The Wolf Den #803 - Is Crypto Evil?

Probably not.

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In This Issue:

1. Is Crypto Evil?

2. Bitcoin Fully Retraces

3. Markets In Wait-And-See Mode

4. Ethereum Flipped Bitcoin

5. All ETFs Delayed

6. Coinbase Welcomes The Competition

7. Inflation Persists

8. Bitcoin Is Poised For A Huge Bull Market | 95% Chance Of Bitcoin ETF Approval

Is Crypto Evil?

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Venturing into Crypto Twitter can be quite a jolt for unsuspecting newcomers. Despite our perpetual promises of financial freedom, newcomers might be taken aback by the fact that our community isn't as warm and all-embracing as it might initially seem. As commonplace as greetings like 'good morning' and 'good night' are on various social media platforms, these pleasant exchanges can't overshadow the persistent conflicts that unravel within the intricate web of crypto discourse.

Unavoidably, toxicity remains a staple within the crypto landscape, casting an unsightly pall of tribalism, discord, and ego over the domain. However, is it an absolute truth that the crypto sphere is engulfed in this level of negativity, or is it merely a reflection of the larger society we're an integral part of, mirroring the very same toxicity and divisions that permeate our everyday lives? Today, I shall endeavor to tackle this pressing question head-on.

To begin, it's important to acknowledge that social media, especially Twitter, where the crypto community thrives, often lacks a welcoming atmosphere. Twitter, in particular, offers a space where identities can be concealed, past statements resurface with ease, seeking validation takes prominence, and the rules governing acceptable discourse are limited. While it's plausible to view Twitter as a bastion of free expression, it's equally valid to argue that the platform isn't inherently conducive to fostering kindness.

The second element to consider is that our community centers around the concept of money, an aspect that affects every individual on Earth. The assertion that food, water, and shelter solely constitute the fundamental necessities might not fully align with the realities of contemporary society, where the significance of money is akin to these basic essentials. This is due to the role money plays in granting access to these pillars and determining the quality of that access.

Some amount of money is a fundamental necessity in modern society. Without it, we are basically slaves.

Now, let's shift our focus away from the realm of crypto and explore whether the prevalent negativity here parallels that of another domain, namely religion. While religion exhibits significant diversity across the globe, I'll draw upon my understanding of Christianity, the largest religion in the U.S., to make a comparison.

In the context of Christianity, most individuals attending a church for the first time are welcomed with affection and acceptance. What distinguishes this experience from that of crypto is that the content encountered within a church is shielded within its walls, privacy not inherent in the crypto space.

Within a local church, participants share their actual names, divulge personal details of their lives, and generally offer support along their spiritual journey. Unlike the world of crypto, neighboring churches don't engage in rivalries akin to altcoins, and differing theological perspectives aren't the central focus of discussion.

If we assume someone attends church voluntarily, it's plausible to conclude that most churchgoers leave with a greater sense of happiness than when they arrived—this perspective comes from someone not accustomed to religious gatherings.

Up until this point, I have covered crypto in a negative light, but I promise I will turn that negativity around.

The comparison I presented above holds a significant distinction that warrants attention. The experience of a new attendee entering a local church is fundamentally different from that of a fresh crypto enthusiast joining Crypto Twitter. Unless one is a prominent figure or holds substantial influence, the initial engagement with religion typically transpires on a smaller, more personal scale.

However, in the crypto realm, initial interactions involve a substantial number of individuals. On Crypto Twitter, all your vulnerabilities are laid bare for the world to dissect, without any avenues for redress. Contrasting perspectives inundate newcomers, compelling those with less steadfast resolve to hastily align themselves with one side or another.

If there was such a thing as a newcomer able to step into the world of religion and experience it all in the same place, at the same time, with freedom of expression, it would probably look something like the Hunger Games.

In the 19th century, millions of people died due to religious divisions. The 20th century witnessed World War I, World War II, the Holocaust, and the Israeli-Palestinian conflict, and the 21st century is facing its own religious challenges of terrorism and civil wars around the globe, all to some extent rooted in religion.

Crypto might not always be the nicest place, but thankfully nobody dies here.

This letter has taken a somewhat unexpected turn towards its conclusion, a twist even I hadn't anticipated. Nonetheless, the message I intend to convey is that the toxicity within the crypto sphere isn't as severe as it is in other realms of our world.

When it comes to expressing opinions, the arenas of politics, healthcare, legal systems, and even sports can be considerably more hazardous to navigate than crypto. At the very least, this is one aspect where we seem to have an advantage.

If we can all do our part to be just a little kinder to newcomers and even those who disagree with us, we can elevate the civility and collaboration of our industry beyond its current boundaries.

I hope all of you have a fantastic weekend.

Bitcoin Fully Retraces

4-HOUR CHART

Absolutely pitiful.

It took Bitcoin two days to fully retrace the move up from the Grayscale news… and more. Price actually dropped below where it started before Grayscale, but is now hovering at that support.

This adds a bit more confirmation for me that we are not going to see any real movement for quite a while - until we have another halving cycle and head up. 2015, 2019, 2023. All the same. Boring, crypto becomes a ghost town, few care. And then things spark again at the end of the halving year and head up. Late 2024 it starts, 2025 it goes crazy.

I expect mostly chop until then, with moves down near 20 and into the 30s in between.

There are things that could obviously change this, but seems like the most likely scenario. Accumulate now before the next real bull market. It is coming.

