The Wolf Den #781 - The Future Is Up For Grabs
Three companies want to control your financial future.
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In This Issue:
The Future Is Up For Grabs
Bitcoin Volatility, Coming Soon To A Chart Near You
Stocks Continue To Rise - Legacy Markets
Sponsored by MELD
Worldcoin’s Supply Structure Is Concerning
Vitalik’s Thoughts On Worldcoin
Japan Is All In On Web3
The Fed Wants You To Lose Your Job: Can Bitcoin Survive If They Break The Economy? | Macro Monday
The Future Is Up For Grabs
Elon Musk’s ‘X’ (formerly known as Twitter), Sam Altman’s Worldcoin, and Tim Cook’s Apple share a unique commonality: they are all contending for a stake in the future of finance. Beneath the surface, these juggernauts are locked in a captivating contest, with their pursuits being more aligned than they might seem at first glance.
Among the trio, Apple stands out as the most entrenched and revered entity. Recognized universally as a technological behemoth, Apple predominantly adheres to industry norms and operates with integrity. Distancing itself from the political fray, earning Wall Street's adoration, and boasting unmatched global influence, Apple is undeniably the frontrunner in this trio.
On the other hand, 'X' grapples with its evolving identity. Amidst transformative leadership shifts and organizational overhauls, it remains a magnet for contention. Regardless of Elon Musk's dedication to fostering open dialogue, 'X' navigates through tumultuous waters of transition.
Worldcoin is the enigma. Eliciting skepticism from the crypto-enthusiasts and applause from venture capitalists, it's a divisive entity. To some critics, it mirrors the dystopian undertones of George Orwell’s 1984. Meanwhile, its proponents eagerly embrace the promise of a universally accepted digital identity. Worldcoin's challenge lies in demonstrating its benevolent potential.
At first glance, these three entities might seem worlds apart. But let’s delve deeper into their intersecting ambitions.
Here is a quote I found from Jennifer Bailey, the VP of Apple Pay and Apple Wallet: “Savings helps our users get even more value out of their favorite Apple Card benefit — Daily Cash — while providing them with an easy way to save money every day. Our goal is to build tools that help users lead healthier financial lives, and building Savings into Apple Card in Wallet enables them to spend, send, and save Daily Cash directly and seamlessly — all from one place.”
Apple has chosen a more traditional path, yet its potential reach shouldn't be underestimated. Partnering with financial heavyweight Goldman Sachs and raking in billions within mere days speaks volumes about its capabilities. Especially in an era when trust in institutions is waning, Apple is setting its sights on leading the financial sector.
Turning to ‘X’, formerly known as Twitter, Elon Musk's ambitions extend beyond the conventional boundaries of social media. Beyond his playful engagements with Dogecoin, Musk has articulated a grander vision for ‘X’: to morph into an all-encompassing application where payments play a pivotal role. Historically, Twitter has dabbled with various payment features, but none have truly cemented their place yet. That being said, Musk has not laid to rest the idea of integrating payments and made some pretty grand statements in a recent interview.
“If done right, X would be serving people's financial needs to such a degree that over time it would become maybe half of the global financial system or some big number. I’m not sure what the number is, but pretty big. It would be by far the biggest financial institution, not in the way that people are used to thinking about banks - the most efficient database for the thing that is money, the least amount of fraud, everything is real-time, and if it involved money, everything is done in one way seamlessly.”
Elon Musk is renowned for charting his own course, undeterred by challenges. His success with PayPal is a testament to that determination, and it seems this drive to innovate within the financial system could carry over to ‘X.’ While ‘X’ remains shrouded in some mystery, it’s gearing up to be a significant player in the financial realm of the upcoming decade.
Switching gears, we have Worldcoin, a nascent project with audacious global aspirations. Despite its mission to be "accessible to everyone, irrespective of their country, background, or economic status," its terms of service sadly exclude certain countries. This isn't necessarily a shortcoming of Worldcoin itself but rather the complex regulatory landscapes they navigate. Moreover, Worldcoin's long-term vision remains somewhat ambiguous to me, with much of their current energy seemingly channeled towards their launch. Below is a commentary on Worldcoin from the whitepaper.
