lovecity (@lovecity) • Hey
lovecity (@lovecity) • Hey
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- Healing is coming from fish angels mouth and their gentle touches!
- FLAME TOWERS. BAKU. AZERBAIJAN
- Is this temperature apocalypse or real?
- The Other Halving
By Scott Melker who is known the Wolf of All Streets
Litecoin, a cornerstone in the realm of digital currencies, has once again come under the spotlight with its recent halving. Such intrinsic protocol events, occurring roughly every four years, underscore the cryptocurrency's resilience and its foundational role in the broader digital currency ecosystem.
On August 2, coinciding with the mining of block 2,520,000, the reward for miners was reduced from 12.5 to 6.25 Litecoin (LTC) per block. These halvings are more than just technical occurrences. They possess profound implications for Litecoin's economic structure and also ripple through the market sentiment, often with significant anticipation.
Historically, halvings for leading cryptocurrencies like Litecoin and Bitcoin have dual implications. They serve as a mechanism to control inflation by curtailing the influx of new coins into circulation. Additionally, they highlight the inherent scarcity of the digital asset, often fuelling anticipatory buzz in the market. Even though immediate price reactions might vary, over extended periods, halvings have generally been linked to price appreciation.
Litecoin, often characterized as the "silver to Bitcoin’s gold," stands out with its distinctive journey since its introduction. Charlie Lee's vision in 2011 gave birth to Litecoin, which he perceived as a nimbler version of Bitcoin. With a block generation time of merely 2.5 minutes, in contrast to Bitcoin's 10 minutes, Litecoin promises faster transaction confirmations.
Charlie Lee, ahead of this notable event, humorously shone a light on the inconsistencies among various online halving countdowns. He tweeted, “This is funny. I googled 'Litecoin Block Halving Countdown' and checked the first 4 hits. The ETA for the halving is all over the map! From my quick calculation, I believe NiceHash's countdown is the most accurate. I expect the halving to occur in about a 1 day, 2 hours, and 30…” (@SatoshiLite) on August 1, 2023.
While price movements are an integral aspect of the crypto discourse, Litecoin's pertinence in the expansive cryptocurrency arena cannot be sidestepped. With its increasing clout as a preferred payment alternative, Litecoin is making its presence felt. Recent figures indicate both Litecoin and Bitcoin Lightning payments achieving record volumes on several platforms. In some instances, by June, Litecoin even outpaced Bitcoin.
The embrace of Litecoin transcends established markets like North America, Europe, and the UK. In emerging territories, particularly Africa, Litecoin adoption is surging, reflecting a global shift where cryptocurrencies are gaining an edge over traditional banking systems. This trend in Africa could potentially provide insights into future patterns in regions like Latin America.
As of now, Litecoin stands as the 12th largest cryptocurrency in terms of market capitalization, boasting a valuation of $6.8 billion. It sees daily trade activities around the ballpark of null.14 billion, indicative of strong engagement with the coin. Out of its maximum potential cap of 84 million LTC, a staggering 73.5 million coins are already in circulation.
However, not all is rosy. The anticipation around the recent halving event took Litecoin’s price on a roller-coaster ride, witnessing a sharp ascent in early July, only to face challenges in maintaining the bullish momentum. This culminated in the coin's price taking a hit post-halving, contradicting some bullish expectations. Buy the rumor, sell the news.
Regardless of such market dynamics, the halving event serves to spotlight Litecoin's meticulously crafted monetary structure and its burgeoning influence on a global scale. As it continues to make inroads across diverse regions, Litecoin's stature as a pioneering digital currency looks poised for further growth.
- Cathie Wood’s Predictions Aren’t High Enough
Cathie Wood's recent predictions for Bitcoin's value in 2030—null.25 million in a bullish scenario and $625,000 as a baseline—have sent ripples throughout the crypto community. These estimates don't materialize from thin air; they involve intricate quantitative analyses. Simplistically, one might imagine assembling a team of quants, brainstorming a variety of theories, running numerous Excel models, and voilà: a groundbreaking Bitcoin price prediction emerges.
Of course, such a portrayal is a vast oversimplification of an intricate procedure. I hold profound respect for Cathie Wood and the invaluable insights she has imparted to the financial world. Inspired by her, I thought, why not embark on my own Bitcoin forecasting adventure?
While I may not have a battalion of PhD-level quants or seasoned Wall Street veterans on speed dial, I bring forth a unique perspective. Recognizing that price predictions are a formidable endeavor, I've chosen to delve into the AUM (Assets Under Management) of the top 10 largest asset managers. I'm keen to investigate the potential ramifications if 1%, 5%, or 10% of their assets were reallocated to Bitcoin.
