The Wolf Den #85 - Buying More Time, Bitcoin, Trades And More
Sentivate - The Future Of The Internet
I have been an advisor to Sentivate for almost a year now, but rarely discuss the project. Many of you have asked me for more details, so I asked the team to send a writeup that discusses the essential basics. I am obviously a huge fan of this product and think that it has a legitimate chance of revolutionizing the internet. Here's more:
By Jordy Manyoma:
Sentivate is a hybrid web built to be a viable and realistic replacement for the modern web by integrating centralized and decentralized components. All technology is focused on ensuring that Sentivate is a revolutionary and not an evolutionary replacement in the modern Internet architecture.
The main focus of the project is the Universal Data Transport Protocol (UDSP) and the deployment of the Sentivate Network. The Sentivate Network allows the use of the Universal Web (centralized components) and VIAT (decentralized components) while utilizing the Universal Data Stream Protocol.
In order to utilize the centralized and decentralized components, the project continues the development of the Gravity browser. The browser is a tool to navigate the Universal Web and World Wide Web while integrating the unique components such as a universal identity system, universal domain system, and VIAT while using their proprietary data transport protocol.
Problem:
Sentivate addresses the following issues directly: the looming bandwidth crisis, outdated protocols, broken DNS, lack of accountability, lack of identity, reactive security, and web categorization. Web user demands have changed and data requirements of the web have grown. With the IoT world right around the corner, the current form of the web will face bandwidth issues. HTTP is a major bottleneck due to its chattiness in the heart of the issue being TCP and latency because of the way data is transferred through a multi-step process between the receiver and the sender of data. All of this culminates in billions of dollars wasted cumulatively throughout the world while relying on digital infrastructure incapable of scaling to our global demands.
Importance of seconds in page speed
Improving page loading time with a couple of seconds can make a massive impact on your business.
Mozilla saw 60 million more downloads each year by making their webpage 2.2 seconds faster.
Amazon calculated that webpage load slowdown of just one second could price it $1.6 billion in revenue annually
Bing discovered that a 2-second delay in page loading time led to a 1.8% drop off in queries, a 3.75% reduction in clicks, over a 4% reduction in satisfaction and a 4.3% reduction in revenue per visitor.
Don’t forget about milliseconds
Even by a few hundred milliseconds, can affect your business bottom line. Here are some real-life examples:
Walmart and Amazon both observed a 1% increase in earnings for every 100 milliseconds of improved webpage speed.
Yahoo saw a 9% increase in traffic to every 400 milliseconds of webpage speed improvement.
Google loses 20% of their traffic for every additional 100 milliseconds it takes for a page to load.
Shopzilla improved site speed from 6 seconds to 1.2 seconds, which increased earnings by 12% and page views from 25%
Delayed communications and the inability to execute day-to-day tasks reliant on Internet services lead to higher transaction costs and reduced output. For people and businesses, disruptions result in lost purchases, missed payments, misinformation, or lack of action.
Disruptions are sometimes applied to specific services like social media, instant messaging, or search rather than the whole Internet ecosystem. Blocking these services which people and businesses use daily has immediate impacts. Such disruptions make it more difficult for people to communicate with friends and family, discover products or obtain information generally. Businesses lose visibility with customers, and opportunities to interact with them, to obtain feedback, and to receive orders.
Disruptions that are applied recurrently or last longer magnify the impacts on productivity arising from temporary shutdowns. They increase uncertainty in the business environment and force firms to move towards less optimal business models or more expensive suppliers that are not affected by disruptions to Internet connectivity. In response to this uncertainty, businesses may reduce investment and face higher costs.
The impact of Internet shutdowns is not widely researched and there are clear data challenges to this exercise. As far as this report is aware, this study constitutes the first effort to analyze the economic impact of Internet disruptions across countries with different connectivity levels under a common framework. Quantifying the impact of very specific types of disruptions would require a level of granularity which is beyond the information publicly available.
You can read the much more thorough, entire article HERE.
Elrond - The Future Of Money
As you know, Elrond is one of my favorite projects in the crypto space. I have spoken with the CEO, Beniamin Mincu on the podcast and have been relentlessly sharing their updates and chart. Many members starting buying the coin at 15 and 22 sats, which has been hugely profitable. I figured it was time for an update, as they have made tremendous progress since last I profiled them in the newsletter.
