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In This Issue:
Meme Coin Madness
Bybit Finds Interesting Institutional Behavior
Vitalik Posts About Polymarket
Vanguard To Get A New CEO
Prepare For This Story
Meme Coin Madness
The current crypto narrative is a perplexing mix of spot Bitcoin ETF obsession and meme coin mayhem, creating a confusing landscape for both experienced investors and newcomers. It's a strange world when Wall Street is finally bringing legitimacy to crypto, only for Dogwifhat and other seemingly trivial assets to dominate the headlines and steal the spotlight. As I have said in the past, this scenario provides ample ammunition for regulators and legislators, who may use these developments as justification for increased scrutiny and regulation.
There’s never a dull day in crypto.
The situation has shifted somewhat, with conservative investors starting to show a willingness to consider our sector. However, those who were once unwilling to touch crypto with a ten-foot pole will likely now want an even longer one. Those already disinterested are even less likely to be swayed by the current chaos we've created. That being said, the influx of newcomers, even if attracted to crypto for the wrong reasons, should not be dismissed. It's our duty as members of the crypto community to guide them, educate them, and ensure they understand the underlying principles and potential of blockchain technology. If we fail to do so, we risk missing out on building a foundation of educated participants and adoption of transformative technologies.
On that note, what I am about to say may be uncomfortable for some to read, but meme coins serve an important purpose in driving mass adoption. They act as an entry point for new users who might not otherwise be interested in cryptocurrencies. The truth is, many of us entered the crypto space seeking early investment in a coin for financial gain, even if it wasn't a meme coin. Meme coins can also be a fun and simple way to test the waters and dive into what’s out there; we should safely encourage this. Moreover, it's now our turn to pass on the torch of knowledge and help newcomers understand the broader implications and potential of the technology behind these digital assets.
Here’s another hard pill to swallow; meme coins don't need mass adoption; mass adoption needs meme coins. I became obsessed with the world of crypto when I started trading DOGE in 2017. I backed my way into understanding the potential of blockchain technology and cryptocurrencies through the original meme coin. The same story is unfolding today, with newcomers learning about the space through frogs and dogswifhats. It’s funny how the game works.
For the OGs who have been around for a while, I'd like to share some brief advice that's been circling in my head that might help contextualize what we're seeing. This especially applies to those of you who are feeling an intense urge to buy. Ask yourself this: when was the last time you felt an intense urge to sell? Was it at a low point, meaning your timing was off? If your urges come at inopportune times, it’s best to fight them. If you have no idea, then it’s best to err on the side of safety and fight the FOMO.
I can't predict what will happen with meme coins this week, but eventually, the music will stop, and most people will get burned; it always works like this. Personally, I'm playing things safe. However, if this is your area of expertise, now is the time to strike while the iron is hot. Also, keep in mind these two things: it doesn’t take much capital for a meme coin to pop, but 99% of that capital will evaporate and return to Bitcoin or leave the market altogether. As enticing as the game is to play, it’s not an easy one to win.
One lesson I have taken away from playing poker that applies to right now is that you can’t predict stupid. Well-seasoned players do win more often than they lose against newcomers, but it’s often a harder task than one would intuitively assume it to be. New players are very unpredictable and unconventional; their behavior never makes sense or follows traditional patterns. In many ways, this parallels the recent surges of coins such as Cumrocket, up 630% in 7 days, and Dogwifhat, up 380% in 7 days.
You can’t predict stupid.
Anyways, my head might combust if I open the charts tomorrow and meme coins are collectively up another 3x, and I didn't just buy them like everyone else. But I’ll default back to my advice, flick myself in the forehead, and move on. The consensus right now is heavily bullish, which makes me nervous, especially seeing these gains, which are typically the last leg of a move. However, I’m not making any major or sudden changes. $100,000 is still programmed, the ETF is bringing in massive flows and everything else is noise. I’m happy for all of you who do make profits on memes, but for the sake of the market’s health, I would prefer to see things quiet down a little or Bitcoin retake the throne. Beggars can’t be choosers, but an investor can dream.
Let's have a great week! I'm looking forward to returning to my show and diving deeper into my thoughts on stream. If you don’t normally, tune in to my YouTube channel—it's always a great time, and the vibes are great, especially now that the market is up.
Last thing, Macro Monday is happening tomorrow (Tuesday), so be sure to pop by if you haven't joined yet. There will be lots to talk about!
Bybit Finds Interesting Institutional Behavior
A recent report from Bybit suggests that their platform is seeing a significant shift in institutional investor interest from Bitcoin to Ethereum. My gut tells me these findings may not be indicative of the entire space, but I'll present the findings as they are and let you decide. (For the record, I don’t believe Bybit was suggesting that this shift is indicative of the entire space, but rather, they were presenting their findings.) “Our last report shows Bitcoin was the institution’s favorite. Yet, new data suggests institutions are more bullish on Ether than Bitcoin. We have seen Bitcoin and Ether allocation percentages climbing to the highest level in the past six months. Yet it is a stark contrast that retail users has not allocated capital into Ether as significantly as institutions since our last report.” I’m not saying Bybit is wrong, rather they seem to just be reporting on the behavior of their clients.
Vitalik Posts About Polymarket
I'm not an expert on blobs, but I understood the gist of this post well enough to enjoy it and include it in the newsletter. The difference between 0.06 ETH and 0.0001 ETH is 99.83%, which is what the market is pricing in for the difference Dencun will make. For reference on the size of a blob, according to a quick Google search, “With EIP-4844, each block can contain up to six blobs, and each type-3 transaction can have one or two blobs. These blobs can store up to 128kb of data.” This suggests that A. Ethereum will be far cheaper to use, B. Dapps like Polymarket should also become cheaper to use, and C. As Vitalik mentions, you can use Polymarket as a hedge; pretty neat. On a side note, I believe gambling could be a significant breakthrough for crypto applications this cycle. Despite being founded in 2017, Polymarket hasn't come close to reaching its full potential. Just a thought.
Vanguard To Get A New CEO
As much as I would love for it to be the case that Vanguard’s CEO, Tim Buckley, was canned because of Bitcoin, I doubt it’s true. Not every decision made by major asset managers revolves around Bitcoin. If Bitcoin were indeed the reason for Tim Buckley's departure, Vanguard would have to undergo a complete 180° turn in direction. Since John Bogle founded the firm in 1975, Vanguard has stuck true to its conservative roots. As the second-largest investment firm in the world and the largest provider of mutual funds, Vanguard appears to be doing just fine without Bitcoin. The truth is, the firm can afford to ease into Bitcoin very late if they choose to without harm to their bottom line.
Prepare For This Story
For every success story like this, there are a dozen others that don't have a happy ending. The trader featured in this story previously made $1.35 million from $6,000 and is now at the $2 million threshold. While it may sound enticing to jump on board, if you didn't have a meme coin strategy before these pumps, I highly suggest heeding caution here. We worked really hard to get here, doing our due diligence in the bear market, so I would hate to see any of you give it back on an impulsive decision.
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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.