The Wolf Den #77 - BIG PLANS FOR THE WOAS
3 Reasons To Invest In Bitcoin Now
This is an incredibly thorough and well considered piece from Lyn Alden, laying out a reasonable case for buying Bitcoin. Most articles like this are written by Bitcoin maximalists and are rife with assumptions and hyperbole, which is not the case here. Lyn is risk averse and stayed away from Bitcoin for a very long time, only recently coming around to the opinion that it's an important (but small) part of a well diversified portfolio. She lays out a solid case for buying Bitcoin that is a must read.
Perverse Incentives
By Sahil Bloom
Moderna ($MRNA) has been in the news a lot recently - both for good (apparent progress on a vaccine) and bad (insiders selling stock) reasons. I'd like to examine what is going on here in the context of incentives. Incentives are everything, and we have some real perverse incentives at play here.
Let’s look at a simple story of these perverse incentives at play.
Imagine you are a biotech CEO and are developing a vaccine. It’s not going well and you are running out of cash. More money might help, right?
“Wow, Moderna played it well,” you muse.
So what do you do?
You issue an overly-optimistic, non-peer reviewed release on progress, of course. You need cash to continue working for the greater good, so it feels morally sound.
Now you sit and watch as your share price soars. You go on @CNBC and @business for your victory tour.
At market close, you announce a share offering. Naturally, this will be at your, now much higher, share price.
“We need the money to save the entire world,” you tell the markets.
You might even be inclined to sell some of your stock at this new share price. You deserve it.
You might even tell your buddy on the WH task-force that he should probably divest his shares, as it seems like a real conflict (it wasn’t at the lower share price). You sit in your chair and marvel at your CEO superpower - a strong balance sheet and some $ in your pocket!
So now we have a juiced balance sheet, a rich executive, and a public that is no closer to a cure.
“Modern capitalism is bloody brilliant,” you might say, “I think I’ll go play 18.”
Investing Tip - Pay Yourself First
This is pretty common financial advice, but most people ignore it. The typical approach to managing money involves paying bills, buying the stuff that you want, and then saving whatever happens to be left over. The problem is, with this approach there is almost never anything left to save.
In order to be effective at saving and building your nest egg, you need to make it a priority. Most of us are good at finding excuses, and there’s always a reason why saving isn’t convenient. But if you pay yourself first and then create a budget around the amount that you want to save or invest, you’ll find that it’s possible to make progress even when things seem tight.
When I was in my mid 20’s I was living on my own and getting by, but I didn’t have a lot left over after paying bills and necessities. I had no savings and did not start an IRA as I should have. This put me way behind. I was living in New York City, spending an incredible amount of money on meals and drinks with friends, even though I did not have that money to spend.
If I had paid myself first, in terms of contributing to an IRA and built my budget around what was left, I would have been able to make it work. Even if I had saved $100 a month, that would have been $1200 a year that would have compounded for the past two decades - tens of thousands in earnings by now.
Make saving your first priority, not your last. Put money away early and do not touch it - the simple secret to accumulating wealth.
Cryptocurrency Security Guide
Another good resource for some basic steps to take to secure your crypto from my friend Koroush AK. I cannot stress enough the importance of understanding the level of responsibility required to invest in crypto. You are your own bank. I will continue posting good pieces on security.
Will The Fed Start Buying Stocks?
A fall in the S&P 500 does not signal a recession is coming, it is the recession.
It was somewhat inevitable but still shocking to see that the Fed is soon likely to start buying individual equities. This is yet another extension of the government's practice of finding creative ways to bailout their cronies with little benefit to the average citizen. The government is printing endless money, practicing infinite quantitative easing, buying government AND corporate bonds and now will be buying stock.
Japan Heading Towards Digital Currency
The world is going digital. Paper money is soon to go the way of the dodo bird, a distant memory like the Sony Walkman or Trapper Keeper. Central Banks around the world continue to further explore digital currencies, making CBDCs (Central Bank Digital Currency) an inevitability.
Is this a good thing?
Yes... and no.
CBDCs will be good for Bitcoin. The entire world will be introduced to the idea of opening wallets and using digital currencies to transact. This will inevitably lead people to other cryptocurrencies, specifically Bitcoin. One of the main barriers to mainstream adoption is getting the average Joe to accept and use the technology. Their hands will be forced if CBDCs become the de facto standard for transacting.
The bad news is that privacy will be a distant memory. Cash leaves very little trace. Digital transactions will be easily trackable, and utilizing them will require citizens to give up more information to the government. They will know how much you spend, what you buy, where you buy it and when you did it.
That's bad.
Hopefully everyone will realize this and use their new found confidence in digital systems to buy and utilize Bitcoin.
