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In This Issue:
You Are Your Own Worst Enemy
Bitcoin Marks Highest Transaction Day As Countdown For Halving Starts - IntoTheBlock
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
The Million Dollar Bet Is Over
Cathie Wood Still Believes In COIN
The Hike To End All Hikes?
Robert F. Kennedy Jr. Is Pro-Crypto - And Running For President
Bitcoin To $50k? Is The Bottom In?
You Are Your Own Worst Enemy
As active investors, our objective is to successfully navigate a constantly changing landscape, requiring daily decisions about factors within and beyond our control.
No small task!
The decision to invest is an ongoing challenge.
I've touched upon this subject before, but with the current macro landscape teetering on the edge, it feels like an opportune time to revisit the concept. Legendary investor Benjamin Graham's quote encapsulates the essence of our role and what we can control:
"The investor's chief problem - and even his worst enemy - is likely to be himself."
This quote serves as a potent reminder that, although external factors can be unpredictable, investors continue to prosper by focusing on what they can control.
It's fascinating to consider how focusing on the controllable aspects can impact our performance. What would your 1-year or 5-year profit look like if you dedicated 10% more time to factors within your control instead of those outside your control?
While it's essential for investors to understand 'Things I Cannot Control,' success lies in mastering 'Things I Can Control.' Some investors may become so proficient in a few areas within their control that they never need to learn about interest rates, earnings, or lawsuits. This is rare, but possible.
Here’s another famous quote that touches on the topic: “Lord, grant me the strength to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.” - Reinhold Niebuhr
Here's my personal list:
Things I Can Control:
Building my conviction
Allocating my investment budget
Determining my asset cost basis
Developing my technical analysis skills
Managing my emotions and reactions
Adjusting my portfolio allocation
Identifying the tax bracket I fall into
Focusing on a retirement plan
Implementing proper risk management
Securing my digital wallet
Maximizing my income potential
Refining my investment strategy
Selecting the information I consume
Choosing the time horizon I work with
Things I Cannot Control:
Market performance
Inflation and monetary policy
Fluctuating interest rates
Prevailing market sentiment
Dominant market narratives
Corporate earnings and legal disputes
My cognitive wiring
My inherent strengths and weaknesses
The prevalence of scams and frauds
Cryptocurrency adoption rates
Regulatory uncertainty
Economic recessions and depressions
Currency exchange rates
As an extra challenge, create your own list and identify your strengths in the 'Things I Can Control' category and your weaknesses in the 'Things I Cannot Control' category (aspects you're unfamiliar with). Resist the urge to balance your strengths and weaknesses; doing so may lead to mediocre results. Instead, double down on your strengths and become a master in those areas.
Bitcoin Marks Highest Transaction Day As Countdown For Halving Starts - IntoTheBlock
In this report, we bring to you the latest in on-chain cryptocurrency analysis. We look at the blockchain directly and analyze balances, transactions, and the overall activity of market participants. This gives us a unique insight into the future of the market.
This section is written in conjunction with IntoTheBlock (ITB). ITB is an intelligence company that leverages machine learning and advanced statistics to extract intelligent signals tailored to crypto-assets. IntoTheBlock tackles one of the hardest problems in crypto: to provide investors with a view of a crypto asset that goes beyond price and volume data.
The Wolf Den research team uses IntoTheBlock to dig deeper and get the most important insights about the crypto market.
Bitcoin Marks Highest Transaction Day As Countdown For Halving Starts
Bitcoin's price has increased by 69% and its network activity has improved throughout 2023. The upcoming halving of Bitcoin's reward, which is less than a year away, is generating interest among both short-term event traders and long-term fundamental investors. This week, we explore the implications of Bitcoin's recent surge in transaction numbers and discuss how the upcoming halving event could impact the network. Furthermore we analyze how the narrative of halving coincides with the apparent improvement of fundamentals.
Source: IntoTheBlock’s Bitcoin Indicators
Bitcoin transactions per day have reached a six-year peak, setting a new all time high of 682k txs in a single day.
The current high for the daily number of Bitcoin transactions exceeds the previous record of 490k transactions on December 14, 2017, by 192k transactions.
The rising number of daily Bitcoin transactions indicates a growing trend of active usage of the blockchain network, which is largely attributed to the implementation of Bitcoin NFT-like inscriptions referred to as Ordinals inscriptions.
Popular NFT initiatives such as Bored Apes and DeGods have adopted Ordinals and have launched collections on the Bitcoin blockchain.
If the historical pattern repeats, the halving event of Bitcoin is expected to generate more interest among speculators. Moreover, the improving fundamentals of Bitcoin may also be appealing to investors.
Bitcoin is currently experiencing a combination of favorable signals. While a one-year lead time may seem lengthy for the upcoming halving event, its historical significance could add to the increasing discussion surrounding this topic.
Source: IntoTheBlock’s Bitcoin Indicators
Many suggest that the 4-year reward Bitcoin halving serves as a significant driver for the bull cycles in the crypto market.
Although the reduction of Bitcoin's supply has been planned since its creation, the timing of Bitcoin halving has tended to coincide with bull markets.
The quantity of BTC that miners receive per block is expected to decrease from 6.250 to 3.125 by April 2024.
Given that miner rewards currently make up only about 0.10% of the daily volume of Bitcoin, the optimistic sentiment associated with the halving event is expected to have a more significant impact on the cryptocurrency's price than the actual decrease in its supply.
