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In This Issue:
What is Your Backup Plan?
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Investing Is A Young Man’s Game
USDC Leaves Tron
CoinMarketCap Awards
Do Kwon To Be Extradited
Coinbase Writes A Letter To The SEC
Bitcoin: Is The Pre-Halving Top In? [When To Buy]
What is Your Backup Plan?
Without overthinking, what would happen if you lost your Ledger, Trezor, NGrave, or other cold wallet right now?
Would you be f**ked?
If you lost your cold wallet or it was stolen, is it likely that you also lost your 24-word backup phrase? Because they are stored together?
What would happen if you lost your phone and it was the only device that had access to Google Authenticator?
Would you be double f**ked?
If things went south, would you be back at square one? If the answer is ‘yes’ to any of these questions, you need to consider a backup plan. Memorizing a couple of passwords to access these devices or apps is not enough. Let's get serious about security.
For your benefit, I am extremely cautious about such concerns. I have spent ample time considering my own security to minimize and eliminate as many potential attack vectors or loss scenarios as possible. Today, I'm going to share some lesser-known tips that you probably won’t find on a basic 101 security blog. These tips are based entirely on my experiences and expertise. Enjoy!
The first thing that everyone who owns a cold wallet with a significant amount of funds should do is ensure that the device is as protected as possible from the elements. If your cold wallet is not already in a fireproof/waterproof enclosure, make sure to do so ASAP. If your house burns down, having your Ledger melted into a pile of ashes won’t do you any good.
Second on my list is being discreet. I fail in this category (in some ways) because I am a doxed public figure, but you can make up for it in other ways. Be discreet about anything that is valuable to you at all times and in all places. When traveling, it's a good idea to put your phone away in a backpack or fanny pack and avoid flaunting it. If your cold wallet is at home, tuck it away out of sight where a visitor, neighbor, guest, or thief couldn't easily find it.
A second phone just for crypto is a great option. Consider it.
There are even more ways to be discreet that you might not have considered. If you have chosen to write down your seed phrase and store it online (bad idea), do it in a disguised fashion. Store the file under a name that wouldn't suggest it contains a seed phrase, in a location where nobody would look for valuable information or ever delete. If you are writing it down on paper, put it in the back of a journal without context or somewhere in the middle of a diary.
In the rare chance you are digitally compromised, a seed phrase titled 'family memories at the waterpark' would probably buy you some time or never be discovered.
Of course, this runs the risk of you forgetting, but if you know you are the type of person who does not forget easily, this is a solid method. Also worth keeping in mind is that the more places you store your seed phrase, the more places it can be compromised. Consider the trade-offs carefully.
Another idea to mitigate risks is to rely on someone you trust with your life, ideally a family member who has your best interests in mind. If the threat of a fire, flood, natural disaster, or anything else worries you and you want a second home for your passwords, a bank is a possibility. However, so is your aunt, who will never move from her gated retirement community or go through your stuff. Taking into account the same advice as above, this can be a near-perfect backup for your most valuable passwords.
If you want to be creative, consider setting up a decoy seed phrase on your phone, flash drive, or physical records. For your real seed phrase, split it into multiple parts and give each part to a family member you trust. This ventures into the world of multi-sig, and there are some great services available if you want to go that route. One advantage of making it difficult to access your funds is that you will be less likely to panic sell.
The downside to such intricate methods is that they can slow you down when you do need access to your funds. Security is a game of trade-offs that optimally varies from person to person. Some investors are convinced exchanges are the best option to store their funds, and I'm not going to knock that method if they are taking it seriously with precautions. We have seen cold wallets compromised in the past, so I can't blame someone if they choose the exchange route, which now offers vaults for storing crypto and other unique security features.
Take the time now to go through your passwords and reset them if you haven't done so in a while. It's good practice to cycle through passwords and review your seed phrases so they don't collect dust. Move slowly and carefully from platform to platform. Devise a plan in case the worst happens instead of hoping you’ll never be 'that guy.' Taking security into our own hands requires a great deal of responsibility. There are plenty of places where one can make mistakes in the market, and I don't plan on letting this be one of them.
Stay safe and be smart. Your Bitcoin depends on it.