The Wolf Of All Streets Podcast Ft. Thomas Bertani
Thomas Bertani, President of Poseidon Group, Founder of Eidoo and pNetwork, and CEO of Provable Things has been involved in nearly every facet of the blockchain space. What began as a curiosity in Bitcoin mining led to him controlling 5% of Bitcoin's hashrate. He has started several successful businesses that he still manages today with the intent of both expanding and connecting the blockchain space. His experiences as a developer, entrepreneur, consultant and educator culminated in him speaking at hundreds of conferences and teaching blockchain at some of the most prestigious institutions in the world.
Thomas and I further discuss Thomas's decision to drop out of college to become a lecturer, crypto currently being equivalent to Windows 95, the crypto community today versus in the past, yield farming and its inherent risk, voices calling for Bitcoin to go to zero, taking over 100+ flights in a year, Bitcoin dropping to $10 in 2012, and teaching blockchain all around the world.
LEAKED: FDIC Insured Checking On BlockCard!
I’ve been using the BlockCard VISA Debit Card for a few weeks now. It’s a great way buy things with crypto + to earn 6.38% crypto back on all purchases
BUT, I just logged into my account and noticed I could open a Bank Account. I went through the process and got an account + routing number in a few seconds. I reached out to the Ternio founders to see what’s up. They said they had silently opened up the feature just days ago and most BlockCard users don’t even know it’s available yet.
Big banks will flag your Bank account if they see crypto purchases or deposits being made (for obvious reasons). BlockCard Bank Accounts are crypto friendly, so if you’re trading on crypto exchanges you should use BlockCard as your withdraw option if you’re moving to USD. Plus, your USD deposits are FDIC Insured up to $250,000 like the big banks.
The founders also told me they are opening up an option to “buy crypto” directly with USD in the account. It’s not open yet, but I see the button in my dashboard. I would highly recommend using BlockCard Bank Accounts with your crypto exchange accounts. I’ll update everyone once the crypto purchases are available as well.
Bitcoin Thoughts And Analysis
There is basically nothing to say here... again. Even with the small movement up in the past day, Bitcoin still remains sideways in my mind, with the opportunities largely in the altcoin market.
MONTHLY CHART
We are beating a dead horse by looking at the monthly. $9,243. That's it. Let's see if we can close the month above that line. I did a thorough review of why this line is so important last week, so give that a look if you are interested!
WEEKLY CHART
Sideways between the blue lines. That's it. Longs look better above the top line, short looks better below the lower line.
DAILY CHART
I am watching the 50 MA (blue line) on this time frame. That seems to be the key resistance. Price has still been unable to flip it. A daily close above that line would start to make for a more bullish case. Otherwise... sideways.
4 HOUR CHART
Zooming in Bitcoin looks bullish, and has on lower time frames. We still have the breakout from the huge descending channel and the recent break through the red resistance. We can also see an increase in volume finally coming in a bit today.
That said, the 4 hour candle is 15 minutes from closing and presently looks like an ugly shooting star. More sideways coming?
Also note, RSI went from basically oversold all of the way to overbought with price only advancing $300. That is somewhat absurd, honestly. Tons of pressure required to barely move price. Nothing is happening here for now. Still watching the larger time frames (like weekly) to see if we can get a real move.
Altcoin Trades
We had some absolute monster trades last week, none bigger than SXP and PNT, which I shared multiple times. I also marked ERD as a likely SELL after riding it up for an 8X. It dropped over 30% from the top. That said, I bought back in at around 136 sats after selling at 178. It is back in the 170s now.
ENG, POWR, TROY, HOT and a number of others have all offered chances for great profit. They all still look good! COMP is the only one that looks a bit iffy. Today is a bit strange, with Bitcoin threatening a move and alts reacting disproportionately. We saw alts also take a bit of a dive yesterday, without Bitcoin doing much. For this reason, I skimmed profits off of the top of a number of positions and am proceeding with caution today.
LINK/BTC
Dips have always been for buying on LINK. The question is, will it dip further? Last week I identified this zone as a potential buy area, saying that I thought a healthy retrace was coming. That has happened and price is now in that zone. Further, we have some potential hidden bullish divergence with RSI at the moment, although we need to see a definitive elbow up on RSI to end the day. I would love to buy LINK even lower, but I am sclaing into a small position here in case this area holds and we never get that further retrace. If it ever returns to the pink line, I would go in EXTREMELY heavy.
MANA/BTC
MANA announced a Samsung partnership today and the market reacted. LOOK AT THAT VOLUME. That's why I am interested in trading this pair. Really simple here, and there's some risk because of that massive candle. I think that anything above 500 looks good here. Ideally, you want to see a daily close above that and then catch a daily retest, but there are a lot of ways to play this if you zoom in. Even safer would be a close above 541 or so, if you are looking for extra confirmation. My target is optimistic at 699.
SXP/BTC
I did almost a 3X on this in a week. Both of the entries from last week's newsletters are shown with red arrows. Monster. This is one of those coins that has fomo behind it, so I will continue to trade it until it gives me a reason not to. That's how this works - you do 2, 3, or 4 profitable trades, then it reverses, you take your one loss and move on.