“Worldcoin was founded with the mission of creating a globally-inclusive identity and financial network, owned by the majority of humanity. If successful, Worldcoin could considerably increase economic opportunity, scale a reliable solution for distinguishing humans from AI online while preserving privacy, enable global democratic processes, and show a potential path to AI-funded UBI.”
Of the three, Worldcoin currently has the least established foothold, but it undoubtedly carries the boldest vision. As of now, I can't utilize the product in the U.S., and my skepticism towards the project persists. The overarching question remains: is Worldcoin's goal global dominance or global betterment? Regardless, it's evident that Worldcoin is vying for a significant role in shaping the monetary future — a sentiment many can resonate with and acknowledge.
Note - CryptoTownHall is trying to have Sam Altman on the show to explain Worldcoin and address some of the crypto space’s questions and concerns.
All three companies have a shared ambition: to influence the future landscape of finance. While their approaches differ considerably, their end objectives are surprisingly aligned. I believe there's room for each of them to thrive within their specific domains. However, I'm inclined to think the ultimate victor in this financial evolution might be none of the above. Instead, the laurels might go to Bitcoin.
Bitcoin has the best of what these three companies offer, minus the major downfalls.
Bitcoin lacks the centralization of these three and isn't tied down to an outside ruleset other than its own.
Wallstreet is opening up to Bitcoin and knows that Bitcoin will probably produce exceptional returns this coming decade.
Bitcoin meets most of the transactional needs of its users and already has a working system in place, ready to capture a large portion of the world’s value.
Bitcoin exists in real-time and has the benefits of a cryptocurrency that does not have to be concerned with fair distribution or biometrics. It already works.
While these companies offer commendable innovations, they aren't without their blind spots. To many, Bitcoin represents the beacon of hope for a reformed financial ecosystem, a sentiment yet to be fully grasped globally. The silver lining for us? We're privy to this information, positioning us favorably to seize opportunities before the tidal wave of institutional money rolls in.
The financial picture of the next decade will be unrecognizable from today's. And in this race to forecast the future, perhaps we, the underdogs, truly have the clearest vantage point.
Bitcoin Volatility, Coming Soon To A Chart Near You
Does it feel like Bitcoin has been stuck in a tiny range and has barely moved for weeks? Does it feel like there has been almost no volatility?
These feelings are supported by the fact that the weekly Bollinger Bands are currently the TIGHTEST THEY HAVE EVER BEEN. Pretty crazy. That signals that this is effectively the least volatile that Bitcoin has been in history. It also indicates that a huge move is coming, but does not give many clues to the direction. Also, the bands can continue to tighten and stay that way for many candles.
Either way, whenever these bands finally expand, the move should be explosive.
We have a confirmed breakdown of the red range, with price still holding the 50 MA as support. Very hard to determine what comes next. But when a range breaks down on increased volume, the down trend is usually starting, not ending. I would anticipate more downside, with RSI pushing to oversold.
Stocks Continue To Rise - Legacy Markets
Tuesday saw a cautious rise in equity markets due to upcoming company earnings and central bank meetings. The Stoxx Europe 600 and Nasdaq 100 index saw gains, but investors await signals from global policymakers, especially the Federal Reserve. Major companies like Microsoft and Alphabet Inc. are set to report earnings, adding to the market's uncertainty.
In the euro zone, declining loan demands cast doubt on interest rate hikes. In contrast, the US Dow Jones shows optimism, marking its longest winning streak in over six years. European company earnings were mixed; while Unilever and Remy Cointreau saw growth, others like Dassault Systemes SE faced declines.
Chinese economic support signals boosted Hong Kong tech shares. Key commodities and currencies, including the yuan and Australian dollar, strengthened. Meanwhile, Russia's attack on a Ukrainian port has driven wheat prices up.
