The Wolf Den #739 - Bitcoin 2023: Triumphs, Tribulations And Trolls
A quick look at Bitcoin Miami... for better or for worse.
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In This Issue:
Bitcoin 2023: Triumphs, Tribulations And Trolls
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Biden On The War Path Against Crypto
PSYOPS
Metamask Misinformation
DeFi, ZK Snarks, Layer 2 | What Founders Fund Partner Joey Krug Invests In
Bitcoin 2023: Triumphs, Tribulations And Trolls
The 2023 Bitcoin Conference is a wrap. The meticulous planning and execution by the organizers that brought this colossal event to fruition is astonishing, but our collective conduct still leaves much to be desired. I suppose that's to be expected when 12,000 (reportedly) enthusiasts of 'magic internet money' converge in a single location.
To be clear, the smaller crowd (reportedly 1/3 of last year), lack of huge sponsors (who are fearful of marketing on American soil) and general malaise around the industry have nothing to do with the conference. They’re doing their best in the current environment.
Regardless, let's delve into some of the conference 'highlights' and 'lowlights.” We do not shy away from truth here.
To begin with, has anyone addressed the issues with El Salvador's venture into Bitcoin? I am aware of the complexities and sensitivity of this topic within the Bitcoin community, but what happened to the promised Bitcoin City? Or the volcano bond and the billion-dollar Bitcoin bond? Was this venture entirely contingent on Bitcoin's price increase? We haven’t heard much about El Salvador in the past two years.
Being absent from the conference, I might have missed some discussions. However, I sincerely doubt if the El Salvador situation was addressed adequately. I am not blaming El Salvador as I know their circumstances are far from simple, but an open conversation about our missteps could be beneficial. Currently, we see only selective highlights of the country's progress, which brings us to the first major conference announcement: Strike going global.
Jack Mallers announced that Strike is going global to combat the murky world of crypto exchanges, unregistered licensing regimes, and a plethora of different coins. As a part of this move, the Chicago-based Bitcoin provider is moving its headquarters from the United States to El Salvador.
I wholeheartedly support Strike's global mission, but this news initially caused me some frustration. I hope my apprehensions are unfounded and this proves to be the right decision, but it appears the most critical battle is unfolding here in the U.S., and we need all hands on deck.
Retreat is not victory.
I also have my doubts about the impact of this decision. We saw Strike added to Twitter ages ago, with fanfare and misplaced certainty that it would replace Western Union for global remittances. And then… crickets. Nobody used it.
Robert F. Kennedy Jr's speech was another key development. Accepting Bitcoin donations and endorsing Bitcoin at the conference, Kennedy Jr's stance was quite balanced. While Bitcoin maximalists might not appreciate his broader view, I believe this could be a healthier direction for his campaign and our nation.
While it's too early to predict the election outcome, my intuition suggests that Kennedy Jr's chances raging against the DNC machine are slim. Consequently, we need to cast our votes judiciously. That said, Kennedy Jr's campaign is likely to ensure Bitcoin and crypto remain talking points in the upcoming election, which is a significant achievement. Here is a quick review of his campaign pledges so far:
I will defend the right of self-custody of Bitcoin and other digital assets.
I will uphold the right to run a node at home.
I will defend use-neutral, industry-neutral regulation of energy.
I will ensure that the United States remains the global hub of Bitcoin and other cryptocurrencies... I will counter the government's increasing antipathy towards this industry.
I understand the need for regulation, and my administration will consult the right stakeholders to establish sensible jurisdiction.
I will consider granting pardons to individuals like Ross Ulbricht and will act swiftly in doing so.
“I am not here to give investment advice or to promote Bitcoin over other cryptocurrencies or currencies, that’s the job of the free market, not the president.”
Finally is the real elephant (or wizard) in the room - Eric Wall and Udi Wertheimer's audacious trolling of the conference. Their eccentric behavior is a response to the pushback they've received from the Bitcoin community. Despite the eccentricity, they shed light on Bitcoin's true essence.