Elrond is one of the rare projects which sets a new trajectory for the entire blockchain space.
After more than 2.5 years of work, they have built one of the most advanced networks out there. The network is live, and can now process more than 15k TPS, with 100x lower transaction cost than Bitcoin or Ethereum. Think about that for a second. The recording of their mainnet event can be watched here: elrond.com
On Saturday, they have just unveiled Maiar, a simple and beautiful app which is positioned to be the application that will take crypto to the mainstream. You can check it out here:
It’s exciting, built on Elrond, and going through a rapid beta iteration cycle.
Last but not least, Elrond has made a strategic change to their token economics. What this boils down to for now is: from 20Billion ERD, they have moved to 20 Million eGLD. eGold or Elrond Gold seems to be the simplest and most powerful metaphor that could convey easily to everyone what Elrond intends to be.
With the internet scale blockchain network they have built, Elrond intends to create a global, transparent, non-inflationary financial system. With Maiar they intend to make this new digital economy available to anyone in the world with a mobile phone. eGold will thus be the scarce store of value that will power their entire ecosystem.
Exciting times ahead for Elrond. They have an upcoming Bitfinex listing, Crypto.com is here, and I expect their presence in the US to grow significantly.
CryptoAtlas - The Future Of The Crypto Community
Engage with the crypto community like never before
My good friend @daniloscarlucci launched a really cool platform last week called CryptoAtlas. I have had the opportunity to test drive the early versions and I am impressed with where it is headed. Essentially, CryptoAtlas is a crypto community that is focused on product discovery and community engagement. CryptoAtlas highlights new products and resources every day (for example yesterday they pushed an interesting product called Parachute there), and allows you to create your own list of Favorite Products and Favorite Coins.
As an example, you can check out my own profile here (and you can follow me) https://www.cryptoatlas.io/scottmelker. As you can see in the below screenshot, I have created my list of favorite products and resources, as well as added my partners and supporters. On the coin front, I have also made a list of coins I like (and hold).
Unlike all other websites that are quantitative “data/analytics” platforms, CryptoAtlas focuses on the “community sentiment” and qualitative data. The site is still in its infancy but for example if you look at their Rankings page, and the subsequent categories, you will notice that quality products or services are always indexed at the top. My own newsletter and podcast are there.
One more thing worth mentioning is that CryptoAtlas has an Opinion Leaders section where you can discover what other people from the industry have favorited in terms of products or coins. For instance, you can see profiles from investors like Adam Benayoun from Collider Capital, or Ruben Merre, founder of ngrave.io (whom I interviewed in the Podcast before) or YouTuber Boxmining.
I will be using CryptoAtlas regularly to curate my list of favorite products and coins as well as to push out more content once they have those features enabled. In the meantime, I will be hosting an AMA on the platform sometime soon -> sign up here and start posting your questions! Hope you enjoy the platform as much as I do!
Trading Psychology: A Non-Cynical Primer
This is a great piece written by CryptoCred about trading psychology, a topic that is wildly under discussed among traders. I always try to give helpful tips and ideas, but this digs a bit deeper into some of the specific areas where trading psychology is most essential, and how to deal with it in that context.
The article focuses on 3 areas.
Trade Execution / Entry
Trade Management
Equity Curve Swings & Streaks
Give it a read, you will find a lot of useful information, all wrapped up in Cred's unique style.
The Story Of Gregor MacGregor
By Sahil Bloom:
In 1822, a Scottish military General named Gregor MacGregor made a fortune selling settlers and investors on the dream of a new South American paradise. The only problem? It was all an elaborate lie. Who's up for a story?
General Gregor MacGregor was in need of a new adventure. The former British Army officer had become a mercenary, fighting on behalf of Venezuela and New Granada in their struggles for independence against the Spanish. He was not an idealist. He only sought one thing. Glory.
After Venezuela was liberated from Spanish rule, MacGregor led various private campaigns in Latin America. In 1820, he landed on the Mosquito Coast, a 200 mile stretch of coastline on the Caribbean side of modern day Nicaragua and Honduras. Here, he would find his glory.
