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!
Real Vision was kind enough to offer my readers a sweet deal on their membership plans if you sign up using the link HERE. These deals will only last until July 31st, so if you are thinking about a membership, now is the time to act!
Most of you probably already know what Real Vision is, but in case you don’t, I can’t say enough good things about what the platform is doing. Raoul Pal and his team are some of the best in the world when it comes to macro-finance, hands down. Real experts break down the complex world of finance, business, crypto, and the global economy, with real in-depth analysis - Real Vision.
That’s just a sneak peek, to see the entire deal, click HERE.
In This Issue:
Is The Future Of Bitcoin Tax Free?
Bitcoin Bounces From Range Lows
Altcoins Are Heating Up!
Is This The Top Of Tech? Legacy Market Wrap
DeFi On The Ropes
Cathie Wood Is High On Hopium
Tesla Didn’t Sell Bitcoin
Bitcoin's Base Case Is $625K, Bull Case: $1,500,000 | Is Cathie Wood Sane? | Mark Yusko & Chris Inks
Is The Future Of Bitcoin Tax Free?
The intricate world of global investing is intriguing. While we might all purchase an asset at the same price, when it's time to cash out, the tax implications differ, resulting in varied returns for each investor.
Recently, countries like Switzerland, Germany, Portugal, and Singapore have done away with long-term capital gains tax on crypto. On the flip side, countries like India, Austria, Norway, Denmark, France, and the U.S. have less lenient tax structures.
Over time, astute investors have realized they can sidestep these taxes by becoming residents of tax-friendly nations. This move, however, entails significant lifestyle alterations. For someone like me, the idea of relocating and potentially learning a new language just for tax benefits seems like an oversimplification. Further, it is effectively impossible without giving up citizenship and paying penalties for many years to come. So, rest assured, I'll be right here with many of you, fulfilling my tax obligations.
In the U.S., the tax bracket an investor falls into when they sell determines the taxes due. This is influenced by a myriad of factors: income, marital status, and crucially, how long the assets were retained. I'm no tax expert, so I won't delve deeper. But if taxes haven't been on your radar, perhaps it's time they were.
Now, for a jaw-dropping revelation: Imagine a scenario where U.S. citizens don't have to pay any taxes on their crypto sales. Sounds implausible? Hold onto your hats, because this could potentially become reality in the upcoming election.
U.S. Democratic presidential hopeful, Robert F. Kennedy Jr., has put forth a proposal allowing individuals to exchange Bitcoin for USD without the shackles of capital gains tax. Additionally, there's a bonus: the USD received would be partially Bitcoin-backed. Astonishing, right?
Here's a summarized version of RFK's statement, which is definitely worth your attention:
I want to talk about two additional reforms that we have given a lot of thought to… The Kennedy administration will exempt the conversion of Bitcoin to the US dollar from capital gains taxes.
There are downsides to this policy, I want to be explicit about this, this policy will do something that is inconsistent with many of the other policy objections in my administration, which will give a windfall to the early investors in Bitcoin.
However, the benefits of this policy are so great to our country that they dwarf the disadvantages. The benefits include facilitating innovations, spurring investments, ensuring citizen privacy, and incentivizing ventures to grow their business and keep tech jobs in the U.S. rather than elsewhere.
And this is the rationale:
One of the historical factors we looked at was the very controversial policy of exempting e-commerce from taxes. People said that would benefit certain wealthy people, but what really happened is companies like eBay, PayPal, and Amazon remained in the U.S., and we attracted engineering talent from all over the world to grow that industry. Silicon Valley is largely a result of that policy. Exempting Bitcoin from exchange taxes is almost a perfect analogy.
And the final point:
Secondly, the Kennedy administration will begin to back the U.S. dollar with real finite assets such as gold, silver, platinum, and Bitcoin, which is the world's hardest liquid asset. This will include U.S. treasury bills, notes, and bonds. My plan would be to start very, very small, perhaps 1% of issued T-bills would be backed by hard currency and then depending on the outcome, we would increase that annually. This will ironically allow us to use Bitcoin to save the U.S. dollar.
Isn't it astounding? RFK's proposal would undoubtedly be a windfall for early investors. But if we look beyond individual gains, the broader industry benefits would be transformative. The prospect of eradicating taxes on Bitcoin could significantly influence our nation's energy future. Moreover, innovation in this sector would skyrocket, making the U.S. a magnet for global talent and businesses seeking these tax advantages.