A significant number of investors now link the halving event to an increase in Bitcoin's price. Based on how this correlation has played out in the past three halvings, there are grounds to believe that individuals will try to anticipate this trend.
Bitcoin Thoughts And Analysis
Another bank failure, another Bitcoin bounce… albeit small.
There’s little to analyze on the chart, as we continue to trade in this same sideways choppy range. But it is worth noting that Bitcoin price moved well after FOMC and seems to move on any discussion of bank failures.
Is it becoming a flight to safety or are people just trading around news events? It remains to be seen, but it is encouraging.
Legacy Markets
European stocks have fallen as investors await the European Central Bank's rate decision following the Federal Reserve's quarter-point hike. Energy stocks performed well after Shell Plc reported strong quarterly profits and continued share buybacks. Most other sectors in Europe experienced declines, and US regional lenders also dropped due to renewed concerns about financial stability. The ECB is expected to slow the pace of rate increases, while oil prices have recovered after an initial dip. As tightening credit conditions exert downward pressure on the economy, the Fed may move towards a less restrictive stance. Meanwhile, an Asia-wide gauge of equities increased, driven by gains in Hong Kong shares.
Key events this week:
US initial jobless claims, trade balance, Thursday
European Central Bank rate decision, followed by ECB President Christine Lagarde’s news conference, Thursday
US unemployment, nonfarm payrolls, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.5% as of 9:56 a.m. London time
S&P 500 futures were little changed
Nasdaq 100 futures rose 0.3%
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index rose 0.5%
The MSCI Emerging Markets Index rose 0.7%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.2% to $1.1043
The Japanese yen was little changed at 134.63 per dollar
The offshore yuan was little changed at 6.9254 per dollar
The British pound was little changed at $1.2562
Cryptocurrencies
Bitcoin rose 2% to $29,094.65
Ether rose 1.5% to $1,902.37
Bonds
The yield on 10-year Treasuries advanced three basis points to 3.37%
Germany’s 10-year yield advanced one basis point to 2.26%
Britain’s 10-year yield advanced two basis points to 3.71%
Commodities
Brent crude rose 1.3% to $73.25 a barrel
Spot gold fell 0.2% to $2,034.72 an ounce
The Million Dollar Bet Is Over
I have some not-so-surprising news: Balaji Srinivasan's million-dollar Bitcoin bet has ended in an early loss. The bet's early settlement can be attributed to Bitcoin's limited price movement, making it unlikely that it will reach $1 million within 90 days. If you're questioning whether the bet was a publicity stunt, the evidence seems to suggest so.
Just yesterday, Balaji published a blog post titled "The Fiat Crisis," opening with the statement, "I just burned a million to tell you they're printing trillions." He said this weeks ago on twitter spaces when we spoke. Is it possible that this stance serves as a convenient fallback now that the bet has failed? Yes, but it's safe to say we've all understood the underlying message from the start. Balaji's lost bet has effectively alerted us to the deeply flawed financial system. We should acknowledge his efforts, even if his predictions materialize in a decade.
Ultimately, the crux of the matter is determining when the proverbial "can" can no longer be kicked down the road. In a spoiler alert, Balaji outlines a potential timeline in his blog post.
Cathie Wood Still Believes In COIN
Despite the regulatory challenges Coinbase is currently facing, Cathie Wood's ARK Invest continues to dollar-cost average, investing millions of dollars into $COIN stock. On Monday and Tuesday of this week, Wood purchased a total of $16 million worth of $COIN across her various funds as the share price hovers around the $50 range. Intrigued, I looked into ARK's estimated average cost and was astonished. According to Cathiesark.com, ARK's average cost per share is $254.65. If you're a fan of Coinbase and regret missing the $30 bottom, keep in mind that your average could easily be in the $200s or higher. This demonstrates what extreme conviction looks like in action; now, we simply wait to see if the bet ultimately pays off.
The Hike To End All Hikes?
As expected, the Fed delivered a quarter percent hike, bringing the benchmark interest rate to a range of 5-5.25 percent. Accompanying the decision, Powell made a few notable statements: “The Committee anticipates that some additional policy firming may be appropriate. A decision on a pause was not made today. We are prepared to do more if greater monetary policy restraint is warranted.” And for my expert analysts, following these statements Powell blinked twice, sniffled once, and then turned a page in that order. Make of that what you will.
The Fed is one big charade and FOMC is a waste of time. Let’s move on.
Robert F. Kennedy Jr. Is Pro-Crypto - And Running For President
Presidential candidate Robert F. Kennedy Jr. has entered the debate on cryptocurrency, criticizing the federal government's alleged war on the industry. Citing a blog post by author Ellen Brown, Kennedy argues that the FDIC and SEC have no authority to wage an extra-legal war on crypto. He is joined by other prominent US politicians, such as Florida Governor Ron DeSantis and Senator Ted Cruz, in expressing concerns about the crypto industry and central bank digital currencies (CBDCs). The growing debate over cryptocurrency's future is not strictly divided along party lines, with various politicians expressing differing opinions on the matter. As the House of Representatives considers new legislation on crypto regulation, these debates are expected to intensify.
Read this twitter thread.
Bitcoin To $50k? Is The Bottom In?
Today's guest Chris Inks from Texas West Capital presents his views and analysis of Bitcoin ahead of the upcoming Fed rates hike. Buckle up, it’s time for some old-school trading.
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.