The Wolf Den #734 - Live For Today Or Save For Tomorrow?
Enjoy your money now, or save for retirement?
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In This Issue:
Live For Today Or Save For Tomorrow?
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
The Numbers Behind Staking
Binance Leaves Canada, Eh?
Reflecting on Ethereum - Update
Paradigm Wants More COIN
Why Is Solana So Popular? | Anatoly Yakovenko
Live For Today Or Save For Tomorrow?
Financial advice can significantly differ based on the consulted individual. It's not just in finance where we see contradictory advice from 'experts', but also in diet, exercise, medicine, fashion, education, parenting, and many more fields. Essentially, the one thing we can rely on 'experts' for is their propensity to disagree.
In today's newsletter, I want to highlight a prominent contradiction that exists within personal finance. I like to call it the "Save More or Spend More Dilemma." As the title suggests, the quandary stems from the conflicting advice that we should both save more and spend more. So, what's the correct approach?
Let’s dive in.
Save More
The 'Save More' mindset contends that saving even as little as 1% more annually can substantially enhance one's life quality. When this 1% is judiciously invested and compounded in the market, it works wonders. Dreaming of an early retirement? Want to cover your child's college fees? Or perhaps you've set your heart on a dream house? All these are achievable. Gradually increasing your savings and investing it is a secure method of wealth accumulation. An option could be to commit to saving an extra 1% each time you receive a pay raise, the difference would be barely perceptible.
Spend More
Before discussing the 'Spend More' approach, let me clarify that I'm referring to purposeful and mindful spending. For instance, spending a bit extra each week to dine out during workdays may reclaim time otherwise spent cooking, cleaning, and shopping. Maybe an enriching experience or a short getaway is required to rejuvenate the mind, but the cost chips away at your savings. Proponents of this philosophy argue that money is meant to be spent and that prudent spending can have far-reaching benefits. Which philosophy do you adhere to?
It's quite clear that both philosophies hold merit to some degree. The goal of the 'Save More' group is to enable future spending, while the 'Spend More' group implies that you have saved and earned money to begin with. The key is balance, and anyone asserting they know precisely what's best is simply misguided. When facing financial decisions where the answer isn't immediately apparent, here are some questions I recommend considering:
Will I regret this?
Will I one day wish I had done more?
Is my current priority delayed gratification or instant gratification?
Are my basic needs met?
What about my family's?
Do I have a financial safety net?
How robust is it?
Can I strike a balance between saving and spending?
Remember, what's right for you might not suit someone else or even your future self. Approach each decision individually, but avoid over-analyzing them. I hope this introduction proves helpful, and I'm excited for the week ahead.
Bitcoin Thoughts And Analysis
When in doubt, zoom out.
While many obsess over low time frame charts, taking a look at the weekly shows just how little has changed over the past few weeks.
As you can see, price dropped to a low of around $25,700 last week, front running the $25,212 line that seemingly everybody (including me) has been talking about. Is that it? Is that enough? Hard to say, but we do know that when there is a key level, usually we see price bounce above it, which is what we have for now. Regardless, the target of the confirmed inverse head and shoulder still exists (low 40Ks) and we have no reason as of yet to believe the top is in. We still have a new series of higher highs and higher lows and a higher high (red checks) that was made on the larger time frames at $25,212.
Bitcoin is boring, but not yet bearish.
Altcoin Charts
A friend asked me to take a look at SUI, which is arguably the most hyped new project to hit the market outside of the memes.
This has a very clearly defined blue range, based on the highs after the Binance launch (not including the stupid first candle) and the subsequent lows. This gave us a potential double bottom with the EQ (equilibrium, mid range line) of the range as the neckline. A close above that dashed line would confirm the double bottom, with a target that exactly the top of the range.
Basically, you can play this at three defined levels - $1.02, $1.23 and 1.50.
A drop back to the range lows or a flip of the EQ are the moves to look for now.
Reminder, charts are just guesses, nobody know what will happen, risk management is all that actually matter. I do not own SUI.
Legacy Markets
Stocks and commodities have seen an increase as investors anticipate US politicians to negotiate a resolution to the ongoing debt-ceiling standoff, with President Joe Biden expressing optimism about a potential deal. S&P 500 futures rose by 0.4%, indicating a recovery from Friday's downturn. Other markets also leaned towards risk, with copper and mining shares experiencing gains, particularly in European stocks. South Africa's rand also saw a surge due to signs of easing tension with the US.
The US debt ceiling remains the primary concern for investors this week, with warnings about potential market instability and economic catastrophe if politicians fail to agree on raising the government's $31.4 trillion borrowing limit. Further discussions are scheduled for Tuesday between President Biden, House Speaker Kevin McCarthy, and other congressional leaders.
However, the political deadlock in Washington is only one among several risks causing investors to remain cautious, including potential recession, vulnerabilities in the banking system, and dashed hopes for a shift towards a more lenient monetary policy. Last week, the S&P 500 fell by 0.3%, marking the sixth consecutive week without a 1% move - the longest period of stagnation since late 2019.
In other markets, the Turkish lira fell as the country's presidential election appears set for a runoff vote in two weeks. Meanwhile, the Thai baht rose following a successful weekend election for pro-democracy parties.
