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In This Issue:
This Is How It Begins
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Assume Nothing
Do Kwon Gets A Small Win
Coinbase Climbs The App Store Ranks
Whale Sells Coins Mined in 2010 At All Time High
Leverage Flushed - Healthy Reset for Funding Rates
Crypto Skyrockets | Bitcoin To Break All-Time High | Macro
This Is How It Begins
We're at a point in the cycle where unless earth-shattering news emerges, everything is quickly overlooked, fading from virality within hours or a day. Just two days ago, an announcement broke that would have been a major topic if the price hadn't been surging. However, it's already been overshadowed and completely forgotten.
I didn't forget.
Without comment and minimal publicity, BlackRock filed an amendment with the SEC to integrate Bitcoin exposure into one of its funds, the Strategic Income Opportunities Fund (BSIIX). I have been saying for a while that the approval of a spot ETF was pivotal, but the inclusion of Bitcoin in other diversified funds would be the seismic shift we have been waiting for and it’s now here.
BSIIX buying Bitcoin in and of itself isn't going to make more than a dent in the total BTC marketcap. BSIIX is BlackRock’s 28th largest fund and has $24 billion in net assets. The fund typically invests in fixed-income securities and can be best understood by the two pictures below. Spoiler alert: this fund is boring and caters to a select crowd of wealthy boomers who aren’t looking for high risk or high returns.
What matters about this development is the domino effect that will ensue from the largest investment institution in the world incorporating Bitcoin into a diversified fund, rather than just purchasing the product. This is uncommon for now but won’t be for long. Remember when news spread that Fidelity Canada’s All-in-One Conservative ETF Fund allocated to Bitcoin, and we were all ecstatic? That fund has $143.9 million in assets, a far cry from BlackRock’s $24 billion test run that’s now underway.
This is only the beginning though; we have seen nothing yet.
Just for the record before I move on, these were the two statements included in the SEC filing:
Bitcoin ETPs. The Fund may acquire shares in exchange-traded products (“ETPs”) that seek to reflect generally the performance of the price of bitcoin by directly holding bitcoin (“Bitcoin ETPs”), including shares of a Bitcoin ETP sponsored by an affiliate of BlackRock. The Fund will only invest in Bitcoin ETPs that are listed and traded on national securities exchanges.
Bitcoin Futures. The Fund may invest in bitcoin futures. See “Derivatives—General,” “Derivatives—Regulation of Derivatives” and “Derivatives—Risk Factors in Derivatives” below.
Now for the exciting stuff.
You're likely aware that BlackRock, as the world's largest asset manager, offers a vast array of funds. Care to guess how many they have in total?
BlackRock has 425 ETFs, 603 Mutual funds, and 60 Closed-ends funds for a grand total of 1,091 investment funds.
$10T in AUM, 1,091 funds, and only one is diversifying into Bitcoin. We are so early.
We all know what happens when BlackRock takes action; every other asset manager plays follows the leader. Imagine the potential for Bitcoin when every major asset firm meticulously reviews its investment funds line-by-line to decide if they should add Bitcoin into the mix.
Fidelity alone has over 10,000 investment funds in its portfolio. State Street manages hundreds, and then there is Morgan Stanley, Goldman Sachs, JPMorgan, and many more. I skipped Vanguard because, well, you know why. However, these institutions, like BlackRock, are going to add Bitcoin to their portfolios starting with allocations (likely) ranging from 1-3% in the near future. That’s when capital will flow into Bitcoin like we have never seen before.
If the spot ETF has excited you, Bitcoin being incorporated into various legacy investment funds will be a bigger and better snowball of news. On top of that, Ethereum is following the same story line, allowing investors to embark on a similar journey all over again. Ethereum mirroring Bitcoin is the perfect opportunity for investors who didn’t capitalize off Bitcoin to have a second chance.
Lastly, before I sign off, I want to briefly discuss the market trolling us with the ATH touch followed by an immediate sell-off. I mentioned yesterday that at some point—whether in 20 minutes or 2 months—the market will attempt to eliminate leverage and wipe out newcomers with weak resolve, and that's exactly what is happening now.
