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In This Issue:
A Political Line In The Sand
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Major Players Are Interested In Tokenized Assets
Grayscale Comments On Withdrawal Of ETH Futures ETF
China’s Endgame
Bitcoin Under ATTACK! Politicians Are Trying To Kill Crypto RIGHT NOW - How Do We Stop Them?
A Political Line In The Sand
TRIGGER WARNING: The following content is inherently political. As the saying goes, if you can't take the heat, get out of the kitchen. However, my promise is to stick to the facts related to the focus of this newsletter: crypto. will present them clearly so you can make the most informed decisions, without bias or discussing my personal political beliefs (or lack thereof).
A few years ago, the crossover between politics and crypto was almost nonexistent. There was some intersection between regulators and crypto, but the industry wasn't large or influential enough for elected officials to pay significant attention.
I vividly recall when Congressman Tom Emmer became the first member of Congress to publicly support crypto. It felt like a major breakthrough to have someone inside the system advocating for our cause. Check out this press release from 2018. While others may have come before him, Emmer was, in my opinion, the first to catch significant attention.
Over time, senators and congressmen from both parties began to champion the crypto industry, occasionally setting aside partisan interests and demands. Amid growing support, a rumor began to circulate: on Capitol Hill, crypto was starting to fall along partisan lines, with growing Republican interest and waning Democratic enthusiasm.
A small group of Democrats blurred the political divide over crypto, with occasional criticism from the right to further confuse the divide. However, Republican support continued to grow more rapidly, with them demonstrating greater willingness to listen, engage in positive discussions, draft favorable legislation, and vote in favor of the industry. While I hoped crypto could find bipartisan support (and at times it did), it was clear that Republican support was outpacing Democratic support. The harshest critics almost always seemed to fall on the blue side of the aisle.
In my opinion (feel free to disagree), capturing the interest of one party is better than none, but it comes at a cost. Before I address that cost, let me preface by saying that crypto won't remain a partisan issue forever, but steering it off its current course will be challenging.
The downside to crypto becoming 'red' (and the same would hold true if it had become 'blue') is that Democrats who toe the party line will oppose us, and Republicans who toe their party line will support us without question. Fake friends and fake enemies have entered the chat.
Let's rewind and discuss how we got here in the first place.
On Wednesday, the House of Representatives met to vote on Rep. Mike Flood's (R-Nebraska) joint resolution expressing congressional disapproval of Staff Accounting Bulletin (SAB) 121. For those unfamiliar, SAB 121 represents the SEC's Staff Accounting Bulletin No. 121, which clarifies the accounting treatment for crypto assets. It directs banks holding customer digital tokens to mark them as liabilities on their balance sheets, unlike traditional assets. This could result in banks incurring massive capital expenses. It makes providing custody of crypto impossible for the world’s largest custodians - and they want to participate.
Hours before the vote to repeal SAB 121, the White House signaled its opposition to H.J. Res. 109, the bill aimed at repealing SAB 121. Both of these incidents were historic: this was the first-ever vote on a standalone crypto bill in Congress… and the first time the administration preempted Congress with opposition.
Despite the administration's last-ditch efforts to sway the vote and intimidate the party into line, 21 Democrats broke rank to vote in favor of H.J. Res. 109. This is another reason why I dislike simplifying crypto into 'red' or 'blue.' Time and time again, Democrats have risked their seats to do what is right, and I expect this trend to continue. H.J. Res. 109 passed in the House.
Following everything that had already transpired, last night former President Donald J. Trump hosted a dinner event at Mar-A-Lago for buyers of his NFT cards. During the event, he explicitly expressed his support for crypto in the clearest way we've seen yet:
“They are against it. Biden doesn't even know what it is. If you ask Biden, 'Sir, are you for or against crypto?' he'd say, 'What's that?... Get me off the stage, get me off the stage.' Gensler is very much against it, the Democrats are very much against it. And I say this, a lot of people are very much for it, probably a lot of the people in this group. I'm fine with it. I want to make sure it's good and solid and everything else, but I'm good with it. If you like crypto in any form—it comes in a lot of different forms—if you're in favor of crypto, you better vote for Trump.”
Following this statement, a question from the crowd was caught on camera by a crypto Twitter user named DeGods:
DeGods: A lot of the smartest people in crypto are moving their businesses out of the U.S. because they are scared of the U.S.’s regulations…
Donald Trump: Because of the hostility, crypto is moving out of the U.S. because of hostility toward crypto.
DeGods: Correct, what will you do to stop it?
Donald Trump: We will stop it because I don't want that, I don't want that. If we are going to embrace it, we have to let them be here.
In true crypto Twitter fashion, the announcement went viral, with numerous major accounts pledging their support for Trump.
Don't forget, RFK Jr. is still in the running and genuinely pro-crypto, which shouldn't be ignored.
All in all, with Trump and Biden's recent statements on crypto, this election is shaping up to be extremely significant for the industry.
Since we're on the topic of politics, I've copied below three separate polls I found online. Polls are not an exact science, but it's fair to say this appears to be a very close race. If Trump earns 1% to 2% more votes by supporting crypto, that could easily be enough to push him over the finish line.
My final message to all of you is this: Don't get too wrapped up in the left vs. right, blue vs. red charade. Not all Republicans have proven they have our best interests in mind, and not all Democrats are anti-crypto. Above politics, we must recognize that our industry is fighting for basic and generational financial human rights that have nothing to do with conservative or progressive values. Crypto is a concern of morality more than anything else.