The land was visually pleasing, but completely inhospitable and unfit for cultivation. But those details wouldn't stop MacGregor! He negotiated with the local king and acquired 8 million acres in exchange for rum and jewelry. He gave the new land an exotic name: Poyais.
Then, the elaborate scheme began. MacGregor arrived back in London in 1821 and started spreading the word of his tropical paradise. He referred to himself as the "Cazique" (Spanish-American word for Chief or Prince) of Poyais. The Poyais Scheme was officially in motion.
MacGregor began to seek investors and settlers. He opened offices across the UK, sharing fake documents and images to inspire confidence in the perfection of this new land. He even published a book on Poyais under a fake name to imbue confidence.
It was time to profit from the scheme. MacGregor offered Poyaisian land certificates to settlers and investors, raising their price by almost 100% as demand surged. 500+ individuals had purchased Poyaisian land, including many who invested all of their savings.
But MacGregor was not done yet. He issued £200K in Poyaisian bonds (~£25M today) backed by the (non-existent!) revenues of the Poyaisian government. The 6% yield was attractive during a period in which British government bond yields had fallen below 3%. Investors went wild.
In 1822, the first ship filled with Poyaisian settlers set sail from London. MacGregor, never satisfied, hit them with one last scam, trading them worthless Bank of Poyais Dollars (printed in Scotland) for their remaining British pounds. With that, he bid them farewell.
Upon arrival in Poyais, the settlers, many of whom had worn their best outfits for the landing, quickly realized they had been deceived. To make matters worse, shortly after arrival, a hurricane blew through the region, destroying their ships.
A combination of inhospitable land and local diseases (yellow fever and malaria) would take its toll on the settlers. Of the ~250 settlers that would arrive in Poyais across seven voyages, just ~50 would survive. All the while, Gregor MacGregor counted his money in London.
But, like most good fraudsters, Gregor MacGregor was relentless. By the time a few survivors returned to London and told the story of their ordeal, he was already in France, peddling Poyais on more unsuspecting settlers and investors.
Incredibly, MacGregor would never be held accountable for the elaborate (and deadly!) fraud. He was arrested in France but acquitted of fraud after prosecutors failed to prove intent. After a few more schemes, he moved to Venezuela, where he died at his home in 1845.
The story of Gregor MacGregor's Poyais Scheme is an incredible one. It should serve as a cautionary tale for investors. If something seems too good to be true, it probably is. So always do your research. I hope you enjoyed this story as much as I did. Stay tuned for more!
Trade LESS, Make MORE
Update from a previous issue:
Trading is one area where less work can often mean more money. The statistics are clear - people who over trade make far less money than those who take better positions with more conviction and are patient. In fact, any trading is likely to lose you money vs. investing.
It’s better to miss a good trade than to take a bad one. Missing a good trade doesn’t deplete your capital - it only fails to add to it. A bad trade will not only reduce the size of your trading account, it will eat up emotional capital and your confidence. A losing trade is not a bad trade, it is one that doesn’t meet your requirements. Bad trades come from working hard to see something that’s not there, guided by your need to trade rather than the market offering a good opportunity. Being a “full time” trader does not mean you have to be trading full time. You take what the market gives and know when to sit on your hands and do nothing.
Statistically, passive investors win the race, like the slow-moving tortoise. Behavioral finance professors Terrance Odean and Brad Barber of the University of California Davis researched 66,400 investors between 1991 and 1997 and concluded that two things weighed down the active traders – lousy stock picking and transaction costs.
In fact, active traders (averaging 258 percent turnover) earned 7 percent less annually than buy-and-hold investors (2 percent turnover), That’s 11.4 percent for the gunslingers vs. 18.5 percent for the sideline-sitters.
In addition, the research showed that another group of investors who converted to online trading saw their returns drop from beating the market by two percent before going online to falling under the market by three percent once online.
Here’s even better proof. Joe Ricketts, Ameritrade’s founder once told Fortune magazine: “The best thing, really, for an investor to do is buy a good company and hold it… Trading often and heavy is not something that makes you a lot of money. That’s contrary to my own interests, but it is the truth.”
Focusing on larger time frame trades that fit every criteria of your system is more likely to make you money than aggressively entering and exiting positions. And to take that a step further - investing is almost ALWAYS better than trading.
