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In This Issue:
Lifestyle Deflation
Bitcoin Thoughts And Analysis
Legacy Markets
Mark Your Calendars
Do Kwon Wins Extradition Appeal
Ethereum Staking Nears a Major Milestone
Beware of The Chinese New Year
Bitcoin’s Massive Pump (Here Is Why It Is Not Late To Buy)
Lifestyle Deflation
There's a golden rule in financial planning that's hard to beat: increasing your income is a direct path to achieving your financial goals. While savvy investments are crucial, focusing on building a solid income foundation proves to be a highly efficient strategy for future planning.
However, a shadow often looms over the benefits of a higher income, preventing many from fully enjoying the fruits of their labor. This phenomenon, known as lifestyle creep or inflation, is something many of us might unknowingly fall prey to.
Reflect on your last raise. Did it lead you to browse CarMax or Carvana for a car upgrade? Consider swapping your Fossil watch for a Rolex? Or extend a vacation because it suddenly seemed affordable?
Lifestyle inflation is the internal push to level up our purchases in response to an income increase, leading us to spend more on luxuries we think will boost our happiness. It's a common trap, especially early in our careers, but it's also a phase where the realization that happiness doesn't equate to money hasn't fully settled in.
Yet, what if there's a strategy to bypass lifestyle inflation while still occasionally indulging in the finer things? Enter lifestyle deflation—the conscious choice to dial back on luxury spending with each raise and direct more towards savings, particularly during those crucial early years. This approach can significantly amplify your financial growth over decades through the magic of compounding.
It might seem counterintuitive, especially when lifestyle inflation tends to kick in during our most investment-critical years. But imagine the compounded success awaiting those who choose this path.
I acknowledge that a blanket approach to lifestyle deflation might not suit everyone or even be in vogue. It's perfectly reasonable to upgrade your gym membership for a better exercise experience or take a longer vacation for quality family time. The key is ensuring that your spending decisions align with genuine value and joy, not just impulse.
Ultimately, if your budget prioritizes investments and considers lifestyle luxuries and pleasures as secondary, you're on the fastest track to upgrading your life sustainably. And yes, there's merit in occasionally indulging in our hard-earned success. Why else do we strive to improve, read this newsletter, or eagerly await Bitcoin's surge past $100,000, if not to enjoy life's pleasures responsibly?
Bitcoin's lessons on deflation might just hold the key to a healthier financial mindset: earning more and living better by appreciating that sometimes, less truly is more. It's a radical yet sensible notion, much like Bitcoin itself.
Enjoy your weekend and remember, striving for less can sometimes lead to gaining much more. Wolf out.
Bitcoin Thoughts And Analysis
As you can see, the bull pennant is playing out in grand style. The token looks ready to head back to the ETF highs, with a target somewhere near $49,000.
More importantly, it seems EXTREMELY likely that the bottom of this correction is far in the past.
Legacy Markets
Global markets are in a holding pattern ahead of the US inflation data release, expected to influence the Federal Reserve's interest rate decisions. The upcoming annual revisions to the US consumer price index have the potential to significantly impact the Fed's confidence in achieving a 2% inflation target. European and US markets showed little movement, with bond markets also stable despite anticipation around future Fed rate cuts. L’Oreal shares dropped due to decreased spending by Chinese shoppers, while Tesco's stock rose following news of Barclays acquiring part of its banking operations. The bond market anticipates reduced volatility, counterbalanced by cautious central bank statements on rate reductions. US stocks have been strong, with the S&P 500 briefly reaching a record high, driven by soft landing expectations and AI optimism. However, some analysts warn of nearing sell signals in the equity rally. In Asia, markets were closed for the Lunar New Year, with the Japanese yen stabilizing after recent declines. Corporate movements include Barclays' acquisition of Tesco’s banking unit and potential merger talks between Southeast Asia’s major ride-hailing firms, Grab Holdings Ltd. and GoTo Group.
