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In This Issue:
Making Sense Of The ETFs
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Is the U.S. Government Dumping On Us?
Wall Street Is Asleep At The Wheel
ENA Launches
Massive Crypto Dump: Should You Buy The Dip?
Making Sense Of The ETFs
Since the launch of the Bitcoin Spot ETFs, I've realized that keeping up with daily ETF metrics is incredibly demanding. Without access to a Bloomberg Terminal, relying on Eric Balchunas and James Seyffart for daily updates, though enjoyable, proves to be an impractical approach.
Consider this scenario: a day of positive inflow for Bitcoin without a price change, followed by a significant price decline and a day of smaller outflow, can produce contrasting results when measured in USD versus BTC terms. Despite a decrease in net flows by USD value, the total held in BTC might actually increase.
This complexity isn't unique to Bitcoin but is especially notable due to the asset's recent volatility, which has been amplified by the introduction of ETFs. Furthermore, public ETF trackers are still working through their initial issues, launching new graphs and charts daily, which inevitably leads to occasional inaccuracies.
Given these challenges, I'd like to share the sources I use for my Bitcoin ETF data, which are freely accessible to everyone.
First off, I'd like to acknowledge Blockworks for developing one of the first public trackers I encountered. Although the product mainly tracks basic metrics such as AUM, 24-hour volume, and price, the team has remained dedicated to staying ahead by also developing a page dedicated to Ethereum ETF tracking—a feature not yet offered by other platforms.
Next on the list is Apollo’s Bitcoin ETF Tracker.
For all the visual learners and data whores out there, you should be exploring Apollo. It offers everything found on the Blockworks page and much more. Apollo provides detailed notes next to each issuer, tracking AUM, the total BTC held, and BTC held per 1,000 shares.
My favorite chart is the one displayed prominently, showcasing Grayscale's BTC holdings from their inception to the present. It includes the holdings of every issuer, with the exception of Hashdex's DEFI. What stands out is the decline in Grayscale's holdings, in contrast to the rapid growth seen in IBIT and FBTC.
The Apollo Bitcoin ETF tracker features a dynamic racing bar chart, a list of companies known to hold Bitcoin, and a chart detailing net Bitcoin ETF flows. The net flows chart is especially valuable because it captures both outflows and inflows over time, displaying the data in terms of total Bitcoin. While there's a slight delay in updating the figures, the comprehensive overview is provided.
One valuable insight from monitoring ETF flows is the practicality of thinking in BTC rather than USD terms. Given Bitcoin's finite supply and the volatility of its dollar value, relying on USD for daily benchmarks proves unstable. Adapting to this perspective may initially be challenging, but it ultimately enhances the accuracy of tracking.
Lastly, Coinglass's dedicated Bitcoin ETF Overview stands as a formidable competitor to Apollo, offering similar levels of detail but without elaborate visuals. While CoinMarketCap is my preferred crypto tracker, Coinglass excels with its comprehensive ETF coverage, a feature some competitors lack entirely.
Coinglass is direct and efficient, featuring tabs for "Overview," "Flows (USD)," "Asset Inflows/Outflows," and "Bitcoin ETFs vs. Top ETFs." The site ensures constant updates, providing live timestamps for the latest data. For those not using a Bloomberg Terminal or checking each ticker individually, no other free platform matches Coinglass in terms of timely, aggregated accuracy.
Additionally, there are a few charts that cover the basics:
And this interesting one that tracks the premiums/discounts to NAV, which other platforms are ignoring.
My preferred feature on the CoinGlass platform is the tab that juxtaposes the sizes of Bitcoin ETFs against other major ETFs. Within a few years, perhaps even sooner, the distinctions between these columns will blur, signaling a significant shift and integration of Bitcoin ETFs into the mainstream financial ecosystem.
That concludes the charts I wanted to share. Now, speaking freely, what excites me most about the near future is the prospect of BlackRock surpassing Grayscale in what could be described as an ETF flippening—a decade in the making—that might finally put an end to GBTC’s consistent outflows. As of the afternoon of April 2nd, the total market cap of the ETFs stands at $57.63 billion, holding 833,367 BTC with net inflows nearing $13 billion.
