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In This Issue:
What Happens To My Bitcoin If…
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Tesla Didn’t Sell Any Bitcoin
Coinbase Gets Fined… Again
FTX Creditor List Goes Public
What Happens To My Bitcoin If…
It is a common misconception that Bitcoin and other cryptocurrencies operate under a distinct set of rules. While there was a time when the crypto landscape was akin to the Wild West, it is no longer the case. With the exception of the Wash Sale rule, which crypto remains immune to, all standard regulations apply. Here are several scenarios that are likely to occur. Some of them are an inevitable aspect of life.
Let us consider the situation where:
I pass away
In the eyes of the law, cryptocurrencies are treated as any other valuable asset in the event of an investor's death. However, it is not guaranteed that the crypto can be easily redeemed, accessed, or located, even if the law deems the individual as the rightful owner. Legally compliant exchanges in the US are required by law to hand over accounts when requested by the authorities, but this does not necessarily mean that they are technically capable of doing so.
To ensure that your loved ones have access to your crypto assets, it is advisable to hire a lawyer, establish an estate, draft a will, and name beneficiaries. It is essential that crypto is included in this process. Preparing your estate does not guarantee that the funds will be easily accessible. The last thing your loved ones want to do after you pass away is to embark on a treasure hunt for your wealth. But unfortunately, this is currently a necessity for many. So, as morbid as it may sound, plan ahead, as death is a certainty for all of us.
Uplifting, right?
I divorce my spouse
Experts do not agree on the exact divorce rate in the US, but it is estimated that around 50% of marriages will end in divorce. This is a significant point to consider when it comes to investing in crypto. Bitcoin, like any other asset, is treated the same way in divorce proceedings. If Bitcoin (or any other crypto) was purchased prior to the marriage, was a gift, or inheritance, it is often not considered marital property and cannot be divided.
However, any Bitcoin that is purchased during the marriage is considered marital property and will be divided equally. Choose your spouse with more care than the last crypto you bought. But in all seriousness, there are a couple of ways around giving up half of your crypto assets. If one spouse does not want to part with their Bitcoin, then an equivalent amount of value must be given up in other assets. The other option is to sign a prenuptial agreement. You may not be viewed as the "good guy or gal", but at least you will have your Bitcoin if things don't work out.
I owe taxes
Bitcoin, cryptocurrency, NFTs, and every other asset are taxable. I am not an accountant nor giving financial advice in any of these categories, but I do know that taxes are owed when a gain occurs. Furthermore, anyone is susceptible to an audit, where it could be determined that you owe taxes from years ago. In some worst-case scenarios, I have known investors who owe more in taxes than their portfolios are worth - don't be this person. Be smart about what you owe and factor it into your personal finances each year! There is no such thing as a "secret" to avoid taxes, so just pay them.
I misplace it
Losing the password to your bank account may seem like a minor inconvenience, but misplacing the keys to your crypto wallet can be a nightmare. The unfortunate truth is that depending on the circumstances of the loss, some crypto assets may be permanently unrecoverable. While traditional financial institutions have established procedures for regain access to locked accounts, the same cannot always be said for the crypto realm. However, there are crypto recovery services that can be hired, but they come at a cost and are not always successful.
It is important to note that as the crypto industry continues to evolve, not all professionals, such as lawyers, accountants, and estate planners, possess the necessary experience to handle complex issues related to crypto loss. Thus, if you own a significant amount of crypto, it is wise to disclose this information with trusted professionals who can ensure the proper steps are taken to protect your assets.
To avoid potential disasters, it is essential to plan ahead and consider all potential scenarios, such as divorce, taxes, and even death. While these may seem like unlikely scenarios, it is always better to be prepared. Losing access to your crypto assets can be a daunting prospect, but with proper planning and the help of experienced professionals, it is possible to mitigate the risks and protect your assets.
Bitcoin Thoughts And Analysis
Boring. I am only zooming in to show you that Bitcoin remains sideways on low time frames. Nothing to do here but wait and see what happens with this range,
Altcoin Charts
I do NOT share signals in this section. I share setups and charts that I am watching, in an effort to help show you how I view a chart and what criteria would be necessary for me to consider taking a trade. NEVER blindly buy something because it is listed in a newsletter or posted on twitter. You need to have a plan when you enter a trade. These are just ideas, and are almost always “if, then” scenarios. If a certain set of things happen, then I would consider a trade.