Key events this week:
Eurozone industrial production, Monday
US cross-border investment, New York Fed Empire Manufacturing, Monday
Atlanta Fed’s Raphael Bostic speaks at his bank’s annual financial markets conference, Monday
China retail sales, industrial production, Tuesday
US retail sales, industrial production, business inventories, Tuesday
Fed speakers include Cleveland’s Loretta Mester, New York’s John Williams, Atlanta’s Raphael Bostic and Chicago’s Austan Goolsbee, Tuesday
Japan GDP, Wednesday
Eurozone CPI, Wednesday
US housing starts, Wednesday
BOE Governor Andrew Bailey speaks at the British Chamber of Commerce, Wednesday
US initial jobless claims, Conference Board leading index, existing home sales, Thursday
Japan CPI, Friday
ECB President Christine Lagarde participates in panel at Brazil central bank conference, Friday
New York Fed’s John Williams speaks at monetary policy research conference in Washington, and Fed Chair Jerome Powell and former chair Ben Bernanke to take part in panel discussion, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.3% as of 10:10 a.m. London time
S&P 500 futures rose 0.5%
Nasdaq 100 futures rose 0.5%
Futures on the Dow Jones Industrial Average rose 0.5%
The MSCI Asia Pacific Index rose 0.5%
The MSCI Emerging Markets Index rose 0.4%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro rose 0.1% to $1.0860
The Japanese yen fell 0.3% to 136.13 per dollar
The British pound rose 0.2% to $1.2481
Cryptocurrencies
Bitcoin rose 1.8% to $27,437.59
Ether rose 1.8% to $1,830.93
Bonds
The yield on 10-year Treasuries advanced one basis point to 3.47%
Germany’s 10-year yield advanced two basis points to 2.29%
Britain’s 10-year yield was little changed at 3.79%
Commodities
Brent crude was little changed
Spot gold rose 0.3% to $2,016.19 an ounce
The Numbers Behind Staking
When staking an asset, it's crucial to consider certain factors to accurately calculate the true yield. You need to ask: Is there supply inflation or deflation? And is the platform advertising APR or APY? Take for instance, if you're staking ETH on LIDO, the yield is marketed as 6.4% APR. However, this 6.4% figure doesn't include reinvested stETH (which I presume most of you won't be selling immediately), nor does it factor in ETH's current deflationary supply. According to Ultra Sound Money, based on the past 30 days, the ETH supply is projected to contract by 1.46% annually. The computations quickly become complicated, particularly when taxes come into play, but if we set taxes aside for the moment, the yield is actually closer to approximately 8%, subject to market fluctuations. I recommend this platform for a thorough calculation. As bond yields decrease, capital is expected to shift towards staking. If this appeals to you, seize the opportunity to benefit from the yield while it's available.
Binance Leaves Canada, Eh?
The U.S. isn't the only nation grappling with cryptocurrency regulation, but that doesn't make the following news any less disappointing. It's now confirmed that Binance will be retreating from the Canadian market, attributing their withdrawal to stringent regulatory guidance. What exacerbates this scenario is that Changpeng Zhao, a Canadian citizen, feels a strong connection to the country. This development is indeed unfortunate for Canadian cryptocurrency enthusiasts, but Binance assures that they will persist in their engagement with Canadian regulators on the matter. There might be a possibility for Binance to return in the future, given the right conditions are met
Reflecting On Ethereum - Update
Over the weekend, the crypto Twitterverse was buzzing with developers debating speculation about the Ethereum blockchain's apparent failure to confirm transactions. To reiterate from my coverage last Friday, the blockchain was still generating new blocks, and typical end users like us wouldn't have noticed any difference. The issue was that 'finality' (a technical term indicating confirmation) wasn't being achieved. This triggered some anxiety, but I want to reassure you that a solution is already in progress. The precise cause of this hiccup remains somewhat unclear, possibly for our benefit, but it's suspected to be a bug affecting certain clients. While the problem might recur, there's no need for alarm at this point. Continue utilizing ETH as usual. Moreover, for those staking ETH, based on our current understanding, you need not worry about slashing.
Paradigm Wants More COIN
Ever wished to possess the same assets as leading VC funds? Then keep up with the news, as most of this information is publicly available. What's noteworthy about Paradigm's choice to reinforce its position in Coinbase is that Paradigm's co-founder, Fred Ehrsam, is also a co-founder of Coinbase and currently serves on its board of directors. While I cannot ascertain what information Fred is privy to, and I am not implicating anyone of anything, I believe it's safe to say that Fred possesses an exceptional understanding of the company. Paradigm's investment was reported to be 810,000 shares, bought at an average price of $61 on Tuesday and Wednesday. While investing in Coinbase certainly carries risk, I still consider it a worthwhile, albeit small, position in my portfolio (this is not financial advice, do your own research)
Why Is Solana So Popular? | Anatoly Yakovenko
Get ready for an eye-opening interview with Anatoly Yakovenko, the founder of Solana. In this video, Anatoly talks about Saga, Solana's innovative new phone. He shares how big companies are hesitant about digital ownership, but Solana's web3 app store is leading the way. Discover why Solana is outshining Ethereum, and how memes play a role in mass adoption. The interview covers a range of topics, from AI to Saga adoption, stablecoins to CBDCs, and the multichain world, ending with an intriguing discussion on Bitcoin and religion. Don't miss out on this fascinating conversation!
In this episode with Anatoly, we discussed:
Solana is not dead
Solana phone
Big companies don’t like ideas of digital ownership
Solana web3 app store
Solana is more popular than Ethereum
Memes
Mass adoption
Do blockchains need tokens?
Helium move to Solana
Solana world camera
AI & crypto
Saga adoption and its future
Next cycle & stablecoins
CBDCs
Multichain world and interoperability
Bitcoin and religion
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.