The Wolf Den #729 - Frog Memes And The Torch Of Knowledge
Memes could bring the masses, so we need to guide them...
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In This Issue:
Frog Memes And The Torch Of Knowledge
Bitcoin Thoughts And Analysis
Legacy Markets
Highlights From Coinbase Shareholder Letter
Bitcoin Temporarily ‘Broke’
Ethereum Stakers Have Taken The Lead
How One Million People Lost $10 Billion | David Bailey On What Is Going On With GBTC
Frog Memes And The Torch Of Knowledge
The current crypto narrative is a perplexing mix of regional banks collapsing and meme coins soaring, creating a confusing landscape for both experienced investors and newcomers. It's a strange world where the banking sector's troubles bring attention to crypto, only for frog memes and other seemingly trivial assets to dominate the headlines and steal the spotlight. This scenario provides ample ammunition for regulators and legislators, who may use these developments as justification for increased scrutiny and regulation.
Just what we need, cough.
Conservative investors who were once unwilling to touch crypto with a ten-foot pole will likely now want an even longer one. They were already disinterested and unlikely to be swayed by the current state of the market. However, the influx of newcomers, even if attracted by the wrong reasons, should not be dismissed. It is our duty as part of the crypto community to guide them, educate them, and ensure they understand the underlying principles and potential of blockchain technology. If we fail to do so, we risk losing out on another bull run and further adoption of cryptocurrencies.
While it may be uncomfortable for some to read, meme coins serve a purpose in driving mass adoption. They act as an entry point for new users who might not otherwise be interested in cryptocurrencies. Many of us entered the crypto space seeking early investment in a coin for financial gain, even if it wasn't a meme coin. It's now our turn to pass on the torch of knowledge and help newcomers understand the broader implications and potential of the technology behind these digital assets.
It may be a hard pill to swallow, but meme coins don't need mass adoption; mass adoption needs meme coins. I become obsessed with the world of crypto when I started trading DOGE in 2017. I backed my way into understanding the potential of blockchain technology and cryptocurrencies through the original meme coin.
To further understand who might be best suited for the meme coin frenzy, we can categorize traders/investors into three groups: The Fortune Teller, Mr. Discipline, and The Technician. Each has their own strengths and weaknesses in navigating the volatile world of cryptocurrencies.
The Fortune Teller
This group's talent lies in their strong intuition for what lies ahead. Personally, I have no idea if $MONG, $GENSLER, $PEPE, $QUACK, or another meme coin will emerge next, but if this is your strength, now is your time to shine. The fortune teller understands crowd behavior well enough to foresee narratives but risks poor execution if emotions aren't managed. If this is you, trust your instincts.
Mr. Discipline
Mr. Discipline steers clear of meme coins not because they can't be profitable, but because he knows his advantage lies elsewhere. Mr. Discipline is confident that his regular Bitcoin and Ethereum purchases will triumph in the long run, so there's no point in deviating. Mr. Discipline is aware that managing emotions can be challenging, which is why he remains committed to his strategy. If this is you, resist temptation now.
The Technician
The technician is indifferent to the subject of their trading, focusing solely on charts. As long as a good setup presents itself, the technician will strike. Some technicians aim to accumulate Bitcoin, while others are so pure that they won't hold an asset overnight without a tight stop-loss in place. The technician is unconcerned with fundamentals and relies on patience and an uncanny ability to strike when the iron is hot. If this is you, trade the memes ONLY when the price is right.
Know yourself, your strengths and weaknesses, and act accordingly. And above all, don't take on too much risk with meme coins. The casino is always open, but there's no need to live there. If you know someone new to crypto because of meme coins, make sure to educate them about Bitcoin and the broader implications of blockchain technology - they'll thank you later.
Bitcoin Thoughts And Analysis
Meh. Another close right around $28,600, clearly a key level still on the chart. Bitcoin is sideways, waiting for clear direction and it has become exceedingly hard to find anything interesting in the chart to share with you.
$25,212 is still screaming for a retest, but I have no idea if we will get it
Legacy Markets
European stocks faced difficulty building on Friday's rebound as traders evaluated hawkish comments from policymakers and disappointing data from the region's largest economy. The Stoxx Europe 600 index edged higher, with energy stocks outperforming, while bond yields across Europe rose. US futures fluctuated, and the S&P 500 halted its longest losing streak since February. Concerns remain for investors, with the US payroll data suggesting that the Federal Reserve may keep interest rates higher for longer. Additionally, Treasury Secretary Janet Yellen warned of "no good options" for solving the debt limit stalemate without Congress raising the cap.
