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In This Issue:
Gold, Bitcoin, Ramen, and New Friends
Bitcoin Thoughts And Analysis
Legacy Markets
John Deaton is Running for U.S. Senate
The Next ‘Institutional Darling’
WLD Soars
ETF Volume Galore
How To Invest In Everything Being Built On Bitcoin (This Is HUGE)
Gold, Bitcoin, Ramen, and New Friends
I like gold. I like it as a form of jewelry, and it keeps the wife happy. I respect its physical utility, which can't be matched by any other material on the planet. I believe everyone should own a little gold. Why not?
There aren't many ways that gold one-ups Bitcoin, but there are a few, and I think it’s worth pointing them out to keep this newsletter balanced and our perspective fresh. Not to give a backhanded compliment to gold, but understanding these few advantages of gold can highlight the many ways Bitcoin excels.
I talk about Bitcoin every day, so let’s give gold the stage today.
Established History
Gold first became a form of currency around 600 BC, marking its 2600-year history as a reliable medium of exchange. Over the centuries, gold has been recognized worldwide by various groups including merchants, aristocrats, pharaohs, emperors, artisans, explorers, and many more. Its role as a store of value is deeply ingrained in human culture. Bitcoin simply can’t compete in this category. While Bitcoin grows stronger each day, it will likely be a long time, if ever, before it reaches gold's level of recognition and trust.
Durability
Some gold coins date back to the mid-500s BC, showcasing their durability. Vijay Boyapati's perspective on durability is intriguing: “it is not their physical manifestation whose durability should be considered (since a tattered dollar bill may be exchanged for a new one), but the durability of the institution that issues them.” Bitcoin fares better than fiat in this regard, having withstood all hacks and attacks on its network. However, gold remains the ultimate winner in durability. Its legacy, history, timelessness, and cultural significance make it the most durable form of money on Earth, followed by Bitcoin.
Fungibility
You might be surprised to see fungibility on the list, but hear me out. Gold scores higher because it can be melted down, erasing its past, and accurately measured for equal exchange. However, due to the digital nature of Bitcoin, "tainted" coins can be traced, leading some merchants to be reluctant to accept them. The fungibility of fiat currency relies solely on the government's word. In the past, governments have discontinued certain bills, removing their fungibility, and marked bills can also be confiscated. Not to mention, if the U.S. government decides to eradicate coins, they would then trade at a discount relative to their face value.
So those are the three areas gold wins, established history, durability, and fungibility. Which means that Bitcoin holds the crown on censorship resistance, scarcity, divisibility, verifiability, and portability. Gold bugs don’t have much left to hold on to.
Sidebar - for SBF, the only form of currency available to him is likely packets of Ramen, which may require god knows what favors from his new ‘friends.’ Sorry, not sorry.
Credit to Tiffany Fong for the astounding image.
Moving on… The market is getting exciting, but that doesn’t mean boredom still can’t kick in. There has never been a better time to sit on our hands and do nothing than now, and probably for the next few months at least.
There’s a misconception that boredom only strikes in a bear market, but that's false. It's just as prevalent in a bull market, except now we get to watch numbers go up instead of down, which means dopamine instead of cortisol.
There will be a new narrative at some point, either a revitalization of an old one (e.g., countries or governments adopting Bitcoin) or a new one that we can’t foresee. Plus, Ethereum is still stealing the show, which could mean that the next major narrative may revolve around Ethereum. This would make sense, considering that every major narrative has been Bitcoin-focused for as long as I can remember.
Good times are ahead unless Ramen is your only currency, and the shower is now a really scary place. In that case, there may not be many good times ahead. Wishing the best for all of you, Wolf out.
Bitcoin Thoughts And Analysis
Bitcoin is currently working on printing bearish divergence with overbought RSI on the daily chart, which is obviously not ideal. The day is not over, so we do not have confirmation, which would come in the form of a clear elbow down on both RSI and price.
Right now it does not look great, but I assume this would just be a healthy retrace and then we would head back up.
Legacy Markets
European stocks pulled back from near-record highs due to disappointing earnings reports from major companies, with the Stoxx Europe 600 gauge falling slightly. HSBC Holdings saw a significant drop after its fourth-quarter profit plummeted by 80%, contributing to the banking sector's overall decline. Similarly, poor earnings from Glencore Plc and Rio Tinto Plc negatively impacted the basic resources sub-index. On a brighter note, Carrefour SA announced a share buy-back, sparking some positive movement despite underwhelming quarterly sales.
Investors have been optimistic about European stocks, buoyed by positive economic surprises, even as expectations for European Central Bank rate cuts have waned. However, concerns linger over potential headwinds, such as rising bond yields, which could challenge the equity market's enthusiasm.
U.S. equity futures also dipped in anticipation of the Federal Reserve's latest meeting minutes and Nvidia's earnings, which are highly anticipated given the company's significant impact on the AI sector and its contribution to the S&P 500's performance.
In Asia, Chinese shares saw gains as efforts to boost investor confidence continued, despite broader regional market weaknesses. This uptick was led by property developers benefiting from increased bank funding, amidst regulatory actions aimed at reducing short selling pressures.
The commodities market experienced fluctuations, with aluminum prices spiking due to speculation about new U.S. sanctions against Russia, and iron ore prices recovering as Chinese steel mills ramped up output. Both oil and gold prices saw modest increases, reflecting the dynamic and interconnected nature of global financial markets.
Key Events This Week:
Eurozone consumer confidence, Wednesday
Nvidia earnings, Wednesday
Federal Reserve releases minutes from its January meeting, Wednesday
Atlanta Fed President Raphael Bostic speaks, Wednesday
Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, CPI, Thursday
US initial jobless claims, US existing home sales, Thursday
ECB issues account of January meeting, Thursday
Fed Governor Lisa Cook and Minneapolis Fed President Neel Kashkari speak, Thursday
China property prices, Friday
Germany IFO business climate, GDP, Friday
ECB publishes 1- and 3-Year inflation expectations survey, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.3% as of 9:19 a.m. London time
S&P 500 futures fell 0.3%
Nasdaq 100 futures fell 0.4%
Futures on the Dow Jones Industrial Average fell 0.2%
The MSCI Asia Pacific Index was little changed
The MSCI Emerging Markets Index rose 0.1%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.1% to $1.0794
The Japanese yen was little changed at 150.08 per dollar
The offshore yuan was little changed at 7.1971 per dollar
The British pound fell 0.1% to $1.2609
Cryptocurrencies
Bitcoin fell 1.1% to $51,447.12
Ether fell 2.2% to $2,923.64
Bonds
The yield on 10-year Treasuries was little changed at 4.27%
Germany’s 10-year yield advanced two basis points to 2.39%
Britain’s 10-year yield advanced two basis points to 4.06%
Commodities
Brent crude fell 0.5% to $81.90 a barrel
Spot gold rose 0.1% to $2,027.06 an ounce
John Deaton is Running for U.S. Senate
The crypto space needs a strong advocate like John Deaton in this election cycle to replace Elizabeth Warren. John has been a guest on my YouTube channel, CryptoTownHall, and is a personal friend. I trust John to champion crypto and address other critical issues facing Massachussets and the nation. I will support John in this election, and I urge you to do the same if you value crypto, your dollar, and the country. Elizabeth Warren must be beat.
“John Deaton is a successful trial attorney, U.S Marine veteran, cancer survivor, father to three young daughters, and someone who overcame impossible odds to build a life for his family and become a champion for other underdogs.”
You can donate to his campaign here.
The Next ‘Institutional Darling’
AllianceBernstein, a global asset management firm with $725 billion in assets under management, recently shared their insights on Ethereum in a private note to investors. While I wasn't able to obtain the note directly, I've gathered several quotes that provide a glimpse into their perspective. It's worth noting that AllianceBernstein's AUM is more than double the size of Ethereum's market capitalization.
“Ethereum, with its staking yield dynamics, environmentally friendly design, and institutional utility to build new financial markets, is well positioned for mainstream institutional adoption.”
“Ethereum is probably the only other digital asset that will earn ETF approval.”
“Ether yield markets would grow in lockstep with the crypto's market cap and could power unique ETFs, if the staking yields are included in the ETF design.”
“Institutions don't just want to launch ether spot ETFs, they want to build more transparent and open tokenized financial markets on the Ethereum network. The utility is beyond asset gathering.”
WLD Soars
Two weeks ago, WLD was trading around the low $2.00 range, which was roughly the same price it had during its IPO in the middle of last year. Suddenly, WLD surged and is now trading in the mid $6.00s, almost reaching $8.00 a couple of days ago. It's hard to pinpoint why some coins take off in a bull market when others don't, but if I had to speculate, it’s likely the result of increased interest in AI, thanks to Sora and pent-up AI momentum. Last week, Sam Altman announced that the World App had surpassed one million daily users, a significant milestone. The project has ambitious goals, and with such a large user base, I hope it can make a positive impact. I have my doubts.
ETF Volume Galore
ETF volume wet ballistic yesterday. Three ETF issuers broke their all-time high volume, and HODL alone did 14 times more than its daily average and 60 times the number of users. It’s unknown what caused this spike, but it will be interesting to see if the trend continues or if it was a one-time fluke.
How To Invest In Everything Being Built On Bitcoin (This Is HUGE)
My today's guest, Alex Miller, CEO of Hiro, is coming to the show to discuss how recent market updates influenced the development of Bitcoin based projects, and why you should try to build something on Bitcoin too!
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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.