HERE… WE… GO…
For starters, we need to know the AUM of the institutions and what 1%, 5%, and 10% represent.
BlackRock - $9,090,000,000,000 AUM
• 1% - $90 billion
• 5% - $454.5 billion
• 10% - $909 billion
Vanguard - $7,600,000,000,000 AUM
• 1% - $76 billion
• 5% - $380 billion
• 10% - $760 billion
Fidelity Management & Research - $4,240,000,000,000 AUM
• 1% - $42.4 billion
• 5% - $212 billion
• 10% - $424 billion
State Street Global Advisors - $3,600,000,000,000 AUM
• 1% - $36 billion
• 5% - $180 billion
• 10% - $360 billion
Morgan Stanley - $3,131,000,000,000 AUM
• 1% - $31.31 billion
• 5% - $156.55 billion
• 10% - $313.1 billion
JP Morgan Chase- $3,006,000,000,000 AUM
• 1% - $30.06 billion
• 5% - $150.3 billion
• 10% - $300.6 billion
Goldman Sachs - $2,672,000,000,000 AUM
• 1% - $26.72 billion
• 5% - $133.6 billion
• 10% - $267.2 billion
Credit Agricole - $2,660,000,000,000 AUM
• 1% - $26.60 billion
• 5% - $133 billion
• 10% - $266 billion
Alianz Group - $2,300,000,000,000 AUM
• 1% - $23 billion
• 5% - $115 billion
• 10% - $230 billion
Capital Group - null,350,000,000,000 AUM
• 1% - $13.5 billion
• 5% - $67.5 billion
• 10% - $135 billion
Now for the fun part.
The Grand Totals:
• 1% - $378.49 billion
• 5% - null.982 trillion
• 10% - $4.164 trillion
If The Grand Totals Were Added To The Entire Crypto Market Capitalization
• 1% - null.57 trillion (30.8% increase)
• 5% - $3.18 trillion (165% increase)
• 10% - $5.36 trillion (346.6% increase)
If The Grand Totals Were Added To Bitcoin’s Current Market Cap:
The current Bitcoin market cap when I calculated this was $579 billion - keep in mind this figure fluctuates.
• 1% - $957.56 billion (65.2% increase) - Bitcoin is $49,560
• 5% - $2.56 trillion (342.1% increase) - Bitcoin is $132,630
• 10% - $4.74 trillion (718.6% increase) - Bitcoin is $245,580
The current market cap is null.2 trillion
- Cathie Wood’s Predictions Aren’t High Enough
Cathie Wood's recent predictions for Bitcoin's value in 2030—null.25 million in a bullish scenario and $625,000 as a baseline—have sent ripples throughout the crypto community. These estimates don't materialize from thin air; they involve intricate quantitative analyses. Simplistically, one might imagine assembling a team of quants, brainstorming a variety of theories, running numerous Excel models, and voilà: a groundbreaking Bitcoin price prediction emerges.
Of course, such a portrayal is a vast oversimplification of an intricate procedure. I hold profound respect for Cathie Wood and the invaluable insights she has imparted to the financial world. Inspired by her, I thought, why not embark on my own Bitcoin forecasting adventure?
While I may not have a battalion of PhD-level quants or seasoned Wall Street veterans on speed dial, I bring forth a unique perspective. Recognizing that price predictions are a formidable endeavor, I've chosen to delve into the AUM (Assets Under Management) of the top 10 largest asset managers. I'm keen to investigate the potential ramifications if 1%, 5%, or 10% of their assets were reallocated to Bitcoin.
HERE… WE… GO…
For starters, we need to know the AUM of the institutions and what 1%, 5%, and 10% represent.
BlackRock - $9,090,000,000,000 AUM
• 1% - $90 billion
• 5% - $454.5 billion
• 10% - $909 billion
Vanguard - $7,600,000,000,000 AUM
• 1% - $76 billion
• 5% - $380 billion
• 10% - $760 billion
Fidelity Management & Research - $4,240,000,000,000 AUM
• 1% - $42.4 billion
• 5% - $212 billion
• 10% - $424 billion
State Street Global Advisors - $3,600,000,000,000 AUM
• 1% - $36 billion
• 5% - $180 billion
• 10% - $360 billion
Morgan Stanley - $3,131,000,000,000 AUM
• 1% - $31.31 billion
• 5% - $156.55 billion
• 10% - $313.1 billion
JP Morgan Chase- $3,006,000,000,000 AUM
• 1% - $30.06 billion
• 5% - $150.3 billion
• 10% - $300.6 billion
Goldman Sachs - $2,672,000,000,000 AUM
• 1% - $26.72 billion
• 5% - $133.6 billion
• 10% - $267.2 billion
Credit Agricole - $2,660,000,000,000 AUM
• 1% - $26.60 billion
• 5% - $133 billion
• 10% - $266 billion
Alianz Group - $2,300,000,000,000 AUM
• 1% - $23 billion
• 5% - $115 billion
• 10% - $230 billion
Capital Group - null,350,000,000,000 AUM
• 1% - $13.5 billion
• 5% - $67.5 billion
• 10% - $135 billion
Now for the fun part.