Key events this week:
US wholesale inventories, Monday
US President Joe Biden scheduled to meet with congressional leaders on debt limit, Tuesday
New York Fed President John Williams speaks to Economic Club of New York, Tuesday
US CPI, Wednesday
China PPI, CPI, Thursday
UK BOE rate decision, industrial production, GDP, Thursday
US PPI, initial jobless claims, Thursday
Group of Seven finance minister and central bank governors meet in Japan, Thursday
US University of Michigan consumer sentiment, Friday
Fed Governor Philip Jefferson and St. Louis Fed President James Bullard participate in panel discussion on monetary policy at Stanford University, Friday.
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.2% as of 9:49 a.m. London time
S&P 500 futures were little changed
Nasdaq 100 futures were little changed
Futures on the Dow Jones Industrial Average rose 0.1%
The MSCI Asia Pacific Index rose 0.5%
The MSCI Emerging Markets Index rose 0.7%
Currencies
The Bloomberg Dollar Spot Index fell 0.2%
The euro rose 0.3% to $1.1053
The Japanese yen fell 0.1% to 134.94 per dollar
The offshore yuan was little changed at 6.9209 per dollar
The British pound rose 0.1% to $1.2651
Cryptocurrencies
Bitcoin fell 3.8% to $27,860.43
Ether fell 3.6% to $1,850.67
Bonds
The yield on 10-year Treasuries was little changed at 3.44%
Germany’s 10-year yield advanced three basis points to 2.32%
Commodities
Brent crude rose 1.9% to $76.70 a barrel
Spot gold rose 0.3% to $2,022.39 an ounce
Highlights From Coinbase Shareholder Letter
I have compiled some highlights from Coinbase's First Quarter 2023 Shareholder letter below. The stock reacted positively, but the road ahead remains challenging. Here's the good, the bad, and the ugly:
While this first point may not significantly impact the stock's performance, it provides insight into what's being traded on Coinbase.
A statement in the earnings report falls somewhere between the 'bad-to-ugly' category. However, the positive aspect is that the concerns are short-term rather than long-term.
Another highlight is that "assets on platform (AOP) increased 62% Q/Q to $130 billion." This represents a significant win for Coinbase. Lastly, the report touches on Coinbase's controversial interest income. "Interest income grew 32% Q/Q to $241 million in Q1, of which $199 million was from USDC." Did you know that 32% of Coinbase's total net revenue comes from interest on USDC? The SEC likely disapproves, and removing this source of income would deal a massive blow to the company. Addressing this issue is undoubtedly a priority for Coinbase.
Bitcoin Temporarily ‘Broke’
Bitcoin is finally experiencing the consequences of allowing developers unrestricted 'creativity' on the network. On Sunday afternoon, an overflow of transactions seems to have resulted from the activity of Ordinal-based coins. The situation was further exacerbated as Pepe-related events attracted a massive influx of activity and enthusiasm, clogging the network. The congestion was so severe that Binance temporarily suspended withdrawals to alleviate network strain and prevent users from incurring exorbitant fees. Rough estimates indicate that over 400,000 pending transactions were awaiting confirmation on the Bitcoin blockchain, a record-breaking figure that is twice as high as during the 2018 and 2021 bull markets. Although Bitcoin maximalists may loathe this outcome, sometimes there's no such thing as bad publicity.
Ethereum Stakers Have Taken The Lead
The race to stake Ether and surpass withdrawals is nearing its conclusion. Since the merge on April 12, 2.32 million ETH has been deposited, while 2.28 million ETH has been withdrawn. With the short-term surge in withdrawals largely over, we can likely anticipate deposits consistently outpacing withdrawals from now on. At present, approximately 15% of the total ETH supply is staked, a figure that may continue to grow into the mid-20s, provided there are no fundamental or narrative changes. Lastly, ETH staking rewards currently range between a healthy 5% and 6%. If staking aligns with your strategy, the rewards are certainly appealing.
How One Million People Lost $10 Billion | David Bailey On What Is Going On With GBTC
David Bailey is the CEO of BTC Inc, and apparently, he is the man behind the largest Bitcoin conference - Bitcoin Miami. In the first part of this episode David and I discuss GBTC: what has happened and how to get money back. David has a large position invested in the fund and has started a community website to help investors get out. In the second part, we talk everything about Bitcoin, the conference, and the stupidity and greed of the crypto industry.
In this episode with David Bailey, we discussed:
GBTC - what’s going on
Genesis bankruptcy
Litigation
Grayscale involvement
David lost 100 Bitcoins to 3AC
Strategy for GBTC investors
Bitcoin Miami
Controversial speakers
Bitcoiners and the future of Bitcoin
The war on crypto
Greed and stupidity
Promo codes
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.