Key events this week:
US Conf. Board consumer confidence, Tuesday
US new home sales, Wednesday
FOMC rate decision, Fed Chair Powell news conference, Wednesday
China industrial profits, Thursday
ECB rate decision, Thursday
US GDP, durable goods orders, initial jobless claims, wholesale inventories, Thursday
Japan Tokyo CPI, Friday
BOJ rate decision, Friday
Eurozone economic confidence, consumer confidence, Friday
US consumer income, employment cost index, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.2% as of 10:24 a.m. London time
S&P 500 futures rose 0.1%
Nasdaq 100 futures rose 0.4%
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index rose 1.3%
The MSCI Emerging Markets Index rose 1.7%
Currencies
The Bloomberg Dollar Spot Index fell 0.1%
The euro was little changed at $1.1055
The Japanese yen was little changed at 141.36 per dollar
The offshore yuan rose 0.6% to 7.1426 per dollar
The British pound rose 0.1% to $1.2843
Cryptocurrencies
Bitcoin rose 0.2% to $29,189
Ether rose 0.3% to $1,855.61
Bonds
The yield on 10-year Treasuries advanced one basis point to 3.89%
Germany’s 10-year yield advanced two basis points to 2.44%
Britain’s 10-year yield was little changed at 4.26%
Commodities
Brent crude fell 0.3% to $82.46 a barrel
Spot gold rose 0.4% to $1,963.07 an ounce
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Worldcoin’s Supply Structure Is Concerning
Worldcoin certainly made waves with its recent launch, yet there are elements of its token distribution that raise eyebrows. From the information available, Worldcoin's initial supply is set at a massive 10 billion tokens. However, only 143 million Worldcoins, or 1.43% of the entire supply, were made available at its debut. This implies a staggering 98.57% of the token supply is yet to be introduced, a factor that could significantly dilute the token's value in the future.
While the unique mechanism of requiring human scans to unlock and increase the supply is intriguing, debuting with such a tiny fraction of the total supply can lead to complications in the future. The central question is whether Worldcoin's price can grow robustly enough to counteract the dilution brought about by the remaining 98.57% of the supply. It's a monumental challenge.
Furthermore, it's pivotal to note that Worldcoin is off-limits for U.S. residents due to regulatory barriers, a fact that could significantly impede its potential for widespread adoption and growth.
If Sam Altman appears on CryptoTownHall, this will be an important point that we will try and have him discuss.
Vitalik’s Thoughts On Worldcoin
Vitalik, as usual, doesn't distill his thoughts into a quick soundbite. To give you a brief insight, Worldcoin operates on Optimism, a layer 2 solution for Ethereum. If Worldcoin gains traction, this could bode well for the Ethereum network. In his detailed blog post, Vitalik dives deep into complex topics like privacy, accessibility, centralization, and security — areas he's far more adept at discussing than most. For those with a technical inclination and an interest in Worldcoin, I'd suggest giving his blog a read. One particular image stands out, offering a concise summary of Vitalik's stance, striking a balanced perspective.
Japan Is All In On Web3
Japanese Prime Minister Fumio Kishida emphasized Japan's dedication to nurturing the Web3 industry at the WebX conference in Tokyo. He described Web3 as the "new form of capitalism" and recognized its potential for spurring innovation and resolving societal issues. On the same day, Binance's CEO announced the launch of its services on a new Japanese platform next year. The event underscored Japan's initiative in setting up strict regulations to protect investors while supporting Web3's growth. Koichi Hagiuda of Japan’s Liberal Democratic party mentioned the "Start Next Innovator" project, which aims to bolster Japanese Web3 businesses by sending entrepreneurs and students to Silicon Valley.
Japan is heading in the right direction.
The Fed Wants You To Lose Your Job: Can Bitcoin Survive If They Break The Economy? | Macro Monday
The Federal Reserve is on the cusp of making a significant decision regarding a potential hike in interest rates. Peter Tchir, Mike McGlone, and Dave Weisberger delve into the potential ramifications of this decision and its impacts on the Bitcoin price and the overall cryptocurrency market.
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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.