I hope this has helped clear up some of the ongoing confusion regarding the flows, outflows, and reallocation of funds between GBTC and other issuers. It’s crucial to recognize that these figures will change significantly over the next 6 months, 1 year, and 5 years. Also, if you choose to take away just one thing, let it be that the Bitcoin ETFs, specifically IBIT and FBTC, represent the most successful ETF launches in history—and that’s an entirely valid perspective.
While I don’t expect the current market dip to last, I do think the market is primed for a prolonged phase of uneventful fluctuation. Hopefully, I’m wrong, and we’ll see a continuation of the upward trend very soon. Only time will tell.
Bitcoin Thoughts And Analysis
Bitcoin seems to be forming a symmetrical triangle, which many would identify as a bull pennant. The caveat I give there, is that pennants often lose support, making people bearish - but then form bull flags, which are parallel channels down. So always be careful in these situations.
That said, we have a touch at the high, then a touch of support, then two candles touching resistance, then another potential candle now forming a second support. That would confirm the triangle, with 2 alternating up and down touches.
We also have potential tweezer bottoms on the daily, with the two wicks. We need to see a daily close with the current low holding for the tweezer and triangle to be valid.
I still view chop as the most likely scenario for a bit.
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.
This is one of the hyped new coins that has recently been listed on multiple exchanges, so we have limited price action and history to go on. That said, while the market has been correcting, this has shown tremendous strength, maintaining grey dots on Trading Alpha, holding well above the track line, which is green and curving up, and currently attempting a break of the recent all time high. This means a blue sky breakout into price discovery, if successful. I would personally wait to see a close above .0266 as confirmation, and then attempt to catch a retest of that previous high as support. But everyone has a different approach.
I own this token, my entry was .007 at the grey arrow. I am currently ~4x in profit
Legacy Markets
Global stocks declined while Treasury yields neared four-month highs, driven by strong economic indicators and rising commodity prices, which suggested that interest rates might stay elevated longer than anticipated. These factors have hindered global equities from building on the previous quarter's gains, with the Stoxx 600 dropping 0.1% and U.S. futures indicating more downturns. Treasury 10-year yields increased to about 4.38%, reflecting a nearly 20 basis points rise from last week, as market participants adjusted their expectations for U.S. interest rate cuts.
An earthquake in Taiwan raised concerns over semiconductor production, affecting the stock of Taiwan Semiconductor Manufacturing Co. The focus now shifts to Federal Reserve Chair Jerome Powell, especially after his recent comments on needing more proof of inflation control, and the upcoming U.S. jobs report, which could influence policy easing perspectives.
Market sentiment has been cautious, anticipating this Friday's U.S. non-farm payroll data. Less than three Federal Reserve rate cuts are expected in 2024, with some Fed officials supporting the idea of three cuts, despite rising commodity prices hinting at continued inflation concerns. The dollar index remained stable, while the yen held weak against the dollar, prompting thoughts of potential official intervention to bolster the currency.
Key events this week:
Eurozone CPI, unemployment, Wednesday
US ADP employment, ISM Services, Wednesday
Fed Chair Jerome Powell speaks, Wednesday
Fed’s Austan Goolsbee, Adriana Kugler and Michelle Bowman also speak, Wednesday
Eurozone S&P Global Services PMI, PPI, Thursday
US initial jobless claims, Challenger job cuts, Thursday
Fed’s Loretta Mester, Alberto Musalem, Thomas Barkin, Patrick Harker, Austan Goolsbee speak, Thursday
European Central Bank publishes account of March rate decision, Thursday
Eurozone retail sales, Friday
US unemployment, nonfarm payrolls, Friday
Fed’s Michelle Bowman, Thomas Barkin and Lorie Logan speak, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 was little changed as of 9:19 a.m. London time
S&P 500 futures fell 0.2%
Nasdaq 100 futures fell 0.3%
Futures on the Dow Jones Industrial Average fell 0.1%
The MSCI Asia Pacific Index fell 0.7%
The MSCI Emerging Markets Index fell 0.6%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0773
The Japanese yen was little changed at 151.70 per dollar
The offshore yuan was little changed at 7.2599 per dollar
The British pound was little changed at $1.2574
Cryptocurrencies
Bitcoin rose 0.7% to $66,192.93
Ether rose 1% to $3,303.4
Bonds
The yield on 10-year Treasuries advanced three basis points to 4.38%
Germany’s 10-year yield was little changed at 2.40%
Britain’s 10-year yield was little changed at 4.09%
Commodities
Brent crude rose 0.1% to $89.01 a barrel
Spot gold fell 0.5% to $2,269.33 an ounce
Is the U.S. Government Dumping On Us?