Bitcoin Thoughts And Analysis
$52,100.
It's the easy. That is the key resistance at the moment, with price struggling to get above. There are wicks on both weekly candles clearing this level, but an inability to close there.
Otherwise, boring.
Altcoin Charts
For those who are new here, I share SETUPS and not SIGNALS. These are ideas that I am watching - if a certain thing happens, then the trade triggers. I am not telling you what to buy or when. I am showing you how I am watching certain charts and what has to happen for me to take a trade.
I started a new show yesterday with Wick called “Trading Alpha.” Every Wednesday, we dive deep into the altcoin market in search of opportunities. We discussed AI tokens at length, although we were fearful that Nvidia would underperform. We presented what would happen if Nvidia beat earnings… and it did.
There are some solid setups and education here.
Legacy Markets
Nvidia's impressive sales forecast sparked a global rally in technology stocks, driving Nasdaq 100 futures up by 2% in early trading. The company's shares surged up to 13% in pre-market trading as demand for artificial intelligence computing hardware surged, positioning Nvidia close to overtaking Alphabet Inc. in market value. This surge in Nvidia's stock underscores the significant impact of AI technology on the market, reinforcing the belief that AI will continue to drive market strength.
This bullish sentiment was echoed globally, with Japan's Nikkei 225 Index reaching a record high since 1989 and the Stoxx Europe 600 index briefly surpassing its January 2022 peak. Here is the Nikkei chart.
In Europe, technology shares, led by the region’s largest chipmaker, ASML Holding NV, saw significant gains, although overall gains were tempered by reduced expectations for European Central Bank rate cuts after positive euro-area private-sector activity data.
The earnings season also brought attention to several companies:
Mercedes-Benz Group AG's stock rose after announcing a significant buyback plan despite a grim earnings forecast.
Rolls Royce Holdings Plc reported higher-than-expected profits, causing its shares to surge.
BE Semiconductor Industries NV saw an increase in shares after reporting a rise in fourth-quarter revenue, breaking a trend of declining sales.
Nestle SA faced a downturn after projecting slower revenue growth.
Amidst Nvidia's earnings excitement, the Federal Reserve's latest meeting minutes revealed a cautious stance on reducing interest rates too soon, adding a layer of complexity to market dynamics. Meanwhile, the 10-year Treasury yield saw a slight increase, the dollar index declined for the fourth consecutive day, and commodities like West Texas Intermediate crude and gold experienced gains, with Bitcoin showing stability after a recent drop.
Key Events This Week:
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 rose 0.6% as of 9:40 a.m. London time
S&P 500 futures rose 1.1%
Nasdaq 100 futures rose 2%
Futures on the Dow Jones Industrial Average rose 0.2%
The MSCI Asia Pacific Index rose 1.1%
The MSCI Emerging Markets Index rose 0.9%
Currencies
The Bloomberg Dollar Spot Index fell 0.2%
The euro rose 0.3% to $1.0854
The Japanese yen was little changed at 150.23 per dollar
The offshore yuan was little changed at 7.1979 per dollar
The British pound rose 0.3% to $1.2677
Cryptocurrencies
Bitcoin rose 0.7% to $51,730.16
Ether rose 2.6% to $3,004.65
Bonds
The yield on 10-year Treasuries declined one basis point to 4.31%
Germany’s 10-year yield was little changed at 2.45%
Britain’s 10-year yield advanced two basis points to 4.12%
Commodities
Brent crude rose 0.2% to $83.21 a barrel
Spot gold rose 0.2% to $2,029.85 an ounce
Investing Is A Young Man’s Game
I came across this article from the WSJ and considered using it as an introduction, but decided to include it in the education section instead. The chart above summarizes the main point of the article: youth, particularly teens, are increasingly engaging in the market thanks to social media and dynamic social trends. What's notable about the findings is that teens aren't just investing in meme stocks; many are buying shares in large, quality companies such as Tesla, Apple, and Amazon. Kudos to them. I don't believe this significantly diminishes our edge in the market, but it does change the game. Teens are likely to be more volatile in their decision-making. The real impact will probably be seen in 5 to 10 years when these teens have substantial sums in their accounts, and their cohort can influence the broader market.
