HUGE NEWS! As you know, I have been providing completely free content with no sponsors for months. During this time, I have been searching for the perfect sponsor who aligns with my ethos and views on the space - a company that believes in both secure centralized products and offering decentralized features that can be used by everyone around the world. I have said no to more companies than I care to discuss.
Enter OKX!
We have been talking for MONTHS. Now, they have officially decided to come on board as a sponsor in a long term deal! As you likely know, they also have partnerships with the McLaren Formula 1 Team, Manchester City (Premier League Champions last 3 years), Tribeca Film Festival and more. They are the second largest exchange in the world by volume and have continued to expand and hire during this bear market, while others are failing and scaling back.
I will be telling you more about them in the coming months, will be traveling as a spokesperson to their events and more. I’m beyond excited to have this opportunity.
As for you… the best way to support my free content is to simply sign up, which you can do HERE. They’re offering quite a few incentives.
🔥 Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $10,000!
Thank you for your support! I truly can’t wait to see where we can take this partnership. I guess I will be wearing a lot of orange…
In This Issue:
The World’s Worst Investor
Bitcoin Thoughts And Analysis
Legacy Markets
This Cycle Is Different
ETH Is Becoming More Decentralized
AI Craze Isn’t Slowing
Ron DeSantis Is Pro Bitcoin
Top 10 Crypto | Charts And Market Analysis
The World’s ‘Worst’ Investor
Introducing Mr. Topsworth, an aspiring and resolute (fictional) investor, ready to put his earnings to work after a prosperous commencement to his career in the 1960s. With $10,000 and a vision, Mr. Topsworth's interest is solely in investing the S&P 500. However, he is plagued with a seemingly insurmountable obstacle: poor timing.
Mr. Topsworth grapples with investing confidently, invariably plunging his capital into the market at moments of inflated investor confidence and sky-high prices. After thoughtful consideration and significant trepidation, at the age of 28, he injects $10,000 into the S&P 500 in December 1968, coinciding with the decade's market apex, procuring 96 shares.
As the years roll on, his initial $10,000 investment dwindles, consumed by fears of inflation, war, and an oil crisis he fails to comprehend. Five years later, amidst tumultuous market fluctuations and constant overthinking, Mr. Topsworth accumulates another $10,000 and bravely re-enters the market in January 1973, once more at the decade's peak, acquiring 84 shares.
This cycle reoccurs each decade, with investments of:
$10,000 in August 1987 for 30 shares.
$10,000 in December 1999 for 7 shares.
$10,000 in October 2007 for 6 shares.
$10,000 in February 2020 for 3 shares.
Now at the ripe age of 83, Mr. Topsworth has invested a total of $60,000 in the market over six decades, invariably at the most inopportune times. Despite his disastrous timing, and despite his lack of understanding of global crises like COVID, sub-prime mortgages, dot-com bubbles, various wars, M&As, deregulation, and inflation, he has accumulated 226 shares of the S&P 500. Never having sold a single share, his current portfolio is valued at approximately $928,600 - an impressive feat for the arguably worst investor.
Over the past six decades, Mr. Topsworth lamented his 'subpar' performance, but today, with a staggering 1447.67% increase in his portfolio, he wears a proud smile. He ponders: the power of holding on as an investor is monumental. What if Mr. Topsworth had invested $15,000 instead of $10,000 during each round ($90,000 instead of $60,000)? His total investment would now be just under $1.4M, totaling 338.35 shares. Astounding!
Now, let's add some spice and bring in Ms. Bottomsworth, who boasts impeccable timing. Adopting Mr. Topsworth's strategy, she injects $10,000 into the S&P500 once each decade, each time at the market's trough. Fast forwarding through the math, her portfolio of 444 shares today marks a 2,900% increase, valued at approximately $1.8M. If Ms. Bottomsworth had invested $15,000 instead of $10,000, her portfolio would be worth roughly $2.75M.
Both of these characters are actually exceptional investors; despite the contrast in their timing - 'poor' or 'perfect' - the returns are self-evident. Thus, the moral of the tale: we may not be as unlucky as Mr. Topsworth or as lucky as Ms. Bottomsworth in timing the market, but we can achieve notable success if we let time perform its magic. Timing isn't the key, time is.
