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In This Issue:
Catching Up
Bitcoin Flatlines
China Fights Property Slump
Coinbase Finds Support From Legal Scholars
Dumb Money
Fan Favorite Preston Pysh On The Podcast!
Catching Up
I'm always taken aback by how a short hiatus from the cryptocurrency world can make a week-long vacation feel like a lifetime. During my absence, the crypto community saw its leading antagonist imprisoned, the SEC weighed in on the latest batch of ETF proposals, and one of the globe's dominant fintech firms launched its own stablecoin. And who would've guessed? Former president Donald Trump was revealed to own Ethereum, XRP's price momentarily surged to $50 due to a glitch, and even with encouraging numbers from Coinbase's earnings report, its stock plummeted 26.6% from its peak.
History is behind us, but I'd like to briefly revisit these pivotal events, as I suspect they'll be front and center in the near future. Let’s begin with SBF's incarceration. While this move was anticipated, its implications for the sector are profound. The incarceration of SBF, at least momentarily, conveys a stern message, but true justice awaits the trial set for October 2nd. More than anything, it puts to bed the absurd tin foil hat theories that SBF will never see jail time.
Next up is the SEC's postponement of ARK’s Bitcoin ETF proposal. To fill you in, in the days leading to the SEC's decision, most market experts, Cathie Wood included, foresaw this delay. Therefore, the market's indifference. My interpretation? The SEC appears reluctant to offer concessions to the crypto sector. Below is a snippet from the SEC's rationale for the delay. The gist is that the SEC believes that the CBOE has not met the requirements for listing such a financial product.
The Commission noted, “as with earlier proposals, the Commission believes the current data doesn't prove that the bitcoin market possesses inherent resistance to deceit and exploitation.” Intriguingly, the SEC questions the integrity of the spot market but swiftly approves leveraged Bitcoin futures ETFs. Their approach seems as inconsistent as a nightclub bouncer's admission criteria. The SEC has its own playbook, and they are going to do whatever they want until lawmakers make a real effort to stop them or we see regime change.
Now we turn our attention to PYUSD, a contender for the most awkwardly named coin in history. If you don’t see why the name is awkward, just look closer.
To be succinct, the world of crypto doesn't require another stablecoin. My assessment of PYUSD is straightforward: it's likely more centralized than USDC or USDT. Its key selling point? Its affiliation with a brand as recognizable as PayPal. A few years back, the mere notion of PayPal unveiling a stablecoin would have been met with chuckles. Today? It's just another headline.
Other notable tidbits include Donald Trump's Ethereum holdings, valued between $250K to $500K, from licensing his image for 44,000 NFT trading cards. I doubt he grasps the concept of ETH and we know that he is viciously anti-crypto. These are probably just royalties from his NFT collection, but that cannot be 100% confirmed.
Regarding XRP, a fleeting spike to $50 was observed on Gemini due to a malfunction, which, predictably, didn't last or influence the market.
Lastly, despite positive feedback on Coinbase's earnings, its stock price keeps descending, now down 26.6% from its zenith. Fundamentally, Coinbase seems to be mirroring the sentiments of the broader crypto and tech sectors, but I remain bullish on COIN (invest at your discretion).
While other developments are noteworthy, the crypto market's primary focus is undeniably the forthcoming ETF verdict. Political figures embracing Bitcoin, institutions relaxing their crypto stances, and tech giants rolling out new offerings fortify the sector, but the ETF green light is the accelerant everyone is eyeing.
Investing is often a waiting game. 99.9% of the time, it's a test of patience. But endure that, and the occasional 0.1% moments bring monumental rewards. Excited to be back in the fray. Here's to a stellar week ahead!
Bitcoin Flatlines
Do you recognize the chart above? I took a week off, came back, and Bitcoin price was effectively exactly the same as when I left.
Bitcoin volatility is at historic lows, with price trading in a tight range. There is little cause for concern at the moment, just another dead summer while everyone awaits some sort of catalyst or news to spark a significant move in either direction.
China Fights Property Slump
Stocks and bonds experienced a rise due to China's proactive steps to counter its property slump, boosting global market confidence.
US and European futures witnessed a surge, whereas bond yields marginally decreased after China's banking regulator revealed the establishment of a task force to assess risks at Zhongzhi Enterprise Group Co. This significant private wealth manager had defaulted on payment for certain investment products. Additionally, Country Garden Holdings Co., previously China’s leading private developer, is looking to extend a maturing bond, heightening the risk of potential defaults.
Andrew Bell of Witan Investment Trust commented on the significant financial impact, emphasizing China's intent to control it and highlighting the limited risk of global contagion. However, he advised market caution.