#GoDigital Grayscale Campaign Aimed At Boomers
By Adam Tarlowski:
“The History of Money” is the name of Grayscale’s new advertising campaign, airing this week on CNBC, MSNBC, Fox, and Fox Business. If surpassing 5B in AUM and buying up more Bitcoin than is being mined isn’t loud enough, a week's worth of commercials should do the trick. The institutional investment behemoth has one target in mind - Boomers. Want to know who's watching these selected news platforms? Adults in their mid to upper 60’s. And the song playing on the commercial you ask? Blitzkrieg Bop, the perfect rock song to catch a Boomer's ear.
The commercial is stupid-simple. It argues we’ve “proceeded to wave goodbye to value, printing unlimited amounts of money. And that's why it's time for digital currency.” It's so easy, even a boomer could get it.
Commercial on Website: https://grayscale.co/
MicroStrategy Buys $250M of Bitcoin
Digital gold is now the "principal holding" of MicroStrategy's revamped treasury reserve strategy.
By Jason Yanowitz:
MicroStrategy, a public business intelligence company, just bought $250M in Bitcoin as part of their capital allocation strategy.
You heard that right.
Michael J. Saylor, CEO of MicroStrategy, just announced that the company bought Bitcoin as a way to avoid inflation.
MicroStrategy is spending roughly 60% of their treasury on Bitcoin.
MicroStrategy spent $250M of their $420M cash reserves on Bitcoin
Here are some highlights from Michael’s announcement:
“This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”
“Since its inception over a decade ago, Bitcoin has emerged as a significant addition to the global financial system, with characteristics that are useful to both individuals and institutions.”
“MicroStrategy has recognized Bitcoin as a legitimate investment asset that can be superior to cash and accordingly has made Bitcoin the principal holding in its treasury reserve strategy.”
“We spent months deliberating to determine our capital allocation strategy. Our decision to invest in Bitcoin was driven in part by macro factors affecting the economic and business landscape that we believe is creating long-term risks for our corporate treasury program.”
“Those macro factors include, among other things, the economic and public health crisis precipitated by COVID-19, unprecedented government financial stimulus measures including quantitative easing adopted around the world, and global political and economic uncertainty.”
“We believe that these and other factors may well have a significant depreciating effect on the long-term real value of fiat currencies and many other conventional asset types, including many of the assets traditionally held as part of corporate treasury operations.”
“We find the global acceptance, brand recognition, ecosystem vitality, network dominance, architectural resilience, technical utility, and community ethos of Bitcoin to be persuasive evidence of its superiority as an asset class for those seeking a long-term store of value.”
“Bitcoin is digital gold – harder, stronger, faster, and smarter than any money that has preceded it. We expect its value to accrete with advances in technology, expanding adoption, and the network effect that has fueled the rise of so many category killers in the modern era.”
You can learn more about MicroStrategy’s $250M Bitcoin purchase on Business Wire.
The Wolf Of All Streets Podcast Ft. Zuby
Zuby is a well known British rapper, author, podcaster, fitness instructor and life coach. Growing up in Saudi Arabia, he gained a unique life perspective and set out to share his beliefs with the world. Best known for a desire to break the mold, stay true to himself, and think freely, Zuby garnered a massive following in and out of the music industry for his hot takes and music hits.
Zuby and Scott Melker further discuss the transition from Oxford computer science major to making rap videos, countering the cancel culture, the desire to impact 10 million lives, Kanye as the blueprint, the dangers of hip hop culture and being "real," Bitcoin changing the world, an imminent wave of cryptocurrency awakening, defeating "the culture" and more.
This episode is sponsored by Voyager and RoundlyX!
Bitcoin Thoughts And Analysis
Bitcoin has been struggling to break and hold the 12K level, which is not at all surprising. I view it presently as sideways and have not been looking for any trades at the moment. My macro view is still very bullish, so nothing has changed about my investing and buying strategy. I just don't see anything at this moment that is screaming trade - and part of this is because I was not trading for the past week or so. There were great opportunities, which I have presented here as analysis, even if I was not trading them.