Side note - predictions don’t mean much! Nobody has a crystal ball.

Side note 2 - we once again have potential bullish divergence with RSI on the daily.

Markets In Wait-And-See Mode

• Stocks Edge Higher With Key US Jobs Data on Radar: Markets Wrap

Markets are in a wait-and-see mode ahead of crucial U.S. jobs data due on Friday. European stocks and U.S. futures are slightly up, but Treasury yields and the dollar are stable. Energy companies are performing well, thanks to crude oil's strong week, while miners are benefiting from China's new stimulus measures. Car makers like Renault and Volkswagen are down due to increased competition from Asia, and Europe's top copper producer, Aurubis AG, took a hit from a major metal theft.

Investors are closely watching the upcoming jobs report, as its implications could influence the Federal Reserve's interest rate plans. Meanwhile, the European Central Bank is expected to hold rates steady, given economic challenges.

China is pushing new measures to support its economy, boosting Asian markets. China's yuan also strengthened briefly after the central bank reduced foreign exchange reserve requirements.

In other markets, Japan’s Topix index is on a winning streak, and commodities like oil and gold are set for weekly gains.

Key events this week:

• 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

• The Stoxx Europe 600 rose 0.4% as of 10:37 a.m. London time

• S&P 500 futures rose 0.3%

• Nasdaq 100 futures rose 0.1%

• Futures on the Dow Jones Industrial Average rose 0.3%

• The MSCI Asia Pacific Index rose 0.5%

• The MSCI Emerging Markets Index rose 0.4%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro rose 0.1% to $1.0854

• The Japanese yen was little changed at 145.43 per dollar

• The offshore yuan rose 0.1% to 7.2656 per dollar

• The British pound was little changed at $1.2683

Cryptocurrencies

• Bitcoin was little changed at $26,002.13

• Ether fell 0.3% to $1,644.06

Bonds

• The yield on 10-year Treasuries was little changed at 4.10%

• Germany’s 10-year yield advanced two basis points to 2.48%

• Britain’s 10-year yield advanced two basis points to 4.38%

Commodities

• Brent crude rose 0.6% to $87.39 a barrel

• Spot gold rose 0.2% to $1,943.91 an ounce

Ethereum Flipped Bitcoin

• Ethereum Registers More Long-term Holders Than Bitcoin in 2023

Undoubtedly, when it comes to price performance, Bitcoin has maintained a significant edge over Ethereum. However Ethereum's long-term holders are demonstrating a remarkable lead over Bitcoin's, with a ratio of nearly 2 to 1. As per insights from IntoTheBlock's research, Ethereum boasts 73.9 million long-term holders, compared to Bitcoin's 33.6 million HODLers. Ethereum's appeal lies in its evolving nature, while Bitcoin's strength is its unyielding stability. With Bitcoin's growth tied to global instability and Ethereum's growth linked to technological innovation, the eventual winner of the true top position seems as unpredictable as a coin flip.

All ETFs Delayed

• Click Here To View The Tweet

Here’s the best way I can sum this up: The SEC may have won this battle, but they aren’t winning the war. Also, how did Bitcoin drop before the news was announced? Is this just a coincidence, or did someone in the SEC with insider info nuke prices before the news went public? Should the SEC really be worrying about manipulation in the Bitcoin market when there are either potential insiders trading working in the SEC or leaks? This is strange.

Regarldess, no surprises here. The SEC is going to take their time.

Coinbase Welcomes The Competition

• Coinbase set to list PayPal stablecoin PYUSD

It's refreshing to witness competitors in the crypto sphere extending their support to one another, setting a commendable precedent, but I have my doubts about PYUSD. Assuming all liquidity requirements are fulfilled, PayPal's recently introduced stablecoin, PYUSD, should now be available for trading on Coinbase. This listing, however, comes with the "experimental" designation, typically assigned to assets that are either newly introduced or exhibit relatively modest trading volumes.

According to a Nansen report, "On the surface, there's a lack of demand from crypto users for PYUSD when other alternatives exist." Presently, the total PYUSD supply comprises approximately 43 million tokens, and several prominent exchanges, such as Huobi, Kraken, and Crypto.com, have already integrated this stablecoin into their offerings.

As it stands, it's currently challenging to envision a significant surge in PYUSD adoption momentum. My skepticism arises primarily from the availability of more established alternatives within the market. If a substantial Tradfi migration occurs within the crypto space, I could see the coin thriving, but as of the present moment, I find myself harboring reservations about the long-term viability of this coin.

Inflation Persists

• PCE inflation report: Key measure ticks higher in July. What will the Fed do?

In July, a closely monitored inflation gauge saw a slight increase, which could potentially heighten the likelihood of the Fed implementing interest rate hikes later this year. Consumer prices rose by 3.3% compared to the previous year, surpassing June's 3% rate but remaining below the 7% peak observed in June 2022. In terms of what this all means for the market, my guess is it means nothing. Inflation is continuing to drop but remains sticky in some areas. The market will continue to move to its own tune.

Bitcoin Is Poised For A Huge Bull Market | 95% Chance Of Bitcoin ETF Approval

Spot Bitcoin ETF approval chances have increased to 75% this year and 95% by the end of 2024. The authors of this probability, Bloomberg's ETF analysts James Seyffart and Eric Balchunas, joined me. The show was followed by the Charting Man Dan with his technical analysis.

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 DAILY CLOSE

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.