The Wolf Den #716 - Let’s Go Way Back
Nothing in crypto lasts forever... except Bitcoin
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In This Issue:
Let’s Go Way Back
Twitter Spaces Link!
Bitcoin Thoughts And Analysis
Legacy Markets
Gary Gensler Murdered In Broad Daylight
Update: The ETH Staking Withdrawl Queue
We All Get Trump NFTs!
CBDCs Are Coming
He Came For The Money But Stayed For The Technology | Jean-Marie Mognetti, CoinShares
Let’s Go Way Back
Veteran crypto enthusiasts who have witnessed the evolution of the market since its early days will attest that today's crypto landscape is vastly different from what it was just a year ago, not to mention 3, 5, or even 10 years ago. The rapid pace of change is such that as soon as you look back to reminisce, the landscape has already transformed once again. This prompts the question: is there a way to revisit the past and see what it truly looked like?
Fortunately, we have access to a free tool called "The Wayback Machine," which enables us to do just that. As stated on their website, "The Wayback Machine is a digital archive of the World Wide Web, founded by the Internet Archive, a nonprofit organization based in San Francisco, California." This impressive tool allows users to view snapshots of webpages from the past. While there is a wealth of information to explore in the history of crypto, today we will focus on the top 5 coins by market cap and trace their journey through time.
Prepare for a substantial amount of scrolling as we venture back in time. We will examine the state of the crypto market one year ago, two years ago, and so on, all the way back to 2013 – a decade ago. As you scroll, take note of the changes that occur from year to year, specifically, try to identify any two years that appear similar and observe how prices have fluctuated over time. Now, without further ado, let's turn back the clock.
One Year Ago (2022)
Two Years Ago (2021)
Three Years Ago (2020)
Four Years Ago ( 2019)
Five Years Ago (2018)
Six years Ago (2017)
Seven Years Ago (2016)
Eight Years Ago (2015)
Nine Years Ago (2014)
Ten Years Ago (2013)
When I initially chose this topic, I was uncertain about the direction it would take. However, the results clearly demonstrate that in the crypto world, everything is subject to change. You might think Bitcoin is an exception, but today's Bitcoin differs significantly from its 2013 version. While proof-of-work remains unchanged, the addition of the Lightning Network and other developments have radically altered its use case. And who can forget lesser-known cryptocurrencies like Isracoin? It's no surprise that Peercoin didn't last, especially given its confusing abbreviation as PPCoin.
The key takeaway here is that anything can change, even when it seems impossible. Consider the S&P 500, which has roots dating back to 1923 but only took its current form in 1957. To illustrate the fluctuations in the market, let's examine how the five largest companies in the index have evolved over the years. To expedite this process, we'll focus on snapshots from each decade.
1960: AT&T, General Motors, IBM, Standard Oil of New Jersey, DuPont
1970: AT&T, IBM, General Electric, ExxonMobil, General Motors
1980: IBM, AT&T, ExxonMobil, General Motors, DuPont
1990: General Electric, ExxonMobil, IBM, AT&T, Philip Morris
2000: Microsoft, General Electric, Cisco Systems, ExxonMobil, Walmart
2010: ExxonMobil, Microsoft, Apple, General Electric, Berkshire Hathaway
2020: Apple, Microsoft, Amazon, Alphabet, Facebook
Would anyone have ever thought that AT&T could be not only dethroned from the #1 position but also pushed out of the top 5 largest companies in the S&P 500? Today, AT&T sits at the 52nd position, comprising about 0.04% of the entire index, and has become a mere speck in the grand scheme of things.
When contemplating major shifts in the crypto space, the idea that often comes to mind is Ethereum surpassing Bitcoin in market cap. However, this perspective may be short-sighted in the grand scheme of things. It's also possible that stablecoins could overtake both BTC and ETH, or that a central bank digital currency (CBDC) might completely disrupt the market – the possibilities are endless. Given the significant changes that have occurred in crypto over the past decade, it's evident that the landscape will continue to evolve in fascinating ways.
As investors, it's our responsibility to learn from history. By embracing change and maintaining an open mind, we can avoid becoming obsolete, much like a forgotten cryptocurrency. I hope this introduction helps you appreciate how early we are in the development of the crypto space, and that there is still so much to come – developments we cannot yet fathom. The future, indeed, remains a mystery.
Twiter Spaces Link
Did you miss the Twitter Spaces conversation yesterday? You can listen HERE! I was joined by Raoul Pal and other awesome guests. You don’t want to miss this one.
Bitcoin Thoughts And Analysis
The correction in crypto markets should come as a surprise to none of you. Yesterday’s entire newsletter intro was about the increasing greed and I have mentioned repeatedly that we are overdue a retrace and a retest of some key levels.
There was also overbought bearish divergence with RSI on the daily (and other timeframes).
I am still watching $28,600 and $25,212 as the key levels for a retest of support.
I would really like to see $25,212 retested, that would be very bullish to see it hold as support.
Legacy Markets
European stocks and US equity futures fell, while bond yields rose due to the latest corporate earnings reports and inflation data. The Stoxx Europe 600 index declined by 0.3%, led by the technology sector, with ASML Holding NV dropping as much as 4.8% after concerns about its demand outlook. US futures on the Nasdaq 100 and S&P 500 fell 0.7% and 0.5%, respectively, ahead of US banks' earnings reports. UK two-year yields jumped as much as 15 basis points after inflation beat estimates in March, leading traders to anticipate further Bank of England interest-rate hikes. The 10-year Treasury yield increased by 4 basis points.
