Welcome to The Wolf Den! This is where I share the news, my ideas about the market, technical analysis, education and my random musings. The newsletter is released every weekday and is completely FREE. Subscribe!
Sign up for my other newsletter, THE DAILY CLOSE!
I built The Daily Close to give you the same institutional-grade indicators and signals that I use to trade the market on a daily basis. It's automatically generated and delivered to your inbox at the daily close everyday.
1 Week FREE for all subscribers
17% discount if you subscribe for a year
$25 a month, or $250 a year
In This Issue:
Ethereum Is Next
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Trade On OKX!
The Inflows Are Incoming
Fidelity Officially Joins The Fun
3AC Founders Owe $1.3 Billion
Prime Trust Is In Deep Sh**
FTX 2.0 NO
Can Institutions Push Bitcoin Price to $40,000? | Sandy Kaul & Sheldon The Sniper
Ethereum Is Next
Since last year's downturn, Bitcoin has seen significant positive developments. With its stellar performance, it remains at the forefront of the crypto race. Newly emerging Ordinals present an intriguing prospect for exploration, while Bitcoin continues to attract investors seeking alternative stores of value. On Wall Street, the race is on for a Bitcoin ETF approval. Recovering from a challenging 2022, Bitcoin has quickly embraced a bullish narrative, with the halving event still 293 days away.
I am bullish on Bitcoin.
While Bitcoin is achieving remarkable success, it would be unwise to overlook Ethereum, the second-largest crypto asset, quietly making impressive strides. Ethereum has had an equally strong year, and the periods when it garners less attention while Bitcoin dominates are my favorite times to focus on it. Investors may be flocking to Bitcoin for very valid reasons, but Ethereum is poised to be the next hotspot, and I plan to be part of it.
Since hitting a low in November 2022, Bitcoin has nearly doubled in price, with a current increase of approximately 94.5%. During the same period, Ethereum's price has risen by about 72.7%. Bitcoin's lead, which was undoubtedly boosted by BlackRock, was already outpacing Ethereum by over 10% prior to the BlackRock's involvement. However, Ethereum's ability to stage impressive comebacks is a known fact.
On the supply side, Ethereum has been fluctuating between inflation and deflation throughout the year, exceeding zero issuance by a remarkably narrow margin. I expect Ethereum to move rapidly into deflationary issuance and remain there for some time as DeFi activity ramps up. Notably, the amount of Ethereum staked now exceeds the amount held on centralized exchanges.
This trend can be partly attributed to a broad shift away from exchanges, but the demand for Ethereum staking has significantly surpassed projections. Even the most optimistic Ethereum supporters did not foresee nearly 20% of its supply being staked at this stage, with predictions of this figure reaching 25% by year's end. Despite a considerable drop in yield as staking demand has surged, the high staking figures provide a substantial boost to supply-demand economics in terms of price. Once buying pressure begins to mount, the bidding war will be nothing short of spectacular.
As for investor confidence in Ethereum, the image above is quite telling. Isn't it fascinating how just a few months ago, the crypto community was doubtful about the execution of the Shanghai upgrade and the subsequent rise in staking figures? Now, doubts are emerging about Ethereum's ability to outperform Bitcoin. Once the naysayers run out of speculative elements to hold onto, the only thing left to question is price action, which will ironically leave doubters in denial.
While it's impossible to predict when Ethereum will steal the limelight, it's clear that its time is imminent (not financial advice). Throughout the year, there have been minor rotations from Bitcoin to Ethereum to altcoins, but since hitting the lows, no major shift has occurred yet. Though it's early to expect institutions to file spot ETFs for Ethereum, in the world of crypto, nothing is off the table. As long as Ethereum remains relatively unnoticed in the crypto community and beyond, I'll hold onto my bullish outlook. Ethereum remains the undisputed leader in decentralized finance, comfortably reigning supreme in its domain.
And what better way to end this intro than sharing the Ethereum rainbow chart?
Enjoy the colors and buckle up - there are fun times ahead.
Bitcoin Thoughts And Analysis
Rather than share yet another one of my charts, here is a great twitter thread on the bullish state of Bitcoin from Crypto Birb, who will be joining me today on YouTube!
TLDR? The bull run is accelerating.
Altcoin Charts
Legacy Markets
Major US chipmakers, including Nvidia Corp. and Advanced Micro Devices Inc., experienced a significant premarket drop due to reports that US lawmakers are considering new restrictions on chip sales to China. Despite this development, it's unlikely to have a major impact on the stocks, which have surged due to the AI boom, according to Timothy Graf of State Street Bank and Trust Co.
In other market news, equity markets rose, with Europe's Stoxx 600 Index and Japan's Nikkei 225 making gains. UBS Group AG is preparing to cut more than half of Credit Suisse Group AG's workforce, and Goldman Sachs Group Inc. has upgraded its recommendation for struggling Swedish landlord SBB AB.
Thames Water, Britain's largest water supplier, is in discussions with officials regarding contingency plans including a temporary nationalization due to concerns over its more than £13 billion ($16.5 billion) debt.
Investors are awaiting insights from a central banking forum in Portugal, where key figures like the European Central Bank's Christine Lagarde and the Federal Reserve's Jerome Powell are due to speak. Although Treasury yields were broadly lower, robust US economic data indicates that the Fed has more tightening to do. The ECB has also signaled its intention to continue raising interest rates.
Today, the Fed is expected to release the results of its annual stress test of the banking industry. Analysts largely anticipate banks to pass, even as regulators consider tougher requirements following several collapses in the financial sector.