The answer to what the government intends to do with a significant stash of Bitcoin is, at best, 'maybe.' What is known is that the Department of Justice (DOJ) has confiscated around $2 billion worth of Bitcoin from James Zhong, who acquired it unlawfully from Silk Road. Additionally, there were transactions observed: a test transfer of 100,000 Sats to Coinbase, followed by a more substantial transfer of 1999.999 BTC. In January, the U.S. government filed a notice of its intention to sell over $130 million worth of BTC, corresponding to the amount just transferred, while the remaining 29,000 Bitcoins have not been moved or sent to Coinbase.
As to the fate of this considerable cache of Bitcoin, it remains speculative. There's little rationale for the DOJ to liquidate the entire sum abruptly, as doing so could be financially imprudent. The timing of this development might be linked to a recent judicial decision regarding Coinbase's operation as an unregistered broker through its Wallet service. It's plausible that the DOJ might gradually reduce their holdings, securing profits over time. Yet, it's also conceivable that a significant portion of the Bitcoin will be retained indefinitely. The exact strategy remains uncertain.
Wall Street Is Asleep At The Wheel
User @CryptoSnow_IO has put together a thorough analysis that sheds light on what Wall Street might be overlooking with Coinbase. This isn't just another hype-driven commentary; it's a well-substantiated argument, with each point bolstered by data. The assessment spans various categories—transactional revenue, trading volume, international business, subscription and services, stablecoin earnings, custodial fees, and the Base platform—suggesting that each is being significantly undervalued. While current Wall Street predictions hover between $0.50 and $0.60 earnings per share (EPS), the analysis from @CryptoSnow_IO projects figures closer to $3.2 and $3.3.
Even assuming these projections lean towards the optimistic side and the actual EPS settles around $1, this would still indicate that conventional estimates are missing the mark by a factor of two. Additionally, the 53% surge in stock value since Q4 earnings doesn't seem to fully encapsulate the growth anticipated for Q1, hinting at a substantial underestimation by Wall Street. To put things in perspective, the stock debuted at $381 during a bullish phase, with the company at a smaller scale. Considering its expansion and the potential of a larger market cycle, a valuation exceeding $500 seems plausible. The final slide of the thread, showcasing some impressive investigative work, is particularly noteworthy.
ENA Launches
Ethereum's eagerly awaited synthetic dollar token, USDe, has made a promising debut, and the ENA governance token is now operational. However, the launch has elicited a range of reactions from the crypto community, investors, and speculators. Notably, 5% of the total ENA supply has been distributed through an airdrop to all USDe and sUSDe holders, leading to mixed feelings due to the specifics of the token distribution, as illustrated below.
Moreover, the structure of the coin has sparked concerns, drawing parallels to the Terra Luna debacle, albeit with significant backing from prominent entities like Galaxy Digital, OKX, Dragonfly, Binance Labs, and Bybit. This endorsement offers an intriguing prospect for early adopters. Typically, new coins that align with prevailing narratives during a bull market present substantial opportunities. As always, it's prudent to do your own research (DYOR), and I'd like to point out that this time, I was ahead of the curve.
Massive Crypto Dump: Should You Buy The Dip?
I am joined by Dan Gunsberg, Co-Founder & CEO of Hxro, a network of protocols powering derivatives trading and betting on Solana, as we delve into recent developments in the crypto space and discuss actionable insights. In the second part of the show, Andrew Parish and Tillman Holloway from The Arch Public will unveil the outcomes of their AI trading algorithm and evaluate the performance of our initial $10,000 portfolio.
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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.