The Wolf Den #968 - Will The Vanguard Ship Sink Or Sail?
Will Vanguard Approve The ETF?
Welcome to The Wolf Den! This is where I share the news, my ideas about the market, technical analysis, education and my random musings. The newsletter is released every weekday and is completely FREE. Subscribe!
You Need To Check Out Trading Alpha!
I'm deeply committed to delivering the highest-quality content to all of you, which is why I'm thrilled to be partnered with Wick, also known as @ZeroHedge on Twitter, who has the best technical analysis in crypto! Offering the absolute best Indicators & Tools on the market, made by actual trading professionals. Use code 'TENOFFSALE' for a 10% discount.
In This Issue:
Will The Vanguard Ship Sink Or Sail?
Bitcoin Thoughts And Analysis
Legacy Markets
Oklahoma Is Pro-Crypto
Today Is A Huge Day On The Hill
This Ethereum Exploit Led To DOJ Charges
Morgan Stanley Owns Bitcoin
13F Filings Have Poured In
GameStop Pump Explained! 🚀 Will Memecoins & Bitcoin Skyrocket Next?
Will The Vanguard Ship Sink Or Sail?
“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” - William Arthur Ward
Ladies and gentlemen, it appears Vanguard may have found itself a seaworthy captain.
About four months ago, during the launch of spot Bitcoin ETFs, various firms made public statements with varying degrees of optimism about this development. However, one institution, the second largest in the world, stood out by announcing its decision to steer clear of Bitcoin and other crypto-related assets.
A storm of backlash ensued.
"While we continuously evaluate our brokerage offer and new product entries to the market, spot Bitcoin ETFs will not be available for purchase on the Vanguard platform. We also have no plans to offer Vanguard Bitcoin ETFs or other crypto-related products."
"Our perspective is that these products do not align with our offer focused on asset classes such as equities, bonds, and cash, which Vanguard views as the building blocks of a well-balanced, long-term investment portfolio."
Following these statements, I decided to '#BoycottVanguard' until the asset manager came to the light side. I wished Vanguard well but chose not to advise my friends, family, or any of you to support Vanguard, as their anti-crypto stance strongly opposes what my platform stands for.
A couple of months after the ETF launches, during which BlackRock set new records with IBIT and all of the Bitcoin ETFs exceeded even our most bullish predictions, news broke that Vanguard’s CEO, Tim Buckley, would be stepping down. In his LinkedIn statement, he wrote, "It's time for others now." This news quickly stirred excitement within the Bitcoin community, but the rational part of my brain doubted that Buckley's departure was related to Bitcoin. Sometimes, I love being wrong, and hopefully, I soon will be.
Maybe I'm jumping the gun, but with a hint of caution, I believe there is a chance we could soon let go of the ‘#BoycottVanguard’ if the new captain correctly decides what’s best for his ship.
Salim Ramji, Vanguard’s new CEO, used to head up BlackRock’s global ETF business, overseeing the launch and success of IBIT. This marks the first time in Vanguard's history that an outsider has been hired as CEO. Every previous CEO was a rising star, groomed for many years, and closely connected to John Bogle, Vanguard’s founder, who famously said, “Avoid Bitcoin like the plague.”
The following was taken from an interview John Bogle did in 2017:
“Bitcoin. Well, Bitcoin is a currency. Bitcoin has no underlying rate of return. Bonds have an interest coupon, stocks have earnings and dividends. Gold has nothing, and Bitcoin has nothing. There is nothing to support Bitcoin except the hope that you will sell it for more than what you paid for it. I think that's a factually correct statement. How much of Bitcoin is criminal? Some people want to hide their transactions. Some people say it's large, some people say it is small. I don't really know the answer to that question. But I would say, avoid Bitcoin like the plague. Did I make myself clear?”
Salim Ramji isn’t a 180-degree turn for Vanguard. He’s the equivalent of cutting out the bow, stern, and midship and replacing all three sections with entirely brand-new interior and exterior. Vanguard still might not align with Bitcoin, but Ramji is now the voice of Vanguard, meaning he will wield a very strong influence over his crew. You can bet your last dollar that whoever hired him has heard and considered every public statement he has ever made about the asset class. Below are just a few:
“The gold is held in custody in a vault, which is remote from us, but it’s now easier to transact in gold using our gold ETFs. We’re applying that same philosophy to other new and emerging asset classes like bitcoin, just as we did to gold 20 years ago and just as we did to bonds 20 years ago.”
“The underlying technology that underpins Bitcoin and blockchain is something we are incredibly excited about. We are excited about it because it removes friction across the ecosystem. For us, and the role we play, the underpinnings are really powerful.”
Regarding the Bitcoin ETF, it will “help investors gain access to parts of the market that otherwise have been more difficult or really expensive or opaque for them to access otherwise.”