Key events this week:
US wholesale inventories, goods trade balance, Wednesday
Fed to unveil results of annual banking industry stress test, Wednesday
Policy panel with ECB’s Christine Lagarde, Fed Chair Jerome Powell, BOJ’s Kazuo Ueda and BOE’s Andrew Bailey, Wednesday
Eurozone economic confidence, consumer confidence, Thursday
US GDP, initial jobless claims, Thursday
Atlanta Fed President Rafael Bostic speaks, Thursday
China manufacturing PMI, non-manufacturing PMI, balance of payments, Friday
US personal income and spending, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.2% as of 5:12 a.m. New York time
Nasdaq 100 futures fell 0.5%
Futures on the Dow Jones Industrial Average were little changed
The Stoxx Europe 600 rose 0.5%
The MSCI World index rose 0.2%
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro was little changed at $1.0956
The British pound fell 0.3% to $1.2710
The Japanese yen was little changed at 144.01 per dollar
The offshore yuan fell 0.4% to 7.2533 per dollar
Cryptocurrencies
Bitcoin fell 1.3% to $30,251.99
Ether fell 1.8% to $1,858.05
Bonds
The yield on 10-year Treasuries declined two basis points to 3.74%
Germany’s 10-year yield declined two basis points to 2.33%
Britain’s 10-year yield declined three basis points to 4.34%
Commodities
West Texas Intermediate crude fell 0.5% to $67.39 a barrel
Gold futures fell 0.2% to $1,919 an ounce
The Inflows Are Incoming
Meltem Demirors appeared on CryptoTownHall yesterday morning to expand on the thoughts shared above in this thread. If you missed her on the show or want a refresher, the thread above is awesome. Meltem makes the point that if financial advisors begin to recommend just a 1% or 2% allocation to Bitcoin - for older generations - the difference would be massive. Retirees will be the last to onboard into the industry, but their impact will be the largest.
Trade On OKX!
The Wolf Den is proudly sponsored by OKX, the world’s second largest crypto exchange.
🔥 Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $60,000! Details in the image above.
With OKX, you can:
Trade hundreds of tokens and trading pairs on spot, margin and derivatives markets.
Manage your DeFi portfolio by connecting your Web3 wallet to organize all your decentralized assets in one place.
Create, buy and sell NFTs on their NFT Marketplace.
Discover top decentralized applications, including DeFi and blockchain gaming DApps.
Connect to DeFi with their Web3 wallet via their app or browser extension.
Earn crypto in their mining pools, take out crypto collateralized loans, and discover other ways to grow your crypto with OKX Earn.
Connect to the world-famous TradingView Platform and trade crypto directly with their supercharged charts.
OKX are also partners with Manchester City (3 Consecutive Premier League Titles), McLaren Racing, the Tribeca Film Festival and MORE.
🔥 SIGN UP HERE to show support for the FREE Wolf Den Newsletter!
Fidelity Officially Joins The Fun
Last week brought rumors, and this week provides the news. While we must wait for the official S-1 registration to confirm the details, we now have claims from more credible sources that an ETF filing is on the horizon. With the entry of Fidelity, the list of recent ETF applicants now totals six, featuring notable entities like BlackRock, Fidelity, Invesco, Wisdom Tree, Valkyrie, and Bitwise.
Reflecting on Fidelity's history in this realm, the investment manager made its initial ETF proposal in 2021, which was unfortunately rejected. However, Fidelity hasn't let this setback deter its progress in the crypto industry. They've made significant strides in facilitating Bitcoin investment for 401(k) participants, offering crypto trading services, and providing premier crypto research. Fidelity's continued support and involvement in the sector is a heartening sight.
3AC Founders Owe $1.3 Billion
Just last week, both OPNX and the 3AC team were promoting the launch of 3AC ventures with considerable enthusiasm. However, this week brings news that 3AC is facing an additional financial burden of $1.3 billion. Despite already facing insolvency with a staggering $3.5 billion deficit, the firm astonishingly managed to accumulate an extra $1.3 billion in debt post-insolvency - an astounding turn of events. Kyle Davies and Su Zhu, in a seemingly implausible move, managed to deepen their debt even after declaring insolvency. Such a scenario is so outlandish it would be difficult to fabricate.
The current whereabouts of these two individuals remain a mystery. However, there is some reassurance in knowing that the legal system is working to apprehend them. The cryptocurrency industry would undoubtedly be safer with these two potentially culpable parties facing justice.
Prime Trust Is In Deep Sh*t
I recently “broke” the entire story surrounding Prime Trust, which is hitting mainstream media today.
The story surrounding Prime Trust has been unfolding at a rapid pace, but a conclusion appears to be within sight. We have learned that Prime Trust lost access to its wallets in 2021, yet managed to secure funding over $100 million in 2022, and currently owes its customers $82 million. However, the complexity does not end there. Prime Trust served as one of the custodians for TUSD, and Binance has been providing fee-free trading for TUSD to its users. While many connections remain unclear, the truth is beginning to surface rapidly. I intend to delve deeper into this topic today on Crypto Town Hall.
FTX 2.0 NO
I am just going to leave this here.
While I am sure that FTX had great technology and could easily be revived, I stand strong on the opinion that this is a horrible idea. No three letters are more damaging to the crypto space than FTX (maybe SBF?), and putting this back out there for the world to see will negatively impact the space.
I hope creditors made whole, but without reviving this disaster.
Can Institutions Push Bitcoin Price to $40,000? | Sandy Kaul & Sheldon The Sniper
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.