Less toxicity and more tolerance might reduce such antics. Consider Eric’s statement from the conference:
“The reason that I got into Bitcoin was because it used to be the intellectual center of the world, but that is no longer the case... If Bitcoin is supposed to be safe against nation-state attacks and they aren't even safe against me and Udi messing around, then what is the point of this conference?”
It is time for the industry to reflect and address its shortcomings. We are ambitious, aiming to win over institutions, encourage countries to adopt Bitcoin, and reach the masses. Yet, we're often found bickering, making unattainable promises, and parroting the same talking points, neglecting our errors.
This conference might have been less impactful, but we can learn from it and strive to improve next time. On a brighter note, price did not crash as hard as in the past.
Despite this, we have achieved more than anyone could have anticipated, and we've done so in our unique way. Some eccentricity is necessary if we aim to disrupt global finance. The Bitcoin 2024 Conference in Nashville seems like the refreshing restart we need. Let's remain optimistic, remember our shared goals, and work towards a productive and memorable conference next year.
Bitcoin Thoughts And Analysis
Yawn.Bitcoin printed a small weekly candle, with no significant movement in either direction. Price remains ranging sideways with little indication of what move comes next. For now, the key support is the red 200 MA on the weekly, which many traders view as the determiner of the trend. We are still above it for now.
I hate to be redundant, but little has changed here. We wait.
One thing we know - the less volatile things are now, the bigger the next move is likely to be. Glassnode agrees, as you can see in this tweet.
Legacy Markets
Equity markets displayed uncertainty as President Joe Biden and Republican House Speaker Kevin McCarthy prepared for a crucial meeting regarding the ongoing debt-ceiling negotiations. The discussions have fluctuated between progress and deadlock, intensifying the urgency to strike a deal as Treasury Secretary Janet Yellen indicated that the chances of the US meeting its financial obligations by mid-June are "quite low". Futures on the S&P 500 and the Nasdaq 100 remained relatively flat on Monday.
However, Greek markets emerged as a beacon of positivity following Prime Minister Kyriakos Mitsotakis' electoral victory, suggesting a continuation of investment-friendly policies. Despite a seeming breakdown in the debt ceiling talks, there remains optimism for a quick revival, according to Sarah Hewin, senior economist at Standard Chartered Plc.
In business news, Micron Technology Inc.'s shares declined by 5.8% in pre-market trading after China announced the company's products had failed a cybersecurity review, causing a ripple effect on other chipmakers like Nvidia Corp. and Qualcomm Inc.
Meanwhile, Treasury bond yields decreased, led by two-year notes, and the prospects of a June interest-rate hike were reduced to just 25%. This shift follows indications from Federal Reserve Chair Jerome Powell and Minneapolis Fed Chief Neel Kashkari that they would support a pause in rate hikes.
Asian shares received a boost as investors concentrated on Biden's hints about ameliorating relations with Beijing, propelling Hong Kong stocks upwards by over 1%. In Greece, Mitsotakis' strong electoral support was interpreted as a sign that the nation might reclaim an investment-grade rating, a development that would occur 13 years after its default. Consequently, the Athens Stock Exchange General Index soared to its highest point in almost a decade, and the risk premium on Greek 10-year debt fell to its lowest in over a year.