Bitcoin Thoughts And Analysis
As anticipated, price dropped after being rejected at the neckline of the head and shoulders. While nothing has fundamentally changed, this does strengthen the case for a bigger drop. I am still watching $25,212 like everyone else, but think that either we bounce above that or drop through to grab a ton of liquidity below. I doubt it bounces exactly at the line that everyone is watching, but we will see what happens.
The 100 MA (not a line I give much thought to) is now resistance. The weekly 200 MA (not shown) is still holding as support.
Legacy Markets
Key events this week:
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 was little changed as of 9:41 a.m. London time
S&P 500 futures gain 0.5%
Nasdaq 100 futures rose 1.6%
The MSCI Asia Pacific Index fell 0.8%
The MSCI Emerging Markets Index fell 0.6%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.2% to $1.0733
The Japanese yen was little changed at 139.43 per dollar
The offshore yuan fell 0.3% to 7.0845 per dollar
The British pound was little changed at $1.2373
Cryptocurrencies
Bitcoin fell 0.6% to $26,242.66
Ether fell 1.1% to $1,785.51
Bonds
The yield on 10-year Treasuries was little changed at 3.75%
Germany’s 10-year yield was little changed at 2.48%
Britain’s 10-year yield advanced eight basis points to 4.29%
Commodities
Brent crude fell 0.9% to $77.63 a barrel
Spot gold rose 0.4% to $1,964.36 an ounce
Legacy Markets
This Cycle Is Different
Glassnode has identified an intriguing pattern in the current Bitcoin cycle that deviates from the expected norm. The "balance on exchanges" indicator precisely measures the total Bitcoin stored in wallets on centralized exchanges. Contrary to the previous two cycles, when this figure increased leading up to the halving, the current cycle reveals a steady decrease. Previously, a rise in exchange balances was perceived as bullish, but the present trend may be indicative of a shift towards more secure storage methods. Regardless, we are merely at the dawn of a bull run and are 356 days away from the next halving. This gives ample time for either (A) a reversal of this metric or (B) a realization that this metric may no longer hold relevance. Times, indeed, are evolving.
ETH Is Becoming More Decentralized
While the phrase "rising ETH staking" often conjures images of dollar signs for investors, implying increased investor confidence and a reluctance to sell, this viewpoint overlooks a critical element - decentralization. Each new validator integrated into the Ethereum network signifies a step towards greater network resilience. This interconnected web continues to strengthen with each addition. Discover below the insights Coin Metric has gathered about ETH staking.
“Demand for staking ether (ETH) has never been higher. The entry queue has reached its highest level since the Beacon Chain’s genesis in December 2020, with a total of 64K validators eagerly waiting to participate. The surge of new validators has helped push the active validator count to a new high of 580K. This count has more than compensated for the short-lived dip in full exits at the onset of withdrawals.”
AI Craze Isn’t Slowing
NVDA shareholders are on cloud nine at the moment. The shares surged over 25% following yesterday's close, spurred by an earnings triumph, largely credited to advancements in AI. While the mining hashrate's exponential rise likely contributed to this success, AI seems to be the favored narrative currently. Regardless, 2023 has emerged as a highly prosperous year for the stock. While it remains uncertain whether AI will intersect with crypto in a substantial way, envisioning such a scenario suggests the potential to catalyze a phenomenal bull run. This is definitely a development to monitor closely.
Ron DeSantis Is Pro Bitcoin
During his glitchy presidential campaign launch on Twitter Spaces, Florida Governor Ron DeSantis pledged to protect Bitcoin if elected in the next year's presidential run. He suggested regulation of cryptocurrencies should be Congress's responsibility and voiced opposition to any potential ban. DeSantis, who has supported decentralized cryptocurrencies in the past, warned that the current administration's policies could potentially harm Bitcoin.
We now have candidates on both sides of the aisle that support Bitcoin (RFK, DeSantis) and vocally oppose it (Biden, Trump).
The real story here is that Bitcoin is a part of the platform of every single Presidential candidate. We have a come a long way.
Top 10 Crypto | Charts And Market Analysis
Scott Melker evaluates the chances of the US debt ceiling negotiation's failure and the potential default. What will it mean to Bitcoin & US dollar? Tune in every Wednesday at 9 am EST for the technical charts. market alpha and experts' opinions.
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.
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