Key events this week:
US CPI revisions, Friday
Germany CPI, Friday
President Joe Biden hosts German Chancellor Olaf Scholz at the White House, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.1% as of 10:16 a.m. London time
S&P 500 futures were little changed
Nasdaq 100 futures rose 0.2%
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index fell 0.2%
The MSCI Emerging Markets Index fell 0.3%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.1% to $1.0763
The Japanese yen was little changed at 149.41 per dollar
The offshore yuan was little changed at 7.2151 per dollar
The British pound was little changed at $1.2606
Cryptocurrencies
Bitcoin rose 2.9% to $46,646.17
Ether rose 1.8% to $2,468.27
Bonds
The yield on 10-year Treasuries advanced one basis point to 4.17%
Germany’s 10-year yield was little changed at 2.36%
Britain’s 10-year yield was little changed at 4.05%
Commodities
Brent crude rose 0.1% to $81.72 a barrel
Spot gold fell 0.2% to $2,031.27 an ounce
Mark Your Calendars
A lot of important dates are right around the corner that will carry weight in both legacy markets and crypto markets:
Super Tuesday is on March 5.
Ethereum’s Dencun upgrade is scheduled for March 13.
FOMC is on March 19-20.
SBF sentencing is on March 28.
The halving is expected on April 18.
The important Ethereum ETF decision is on May 23.
Circle IPO announcement?
Do Kwon Wins Extradition Appeal
If you've been banking on Do Kwon's capture to signal a market upturn, it's time to recalibrate your expectations. The Montenegrin judiciary has once more rejected the request to extradite Kwon to the United States, putting a damper on such hopes. History, however, reminds us that individuals in Kwon's position sometimes risk leaving their refuges, holding out a sliver of hope for his eventual confrontation with justice. Yet, the likelihood of this scenario is increasingly slim.
It's a common pitfall to link the fortunes of the bull market to the apprehension of certain figures deemed as malefactors. Yet, this perspective doesn't hold up against the broader dynamics of the market. The reality is, the market's trajectory is shaped by a complex interplay of factors, far beyond the outcomes of legal proceedings against individuals. The bull market, should it arrive, will do so on its own terms, driven by fundamental and technical factors, not the legal troubles of any single individual.
Ethereum Staking Nears a Major Milestone
Ethereum is on the verge of surpassing 25% of its supply in staking contracts. Currently, 29.8 million ETH is staked out of a total circulating supply of 120.1 million ETH. If this doesn’t make you bullish, consider the potential when re-staking gains widespread popularity and ETFs incorporate staking features. I recognize that the current surge in re-staking popularity may be fueled temporarily by airdrop interest, but the concept's long-term viability is evident.
Investors faced similar questions when staking withdrawals were enabled, yet stakers largely chose to maintain their positions. Regarding ETF integration of staking, it may require additional time, but developments in the crypto space occur rapidly, with ARK already including staking provisions in their ETF filing. There's no reason Ethereum can't exceed 30%, 35%, and even higher staking levels, especially considering other assets have achieved similar levels and continue to thrive.
Beware of The Chinese New Year
The Chinese New Year is approaching tomorrow. Should I go long or short? I need to know right now! Thankfully, it's the year of the dragon, symbolizing power, strength, good luck, and wisdom, so I must go long, right? But before I make any decisions, I should consider what the experts are saying right? An analyst from Matrixport stated, “The next few days are of great statistical significance as Bitcoin is trending up +11% around Chinese New Year, which begins on February 10 (Saturday).” If you couldn't tell, I'm being sarcastic. Please don't trade significant positions based on Chinese history or arbitrary dates. I hope you enjoy the holiday if you are celebrating. Happy New Year!
Bitcoin’s Massive Pump (Here Is Why It Is Not Late To Buy)
Sidney Powell, Co-Founder and CEO of Maple Finance, joins me today to discuss the tokenization of real-world assets, a crypto market projected to reach 4-16 trillion within the next few years. And of course, we are going to talk to Dan from the Chart Guys about his trades and why Bitcoin is pumping today!
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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.