Key events this week:
Eurozone consumer confidence, Monday
Fed presidents speaking are James Bullard, Raphael Bostic and Thomas Barkin, Monday
Eurozone S&P Global Eurozone Manufacturing & Services PMI, Tuesday
US new home sales, Tuesday
Dallas Fed President Lorie Logan speaks, Tuesday
Fed issues minutes of May 2-3 policy meeting, Wednesday
Bank of England Governor Andrew Bailey speaks, Wednesday
US initial jobless claims, GDP, Thursday
Interest rate decisions in Turkey, South Africa, Indonesia, South Korea, Thursday
Tokyo CPI, Friday
US consumer income, wholesale inventories, durable goods, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.2% as of 10 a.m. London time
S&P 500 futures rose 0.2%
Nasdaq 100 futures rose 0.2%
Futures on the Dow Jones Industrial Average rose 0.1%
The MSCI Asia Pacific Index rose 0.8%
The MSCI Emerging Markets Index rose 0.7%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0810
The Japanese yen rose 0.1% to 137.84 per dollar
The offshore yuan fell 0.2% to 7.0395 per dollar
The British pound was little changed at $1.2441
Cryptocurrencies
Bitcoin was little changed at $26,830.76
Ether rose 0.3% to $1,812.01
Bonds
The yield on 10-year Treasuries declined two basis points to 3.65%
Germany’s 10-year yield declined two basis points to 2.40%
Britain’s 10-year yield declined three basis points to 3.97%
Commodities
Brent crude rose 0.1% to $75.68 a barrel
Spot gold rose 0.2% to $1,981.03 an ounce
Biden On The War Path Against Crypto
While I expressed my criticisms of the Bitcoin conference, the actions of the Biden administration, in my view, have been far more disconcerting. The current apprehension revolves around the administration possibly inserting a clause or provision related to cryptocurrency in the debt ceiling deal. This tactic places us in an unfavorable light if we object, and if we don't, we are forced to accept whatever they propose. Should they aim to implement the wash sale rule on cryptocurrencies, it wouldn't necessarily be detrimental, given that cryptocurrencies have been an exception for the past decade. It's been beneficial not having wash sales apply to cryptocurrencies in the U.S., but it's unlikely this will remain the case indefinitely.
More disconcerting is the uptick in aggressive rhetoric from the administration. Reading Biden’s quote, it literally sounds like crypto traders are stealing food from the mouths of homeless children in the streets of our major cities.
PSYOPS
The inevitable occurred when a meme coin made its debut only to immediately crash. During the PSYOPS presale, investors experienced losses of up to 90% on their initial investments upon receiving the token. What makes this particular case even more disconcerting is the fact that PSYOPS was a relatively high-profile meme coin, indicating a broad impact. There are also rumors that the creator holds over 90% of the total supply, but I don't intend to spend my time investigating these claims. Investing in meme coins is akin to gambling – unless you have a complete understanding of the risks involved, it's best to steer clear. The PSYOPS debacle harmed many, and it won't be the last meme coin to do so. It's high time we refocus on fundamental principles.
Metamask Misinformation
There was a fleeting moment of panic when it seemed we had lost another wallet due to ill-advised decisions, but it turns out the fear, uncertainty, and doubt (FUD) was largely unfounded. MetaMask issued a statement, which refers to the purchase of products or services. It's standard practice for MetaMask to collect taxes on what they sell, so they are set to begin doing just that – it's fairly straightforward. Users who utilize MetaMask for storing, buying, or selling crypto can rest easy; this change will not impact them. In other words, it's business as usual.
DeFi, ZK Snarks, Layer 2 | What Founders Fund Partner Joey Krug Invests In
In this episode, I am joined by Joey Krug, a prominent figure in the cryptocurrency and blockchain industry who has recently joined Founder Fund, a VC with 11 billion AUM. We delve into his investment strategies and explore his insights on the upcoming investment narratives in the crypto space. From discussing DeFi and layer 2 projects to exploring topics like ZK snarks, gaming, and meme coins, Joey's extensive background in both building tech projects and investing makes this episode a must-watch for anyone interested in the field. Don't miss out on this opportunity!
In this episode with Joey Krug, we discussed:
Where is money flowing into crypto
Investing in the Bitcoin ecosystem
Layer 2
Does decentralization matter?
Meme coins
Killer apps for crypto
AI
From computer science to investments
FOMO cycle
Naratives for the next cycle
Lower valuations
Do the projects need tokens?
ZK snarks will be the hot topic
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.