Of course, there still needs to be some degree of caution. We can’t assume Ramji means Vanguard is launching a Bitcoin ETF tomorrow, buying shares of spot ETFs, or even offering access to trading to their clients. However, the Bitcoin door is now wide open for him to walk through if he chooses to do so.
Time will tell.
Despite this optimism, I must present some counter-evidence. CoinDesk published an article yesterday in which Salim Ramji apparently “poured cold water on the idea that he has intentions for the asset management giant to offer its own spot bitcoin ETF.” His answer isn’t direct, so you have to read between the lines. That said, if there’s anything we know about these asset managers, it's that we have to ignore what they say and watch what they do.
Keeping the Vanguard ship docked is not a viable strategy when it comes to an asset as important as Bitcoin. Not considering a Bitcoin approach means the ship will only decay further over time, making it less and less seaworthy until it eventually sinks. Assuming that Vanguard is indeed interested in this asset class, it may be taking the necessary steps to enter the market: replacing old leadership, bringing in new leadership with a forward-thinking vision, and gradually introducing new strategies and approaches.
Bitcoin is proving right now that it doesn’t pay to be on the wrong side of history. Of course, we know nothing definitive about Vanguard yet and maybe all of this speculation is wrong, but the rational part of my brain is now saying Vanguard is watching very closely and slowly preparing to change their tune. Why would the world’s second largest asset manager hand over a new asset class to the world’s largest asset manager without a giving a damn? BlackRock holds the strings. It forced the hand of the SEC to approve a Bitcoin ETF and now it is forcing the hand of Vanguard to play along.
Sooner or later, anyone on the ocean not waiving the orange flag will be left for dead.
If the #1 and #2 institutions get involved, then institutions #3—#999 will as well.
Until Vanguard waives the orange flag, the call to #BoycottVanguard stands, and I will eagerly await the day it is no longer necessary.
Bitcoin game theory is real. It’s happening right in front of us.
Bitcoin Thoughts And Analysis
Trading Alpha has turned bullish on the daily chart, and gave the signal early in the candle that things were about to get spicy. As you can see, there was a yellow squeeze shade and then a grey arrow, showing the volatility would be to the upside. What we ended up with was a move through the track line and a huge candle spread. Nice.
That said, this is STILL CHOP IN A RANGE! The equilibrium of the range (the dotted center line) is still looming above as resistance, and would be the reasonable target for this move for now - around $67,000. Lower time frames are already overbought and showing potential bearish divergence, so I refuse to get too excited. I will save that for a break of the all time high, whenever it comes again.
Either way, it was nice to see bulls step up yesterday, I would love to see them continue to press.
Legacy Markets
Stocks took a breather after reaching all-time highs, with investors focusing on Federal Reserve speakers and jobless claims data for clues on future interest rates. S&P 500 futures remained steady, while Europe’s benchmark index edged lower. Treasuries and the dollar saw minor movements. Copper prices soared due to a short squeeze on the Comex exchange.
Meme stocks like GameStop and AMC continued to decline, while Chubb Ltd. shares rose following Berkshire Hathaway’s $6.7 billion investment. Cisco Systems gained on a positive revenue forecast.
Investors are hoping jobless claims data will indicate labor market slack, allowing the Fed to ease monetary policy. Central bank officials are expected to speak today, with futures markets predicting about two rate cuts this year. European traders are also watching for potential interest rate cuts from the ECB, with swap contracts pricing in three cuts in 2024.
In Europe, German industrials face weak demand from China, leading Siemens AG to lower guidance for its digital industries unit. In Asia, a regional gauge neared a new peak as shares of Chinese developers rose on hopes of policy support from Beijing.
Key events this week:
US housing starts, initial jobless claims, industrial production, Thursday
Philadelphia Fed President Patrick Harker speaks, Thursday
Cleveland Fed President Loretta Mester speaks, Thursday
Atlanta Fed President Raphael Bostic speaks, Thursday
China property prices, retail sales, industrial production, Friday
Eurozone CPI, Friday
US Conf. Board leading index, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.1% as of 6:07 a.m. New York time
Nasdaq 100 futures rose 0.1%
Futures on the Dow Jones Industrial Average were little changed
The Stoxx Europe 600 fell 0.2%
The MSCI World Index was little changed
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.1% to $1.0871
The British pound fell 0.1% to $1.2669
The Japanese yen rose 0.2% to 154.63 per dollar
Cryptocurrencies
Bitcoin rose 0.4% to $66,221.63
Ether fell 0.6% to $3,004.02
Bonds
The yield on 10-year Treasuries was little changed at 4.33%
Germany’s 10-year yield was little changed at 2.42%
Britain’s 10-year yield was little changed at 4.06%
Commodities
West Texas Intermediate crude fell 0.6% to $78.37 a barrel
Spot gold was little changed
Oklahoma Is Pro-Crypto
Now adding Oklahoma to the list of pro-Bitcoin states. Earlier this week, Governor Kevin Stitt approved HB 3594, a landmark bill that makes Oklahoma the first state to codify the protection of crypto-related rights into law. Effective November 1st, the bill ensures that the Oklahoma state government cannot prohibit, restrict, or impair the use of crypto in purchases or the self-custody of crypto. Additionally, it includes safeguards for miners, who have faced extensive legal hurdles related to zoning, noise complaints, and discriminatory rate schedules.