Shares in mainland China fell, with Hong Kong’s Hang Seng Index and the CSI 300 Index also experiencing declines. European government bonds yields dropped slightly, while Treasury yields remained steady, given speculations about the Federal Reserve's monetary policy.
Andrew Bell pointed out the equity market's recent rally, emphasizing the anticipation surrounding potential peaks in interest rates. The yen maintained its stability against the dollar, and the ruble fell due to the ongoing conflict in Ukraine and consequent international sanctions.
Key events this week:
China medium-term lending, retail sales, industrial production, fixed-asset investment, FX net settlement, Tuesday
Japan industrial production, GDP, Tuesday
UK jobless claims, unemployment, Tuesday
US retail sales, empire manufacturing, business inventories, cross-border investment, Tuesday
Reserve Bank of Australia policy minutes, Tuesday
Federal Reserve Bank of Minneapolis President Neel Kashkari speaks, Tuesday
China property prices, Wednesday
Eurozone industrial production, GDP, Wednesday
UK CPI, Wednesday
US FOMC minutes, housing starts, industrial production, Wednesday
US initial jobless claims, US Conf. Board leading index, Thursday
Eurozone CPI, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.2% as of 10:06 a.m. London time
S&P 500 futures rose 0.2%
Nasdaq 100 futures rose 0.4%
Futures on the Dow Jones Industrial Average rose 0.1%
The MSCI Asia Pacific Index fell 1.2%
The MSCI Emerging Markets Index fell 0.9%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0943
The Japanese yen was little changed at 144.94 per dollar
The offshore yuan fell 0.2% to 7.2768 per dollar
The British pound was unchanged at $1.2696
Cryptocurrencies
Bitcoin was little changed at $29,385.29
Ether fell 0.3% to $1,847.1
Bonds
The yield on 10-year Treasuries was little changed at 4.15%
Germany’s 10-year yield declined one basis point to 2.61%
Britain’s 10-year yield was little changed at 4.52%
Commodities
Brent crude fell 0.4% to $86.49 a barrel
Spot gold was little changed
Coinbase Finds Support From Legal Scholars
A collective of legal scholars from six renowned universities have submitted an amicus brief to a U.S. District Court, siding with Coinbase in its case against the SEC. While the viewpoints expressed don't reflect those of their respective universities, the weight of the statement is undeniable. Each of these academics is a recognized authority within their institutions and are experts in securities laws. In essence, when esteemed professors from UCLA, Fordham, Yale, Boston, Widener, and Chicago identify issues with your stance, it's a daunting challenge for the SEC. Many in the U.S. are rooting for Coinbase to triumph, and it seems likely they will.
Dumb Money
Coming to theaters on September 22nd, Sony Pictures Entertainment presents "Dumb Money," inspired by the GameStop Short Squeeze. While the premise may seem lighthearted, the trailer promises an engaging watch, bolstered by a stellar cast. "Dumb Money" features Pete Davidson, Vincent D’Onofrio, America Ferrera, Nick Offerman, Anthony Ramos, Sebastian Stan, Shailene Woodley, and Seth Rogen. Read on for a description of the film:.
“Dumb Money is the ultimate David vs. Goliath tale, based on the insane true story of everyday people who flipped the script on Wall Street and got rich by turning GameStop (yes, the mall videogame store) into the world’s hottest company. In the middle of everything is regular guy Keith Gill (Paul Dano), who starts it all by sinking his life savings into the stock and posting about it. When his social posts start blowing up, so does his life and the lives of everyone following him. As a stock tip becomes a movement, everyone gets rich – until the billionaires fight back, and both sides find their worlds turned upside down.”
Bitcoin To Go Up By 100% A Year & The Real Reason Why BlackRock Invests In Bitcoin | Preston Pysh
I have finally had a chance to have Preston Pysh as my guest on a podcast, and I can’t be more excited for you guys, because this is truly one of the best conversations I have ever had! BlackRock’s pivot to Bitcoin, El Salvador, MicroStrategy, Worldcoin, and much more - you will understand what really is going on in crypto and why Preston is so bullish on Bitcoin
In this episode with Preston, we discussed:
Is BlackRock good for crypto?
Lightning Network
Money is broke
Building on Bitcoin vs other blockchains
The El Salvador experiment
Bitcoin to go up by 100% a year
Who can understand Bitcoin and who can’t
Bitcoin to dematerialize the need for gold
Worldcoin
Clown world
Why Bitcoin pivoted on Bitcoin
Why no one followed MicroStrategy & El Salvador?
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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.