This move would undeniably elevate the U.S. crypto industry to new heights.
However, no policy change comes without potential pitfalls, some of which might only manifest in the long run. From my perspective, RFK's proposal seems feasible. The IRS doesn't necessarily need to garner extra revenue from crypto enthusiasts; there are larger fish to fry. As for pegging the U.S. dollar to finite assets like Bitcoin, that's a debate best left to financial experts. While naysayers are quick to dismiss the possibility, beginning with a modest reserve seems within reach.
What's exciting is the timing. With the election still over a year away, there's ample time for pro-crypto contenders to fine-tune their policies, or introduce even more innovative ideas, especially if RFK Jr. faces declining popularity. This announcement likely marks just the beginning of crypto discussions among presidential candidates. Competing candidates will now be pressed to match or even surpass RFK Jr.'s crypto-friendly proposal.
Before concluding, it's essential to note that RFK Jr. doesn't exclusively champion Bitcoin. Though his recent remarks focused on 'Bitcoin,' in the past, he's voiced support for the broader cryptocurrency realm. Check out his previous statements for a fuller picture.
“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 will defend the right of self-custody of Bitcoin and other digital assets.”
“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.”
The 2024 election promises to be a thrilling ride for crypto enthusiasts. With the current momentum, the future seems promising. So, grab your popcorn; we're in for quite the spectacle.
Side note - I will be interviewing RFK Jr. on twitter spaces next Wednesday at 2 PM EST.
Bitcoin Bounces From Range Lows
Bitcoin is boring, giving altcoins a bit of time to finally shine. I like that Bitcoin bounced from the local range lows and that RSI bounced at 50, so I do believe the bearish divergence has played out. Back to the top of the range?
For now, nothing to do but wait to see which way we break from this range.
Altcoins Are Heating Up!
Altcoins are moving across the board, which is encouraging to see. In past cycles, the dream scenario for altcoins was always for Bitcoin to move up, then consolidate sideways. We saw that happen for the past month, but altcoins have lagged. Let’s hope Bitcoin stays here for a bit and that confidence in the altcoin market increases.
I shared this idea a few days ago and we are getting the breakout I was looking for. The bigger trade is a break above the range highs around $9.9. which would be the immediate first target from the breakout through the blue descending line.
Above $9.90 all bets are off and sky is the limit.
I am currently trading Injective and have been holding some through the bear market.
This is a smaller cap coin than I usually share, but it is something I have looked into on the fundamental side and that I have actually bought myself, so I figured I would share the chart. I purchased this on a DEX and OTC, not on a centralized exchange because it is not available in the US. You can trade it on Bittrex and Crypto.com globally. Also, to be clear, I first bought this below .003 and added around .005 a few days ago.
The chart looks great, with a clean breakout through the blue resistance, a retest of support around .0047 and now a move away.
There is minimal volume on this chart and coin, so I would keep that in mind. This is a small position, but I am targeting the highs around .019 eventually, which is a 3x from here. I will start taking profit in small amounts at the red 200 MA and various levels above, if we get there.
Is This The Top Of Tech? Legacy Market Wrap
Tech giants' disappointing earnings are casting doubts on the Nasdaq 100's impressive performance during the first half of the year. Futures on the Nasdaq 100 experienced a 0.7% dip after Netflix missed sales expectations, and Tesla faced reduced profitability in Q2, indicating challenges to the electric vehicle maker's margins. This year saw the Nasdaq spike by 45%, driven by heightened enthusiasm for artificial intelligence, significantly outpacing the S&P 500’s 19% ascent. However, Aegon Asset Management's Cameron McCrimmon warns that the substantial tech stock returns might be exaggerated and could foreshadow a downturn.
In Europe, tech stocks took a hit after Taiwan Semiconductor Manufacturing Co. adjusted its outlook. Conversely, Anglo American Plc's positive Q2 results lifted the primary European equity index. Amidst speculation on the implications of relaxed inflation for the Federal Reserve's rate-adjustment trajectory, U.S. Treasuries have momentarily halted their rally. Another point of interest has been the significant rise in wheat prices, the largest in a decade, following Russia's warning related to ships en route to Ukraine, hinting at a potential inflationary impact.