MATIC is one of the few coins that has consistently outperformed in both bull and bear markets, going up more when things are good and dropping less when things are bad. Further, it is one of the only projects that is continually in the mainstream news with huge partnerships and real world applications. I am a huge Polygon bull and this continues to be one of my largest holdings. I do not intend to sell any in the foreseeable future.
That said, there continues to be a solid trade opportunity here. This is already up ~10% on the setups I have shared before, but now we have a potential weekly move through descending resistance. As you can see, that descending line has 3 touches, confirming it as resistance. Some traders balk at using descending lines, as moves through often lead to fake outs, but this is still a classic way to determine a trend change. You can also see that MATIC has flipped the weekly 50 MA to support, which is another signal that the trend has changed. the .95 cent area is a key support that lines up with the blue 50 MA.
This is a weekly chart, so we are looking for a break of that line on the Sunday close. If we zoom into the daily. it is already broken and being retested as support.
The immediate target is the $1.30 area, but this could go much higher if we get a sustained bull run for crypto.
Legacy Markets
Global equity momentum slowed on Friday, as chipmaker Intel Corp's weak quarterly forecast added to investor concerns over company earnings and a set of robust US economic data raised the possibility of continued rate hikes from the Federal Reserve. The Stoxx 600 index in Europe struggled to build on its 0.4% gain from Thursday, while futures on the tech-heavy Nasdaq 100 dropped about 0.5%, with Intel down as much as 11% in premarket trading after issuing one of its weakest ever quarterly forecasts. US stocks remain on track for their best month since July, but caution has increased as company earnings are released.
Key events:
American Express, Charter Communications, Chevron, HCA Healthcare to report results Friday
US personal income/spending, PCE deflator, University of Michigan consumer sentiment, pending home sales, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 was little changed as of 10:36 a.m. London time
S&P 500 futures fell 0.3%
Nasdaq 100 futures fell 0.5%
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index rose 0.4%
The MSCI Emerging Markets Index was little changed
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0890
The Japanese yen rose 0.4% to 129.75 per dollar
The offshore yuan fell 0.2% to 6.7517 per dollar
The British pound fell 0.2% to $1.2377
Cryptocurrencies
Bitcoin fell 0.5% to $22,975.38
Ether fell 1.3% to $1,581.39
Bonds
The yield on 10-year Treasuries advanced four basis points to 3.53%
Germany’s 10-year yield advanced four basis points to 2.26%
Britain’s 10-year yield advanced two basis points to 3.34%
Commodities
Brent crude rose 1.2% to $88.51 a barrel
Spot gold was little changed
Tesla Didn’t Sell Any Bitcoin
Bitcoin enthusiasts are eagerly awaiting each Tesla quarterly report, hoping that the electric vehicle manufacturer doesn't sell off their investment. In the second quarter of 2022, Tesla sold 75% of its Bitcoin holdings, causing the market to react negatively. However, the company did hold onto the remaining portion of its Bitcoin throughout the year.
As of now, Tesla holds $184 million in Bitcoin, a decrease of $34 million from the previous quarter due to market fluctuations. The company's reasoning for selling off their investment was to demonstrate the liquidity of Bitcoin as an alternative to holding cash on a balance sheet. This move did not sit well with the Bitcoin community. A positive sign that the bullish market is back on track would be if Tesla adds to their current position. All eyes are on Elon Musk to see what he will do next.
Coinbase Gets Fined… Again
The Dutch Central Bank has imposed a fine of $3.6 million on Coinbase for failing to comply with the country's Anti-Money Laundering (AML) and Anti-Terrorist Financing (ATF) laws. According to Coinbase, the exchange had always "intended to register" for these laws, which raises questions about the fairness of the fines. The rule that led to the fine was introduced in May 2020, with the goal of curtailing terrorist financing. While Coinbase may not have operated perfectly, it is possible that regulatory bodies view crypto exchanges as an easy target for fines. If you want to read the Dutch Bank’s report, you can do so HERE.
FTX Creditor List Goes Public
A list of FTX creditors containing 116 pages of companies from various industries, including tech, media, law, airlines, crypto exchanges, and investment firms, has been made public. Notable crypto-related companies on the list include Coinbase, Binance, Circle, Bittrex, Messari, Yuga Labs, and Galaxy Digital. Non-crypto-related entities on the list include major companies such as Apple, Amazon, Airbnb, Microsoft, Google, LinkedIn, Netflix, Southwest Airlines, and Skybridge Capital. The list is extensive, but it is not clear how much money each creditor is owed or if they had a trading account with FTX. It is important to note that not all creditors on the list will be affected in a significant way.
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.