The Grand Totals:
• 1% - $378.49 billion
• 5% - null.982 trillion
• 10% - $4.164 trillion
If The Grand Totals Were Added To The Entire Crypto Market Capitalization
• 1% - null.57 trillion (30.8% increase)
• 5% - $3.18 trillion (165% increase)
• 10% - $5.36 trillion (346.6% increase)
If The Grand Totals Were Added To Bitcoin’s Current Market Cap:
The current Bitcoin market cap when I calculated this was $579 billion - keep in mind this figure fluctuates.
• 1% - $957.56 billion (65.2% increase) - Bitcoin is $49,560
• 5% - $2.56 trillion (342.1% increase) - Bitcoin is $132,630
• 10% - $4.74 trillion (718.6% increase) - Bitcoin is $245,580
The current market cap is null.2 trillion
- TÜRKİYE WOMEN VOLLEYBALL TEAM IS THE CHAMPION OF THE 2023!!!
CONGRATULATIONS!!!
- Bitcoin Will Be the Currency of AIs#1
By Scott Melker who is known the Wolf of All Streets
In the world of cryptocurrency, filtering out the 'noise' and focusing on the 'signal' can feel like an insurmountable task. Within this digital cacophony, a multitude of voices compete for attention, each promoting diverging ideas and perspectives. It is, therefore, no surprise that newcomers might quickly feel overwhelmed by this complex ecosystem and choose to abandon their crypto adventure prematurely.
Despite the pandemonium, a select few influential figures emerge whose opinions significantly influence the prevailing narrative in the cryptocurrency sphere. One such individual, a personal inspiration of mine, has maintained a somewhat clandestine status among the crypto ranks, despite his profound insights - Arthur Hayes.
For anyone with even the slightest interest in cryptocurrencies, neglecting to familiarize oneself with Arthur Hayes' work equates to a substantial missed opportunity. As a considerable amount of the information shared in this space draws from Hayes' insights, it seemed fitting to spotlight the master himself and delve into his latest piece, titled "Massa," published just recently.
For the uninitiated, Arthur Hayes is synonymous with Bitmex, a pioneering cryptocurrency exchange that embodied the adventurous spirit of early crypto with its daring derivative offerings. Bitmex was a haven for the most audacious investors - it was an all-or-nothing game of chance. After falling under heavy regulatory scrutiny in 2020, Hayes stepped away from Bitmex as it halted operations in the U.S. Thankfully, this was not the last we heard from him.
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- Fishs at the Qebele Restaurant in Qebele/Azerbaijan
- Ethereum Is Next
By Scott Melker who is known the Wolf of All Streets
Since last year's downturn, Bitcoin has seen significant positive developments. With its stellar performance, it remains at the forefront of the crypto race. Newly emerging Ordinals present an intriguing prospect for exploration, while Bitcoin continues to attract investors seeking alternative stores of value. On Wall Street, the race is on for a Bitcoin ETF approval. Recovering from a challenging 2022, Bitcoin has quickly embraced a bullish narrative, with the halving event still 293 days away.
I am bullish on Bitcoin.
While Bitcoin is achieving remarkable success, it would be unwise to overlook Ethereum, the second-largest crypto asset, quietly making impressive strides. Ethereum has had an equally strong year, and the periods when it garners less attention while Bitcoin dominates are my favorite times to focus on it. Investors may be flocking to Bitcoin for very valid reasons, but Ethereum is poised to be the next hotspot, and I plan to be part of it.
Since hitting a low in November 2022, Bitcoin has nearly doubled in price, with a current increase of approximately 94.5%. During the same period, Ethereum's price has risen by about 72.7%. Bitcoin's lead, which was undoubtedly boosted by BlackRock, was already outpacing Ethereum by over 10% prior to the BlackRock's involvement. However, Ethereum's ability to stage impressive comebacks is a known fact.
On the supply side, Ethereum has been fluctuating between inflation and deflation throughout the year, exceeding zero issuance by a remarkably narrow margin. I expect Ethereum to move rapidly into deflationary issuance and remain there for some time as DeFi activity ramps up. Notably, the amount of Ethereum staked now exceeds the amount held on centralized exchanges.