To be clear, Bitcoin is bullish in general, even if we see some significant retracement. It has broken through and held every key level. Buy dips is the name of the game for me. Sometimes you need to go down a bit for a healthy retrace to gain strength for the next big push.
For some perspective, Pomp sent out a very interesting tweet this morning.
In over 10 years, there have only been 52 days in Bitcoin's history when it was trading above the current price. I know that a lot of people bought during that period, because it's when fomo was at its greatest. But 99% of historical Bitcoin buying has been profitable. This is the most compelling case to "just buy Bitcoin."
MONTHLY CHART
Last month was massive, as we have discussed. Huge bullish candle, broke through multiple key levels. This month already came back to retest the level around $10,540, which you will remember is the level that confirmed a "higher high" since the drop from 14K. That's an official break of the bear market structure and the bear case, from a technical perspective. Zoomed out, you can use the lines drawn here as key levels of potential resistance and support.
WEEKLY CHART
The weekly was ranging between the 2 blue lines before the break the upside. That was our long trade, which worked out exceptionally well. You can see that price is currently interacting with a key level, around $11,555. Last week closed above, so I am looking to see if this week can hold that level as support.
Interestingly, the weekly has not really retested that $10,540 area, so I would buy heavily if we see a drop there.
DAILY CHART
This is the only thing that I am watching on the daily. There is a clear potential bear div coming from overbought RSI here, which is usually large sell signal. First, it has not confirmed, that would require a close down here with RSI making a definitive elbow down. Also, if it does close like this, there will be potential hidden bullish divergence, a signal for continuation. That would require a clear elbow back up on RSI tomorrow. So it is a bit muddled. For now, I am watching the potential bear div closely.
4-HOUR CHART
This is the most interesting time frame for me at the moment. I have posted that ascending line as a potential entry off of support before, and price almost got there in the past hour. I will likely take a long there if it happens, as the risk/reward is good with a tight stop below. It if bounces, I will move my stop up comfortably below that line.
$11,486 is clearly an important level, and price continues to test it and then bounce back above. That's another spot for scalpers that has been profitable, but the more it is tested, the more likely it is to break down/
Bottom line - as you can tell from the analysis, different time frames are showing different things and it's a hard spot to enter with conviction, unless you are building a longer term position and averaging in on the belief that we see new highs. Otherwise, zoom in and choose your spot.
Altcoin Charts
Always be cautious here. Bitcoin is shaking around, which means that altcoins will likely suffer on a move. That said, a few I am watching are testing support or look strong in the face of Bitcoin's action.
BAL/BTC
This is risky, with very little price action on Binance to go off of. That said, it's in a clear descending wedge and hitting a very local support. If this area holds, I would expect movement up and then an eventual break of the top descending blue line. That would be my entry signal, with a target of the recent highs. If that flips to support, sky is the limit in price discovery.
LINK/BTC
LINK looks to be recovering quickly from the slight drop caused by Bitcoin. It's presently printing a nice bullish hammer on the 4 hour (12 minutes left as of writing) and may be ready to break the descending blue line. That would be a technically sold signal that the small downtrend is ending and price is ready to continue back up. If it keeps dropping, entry would be the top red line. If the bull market continues, I expect LINK to be a major benefactor.
WRX/BTC
I am still in this from the previous entry that I shared, up a few percent. Price finally closed a candle above the blue zone on the daily, so I am looking for the present area to hold as support. This will largely depend on Bitcoin! Either way, my stops are comfortably below the blue zone. Targets are shown as levels marked above. From a technical perspective, a break of the blue line means a trip to the top of the blue line, a sizable move.
Legacy Markets
The stock market has effectively fully recovered from the coronavirus crash, even while the global economy remains in shambles. Money printing is a hell of a drug! You can see this visualized in the SPY chart, which is an ETF that tracks the S&P.
$339.08 was the all time high. Price is currently trading around $337. There's no way to justify this movement, either through fundamental or technical analysis. This is purely money printing and government intervention - printing money and buying stocks and bonds. If ever there was a clear case for Bitcoin, you can see it on that chart. People aren't working. GDP is contracting at never before seen rates and people are hurting.
Stocks go up.
CRON (CRONOS GROUP INC.)