I am interested again. I am looking for either a drop to the black support at 14636 or a break of the red line. A break of the red line should target the recent highs at the very least. 12298 is another potential entry, if it drops that far. Below that I become far less interested in this coin.
UTK/BTC
I had this setup cued up for the newsletter today. First, I was front run to add to this position in the green circle. Second, it bounced incredibly hard before I had a chance to share. At this point, anything above 715 seems like a gift. I love this company fundamentally, so I have a small stack put away in case it truly goes nuts.
What an absolute beast.
XTZ/BTC
I have been looking for another entry on this. Anything above the pink line is a resistance to support flip, so I bought a bit above that. Now price is breaking above the EQ (dashed center line) of the macro trading range once again. The safest entry is a break of the descending white line. That should target the top of the descending white line, with higher target being the top of the range. Here is the wider view.
Legacy Markets
Our stock trades are going nuts. CODX broke out and is putting in a massive green candle today. Trading stocks has been very profitable. Not many thing I am seeing immediately, but I like to keep the setups to my favorites without overwhelming you.
Side note, I am no longer short anything. My Tesla short stopped out (in profit) and I closed by Beyond Meat short even.
TUP (TUPPERWARE)
Pressing hard against resistance. I am looking to buy this on a retest of 7.98 as support if the resistance breaks. That's it simple. Targets are shown. 200 MA support price nicely as well.
XAG (SILVER)
Either you have been living under a rock, or you know that I am extremely bullish on silver. I have been posting setups in the newsletter for MONTHS, with the first entry at around $14. Price is currently testing the range highs. A break above this should send silver absolutely flying. At this point, if you can catch a dip to the key support at $18, that would be a miracle, but I don't see it retracing that much in the near future. This is a monthly chart - clear breakout of a multi year downtrend, beautiful wick down to test that descending black line as support and clear support at the range bottom, where we entered. Absolutely beautiful.
XAIR (BEYOND AIR INC.)
Simple trade. I am watching this descending wedge on the daily chart, statistically likely to break to the upside. Potential entries are a retest of the red 200 MA which just became support, a bounce off of the bottom black line (unlikely to happen) or a break of the top descending black line. This is the entry I am looking for and I have my alarm set. A break of that line would target the horizontal line at the top of the pattern.
My Recommended Platforms And Tools
Voyager
This is where I invest, commission-free. They now let you earn interest on your Bitcoin held in Voyager, so you can compound while trading. Not only that, you’ll get $25 in free BTC when you download & fund.
Rewards Code: Scott25
Phemex
This is where I trade with leverage and can also trade spot with no fees.
RoundlyX
I use RoundlyX to buy small amounts of Bitcoin every single day. They automatically round up my credit card purchases (with 10x multiplier) and invest them in crypto. Absolutely brilliant. Passively invest money you don’t need without a thought. Further, they have integrated with Voyager (see above) to offer commission-free purchases.
Rewards Code: WOLF
TexasWest Capital
This is where I spend my days teaching and learning! Our Discord group is a one stop shop for everything you need to learn to trade and control your emotions. Feel free to DM me on Twitter or respond to this email for questions.
Choice IRA by Kingdom Trust
Self-Directed IRA for Americans - allows you to invest in Bitcoin and any other asset for your retirement, with all of the tax benefits of a normal IRA.
Efani
Concierge Phone Service for Americans that protects your from SIM Swaps and other phone related hacks. I cannot stress enough how amazing this service is.
A new crypto rewards debit card that I have been testing and loving. I use both the virtual card online and the physical black card at actual retail (I will do this more after COVID!). They offer 6.38% cash back in crypto, which is really astounding.
BlockFi
BlockFI is where I personally store part of my long holdings. They offer up to 8.6% annually, compounding, depending on the asset (BTC, ETH or GUSD), which is much better than any legacy savings account or investment.
Follow me on Twitter at @scottmelker. This is where I am constantly updating my trades and sharing ideas.
Voyager
Voyager continues to push the limits of what’s possible with a crypto broker. In the past week alone, they have activated 2FA, added COMP and added Maker, the digital currency that can be used by anyone, anywhere, anytime. They are adding more coins this week, but the official news has not been announced!
Just a reminder that Voyager is publicly traded on the Canadian stock exchange, has NO TRADING FEES and has FDIC insurance on all dollar holdings. Nobody can compete.
Use code SCOTT25 when you download the app to get $25 in free Bitcoin when you fund your account.
Phemex
Phemex has just added TRX to their spot market, and the team informed me that ADA and ONT, two of the most talked about alts of late, should be coming very soon as well. Spot trading is available on Phemex with 0 trading fees under affordable membership plans, but I was also told that soon it will be possible to trade spot on Phemex under a standard fee-based model.
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.