The Wolf Den #805 - 2023 Is 2019

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In This Issue:

1. 2023 Is 2019

2. Bitcoin Chop

3. China, Bad. Europe, Bad. When US?

4. Solana Is Clawing Its Way Out Of The Bear Market

5. Grayscale Wants Approval, Now

6. MetaMask Adds ‘Sell’ Feature

7. Coinbase Is Bullish On Coinbase

8. Is Gold About To Pump? Why Is Bitcoin Falling? | Macro

2023 Is 2019

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Crypto in 2023 bears a striking resemblance to crypto in 2019.

Allow me to explain.

At the outset of 2018, altcoins were riding high, basking in the final rays of the bull market's glory. Ethereum made a new all time high. Things were good. Very good.

However, the year soon transformed into a dumpster fire of epic proportions. A brutal market sell-off, ignited by the ICO debacle, regulatory crackdowns, a lack of institutional interest, and a slew of major security breaches, sent shockwaves through the crypto landscape. If we had to sum up 2018 in a single word, it would undoubtedly be 'pain.'

Now, turning the pages to 2019, Bitcoin embarked on a rollercoaster ride:

In 2019, Bitcoin's price journey resembled a heart-pounding thriller. Starting the year at approximately $3,750, Bitcoin surprised us all with a spectacular surge in June, briefly soaring above the $13,000 mark. However, the latter half of the year witnessed a gradual descent, with Bitcoin's price fluctuating between $7,000 and $10,000. When the dust settled at the close of 2019, Bitcoin found itself around $7,200. These wild price swings underscored the volatile nature of crypto, a pendulum swayed by market sentiment and regulatory winds.

Does this narrative sound all too familiar when we look at Bitcoin in 2023?

Let's press on.

Now, let's shift our focus to altcoins in 2019. Unfortunately, altcoins didn't enjoy the same meteoric rise as Bitcoin. Many either suffered losses or stagnated, while Bitcoin's dominance over the market grew stronger. Why? Well, it's largely due to the watchful eyes of governments and regulatory bodies, honing in on issues like AML, KYC, ICOs, taxation, and investor safeguards. It was also a result of money living the market. With reduced liquidity, the washing machine churned from Bitcoin to altcoins with no new fresh capital to raise prices.

Despite these formidable challenges, stablecoins began to shine as a reliable innovation with real-world utility. Much of the progress in 2019 unfolded behind the scenes, only fully appreciated in the years that followed.

The bear market is for building.

Ring any bells?

The 4-year cycle has been a real phenomenon. In 2019, people were making the same comparisons to 2015. The year before the halving has ALWAYS been one of lower prices, apathy and narratives of “crypto going to zero.”

Even a cursory glance at the chart shows the similarities between each period.

If if ain’t broke, don’t try to fix it. We will ride the trend until it is proven false.

Investors in 2023 find themselves rubbing their eyes, trying to see the market more clearly. Time-based capitulation has set in. The market has done “nothing” for so long that people sell and move on. Just like 2019. Now, the market seems to be gradually regaining its composure, striving to rediscover its footing once more.

I do think there is a good chance we see the ETF approved this year, which would put a definitive end to our hangover, but I wouldn't hold my breath. We may have to deal with the spins a little bit longer than we all may have hoped.

Regardless, now is not the time to capitulate. Everything about 2023 reeks of 2019 - and we all know what happened in late 2020 and early 2021…

Bitcoin Chop

DAILY CHART

When Bitcoin dropped a few weeks ago, I drew something similar to the blue line above. I have NO idea if something like this will happen, but it would make a decent amount of sense with the bullish divergence and the seasonality of Bitcoin. September is usually slow and slightly down, but October is usually up.

Sentiment is garbage, I think consensus is a move down. It seems like a move up to the next resistance makes more sense, even if we head back down after. Still tons of resistance above, so I don’t so price moving above the $28,600 area without a major catalyst. What I have drawn is still just sideways - it just means visiting the top of this small range.

China, Bad. Europe, Bad. When US?

• Stocks Slide as European Stagflation Fears Mount: Markets Wrap

European stocks continued to decline, with the Stoxx 600 index falling 0.7%, due to disappointing German factory data and high oil prices, which reignited stagflation fears in the Eurozone. These factors, coupled with signs of economic slowdown in China, also put downward pressure on U.S. equity futures. The U.S. dollar has been performing well thanks to the relative resilience of the American economy and the growing belief that the European Central Bank (ECB) will not raise interest rates in the near future. Meanwhile, Japan warned against the rapid depreciation of the yen, and China's central bank indicated a weakening yuan. Brent crude prices remain high, leading to revised end-year forecasts that favor higher oil prices. In Asia, stocks were steady, fueled by speculation of further economic stimulus. Overall, the global economic landscape remains uncertain, with multiple pressures exerting downward force on equity markets.