Everything quieting down is natural and healthy; a helpful reset for things to move forward and upward.
As long as the news and sentiment remain bullish, I remain bullish, and this should all be temporary. Don’t over think it. If the swings affect you, close your portfolios, log off X, and come back in a week or month; things will most likely be fine and resume on.
The market moved faster than anticipated and could just as easily correct deeper than expected; it’s all part of the game. Sit tight and do nothing; we are nowhere near the top.
Bitcoin Thoughts And Analysis
Don't use leverage, kids.
Yesterday's candle saw a top near $69,300, breaking the previous all time high... then a drop to $59,300, liquidating 1B in leveraged positions.
We have $10,000 candles. In a day. And price has bounced back to where it was yesterday at this time.
Be careful out there, remain in your spot positions, don't get shaken out. This is where the market gets absolutely insane.
This is a great tweet, showing the EXACT SAME shakeout after price breached the $20,000 high in the past cycle. There is nothing new here, we are still in a bull market.
Altcoin Charts
K.I.S.S. - KEEP IT SIMPLE, STUPID! It is clear that we are in a raging bull market and that dips are for buying. A 15% flush in Bitcoin led to opportunities to buy some strong altcoins at an even more sever discount.
If you have been reading for a while, then you likely have your favorite coins that you believe in coming into the next cycle. Your bags should already be packed. Now is the time to just add on dips and do very little. No need for leverage, no need to over trade.
Legacy Markets
On Wednesday, stocks and Treasuries experienced minimal changes as traders adopted a cautious approach ahead of Federal Reserve Chair Jerome Powell's testimony, where he is anticipated to emphasize a delayed approach to interest rate cuts. The Stoxx 600 in Europe saw a slight decline, while futures on the S&P 500 and Nasdaq 100 showed marginal gains. Treasury yields remained stable, and the dollar index saw little movement, reflecting a period of market hesitancy.
Attention is also on the UK government's budget announcement and bond issuance plan, with expectations centered around potential personal tax cuts. Meanwhile, gold and Bitcoin presented mixed signals regarding risk appetite, with Bitcoin recovering from a brief dip and gold maintaining its gains amid rate cut expectations and geopolitical concerns.
In Asia, Hong Kong's market rebounded, led by major tech firms, while China's stocks showed volatility. Upcoming briefings by Chinese officials could shed light on plans to stimulate consumption. Japan's largest bank anticipates an end to negative interest rates soon, contrasting with more uncertain market predictions.
In Egypt, the pound experienced a significant drop following a central bank decision to let the market set the exchange rate and an unexpected interest rate hike, aiming to alleviate currency shortages and secure an IMF loan. In the commodities sector, oil prices stabilized despite rising US inventories, suggesting a potential imbalance between supply and demand.
Assume Nothing
There's a common assumption that, based on price history, Bitcoin is expected to make a significant move, potentially doubling in value, after surpassing its all-time high. The belief is that in previous instances, Bitcoin experienced rapid price increases shortly after breaking its ATH. However, this pattern has not always held true. For example, in October 2021, Bitcoin briefly exceeded its previous ATH of $65,000 but then entered a multi-year bear market.
Bitcoin tends to defy the crowd, often moving in the most unexpected directions. From what I can tell, most investors (me included) were not anticipating a new ATH this soon before the halving. While the momentum is still in the bull’s court for a higher move after a brief pullback, there's always the possibility of a more drawn-out reversal. I highly suggest refraining from leverage and exercising caution with trading given the current volatility.
Do Kwon Gets A Small Win
At this point, the series of back-and-forth court decisions in this case is somewhat bewildering, but the essence of this segment is that Do Kwon has successfully appealed the lower court's decision regarding his extradition. This means that, for now, he remains in Montenegro without facing extradition. While this outcome is positive for Do Kwon, it does not eliminate the possibility of extradition altogether.
The court could still revisit his case under different circumstances or on different grounds, and the U.S. continues to pursue the case whether Do Kwon is physically present or not. Currently, Do Kwon is serving a four-month prison sentence in Montenegro for possessing fake passports, and if extradition does not occur, his incarceration will unfortunately conclude at that point. In other developments, SBF's sentencing is scheduled for March 28th, providing at least some forthcoming news to anticipate.