USDC Leaves Tron
Effective immediately, Circle has decided to discontinue support for USDC on the TRON blockchain in a phased transition. If this affects you, do note that, “through February 2025, Circle Mint customers may transfer USDC to other blockchains, or redeem USDC on TRON for fiat currency directly with Circle.” The only thing that changed immediately was the transfers of USDC on Tron.
Not much is known about the decision, but this was said from Circle, “Our decision to discontinue support for USDC on TRON is the result of an enterprise-wide approach that involved the business organization, compliance and other functions across our company. This action aligns with our efforts to ensure that USDC remains trusted, transparent and safe - characteristics that make it the leading regulated digital dollar on the internet.”
Following the announcement, there has been some hope that USDC is headed to Solana, but that remains to be unknown. Circle did say in its official post, “Our commitment to growing USDC remains steadfast. We will continue to expand USDC’s reach to additional blockchains to deliver the widest access, broadest developer choice, and most secure user experience of any dollar stablecoin in the world.” Which probably is responsible for giving Solana investors the idea.
Justin Sun, the founder of Tron said the following regarding the decision, “We respect and support each developer's development decisions and hope to encourage them to develop on TRON. Ultimately, TRON's vision is to become the largest and most prosperous decentralized financial protocol in the world. A decentralized world needs decentralized money, and we continue to move forward. Let's go!”
There’s certainly a strong future ahead for USDC, particularly with the support of Coinbase. However, Tether continues to extend its lead without any signs of slowing down. For USDC to catch up, significant changes are necessary. Simply leaving Tron, while a step in the right direction, is likely only a temporary setback. The importance of stablecoins is often overlooked, which is why I have expanded this segment extensively. Stablecoins are THE most important innovation this space has, period.
CoinMarketCap Awards
Everyone appreciates rewards and recognition, and CoinTelegraph's top 100 list is a huge hit every year. CoinMarketCap, known for more than just its market cap data, has announced their own awards starting on February 21 and running through March 6. You can find a fun video explaining the ceremony linked above.
The categories being awarded are: “Cryptocurrency of the Year, Meme Coin of the Year, Most Innovative NFT and Gaming Project, Most Innovative DeFi Project, Bridge Builder of the Year, Social Influencer to Watch, Crypto Leader of the Year, and Most Innovative L1/L2/Cross-Chain Project.”
Rush Luton, the CEO of CMC on the announcement, “The innovation we have seen in Crypto this past year is truly inspiring. Our intention is for the CMC Crypto Awards to become the most recognized annual celebration of Crypto and Web3. Think of it as the ‘Oscars Of Crypto’, an entertaining way to bring the whole industry together and celebrate the people and projects that are driving the industry forward. We congratulate all the nominees and look forward to sharing their achievements with the whole global crypto community.”
Do Kwon To Be Extradited
Two weeks ago, we learned that Do Kwon wouldn't be extradited to the U.S. due to a Montenegro court decision. The opposite now appears to be true. If locking up criminals (if he proves to be a criminal) has any impact on the bull market, then we could be in for a great ride. Additionally, there's still Mashinsky, who faces seven criminal charges.
Coinbase Writes A Letter To The SEC
The community supporting Ethereum is strong and will remain so, even if no good news comes in May (i.e. the spot ETF decision). Coinbase's full letter can be read HERE if you are interested. Considering the success of Bitcoin ETFs, Ethereum stands to gain a lot if a spot ETF is approved. Additionally, Ethereum is not a security. The SEC has not explicitly classified it as one, even though they have not explicitly called it a commodity either.Gary Gensler may be praying the rosary every night in hopes he can classify Ethereum as a security, but it’s not going to happen. What will likely happen is the approval of a spot ETH ETF eventually.
Bitcoin: Is The Pre-Halving Top In? [When To Buy]
I am joined by Noelle Acheson, a host of the CoinDesk's "Markets Daily" podcast, author of the Crypto is Macro Now newsletter and a former head of research at Genesis Trading. We'll talk about Bitcoin spot ETFs and it's potential downside, the problems with liquidity from China, the race to the bottom of fiat currencies, where we are in the crypto cycle and much more!
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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.