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In This Issue:
The SEC Circus
Bitcoin Thoughts And Analysis
Legacy Markets
Arizona Prepares To Buy Bitcoin
The ETF Is Breaking Volume Records
Bank Collapses Are So Back
Crypto Is A Force To Be Reckoned With In U.S. Politics
$150K Bitcoin | Will Bitcoin Double In Price After The Halving? | Mike Alfred
The SEC Circus
“The Commission’s enforcement action against ShapeShift is the latest installment in the serial drama of the Commission’s poorly conceived crypto policy.”
That line, which you might assume to be fitting for an outspoken anti-establishment armchair critic or an anonymous crypto farm animal on X, actually comes from SEC Commissioners Hester M. Peirce and Mark T. Uyeda.
They voiced this sentiment in their March 5 dissent, responding to their own agency's decision to force the crypto exchange ShapeShift to shut down its U.S. exchange and pay $275,000 for "violating securities laws."
There is no bigger scam on the planet than the SEC.
For a quick backstory on ShapeShift, the exchange was founded by crypto pioneer Erik Voorhees and ran from 2014 to 2021 until it faced accusations similar to those brought against Coinbase, Kraken, and Binance.US by the SEC. Despite operating no differently than any other exchange and literally doing nothing wrong, ShapeShift couldn't withstand the SEC’s pressure and was abruptly forced to close shop.
ShapeShift was added to the list of innovative platforms forced to abandon U.S. investors and move offshore.
Fast forward to today, and there's a pitiful yet laughable update to the saga. As previously mentioned, ShapeShift was fined $275,000, but at the expense of making Gary Gensler and his henchmen once again appear more foolish than ever. Since Commissioner Pierce has aligned with our side, her critiques of the agency she co-leads have become increasingly vocal, acerbic and, one might even say, theatrical.
Allow me to set the stage with some dialogue from her dissent.
Immediately following that paragraph came this segment. Enjoy.
Is that not brilliant?
In what world does the SEC prevail against Coinbase and permanently deny an ETH spot ETF if this is the attitude of two of the five Commissioners commenting from the inside at the very top? Every time I listen to Commissioner Peirce talk, I am left speechless. She articulates our criticisms of the SEC better than any of us can. And her credibility is multiplied by 1,000 because she literally is the SEC.
The SEC putting itself at odds with a $2.5 trillion market is neither a sustainable path nor one conducive to investor protection or freedom.
It sure would be one hell of a narrative and simultaneous epic win for our space and country if Gary Gensler was kicked out of office. Even if Joe Biden did it to win votes amongst the crypto crowd, I would be perfectly content with that decision. I’m holding my breath.
Gary Gensler can’t imagine giving up his power to an industry that stands for financial freedom. The snake… I mean SEC, is rotting from the head and it’s only a matter of time until something changes. On that note, I will end this intro with a quote Erik Voorhees shared in response to the SEC’s charges.
“In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.” - Federalist 51
The SEC will lose against Coinbase and be compelled to concede to an Ethereum spot ETF. This outcome is foreseeable and will be a significant victory for the industry and forward-thinking investors. Just look at what’s going on around you, things are changing for the better. I remain hopeful.
And of course, #FireGaryGensler.
Bitcoin Thoughts And Analysis
We discussed the bearish divergence on Bitcoin with overbought RSI - now we have hidden bullish divergence, which effectively "cancels" the bear div.
Bitcoin continues to hang in there below the all time high, showing strength. Now we just wait until the next big move and hope that alts make their own moves while we consolidate.
Legacy Markets
Global stocks remained near record highs, with the yen experiencing a significant surge amid growing expectations that the Bank of Japan (BOJ) will begin raising interest rates in March, marking it as the last of the major central banks to initiate such a move. This speculation was fueled by accelerated wage growth in Japan and comments from a BOJ board member, hinting at an end to Japan's sub-zero interest rates for the first time since 2007.
In Europe, market movements were muted, with Nasdaq 100 futures slightly up by 0.3% following Federal Reserve Chair Jerome Powell's reassurance of policy easing within the year. Notable stock performances included Virgin Money UK Plc, which saw an increase after Nationwide Building Society's acquisition announcement, and Novo Nordisk A/S, which reached a record high after presenting data on a weight-loss drug.
The yen's rise led to a decline in Tokyo's Nikkei 225 index and an increase in Japanese government bond yields, sparking concerns about Japanese investments in foreign markets returning to Japan for higher yields. The dollar experienced a slight pullback against a basket of currencies.
Investors are closely watching the European Central Bank for potential rate cut signals, though expectations for significant rate reductions have been moderated. Jerome Powell's continued testimony to Congress and upcoming employment data are anticipated to further influence market sentiment.
Amid these developments, gold prices surged to new highs, and oil prices remained stable despite geopolitical tensions in the Middle East affecting the energy sector. Bitcoin saw gains but stayed below its record highs, reflecting a cautious but attentive market landscape as investors await further central bank actions and economic indicators.