Furthermore, the U.S. dollar saw a decline relative to its G10 peers. In contrast, after the People’s Bank of China's intervention, the offshore yuan climbed by 0.7% against the dollar, marking the best Asian currency performance. Lastly, despite China's efforts, including rate cuts and easing tech firm regulations, the nation struggles to drive substantial growth in its economy, which stands as the second-largest globally.
Key events this week:
US initial jobless claims, existing home sales, Conf. Board leading index, Thursday
Japan CPI, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.2% as of 6:06 a.m. New York time
Nasdaq 100 futures fell 0.7%
Futures on the Dow Jones Industrial Average were little changed
The Stoxx Europe 600 rose 0.2%
The MSCI World index was little changed
Currencies
The Bloomberg Dollar Spot Index fell 0.1%
The euro was little changed at $1.1208
The British pound fell 0.2% to $1.2911
The Japanese yen was little changed at 139.53 per dollar
Cryptocurrencies
Bitcoin rose 1.3% to $30,367.09
Ether rose 1.1% to $1,920.36
Bonds
The yield on 10-year Treasuries advanced four basis points to 3.79%
Germany’s 10-year yield was little changed at 2.44%
Britain’s 10-year yield was little changed at 4.22%
Commodities
West Texas Intermediate crude rose 0.1% to $75.46 a barrel
Gold futures rose 0.2% to $2,022.70 an ounce
🔥MELD is a next-gen multi-chain crypto wallet for a new age of modern money and digital assets.
🔥 On MELD, you can get a fiat loan backed by crypto & keep your keys.
🔥 If you haven’t already, it’s time you check out MELD, the Sponsor of The Wolf Den.
🔥 MELD is the WEB3 BANKING STACK
DeFi On The Ropes
While recent developments have been positive for the crypto community, it's crucial not to become complacent. Currently, some members of the U.S. Senate are pushing a bill that, if passed, could severely hinder DeFi operations within the country. Titled the "Crypto-Asset National Security Enhancement Act of 2023," this legislation aims to implement banking-style regulations on DeFi platforms, compelling prominent DeFi investors to uphold AML requirements.
What's intriguing about this proposal isn't just its content, but its backers. One might anticipate such a bill to be championed primarily by traditional crypto skeptics. Surprisingly, among its supporters are several renowned crypto proponents, which adds a twist to the narrative. The bill enjoys bipartisan support, with Senators Warren, Marshall, Lummis, and Gillibrand endorsing it. It also proposes the collaborative involvement of major entities such as the US Treasury, SEC, CFTC, and FinCEN. Should this legislation become law, it could drastically alter the very essence of DeFi as we know it.
Cathie Wood Is High On Hopium
I recently hosted a live stream (link provided below) with Mark Yusko where we delved into Cathie Wood's bold predictions. The takeaway? These predictions might not be as far-fetched as they seem. Mark Yusko posits that if one were to value Bitcoin in a manner akin to gold, then Cathie Wood's base case of $625,000 becomes plausible. Moreover, if Bitcoin is deemed the successor to gold or "gold 2.0," then her optimistic estimate of $1.5 million could well be within reach.
This is Cathie’s condensed reasoning: One reason our confidence has increased in the bull case is because of the regional bank crisis in March. Regional banks went bankrupt and Bitcoin rallied, it was a flight to safety and an insurance policy against the confiscation of wealth and a hedge against counterparty risk, ie. deflation.
Critics can laugh all they want at such predictions, but if Cathie Wood is even a little right, she is going to get the last laugh. I don’t plan on underestimating her or the ARK team.
Tesla Didn’t Sell Bitcoin
Tesla has held onto its Bitcoin, contrary to some speculations. While this isn't particularly thrilling news, a sale by Tesla could have potentially caused a minor dip in the market. The narrative might take a fascinating turn if Tesla opts to buy back the Bitcoin it previously offloaded. For context, Tesla divested 75% of its Bitcoin holdings in the previous year.
Bitcoin's Base Case Is $625K, Bull Case: $1,500,000 | Is Cathie Wood Sane? | Mark Yusko & Chris Inks
Cathie Wood thinks Bitcoin can reach $1.5 million. We surely want to believe, but what do my guests think about it? Join Mark Yusko & Chris Inks for my morning live stream!
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
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.