Philippines, Switzerland, Taiwan, Thursday
US cross-border investment, business inventories, empire manufacturing, retail sales, initial jobless claims, industrial production, Thursday
Eurozone S&P Global PMI, CPI, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 1.2% as of 10:09 a.m. London time
Futures on the S&P 500 fell 1.1%
Futures on the Nasdaq 100 fell 1.3%
Futures on the Dow Jones Industrial Average fell 0.8%
The MSCI Asia Pacific Index fell 1.5%
The MSCI Emerging Markets Index fell 1.3%
Currencies
The Bloomberg Dollar Spot Index rose 0.6%
The euro fell 0.6% to $1.0621
The Japanese yen fell 0.8% to 136.62 per dollar
The offshore yuan fell 0.5% to 6.9770 per dollar
The British pound fell 0.7% to $1.2338
Cryptocurrencies
Bitcoin fell 0.8% to $17,691.21
Ether fell 1.7% to $1,287.85
Bonds
The yield on 10-year Treasuries was little changed at 3.48%
Germany’s 10-year yield declined two basis points to 1.92%
Britain’s 10-year yield declined eight basis points to 3.24%
Commodities
Brent crude fell 0.1% to $82.58 a barrel
Spot gold fell 1.6% to $1,778.12 an ounce"
The Digital Asset Anti-Money Laundering Act
Nothing about the bill would prevent the next FTX. In fact, it puts users at more risk.
"Then they fight you."
Senators Warren and Marshall are riding the coattails of the FTX collapse, trying to push through heavy-handed crypto legislation called the Digital Asset Anti-Money Laundering Act. The bill is a direct attack on the industry. It would force all public blockchain infrastructure projects and platforms to register as a financial institutions, which would carry a laundry list of impossible requirements. They want to either break crypto or have full control of it.
By forcing public blockchains to register, blockchains would be forced to KYC all customers, censor the network and users, and endlessly file reports to the government. The ways in which we use blockchains today would cease to exist if this bill was passed. The bill would eradicate all privacy and agency to the point of making crypto obsolete.
Luckily, due to time constraints, the bill has little chance of passing. That does not mean that we are safe. We should expect similar legislation to return next year with new language, new support, and new proposed ways to tear the industry down.
Will Outdated Bitcion Miners Be Replaced?
Japanese electric power company, TEPCO (Tokyo Electric Power Company) is preparing to mine Bitcoin with their excess energy. TEPCO is the largest power company in Japan and is partnering with a local semiconductor designer and developer on the effort. TEPCO has already successfully completed a pilot project, proving their system operates normally with both verticals.
The future of mining is here.
With Bitcoin’s hashrate continuing to print all-time highs and massive new players joining the space, life is likely or become very difficult for preexisting miners that have been struggling for the past couple of years to stay afloat. In addition to TEPCO, ExxonMobil and ConocoPhillips are also finding innovative ways to bolster profits by selling stranded gas to miners. The mining landscape is clearly evolving. As a result, new players appear to be well-positioned to squeeze out old ones.
2023 will be an interesting year for miners.
The Fed Hikes By 50bp
Yesterday’s 0.50% hike brings the Fed’s benchmark policy rate to a new range of 4.25%-4.5%. The decision to raise by 50 basis points comes after the Fed’s decision to raise by 75 basis points in the last 4 meetings, which marked the most aggressive stretch of hikes in the past 40 years. The next FOMC meeting isn't until February of next year, but the consensus is that rates will get as high as 5% to 5.6%.
Markets dumped on the news. While 50 bps was priced in, Powell's assertion that hikes will be more persistent and that the target rate will be higher had markets reeling.
Raoul Pal, Mike Alfred, Lex Sokolin - Today!
Do not miss this livestream, today at 9:30 AM EST! We will be talking about FTX, Binance, Stablecoins and more.
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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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