Key events this week:

• Eurozone retail sales, Wednesday

• Germany factory orders, Wednesday

• US trade, ISM services index, Wednesday

• Canada rate decision, Wednesday

• Bank of England Governor Andrew Bailey testifies to the UK parliament’s Treasury Select Committee, Wednesday

• Federal Reserve issues Beige Book economic survey, Wednesday

• Boston Fed President Susan Collins speaks, Wednesday

• Dallas Fed President Lorie Logan speaks, Wednesday

• China trade, forex reserves, Thursday

• Eurozone GDP, Thursday

• US initial jobless claims, Thursday

• Bank of Canada Governor Tiff Macklem to speak on the Economic Progress Report, Thursday

• Atlanta Fed President Raphael Bostic speaks, Thursday

• New York Fed President John Williams participates in moderated discussion at the Bloomberg Market Forum, Thursday

• Japan GDP, Friday

• Germany CPI, Friday

• US wholesale inventories, consumer credit, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.6% as of 11:01 a.m. London time

• S&P 500 futures fell 0.2%

• Nasdaq 100 futures fell 0.3%

• Futures on the Dow Jones Industrial Average fell 0.2%

• The MSCI Asia Pacific Index was little changed

• The MSCI Emerging Markets Index fell 0.3%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro rose 0.1% to $1.0733

• The Japanese yen rose 0.2% to 147.41 per dollar

• The offshore yuan was little changed at 7.3108 per dollar

• The British pound was little changed at $1.2553

Cryptocurrencies

• Bitcoin rose 0.1% to $25,736.52

• Ether rose 0.1% to $1,631.19

Bonds

• The yield on 10-year Treasuries was little changed at 4.25%

• Germany’s 10-year yield was little changed at 2.62%

• Britain’s 10-year yield was little changed at 4.53%

Commodities

• Brent crude fell 0.6% to $89.54 a barrel

• Spot gold was little changed

Solana Is Clawing Its Way Out Of The Bear Market

• Visa expands USDC settlements to Solana blockchain in partnership with WorldPay, Nuvei

Solana enthusiasts have a reason to celebrate as Visa is extending its stablecoin settlement capabilities to the Solana blockchain, collaborating with merchant acquirers Worldpay and Nuvei. Before the official launch, Visa revealed that it had already successfully conducted extensive live pilots, settling millions of USDC transactions over VisaNet. While this announcement might not grab immediate attention, it represents a significant milestone in bridging the gap between the world of cryptocurrency and traditional finance. This development is undoubtedly positive news for Solana investors

Cuy Sheffield, the Head of Crypto, Visa said, “By leveraging stablecoins like USDC and global blockchain networks like Solana and Ethereum, we're helping to improve the speed of cross-border settlement and providing a modern option for our clients to easily send or receive funds from Visa’s treasury. Visa is committed to being on the forefront of digital currency and blockchain innovation and leveraging these new technologies to help improve the way we move money.”

Grayscale Wants Approval, Now

• New Comment Letter from Grayscale’s Legal Team

Grayscale isn't merely resting on their laurels; they're seeking approval proactively, and that's understandable. In essence, Grayscale has penned a letter requesting a meeting with the SEC to discuss the forthcoming stages of converting their trust into an ETF. Grayscale may not have the authority to compel the SEC to provide answers or approve their product, but they can exert significant pressure on the commission, and that's precisely what they're doing. Below, I've included two noteworthy quotes from the Grayscale blog that represent key points from the letter.

• If any other reason could be offered in attempting to differentiate spot bitcoin ETPs from bitcoin futures ETPs—whether based on the Exchange Act’s requirement that rules be “designed to prevent fraudulent and manipulative acts and practices” or otherwise—we are confident that it would have surfaced by now in one of the fifteen Commission orders that rejected spot bitcoin Rule 19b-4 filings even after bitcoin futures ETPs began trading.

• The Trust’s Rule 19b-4 filing has now been pending for nearly three times the length permitted for Commission action under Section 19(b) of the Exchange Act. […] And so the Commission’s review of the Trust’s Rule 19b-4 filing has now driven on significantly longer than the time allowed by Section 19(b).

MetaMask Adds ‘Sell’ Feature

• Click Here To View The Tweet

The rapid pace of innovation within Web3 is leaving limited opportunities for traditional finance to catch up and gain a share of the market. As mentioned in the post above, MetaMask users now have the option to buy and sell assets on the platform, but this convenience comes at a significant cost. As demonstrated in the video above, the tutorial chooses to sell 0.05 ETH, and after factoring in transaction fees, only 0.458 ETH remains, resulting in an 8% cost for selling. Therefore, my recommendation is to continue using traditional exchanges for buying and selling transactions and consider MetaMask as a last resort. To read more about the details of the feature, click HERE.

Coinbase Is Bullish On Coinbase

• Coinbase to upsize debt repurchase by $30M

Coinbase has increased its cash offer for the buyback of its 3.625% Senior Notes due in 2031 from $150 million to $180 million. In this offer, Coinbase is willing to pay investors 67.5 cents on the dollar for their tendered 2031 Notes if they are accepted for repurchase, which represents a favorable deal for Coinbase. At one point, the value of these bonds had declined to 46 cents on the dollar but has since rebounded toward parity. Despite the complexity of the financial details, the message in this segment is clear: Coinbase possesses the financial strength to repurchase its debt and has opted to do so on favorable terms. Considering this development, it's challenging to have a pessimistic outlook on Coinbase when Coinbase itself expresses confidence in its prospects.

Is Gold About To Pump? Why Is Bitcoin Falling? | Macro

In observance of the U.S. Labor Day, we've rescheduled Macro Monday to Tuesday. Join James Lavish, Mike McGlone, and Dave Weisberger as we break down the main macro events and their impact on the crypto market.

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.