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In This Issue:
It’s Go Big Or Go Home
Bitcoin Thoughts And Analysis
Legacy Markets
Florida Gives CBDCs The Boot
Coinbase Ends Bitcoin Loans
Apple Finds Early Success
$PEPE Hits $1B Market Cap
The Rise Of OKX: How It Quietly Emerged As A Crypto Leader | Hong Fang
It’s Go Big Or Go Home
Professional investing is like a competitive, high intensity contact sport. You are vying for victory against yourself, the buyer/seller, and the market. The stakes are high, and there are no consolation prizes and participation trophies. It's crucial to understand that investing can be as challenging as playing a man down in soccer (football) or against a formidable hockey time on a power play.
It's a "Go Big or Go Home" mentality.
But how fitting is the sports analogy for investing? Let's examine basketball for comparison.
For amateur players, a team vs. team basketball game usually hinges on three fundamental factors: speed, strength, and height. Properly employing these three aspects can create immense pressure that smaller and slower teams cannot withstand. Even a team of proficient shooters, passers, and dribblers may struggle against a team that effectively applies pressure and has a size advantage.
For the average basketball player, defending against a 6'2", 220lb, swift opponent is a daunting task. Even if this athletic player has no basketball experience, the odds are still heavily against the average player. Now envision a team of five casual players against a team of five superhumans. It's likely the game will be decided within minutes through fast breaks and aggressive play under the rim—similar to how markets operate.
Until the fundamentals are honed and developed, novices in basketball will be utterly dominated by those with greater speed, size, and strength. The same can be said for investing. Even if you've read some books and practiced paper trading, a new investor with accreditation, access to deeper liquidity, and high-end information (e.g., a Bloomberg Terminal) will likely still outperform you.
This perspective may seem pessimistic, but there's good news: in investing, both parties can technically win, despite all of these variables. While this statement may appear contradictory to earlier assertions, it's important to note that the outcome of basketball is binary, while that of investment decisions isn't.
Don't be misled, though. Every investment decision still involves high pressure against yourself, the buyer/seller, and the market. However, you can still triumph, even against formidable opponents—both parties can win. That said, it's equally possible for both parties to lose in any given investment scenario.
Without appropriate risk management, due diligence, or market awareness, investing can be reduced to one schmuck selling to another schmuck, both incurring losses. As for the winners, considering that institutions manage most of the world's money, they often just reap profits from one another. For average investors like us, it means we must fiercely compete for every win under tremendous pressure.
The key takeaway is that if you're passionate about investing, you must put in the necessary work both on and off the metaphorical court. Use this introduction as motivation to delve deeper. If you already have a strategy, refine your skills. If you don't, start by researching what legendary investors are doing.
Anyone can invest, but not everyone begins with a set of advantages. In other words, we must work tirelessly to level the playing field. Remember, opportunities will present themselves when you're prepared.
Have a great weekend, and I look forward to reconnecting next week. I’m out.
Bitcoin Thoughts And Analysis
Nothing happening here! We will revisit on Monday.
Legacy Markets
The tumultuous week for financial markets is ending on a positive note as risk assets are bid higher, regional banks recover from a severe rout, and strong job figures alleviate concerns about an economic recession. S&P 500 futures indicate the equity benchmark will rise after its longest losing streak since February. PacWest Bancorp, Western Alliance Bancorp, and First Horizon Corp. also rebounded, while Apple Inc. saw gains due to solid earnings. The US added more jobs in April than anticipated, and the unemployment rate returned to a multi-decade low, demonstrating the labor market's resilience despite economic challenges.
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.7% as of 8:56 a.m. New York time
Nasdaq 100 futures rose 0.6%
Futures on the Dow Jones Industrial Average rose 0.6%
The Stoxx Europe 600 rose 0.6%
The MSCI World index was little changed
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro fell 0.3% to $1.0975
The British pound was little changed at $1.2567
The Japanese yen fell 0.5% to 135.00 per dollar
Cryptocurrencies
Bitcoin rose 0.5% to $29,017.94
Ether rose 1.6% to $1,909.2
Bonds
The yield on 10-year Treasuries advanced eight basis points to 3.45%
Germany’s 10-year yield advanced 10 basis points to 2.29%
Britain’s 10-year yield advanced 13 basis points to 3.79%
Commodities
West Texas Intermediate crude rose 2.6% to $70.37 a barrel
Gold futures fell 1.7% to $2,020.50 an ounce
Florida Gives CBDCs The Boot
Instead of waiting for legislators to develop a Central Bank Digital Currency (CBDC) and then challenging it, some states, such as Florida, are adopting a proactive stance by banning the technology before it emerges. Bill HB 7049 was passed last week after a 34-5 vote, in which CBDCs were defined as not being considered money in the state of Florida, effectively prohibiting CBDC usage. While the bill is a positive step, if the federal government decides to designate their CBDC as legal tender, the state bill would be overridden, according to the supremacy clause in the U.S. Constitution.
Coinbase Ends Bitcoin Loans
Without giving a specific reason, Coinbase has chosen to discontinue its Bitcoin Loan program, which allowed users to borrow up to $1 million using Bitcoin as collateral. The program's terms enabled borrowing up to 40% of the collateral at a 9% interest rate, with no credit check required. In 5 days, customers will no longer have the option to take out loans, but no action will be taken against outstanding loans. In essence, if this opportunity appeals to you, time is of the essence. It's difficult to believe that this product wasn't profitable for Coinbase, which suggests there may be an unknown regulatory issue at play.
Apple Finds Early Success
Amid ongoing instability in regional banks, Apple's high-yield savings account attracted $990 million in deposits and saw 240,000 accounts opened within just four days of its launch. The company appears to have executed its timing perfectly and has merely tapped into a fraction of its target audience. Apple already serves over 1 billion people, which means that approximately 0.024% have opened an account. Envision the impact on Apple if 1%, 5%, or 10% of their users were to open an account. Apple would either dominate the world or transform into a colossal bank—both outcomes are essentially the same.
$PEPE Hits $1B Market Cap
The frog-themed memecoin Pepe (PEPE) has experienced an 85% surge within the last 24 hours, reaching a $1 billion market cap just three weeks after its launch. Despite having no intrinsic value or expectation of financial returns, PEPE seems to be following a similar trajectory to well-known memecoins Dogecoin and Shiba Inu. Investment in memecoins is high-risk due to their lack of underlying fundamentals and extreme volatility. Recently, five addresses linked to the Pepe team allegedly made a $1.23 million profit in a thin liquid market, raising concerns about the on-chain activity.
On the one hand, I love seeing people make money (although I don’t think this will end well for many) and I have a special place in my heart for meme coins like DOGE, which helped bring me into crypto. On the other hand, this is simply money printing to enrich the few at the expense of the many and will likely bring increased attention from regulators. That’s not great.
The Rise Of OKX: How It Quietly Emerged As A Crypto Leader | Hong Fang
In this episode of the Wolf Of All Streets podcast, Hong Fang, the CEO of OKCoin and OKX, shares insights into the success of OKX and the company's values that have helped it become a leading cryptocurrency exchange. With a focus on delivering outstanding results and attracting new clients, Hong discusses how OKX's values have played a crucial role in achieving these goals. Tune in to learn more about the values and strategies that have made OKX a successful player in the world of cryptocurrency.
In this episode with Hong Fang, we discussed:
Running OKX and OKCoin
Success of OKX
Decentralization in the centralized business
Public audit
Everything should be crypto native
OKCoin
Banking crisis
Banking for the crypto industry
Tokenize everything?
About human imagination
Doing things right
How OKX does marketing
Is the bear market a good thing for crypto?
MPC: multi-party computation technology
Innovations road map
Retail vs institutional clients
Final thoughts
Reach out to Hong Fang (dm open!)
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.