Key Events This Week:
European Central Bank’s rate decision, Thursday
US initial jobless claims, trade, Thursday
President Joe Biden delivers the State of the Union address, Thursday
Fed Chair Jerome Powell testifies before the Senate Banking Committee, Thursday
Cleveland Fed President Loretta Mester speaks, Thursday
Eurozone GDP, Friday
US nonfarm payrolls, unemployment, Friday
New York Fed President John Williams speaks, Friday
ECB Governing Council member Robert Holzmann speaks, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.2% as of 10:27 a.m. London time
S&P 500 futures rose 0.1%
Nasdaq 100 futures rose 0.2%
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index rose 0.3%
The MSCI Emerging Markets Index rose 0.2%
Currencies
The Bloomberg Dollar Spot Index fell 0.2%
The euro was little changed at $1.0895
The Japanese yen rose 0.9% to 147.97 per dollar
The offshore yuan was little changed at 7.2092 per dollar
The British pound rose 0.1% to $1.2750
Cryptocurrencies
Bitcoin rose 0.7% to $66,958.73
Ether fell 1.2% to $3,802.68
Bonds
The yield on 10-year Treasuries was little changed at 4.10%
Germany’s 10-year yield declined one basis point to 2.31%
Britain’s 10-year yield advanced two basis points to 4.02%
Commodities
Brent crude fell 0.5% to $82.58 a barrel
Spot gold rose 0.4% to $2,157.20 an ounce
Arizona Prepares To Buy Bitcoin
The Arizona State Senate passed a resolution encouraging the Arizona State Retirement System (ASRS) and the Public Safety Personnel Retirement System (PSPRS) to explore including Bitcoin ETFs in their portfolios. The bill first passed the Senate's Third Reading on February 22 in a 16-13 vote and is now under review by the House after passing a second time. The proposal highlights the importance of monitoring Bitcoin ETF developments and urges the ASRS and PSPRS to consider the implications of such investments, including consulting with SEC-approved firms.
For the ASRS and PSPRS to buy Bitcoin, they would need to submit a comprehensive report on the feasibility, risks, and potential benefits of investing in the asset, including recommendations for safe investment practices. This report would then be submitted to state officials aiming to provide the necessary information for informed decision-making and potential portfolio diversification and growth. If Arizona does buy Bitcoin, there are a lot of hoops left to jump through, but it would certainly be historic for a state and one that would gain significant attention.
The ETF Is Breaking Volume Records
The spot Bitcoin ETF's record-breaking streak is unlike anything ever seen before in markets. BlackRock’s IBIT alone, according to Eric Balchunas, “now ranks 2nd among all ETFs in 1D flow, 1W flow, 1M flow and 3rd in YTD flows.” Remember when there was concern that only a few ETFs would survive and the weaker competitors would be outcompeted for volume and flows, that idea has completely vanished. The pace at which the spot Bitcoin ETF market is moving is not a winner-take-all scenario; all filers are winning. Each of the filers is continuing to beat their own records each big day, and BlackRock just crossed the $10B mark in AUM threshold and Fidelity is well on its way closing in on $7B. If you want to track some of the ETF stats you see thrown around on Twitter, I recommend these two platforms: Blockwork’s Bitcoin ETF Tracker and Coinglass’s Bitcoin ETF Overview for live updates.
One last thing, while we are on the topic of ETFs and volume: Coinbase just had its highest day of trading volume ever, even though the ETFs are 'supposed to be stealing volume,' and Bitcoin isn’t even at its all-time high (ATH). Considering the circumstances, the record is only going to continue to be broken, which means good things will come quarterly earnings time. COIN is still very much being slept on.
Bank Collapses Are So Back
Do you recall Signature Bank, one of the banks caught up in the early 2023 regional collapse, where the government had to bail out and corrupt politicians tried to blame crypto? Well, NYCB, the bank that acquired Signature with over $100 billion in assets, plummeted 45% when it issued a warning call for a cash infusion through equity capital, only to surge 30% like a volatile cryptocurrency by day's end. This outcome was unexpected given the circumstances earlier in the day, but having friends like Steven Mnuchin and other prominent investment firm leaders willing to inject $1 billion when needed helps. While the crisis is averted for now, it should serve as a reminder that Bitcoin is still our lifeboat. Cracks still exist in the foundation, and not all banks will be as fortunate as NYCB was last year.
Before I leave the topic of banks, I want to clarify a few things since this topic is important and will likely be revisited in the future. Nothing about the collapse of banks is political, as some pundits may want you to believe. This is not the fault of reckless VCs or banking wokeness. This is not a red or blue issue; it is a central bank issue. Inflating the money supply by 80% in two years is not conducive to monetary stability. The banking system is split into a tiered system. There are a handful of tier-one banks such as JPMorgan, Bank of America, and Wells Fargo. These banks carry implicit guarantees on your deposits. And then there are tier-two banks like Signature and NYCB that carry explicit guarantees on your money. Beyond tier-one and tier-two is everyone else, and the truth is that no bank is 100% safe.
Crypto Is A Force To Be Reckoned With In Politics
The seeds being planted in U.S. politics today may not be fully appreciated now, but their impact will be immensely important in the years to come. The article above outlines the efforts of four separate pro-crypto PACs, with three of them spending more than $1 million each to support pro-crypto congressional candidates. While the exact amounts vary by race, it appears that around $1 million was spent on each candidate, and these efforts seem to be paying off. As seats are secured, we will have a clearer picture, but as the article indicates, each supported candidate is either advancing, favored, or has a clear shot at winning. There is a real possibility that American crypto politics will look very different in the near future, and I am all for it.
$150K Bitcoin | Will Bitcoin Double In Price After The Halving? | Mike Alfred
After reaching a new all-time high yesterday, Bitcoin significantly dropped and then rebounded again. We haven't seen such volatility for a long time, and we can't say we haven't missed it. Previously, the Bitcoin price doubled soon after reaching the price record, and if it happens this time as we approach the halving, the price could break $150K. Whether or not it might happen, I will discuss it with Mike Alfred, an investor, and Christopher Inks from TexasWestCapital.
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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.