The Wolf Den #800 - 12-17-2017
Do you remember that date?
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In This Issue:
12-17-2017
Bitcoin Is Still Boring
Altcoin Update
Markets Hold Breath For Deluge Of Data
This Chart Is A Lie
NFTs Are Next
Binance May Exit Russia
BitBoy To Be Rebranded
Bitcoin Is Underperforming, But The Upside Is Huge! Here Is Why | Macro Monday
12-17-2017
Take a look at these 3 ancient artifacts below, recovered by The Wayback Machine.
These are the top 20 coins in order by market capitalization at the peak of the 2017 bull run. In that year, these were considered the “blue chips” of the cryptocurrency space. Today, this list is almost entirely a graveyard of bad investments.
Depending on who you ask, most of these coins are irrelevant today. There could probably be an argument that only two of the coins are meaningfully relevant today, but I’ll let you decide that on your own.
Here’s a trivia question for you. Bitcoin and Ethereum are up in value from this list, but what third coin is also up in value?
If you guessed Tron, you would be correct.
The rest of these coins have yielded negative returns since being featured on this list. Ripple and Cardano have managed to hold their top 10 positions (losing a few ranks), but the 16 others have fallen down to the 20s - 80s in terms of market capitalization and some into oblivion.
Excluding Bitcoin, Ethereum, and Tron (the only three coins up in price), the average percentage price decrease amongst the losing coins could be described as horrendous. Almost every major coin not named Bitcoin, Ethereum, or Tron has taken a bath. In blood.
What once was, no longer is.
Does this mean that 17/20 of today’s top performers will yield negative returns 5 years from now, joining the crypto graveyard? I can’t see the future, but the answer can definitely be a yes.
As the saying goes, “past performance is no guarantee of future results.”
To be fair, I could have written this intro back in late 2021 during the altcoin explosion and concluded that HODLING is the key to winning, but anyone following that advice and holding anything other than Bitcoin, Ethereum, or Tron (nobody) would still have likely lost badly. 2017 is only 5.5 years ago, so it is a more accurate view of the change in the market.
Simply HOLDing is not enough when we know that most projects will eventually fail.
Even Ripple, which was once the second-largest coin by market capitalization, has dropped to number 5 currently, but lower in the past. The odds that it returns to its former glory at number 2 are slim to none - and slim just walked out the door.
Assuming the world hasn’t blown up by 2028, 2023’s most popular coins will likely also be a graveyard of failed projects. Picking winners isn’t easy. Remember that the next time you swear to never sell an altcoin. Most won’t make it.
As an aside, I have held bags of plenty of beaten-down altcoins. I am far from perfect. This is why I maintain a strategy of 70% long-term holds, which is almost entirely Bitcoin and Ethereum with the small remains of past successful trades there as well. I try to keep 15% or less in speculative investments with 15% in cash. That way my suffering is capped.
Either way, this is a lesson for me as well as all of you.
Last but certainly not least, thank you all so much for sticking with me on this journey. We reached 800 and I’m still writing strong. Each one of you mean the world to me, I can’t thank you all enough.
Bitcoin Is Still Boring
Bitcoin is still boring, and we are still waiting for a clear bullish divergence.
Great update, right? Some days there is just nothing to do but wait.
Altcoin Update
I would love nothing more than to be sharing a slew of altcoin charts, but that would be irresponsible of me. I know that many of you remember the days of multiple setups each newsletter, and signed up for that very reason. But I only share setups when I would personally feel comfortable putting my own money into altcoins, and for now I still think the more likely scenario is down. I could be wrong, but I am holding tight and waiting.
Markets Hold Breath For Deluge Of Data
U.S. stock futures showed mixed performance as traders await crucial economic data to gauge the future actions of global central banks. Contracts on the S&P 500 and Nasdaq edged higher after China hinted at further economic support. In individual stock news, Best Buy rose 3.3% ahead of its Q2 earnings, while Verizon and AT&T gained on Citigroup's upgrade. Despite recent gains, global stocks are set for their worst month in nearly a year, driven by anti-inflationary policy moves.
Investors are keenly focusing on upcoming U.S. economic reports, including consumer confidence, employment growth, and inflation indicators. Meanwhile, European markets also showed positive signs, led by miners and real estate. NN Group NV surged 10% on strong results, and UK stocks did well as inflation pressures eased. In Asia, markets were up, especially Chinese stocks, as China plans to cut mortgage interest rates for the first time since the global financial crisis. Oil prices hovered around $80 per barrel, while gold edged higher.