Coinbase Climbs The App Store Ranks
Despite experiencing its second (maybe 3rd) outage in a week, Coinbase's app has surged into the top 100 downloaded apps in the Apple Store for the first time in two years. If you're interested in tracking the app's performance, the link above provides a tracker that sends updates once or twice a day. While Coinbase’s app store ranking may not be the most reliable top indicator, it does offer a glimpse into retail investor activity. It's likely that when we reach a true market top, Coinbase will be among the top 5 apps, if not #1. According to the image provided, Coinbase currently sits at position #44, a significant jump from its previous position of #84 in the 'all apps' category.
Regarding the "$0" issue happening on Coinbase, it is annoying, but I don't think it lends credibility to any conspiracy theory that Coinbase does not have the assets it claims to have. I believe the default of the exchange when there is an issue is to show “$0,” but had it just been “$” instead, there would have been far less panic. I assume this display glitch will be fixed to at least cause less panic the next time there are technical difficulties. Also, in fairness, Binance is still having its own issues, so Coinbase is not the only perpetrator. Still, it’s good practice to remove your assets from exchanges if you are capable of properly handling and managing cold storage.
Whale Sells Coins Mined in 2010 At All Time High
Mega Whale Resurfaces: 1,000 Vintage Bitcoins From 2010 Moved as BTC Peaked at $69,210
A notable Bitcoin mega whale, active since at least 2020, has recently transferred a significant amount of vintage bitcoins from 2010, aligning these transactions with moments when Bitcoin (BTC) reached peak values. On March 1, 2024, the entity moved 2,000 bitcoins and, four days later, as Bitcoin hit its peak at $69,210 per coin, transferred another 1,000 bitcoins. These coins, mined in the latter months of 2010 when Bitcoin's value was less than $0.39, were part of 20 block rewards shifted in a single series of transactions.
This pattern of movement, involving the consolidation of funds from Pay-to-Public-Key-Hash (P2PKH) addresses into a single Pay-to-Script-Hash (P2SH) address and subsequent relocation, reflects the whale's historical activity. Notably, this marks the 16th time this entity's transactions have been observed, cumulatively moving 17,000 BTC from dormant addresses. The timing of these transfers often coincides with significant Bitcoin milestones or price movements, suggesting a strategic approach to these movements.
This whale demonstrates a pattern of awakening from dormancy at critical junctures in Bitcoin's price history. These movements not only stir market speculation but also add to the mystique surrounding the early days of Bitcoin and those who mined it. The ongoing intrigue about the whale's identity and the implications of such large-scale transfers from the nascent days of Bitcoin continues to captivate the cryptocurrency community's attention.
Leverage Flushed - Healthy Reset for Funding Rates
Following Bitcoin's sharp decline from its new all-time high above $69,000, funding rates in the crypto perpetual futures market have normalized. This pullback, which saw Bitcoin drop 10% to $59,700, effectively cleared the market of excess leverage by forcing the closure of $1 billion worth of leveraged bets. This reset of funding rates, from triple-digit figures to below 20%, suggests the market's previous overheated state has cooled, potentially paving the way for a more sustainable move towards record highs.
The correction and subsequent normalization of funding rates indicate a shift away from the extreme optimism and leverage that characterized the market as Bitcoin reached its peak. This mechanism helps align the prices of perpetual futures with spot prices, ensuring stability in the market.
Crypto Skyrockets | Bitcoin To Break All-Time High | Macro
Bitcoin is about to break its all-time high, cryptocurrencies are skyrocketing, and meme coins are experiencing some crazy movements, with some of them posting triple-digit gains. This week's episode of Macro Monday is happening today, on Tuesday, and I am joined by Dave Weisberger, my regular co-host and the co-founder of CoinRoutes. James Lavish and Mike McGlone won't be here today, but instead, we have Matthew Sigel, Head of Digital Assets Research at VanEck, joining us.
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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.