Investors are monitoring earnings reports for signs of the impact of central banks' attempts to curb inflation on economic activity. Results from major US lenders have been mixed, with Bank of America beating profit expectations and Goldman Sachs trailing estimates. European Central Bank Chief Economist Philip Lane suggested another interest rate increase in May, while US regional bank presidents have called for higher interest rates to combat inflation. In other markets, Bitcoin fell below $30,000, and oil prices declined due to concerns over uneven demand recovery. Gold and iron ore dipped as China vowed to curb unreasonable price gains.
Gary Gensler Murdered In Broad Daylight
The daily SEC drama is making headlines, and in today's episode, Gary Gensler finally experienced a taste of his own medicine during an oversight hearing on the SEC. Patrick McHenry, Chair of the United States House Financial Services Committee, dove straight into the issues at hand.
A major obstacle to mainstream crypto adoption is the disagreement between the SEC and the CFTC over the classification of digital assets – Ether being a prime example. While the CFTC contends that Ether is a commodity, the SEC insists on categorizing it as a security… although Gensler refused to actually say it in the hearing. This disagreement was addressed by Chairman McHenry during the hearing, and the ensuing dialogue was quite revealing. In the transcript below, I've used "..." to represent instances where speech was cut off. You can watch the full clip HERE.
Patrick McHenry: Ether is one of the most popular digital assets that empower the Ethereum blockchain. Back in 2018, the SEC finance director stated Ether was not a security. Last month the CFTC chair expressed his view that Ether is a commodity. The State Attorney General of NY asserted in a court filing that Ether is a security. Clearly, an asset cannot be both a commodity and security, do you agree?
Gary Gensler: Actually, all securities are commodities under the Commodity and Exchange Act, it’s that we are excluded commodities. But I agree that a security cannot be also an excluded commodity and an included commodity.
Patrick McHenry: How would you categorize Ether then?
Gary Gensler: I think that the general sweep of what Congress did, not just in the 30s but…
Patrick McHenry: I am asking you, sitting in your chair now, under the laws as exist, is Ether a commodity or a security?
Gary Gensler: Without speaking to any one…
Patrick McHenry: I know you have repeatedly said you would not speak to one, except you have spoken to one, Bitcoin. So I am asking you to speak to the second largest one.
Gary Gensler: And speaking to the tokens, there are ten to twelve thousand, if there are a group of…
Patrick McHenry: I am asking about one, a specific question Chair Gensler. I said this in private, so this should be no shock to you. I am asking this question, is Ether a commodity or a security?
Gary Gensler: Again it depends on the facts and the law…
Patrick McHenry: I am asking about the facts and the law, sitting in your seat, and the judgment you are making.
Gary Gensler: Mr. Chair, I think you would not want me to pre-judge because…
Patrick McHenry: But you have pre-judged, you have taken 15 enforcement actions, we are finding out as we go, as you file suit, as people get Wells Notices on what is a security.
Did you enjoy that? Because I’ve got more.
HERE is Warren Davidson absolutely annihilating Gensler with my favorite quotes of the day - “You have essentially a Hotel California rule for crypto, where you can check in anytime you like but you can never leave.”
Not enough? How about when Gensler admitted that, even though he taught about Bitcoin and blockchain at MIT, he has NEVER had a digital wallet or owned the asset.
You would think that was it, but Tom Emmer had some choice words as well.
Gensler was absolutely eviscerated today.
Update: The ETH Staking Withdrawl Queue
The article headline sounds bearish, but the reality of ETH withdrawals has been primarily positive so far. As stated above, the withdrawal queue is now at a 17-day wait in total, but the headline number doesn’t detail the entire process. The length of the queue is based on the exit queue, the withdrawal delay, and processing, each taking significant time.
I think what matters most is that stakers are matching and exceeding withdrawals and the heightened withdrawal activity is only temporary. Within a month, we should see deposits far outpace withdrawals, which should shift the narrative back into Ethereum’s court as long as Bitcoin holds.
We All Get Trump NFTs!
Did you miss out on the first Trump NFT collection and are eager to purchase at the mint price? You're in luck – but it's hard not to chuckle at news like this. In true crypto fashion, Trump realized he could simply mint more NFTs to generate additional revenue. The value of the original NFTs plummeted, but it's unlikely that Trump is too concerned. And who could forget the reports that some of the NFTs featured copyrighted images? The comedic material in the crypto space truly seems never-ending.
CBDCs Are Coming
The Bank of England has successfully tested distributed ledger technology (DLT) for managing large and complex interbank transactions through "Project Meridian," conducted via the Bank for International Settlements' (BIS) London innovation hub. The prototype could potentially accelerate and reduce costs for transactions in central bank Real-Time Gross Settlement (RTGS) systems. Project Meridian linked the central bank's RTGS system with other financial infrastructures, enabling secure and resilient exchanges of ownership of funds and assets. Although DLT has inspired innovation in traditional finance, a Bank of England official previously warned that it may be too cumbersome for central bank digital currencies. The Meridian prototype can be applied to other asset classes, such as foreign exchange, equities, and bonds, but requires policy, regulatory, and legal considerations before implementation.
He Came For The Money But Stayed For The Technology | Jean-Marie Mognetti, CoinShares
Jean-Marie Mognetti is the Co-Founder & CEO of CoinShares, one of the leading digital assets investment firms with over $5bn AUM. In this episode Jean-Marie talks about his way into crypto, which started 10 years ago, his views on crypto regulation, DeFi, and his forecast for 2023.
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.
It was great to see Gensler get hammered by Congress.
Now, finish the job and fire him!!!!