Key events this week:
US Conference Board consumer confidence, Tuesday
Eurozone economic confidence, consumer confidence, Wednesday
US GDP, wholesale inventories, pending home sales, Wednesday
China manufacturing PMI, non-manufacturing PMI, Thursday
Japan industrial production, retail sales, Thursday
Eurozone CPI, unemployment, Thursday
ECB publishes account of July monetary policy meeting, Thursday
US personal spending and income, initial jobless claims, Thursday
China Caixin manufacturing PMI, Friday
Eurozone S&P Global Eurozone Manufacturing PMI, Friday
South African central bank governor Lesetja Kganyago, Atlanta Fed President Raphael Bostic, BOE’s Huw Pill, IMF’s Gita Gopinath on panel at the South African Reserve Bank conference, Friday
Boston Fed President Susan Collins speaks at virtual event, Friday
US unemployment, nonfarm payrolls, light vehicle sales, ISM manufacturing, construction spending, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.1% as of 6:08 a.m. New York time
Nasdaq 100 futures rose 0.1%
Futures on the Dow Jones Industrial Average rose 0.1%
The Stoxx Europe 600 rose 0.7%
The MSCI World index rose 0.2%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0812
The British pound rose 0.1% to $1.2615
The Japanese yen was little changed at 146.56 per dollar
Cryptocurrencies
Bitcoin was little changed at $25,970.41
Ether fell 0.1% to $1,644.2
Bonds
The yield on 10-year Treasuries was little changed at 4.20%
Germany’s 10-year yield declined two basis points to 2.54%
Britain’s 10-year yield was little changed at 4.45%
Commodities
West Texas Intermediate crude rose 0.7% to $80.64 a barrel
Gold futures rose 0.3% to $1,951.70 an ounce
This Chart Is A Lie
The chart above does NOT state how long the current bear market is vs. past bear markets. I keep seeing this going around.
2018 was not the bear market? Price going from 20K to 6K was not the bear market?
This is year-over-year returns, which is in no way a metric of bear market length. That is arbitrary cherry-picking of data.
Anyone who is congratulating you for surviving “the longest bear market” while using this image as proof is manipulating the concept of bear and bull markets to their advantage. DYOR.
NFTs Are Next
Since the SEC is on a war path to sue everything under the crypto sun, I’m not surprised to see NFTs next in the commission’s crosshair. The SEC has now accused Impact Theory, a Los Angeles-based media and entertainment company founded by Tom Bilyeu (a friend of mine) for illegally selling NFTs without registration or exemption.
I never purchased an Impact Theory NFT but if I had to guess, the SEC likely followed their typical protocol of zero guidance along with no warnings, just a lawsuit when the commission felt like the time was right. In this case, the SEC is claiming that Impact Theory has raised approximately $30 million from the sales of their NFTs that they advertised as an investment opportunity.
According to the SEC’s order, “Impact Theory has agreed to adjudicate the charges and pay more than $6.1 million in damages, interest and penalties without accepting or denying the findings.” Even though this sucks for Impact Theory, the SEC is losing its war against us and crypto is clearly winning. I would much rather be betting against the SEC than with them.
Binance May Exit Russia
Out of all the countries that Binance has withdrawn from in the past few months, it's quite surprising to observe that Binance hasn't completely ceased its operations in Russia yet, especially given the complex geopolitical situation. For reference, Binance had already curtailed its services in Russia since the previous year; however, certain features such as peer-to-peer trading were still accessible until just yesterday. Presently, Russian customers find themselves restricted to trading their digital assets solely for Rubles, with no other functionalities available. According to an unnamed Binance spokesperson, “All options are on the table, including full exit.”
BitBoy To Be Rebranded
I am sad to hear that Bitboy relapsed and is struggling once again with addiction after over a decade of being clean.
This story is extremely new and personal, which is why I don't plan on elaborating on the details, but I do need to say that at the end of the day, we are all humans first. I don't know how far the story goes beyond the accusations of substance abuse but the article above cites “emotional, physical, and financial damage” committed by Armstrong. Maybe Armstrong will appear on CryptoTownHall to share his side of the story, but if not, I am leaving the story at this, I hope the best for everyone involved.
Best wishes to him and his family. I feel for him, his wife and his children. Hope he gets the help he needs.
Bitcoin Is Underperforming, But The Upside Is Huge! Here Is Why | Macro Monday
What the world of macro and crypto will look like after Jackson Hole? James Lavish, Dave Weisberger, and Mike McGlone will shed some light on Jerome Powell's comments.
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.
Congrats on your 800th mate!