This trend can be partly attributed to a broad shift away from exchanges, but the demand for Ethereum staking has significantly surpassed projections. Even the most optimistic Ethereum supporters did not foresee nearly 20% of its supply being staked at this stage, with predictions of this figure reaching 25% by year's end. Despite a considerable drop in yield as staking demand has surged, the high staking figures provide a substantial boost to supply-demand economics in terms of price. Once buying pressure begins to mount, the bidding war will be nothing short of spectacular.
As for investor confidence in Ethereum, the image above is quite telling. Isn't it fascinating how just a few months ago, the crypto community was doubtful about the execution of the Shanghai upgrade and the subsequent rise in staking figures? Now, doubts are emerging about Ethereum's ability to outperform Bitcoin. Once the naysayers run out of speculative elements to hold onto, the only thing left to question is price action, which will ironically leave doubters in denial.
While it's impossible to predict when Ethereum will steal the limelight, it's clear that its time is imminent (not financial advice). Throughout the year, there have been minor rotations from Bitcoin to Ethereum to altcoins, but since hitting the lows, no major shift has occurred yet. Though it's early to expect institutions to file spot ETFs for Ethereum, in the world of crypto, nothing is off the table. As long as Ethereum remains relatively unnoticed in the crypto community and beyond, I'll hold onto my bullish outlook. Ethereum remains the undisputed leader in decentralized finance, comfortably reigning supreme in its domain.
- JUST IN: Hong Kong's biggest bank, null.3 trillion HSBC now reportedly offers #Bitcoin ETFs to clients .
#ETF #News #Crypto #Bignews
[Bitcoin Magazine Twitter'da](https://twitter.com/BitcoinMagazine/status/1673299810646892544)
“JUST IN: Hong Kong's biggest bank, null.3 trillion HSBC now reportedly offers #Bitcoin ETFs to clients”
- A Letter To Bulls
By Scott Melker who is known the Wolf of All Streets
Dear Crypto Enthusiasts,
Take a moment and applaud yourselves – you've earned it. The previous news cycle was no walk in the park; the market attempted to rattle you, but your steadfastness prevailed. However, before we get caught up in euphoria, let's stay grounded – bull markets bring their own challenges - including deciding whether we are in a bull market or not!
The survival tactics required in a bear market are not the same as those needed to thrive in a bull market. Prolonged market extremes can condition us into a single mode, causing us to forget how to adapt when the price direction reverses. Losing money in a bear market is tough, but surrendering profits in a bull market can be even more agonizing.
I urge you to understand the weight of this message. I want you to succeed and truly believe you can. To help, I've compiled a few pointers to prepare your mindset for the upcoming trends, whether they be immediate or after the halving next year. Do NOT fall into the trap of thinking it's 'up only' - it might feel like it for a while, but it's not sustainable. The time to get ready for a bull market is now, and your portfolio's health depends on it.
Winning Is Not a Given
During a crypto bull market, not all assets will flourish. The majority of what exists now may not endure from one cycle to the next. I've reiterated this countless times - there's no better time to let go of underperformers. If you're banking on last cycle's altcoins topping the charts in this cycle, brace for disappointment. An altcoin getting a sympathy boost from Bitcoin's rise is NOT victory; it's a sign to allocate your resources elsewhere. As much as we'd all like to win, markets don't operate that way - you still need to earn your slice of success.
Avoid Envy
Bull markets will always present greener pastures. The key is to concentrate on nurturing your own portfolio. Below, I've outlined the common cycle of crypto envy – it's a recurring pattern of mental strain and portfolio decline that we've all experienced. Don't get caught in it.
Bitcoin holders envy early investors.
ETH holders envy Bitcoin's superior performance.
Altcoin holders envy GBTC's outperformance.
GBTC holders regret not buying real Bitcoin.
Ironically, as soon as Bitcoin cools down, these roles reverse, just like in a game of musical chairs:
Bitcoin holders envy ETH investors.
ETH investors envy altcoin holders.
Altcoin holders envy GBTC and memecoin investors.
Memecoin investors envy Bitcoin holders.
Envy is the market's way of coaxing you into chasing the wrong strategies and narratives. Resist it. If you change your perspective, you'll see that after Bitcoin settles, Ethereum and then altcoins will have their day. Diligent investing can yield multiple winners at different times.
Don't Cash Out Minor Gains
Don't fool yourself into trading through a bull market! Unless you're certain you can outpace a bull run, avoid this folly. A profitable trade doesn't always equate to time well spent. Your trading activity could erode your own profits, effectively cannibalizing your portfolio. Most investors are better off holding steady, weathering the highs and lows. I've written in depth about this on my blog, 'