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In This Issue:
How To Double Your Money
Bitcoin Thoughts And Analysis
Legacy Markets
Everything You Need To Know About JUP Tokenomics
FTX Creditors Are Being Paid in ‘Full’
Ripple’s Co-founder Chris Larsen Was Hacked
Dwight Howard Rugged Us
Ethereum To Hit $4,000 By May?
How To Double Your Money
Americans LOVE to gamble.
Our expenditure on lotteries has shown a sharp increase, reaching $130 billion, $139 billion, and $160 billion in 2021, 2022, and 2023, respectively. However, these figures pale in comparison to the total gambling spend, which includes lotteries, casino gambling, and Pari-mutuel net receipts. These staggering amounts were $545 billion in 2021, $688 billion in 2022, and $747 billion in 2023, as reported by the Bureau of Economic Analysis.
To contextualize the magnitude of gambling expenditure, it surpasses the spending in several other significant consumer categories. Notably, it exceeds expenditures on audio-video and information processing equipment, vehicle rental and leasing, dental services, games, toys, hobbies, pet-related products, nonalcoholic beverages, and even the combined expenses on membership clubs, sports centers, spectator sports, and movie theaters.
The sheer scale of the gambling industry becomes evident when considering that even combining many of these categories doesn't match the total spent on gambling. To visually illustrate, one could stroll into a Hard Rock casino in Biloxi, Mississippi, or a Grand Falls Casino in Larchwood, Iowa, on a Tuesday night at 11:30 pm, only to encounter hundreds, if not thousands, of middle to stone-aged slot enthusiasts willingly parting with their lungs and life's earnings in pursuit of a Sunset Wild on Buffalo Grand.
Interestingly, when it comes to demographic spending patterns in gambling, the prevalent trend is that individuals from lower-income brackets tend to allocate a more significant portion of their earnings to gambling activities, seeking fortune at the slots and beyond.
“Lottery tickets are a big financial vice, particularly for the poorest Americans. Among households in the lowest-income bracket, 28 percent play the lottery at least once a week. That’s the case for just 19 percent of households with higher earnings.”
“Why do the poor gamble much more than others? Multiple studies show, including from Florida Family Policy Council as well as University at Buffalo Research Institute on Addictions (RIA), that very low income households have an almost 100% higher rate of gambling than the general population. They tend to use the lotto much more, go to casinos a little more frequently, and wager money in other ways. The rate of addiction to gambling is also much higher.”
While this newsletter isn't delving deep into the sociological aspects of gambling, it's worth noting that the trends observed by the Bureau of Economic Analysis in traditional gambling arenas are mirrored in investment markets. Options trading, day trading, and other speculative activities exhibit similar behavioral patterns.
The amount lost annually by overzealous 'investors', lured by boredom or the thrill of quick gains, is staggering. The situation is exacerbated in the crypto realm, which operates non-stop, tempting traders with continuously emerging, seemingly more lucrative opportunities.
As the crypto market gathers steam, it transforms into an ever more overwhelming arena, overshadowing any prudent exit strategies. If there's one piece of advice to heed, it's to steer clear of gambling with your assets. Don't be another statistic; don't surrender your hard-earned money to fleeting whims.
Occasional indulgence for entertainment is one thing, but it's crucial to actively curb and ultimately eliminate such risky habits. Crypto presents an unparalleled opportunity, and its potential will be realized differently by each individual, depending on their choices and actions.
“The safe way to double your money is to fold it over once and put it in your pocket.” - Frank Hubbard
Bitcoin Thoughts And Analysis
Gross.
After breaking above the 50 MA, price is now back below, with th eblue line as likely resistance.
Frankly, I would not be watching the price action on this asset daily if not for the newsletter - this is just chop.
Legacy Markets
US equity futures are showing signs of recovery, with S&P 500 contracts up by 0.3% after a significant slump, indicating a cautious rebound. On the corporate front, New York Community Bancorp is seeing premarket gains, while Japan's Aozora Bank faces losses linked to the US office market. In Europe, the Stoxx 600 index is experiencing fluctuations amid a busy earnings day, with Adidas's shares dropping due to lower profit forecasts and Deutsche Bank's shares climbing after announcing a share buyback and a higher revenue target.
Key earnings announcements from US tech giants like Apple, Amazon, and Meta are drawing attention. Meanwhile, Federal Reserve Chair Jerome Powell indicated that a March rate cut is unlikely, emphasizing the need for confidence that inflation is moving sustainably towards the 2% target. The Bank of England (BoE) is also expected to maintain high rates but may present a brighter UK economic outlook and lower inflation forecasts, potentially signaling future policy easing.
Globally, the Riksbank in Sweden held rates steady but suggested possible rate cuts in the near future, causing the Swedish krona to weaken. Market reactions include a slight recovery in Treasuries and stability in the dollar's strength, with only the yen gaining against it among major currencies.
Oil prices rebounded after a recent decline, balancing concerns over potential US retaliation for an attack in Jordan against indications of a strong US supply. Corporate updates include job cuts at Deutsche Bank, steady share buybacks from Shell, production adjustments at Glencore, revenue warnings from ING Groep, lowered performance targets at BNP Paribas, strategic exits and leadership changes at Julius Baer, a slow recovery forecast for Roche, steady earnings for BT Group, and Adidas facing impacts from currency movements and leftover inventory from its terminated Yeezy partnership.