This trade is a perfect illustration of why we use trailing stops. I was able to lock in a profit on the dump and have now reentered. If you were not with us before, you should know that I generally view this as a longer play - a good company in the marijuana space that would benefit massively if Biden became President. They recently missed on earnings, which was the cause of the major drop.
All of that said, this is a risky trade if you are looking shorter term. I cannot reiterate that enough. The reason I bought again is because price dropped exactly to the bottom ascending support from the channel it has been trading in. There's GREAT risk/reward for a position here, because support is rising and a breakdown is a great reason to exit. In other words, your loss will be minimal with disproportionately large potential gains if this heads back up. I would take this trade personally, even if I thought it was going to drop - much like I would push in a poker hand with the odds against me if the pot size was big enough to justify it.
I threw some theoretical trade on the chart to illustrate this point. If price simply heads back to the EQ of the channel (the dashed center line), then you have roughly a 7-8 R/R (depending where it hits the EQ). If it heads to the top, we are talking about and 18-20 R/R ratio. Those are trades I will take any time.
SMED (SHARP COMPLIANCE)
This was a great trade from last week. Price broke out of the large flag and above the previous high. I am watching for another potential entry on a retest of that high, at $8.19. Again, they make Sharps containers, which is where needles and medical waste are stored. They will need a lot of those when there's a vaccine!
Phemex
Led by eight former Morgan Stanley Executives, Phemex has built the world’s fastest cryptocurrency derivatives and spot trading platform. Phemex leverages a “User-Oriented” approach to develop far more powerful features than any existing exchange, for traders to easily buy & sell contracts with trust.
A few of my favorite things:
Institutional Background of the team
6 derivatives trading pair (BTC, ETH, XRP, LINK, XTZ, LTC) + GOLD/USD
11 spot trading pairs (BTC, ETH, XRP, LINK, ONT, ADA, TZ, LTC, TRX, ONT, BCH, and NEO)
Spot trading with no trading-fees for members. (suitable for Grid trading, and derivatives traders on Phemex can enjoy hourly withdrawal benefits)
Phemex’s design criteria (<1ms latency speed, >300k tps, >99.9999% availability) can be tested publicly
Sub-Accounts (Allow to hold long and short positions at the same time, or lend accounts to fund managers)
USD settled contracts, allow to hedge against volatility and to simply calculate PnL
Proprietary Cold Wallet System
3 Withdrawals per day, hourly withdrawals for premium users.
Traditional financial products soon, after licensing from MAS
Fund managing options (Up to 200 Sub-accounts, simplified withdrawals, full API integration)
No internal trading desk
Check them out here - you'll get some free Bitcoin for signing up!
Voyager
If you follow me, you know Voyager is my favorite place to buy crypto on the go. Voyager lets you trade 40+ coins commission-free from one easy-to-use app. You can also earn up to 6% interest on tops coins with no lock ups or limits! Download the Voyager app and use code “SCOTT25" to get $25 in free Bitcoin when you create your account.”
My Recommended Platforms And Tools
I use RoundlyX to buy small amounts of Bitcoin every single day. They automatically round up my credit card purchases (with 10x multiplier) and invest them in crypto. Absolutely brilliant. Passively invest money you don’t need without a thought. Further, they have integrated with Voyager (see above) to offer commission-free purchases.
Rewards Code: WOLF
This is where I spend my days teaching and learning! Our Discord group is a one stop shop for everything you need to learn to trade and control your emotions. Feel free to DM me on Twitter or respond to this email for questions.
Self-Directed IRA for Americans - allows you to invest in Bitcoin and any other asset for your retirement, with all of the tax benefits of a normal IRA.
Concierge Phone Service for Americans that protects your from SIM Swaps and other phone related hacks. I cannot stress enough how amazing this service is.
A new crypto rewards debit card that I have been testing and loving. I use both the virtual card online and the physical black card at actual retail (I will do this more after COVID!). They offer 6.38% cash back in crypto, which is really astounding.
Bitcoin Thoughts And Analysis
BlockFI is where I personally store part of my long holdings. They offer up to 8.6% annually, compounding, depending on the asset (BTC, ETH or GUSD), which is much better than any legacy savings account or investment.
Follow me on Twitter at @scottmelker. This is where I am constantly updating my trades and sharing ideas.
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.