Love him or hate him, Donald Trump is telling us he will be better than Biden for crypto. Of course, promises are only as good as the actions that follow, but the message has been received loud and clear. It is up to you to choose whether you believe these politicians or not.
The right presidential candidate will move mountains for this industry, while the wrong one will build them. Please take the election seriously and make your voice heard. Our industry has the strength of tens of millions; we can sway the election, but it will require work. I look forward to revisiting this topic and, as always, deeply appreciate your support. Have a great weekend. Wolf out.
Bitcoin Thoughts And Analysis
Still boring. Yesterday did print a bullish engulfing candle, which is encouraging. We also saw price bounce off of the range low, which is another positive signal. That said, we still are just ranging near the range low and trading below the track line.
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 am personally NOT trading altcoins right now and I do not own this coin. That said, it has shown tremendous relative strength for this entire bull market and on this recent drawdown.
As you can see, Trading Alpha is showing squeeze shading, a breakout to the upside, a grey arrow showing a buy signal and grey dots. About as clear as it gets. There was also a clear “B” at the bottom.
We also have a clear break of the downward resistance (blue line).
This looks headed to the all time high at $7.61. A break above that is blue skies, which is one of the most appealing trades in markets.
Legacy Markets
Global stocks rallied, buoyed by earnings optimism and U.S. economic data supporting the case for interest-rate cuts. The Stoxx 600 gained 0.9%, marking its best weekly performance in over three months, while S&P 500 futures rose 0.4% after the index closed within 1% of its all-time high. Treasury yields and the dollar remained stable, and the British pound fluctuated after data showed the U.K. economy recovering from a shallow recession.
U.S. jobless claims exceeded expectations, bolstering the argument for rate cuts. This, along with upcoming U.S. inflation data and Federal Reserve speeches, will be closely watched, particularly comments from Fed officials Michelle Bowman and Neel Kashkari. Oil extended its three-day gains, supported by key technical levels.
Key events this week:
ECB publishes account of April policy meeting, Friday
US University of Michigan consumer sentiment, Friday
Chicago Fed President Austan Goolsbee speaks, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.9% as of 10:27 a.m. London time
S&P 500 futures rose 0.4%
Nasdaq 100 futures rose 0.4%
Futures on the Dow Jones Industrial Average rose 0.3%
The MSCI Asia Pacific Index rose 0.8%
The MSCI Emerging Markets Index rose 0.8%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0785
The Japanese yen fell 0.2% to 155.73 per dollar
The offshore yuan was little changed at 7.2271 per dollar
The British pound was little changed at $1.2535
Cryptocurrencies
Bitcoin rose 0.4% to $62,903.07
Ether rose 0.2% to $3,028.75
Bonds
The yield on 10-year Treasuries was little changed at 4.45%
Germany’s 10-year yield declined three basis points to 2.47%
Britain’s 10-year yield declined three basis points to 4.11%
Commodities
Brent crude rose 0.4% to $84.20 a barrel
Spot gold rose 1.1% to $2,372.08 an ounce
Major Players Are Interested In Tokenized Assets
The BlackRock effect is in full force. It has been reported that Mastercard, along with major U.S. banking institutions such as Citigroup, Visa, and JPMorgan, is testing distributed ledger technology for banking settlements using tokenization. The focus of this group is on what’s called a Regulated Settlement Network (RSN), which integrates and synchronizes the settlement of various assets, including tokenized Treasurys, investment-grade debt instruments, and commercial bank money.
Mastercard’s head of blockchain and digital assets, Raj Dhamodharan, said, “The application of shared ledger technology to dollar settlements could unlock the next generation of market infrastructures — where programmable settlements are 24/7 and frictionless.”
Real-world tokenized assets aren’t just coming; they're here.
Grayscale Comments On Withdrawal Of ETH Futures ETF
It was perplexing news to learn earlier this week that Grayscale had withdrawn its 19b-4 filing for an Ethereum futures ETF without providing a reason. Speculation heated up, but we now have a statement from the CEO to shed some light:
“At Grayscale, we decided to focus our energy on our spot products. That’s really core to our DNA. Sometimes we will file for a product. That doesn’t necessarily mean it’s going to come to market.”
Of course, this doesn’t reveal if there were backroom talks, which we would likely never learn about. However, it does clarify that Grayscale is still committed and confident in the spot ETH ETF. Sonnenshein also added that Grayscale is “optimistic that the SEC will do the right thing by investors.”
China’s Endgame
The next logical step for China is to allow mainland investors access to Hong Kong ETFs. During a Bitcoin Asia conference, Harvest CEO Han Tongli, one of the three major ETF issuers in Hong Kong, discussed the possibility of including the ETF in the Stock Connect scheme that links exchanges in mainland China and Hong Kong. Not much was said other than Harvest is “not ruling out the idea,” and the application is possible as long as “everything goes smoothly.”
I find it hard to picture China never allowing the mainland access to crypto investing. China cares too much about staying relevant and competitive and is watching everything the U.S. does very closely.
Bitcoin Under ATTACK! Politicians Are Trying To Kill Crypto RIGHT NOW - How Do We Stop Them?
2024 is the year of the elections in the USA, and it means a lot for crypto. I will discuss it with Alex Miller, a long-time Bitcoin supporter and the CEO of Hiro, the framework for a decentralized, user-owned internet built on top of Bitcoin. In the second part of the show, Dan from The Chart Guys will share his market analysis and some trades.
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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.