Key events this week include:
Eurozone S&P Global Manufacturing PMI, CPI, unemployment, Thursday
US productivity, construction spending, ISM Manufacturing, initial jobless claims, Thursday
Apple, Amazon, Meta earnings, Thursday
Bank of England interest rate decision, Thursday
US employment report, University of Michigan consumer sentiment, factory orders, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.3% as of 5:45 a.m. New York time
Nasdaq 100 futures rose 0.5%
Futures on the Dow Jones Industrial Average were little changed
The Stoxx Europe 600 fell 0.2%
The MSCI World index fell 0.2%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.2% to $1.0798
The British pound fell 0.4% to $1.2638
The Japanese yen was little changed at 146.80 per dollar
Cryptocurrencies
Bitcoin fell 0.7% to $42,165.01
Ether fell 0.5% to $2,266.34
Bonds
The yield on 10-year Treasuries advanced four basis points to 3.95%
Germany’s 10-year yield advanced five basis points to 2.22%
Britain’s 10-year yield advanced one basis point to 3.81%
Commodities
West Texas Intermediate crude rose 1% to $76.64 a barrel
Spot gold fell 0.2% to $2,035.31 an ounce
Everything You Need To Know About JUP Tokenomics
Solana's highly anticipated Jupiter airdrop took place yesterday, so I figured it’s a fitting time to discuss the tokenomics of the asset while everyone is frothing at the mouth over their newfound wealth. My plan is to briefly share the pertinent information taken directly from the source, the Jupiter Station Docs, and then discuss.
“As such, the 10B JUP will be 50% managed by the team, 50% distributed to the community. Perfectly balanced, as all cats should be.
For the team managed component, only the 10% of liquidity provision will be used in the first year. The 20% for the current team will start vesting after a year for 2 years. The remaining 20% will be the strategic reserve, used for future team members, future strategic investors, and for past Mercurial stakeholders.
For the community component, we expect 40% to be broken up over 4 rounds of ‘growing the pie’ airdrops.”
The current circulating supply of JUP token right now is somewhere between 15% to 20%, comprised of the liquidity provision and the round one airdrop. In layman's terms, this means a large percentage of the total supply is waiting to enter the market, which will act as a depressant on the price. For the price to appreciate over the long-run, buyers have to absorb and outpace the released JUP tokens. This can only sustainably happen if innovation can outpace the dilution of the remaining supply. This is a tall task, but not impossible. Also, DeFi is not ‘in’ right now, aka the odds are stacked against JUP, but a DeFi summer would certainly help.
FTX Creditors Are Being Paid in ‘Full’
Note the emphasis on 'full' in quotes. This is because FTX has decided against relaunching its exchange, choosing instead to focus on partial reimbursements to its customers. According to the latest updates, FTX creditors are set to receive $16,000 for each Bitcoin, $1,200 for each Ethereum, and $16 for each Solana they held. These payouts represent a staggering -63%, -48%, and -84% difference from the current market values of these cryptocurrencies.
While certainly frustrating, many anticipated that creditors wouldn't be fully compensated, making this outcome somewhat expected and, arguably, preferable to many other potential scenarios. It's hard to deem this development as 'bullish' for the market, but it does offer a form of closure on the FTX saga. Interestingly, the true beneficiaries here are the savvy speculators who acquired claims for mere fractions of their face values – 10 to 20 cents on the dollar.
Ripple’s Co-founder Chris Larsen Was Hacked
The incident, though details are sparse, highlights a significant security breach where a hacker managed to infiltrate various wallets owned by Chris Larsen, making off with XRP valued at over $100 million. This breach led to a temporary dip in XRP's market value, yet the cryptocurrency itself remained intact and secure. This episode seems to be a targeted attack, centering more on personal security vulnerabilities rather than reflecting any inherent risk in the asset itself.
The main takeaway from this event isn't about the financial loss but rather a stark reminder of the ever-present risk of hacking. It underlines the paramount importance of stringent security protocols for digital assets. While pinpointing the exact lapse in security is difficult, it's clear that a vulnerability was exploited, underscoring the need for continuous vigilance and robust protection strategies in the digital asset space.
Dwight Howard Rugged Us
Dwight Howard, renowned for his NBA prowess, seems to have missed the mark in the NFT arena. His 'Ballers by Dwight Howard' collection saw a mere 10% sales success, with the artwork receiving less-than-stellar reviews. Even Avax, initially associated with the project, took steps to distance itself. Howard acknowledged his journey of "learning, building, and evolving" in the NFT space, but by that point, the project's fate was already sealed. The venture came across as a clear-cut attempt at capitalizing on the NFT craze, lacking the substance and commitment often seen in more successful digital asset projects.
Ethereum To Hit $4,000 By May?
My guest today is James Butterfill, Head Of Research at CoinShares. We are going to discuss the potential Ethereum spot ETF, and its impact on the price of Ether, as well as some latest research insights for 2024. In the second part I will be joined by Chris Inks for some of his top trades.
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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.