There’s more: “Oklahoma cannot require parties engaged in mining, staking, and variations to obtain a money transmitter license. Similarly, it cannot require those who operate a blockchain node to obtain a money transmitter license.” If only the U.S. adopted a similar approach, holy hell, there would be a bull market and strong footing for crypto in the U.S.
Today Is A Huge Day On The Hill
H.J. Res 109, the resolution aimed at nullifying SAB 121, is scheduled for a Senate vote today, with bipartisan support evident on both sides of the aisle. Following the House's vote, the expected stance of Republicans is clear, and Democratic support is rapidly increasing. Democrats currently find themselves stuck between a rock and a hard place, torn between appeasing their administration and party leaders or doing what is right.
The good news is that there is a growing sense that many Democrats will align with Republicans and recognize that cryptocurrency should transcend partisan divides. While the president has indicated he would veto the resolution, a substantial show of Democratic support could prompt him to reconsider, especially given concerns about the upcoming November election.
Winning in the House and Senate and losing to a presidential veto is a win in my book (at this point in time). Two-thirds of the way there is a HUGE step in the right direction.
This Ethereum Exploit Led To DOJ Charges
Brothers Anton Peraire-Bueno, 24, of Boston, and James Peraire-Bueno, 28, of New York, have been arrested by the DOJ following their MEV exploit on the Ethereum blockchain, which netted them $25 million. Their scheme targeted specific MEV bots (software that reorders transactions for advantage) and manipulated them into buying illiquid altcoins for their gain. This is a simplified explanation, but sufficient for understanding. The legal response and details of the indictment are complex, and I don't have a formed opinion on their arrest, charges, and claims. However, this incident marks a first of its kind. The IRS special agent in charge stated, “These brothers allegedly committed a first-of-its-kind manipulation of the Ethereum blockchain by fraudulently gaining access to pending transactions, altering the movement of the electronic currency, and ultimately stealing $25 million in cryptocurrency from their victims.”
13F Filings Have Poured In
Imagine what we will see in the next quarter and beyond: new entrants and larger positions. The ones listed below are just the most recent ones we learned about in the past couple of days.
Morgan Stanley owns $234 million worth of Bitcoin ETF
Millennium Management owns ~$2b Bitcoin ETF, 3% of their $64 billion fund.
Pine Ridge Advisers owns $205 million in Bitcoin ETFs, 23% of their $890 million AUM.
Boothbay discloses it holds almost $150 million in BlackRock’s IBIT
Susquehanna International Group invested more than $1 billion in Bitcoin ETFs
GameStop Pump Explained! 🚀 Will Memecoins & Bitcoin Skyrocket Next?
I am joined by Jaime Rogozinski, Founder of WallStreetBets, as we uncover what's happening with the stocks after the return of Keith Patrick Gill aka The RoaringKitty and whether Bitcoin and crypto will skyrocket.
Chris Inks will join us in the second part to share some interesting trades in crypto and beyond.
My Recommended Platforms And Tools
Phemex - Exclusive for new users, earn up to 8800 USDT. Also for a limited time, if you mint your soul pass you will pay no gas fees and enjoy VIP benefits. Use MY LINK to get the rewards!
Arch Public - It’s a hedge fund in your pocket. Built for retail traders, designed to outperform Wall Street. Try emotionless algorithmic trading at Arch Public today.
Trading Alpha - Trade With Confidence! My new go-to indicator site and trading community. Use MY LINK to sign up. Use code 'TENOFFSALE' for a 10% discount.
NGRAVE - ZERO is the most secure and user-friendly hardware wallet. If you aren't happy with your current crypto wallet, look no further than the ZERO.
Nord VPN - Get an exclusive NordVPN deal - 40% discount! It’s risk-free with Nord’s 30-day money-back guarantee. Protect your privacy.
Twitter - I spend most of my time on Twitter, contributing to CryptoTownHall every weekday morning, sharing random charts, and responding to as many of you as I can.
YouTube - Home of the Wolf Of All Streets Podcast and daily livestreams. Market updates, charts, and analysis! Sit down, strap in, and get ready—we’re going deep
TheWolfOfAllStreets.io - The most comprehensive collection of everything I have going on. Plus over 100 blogs and other exclusive content.
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.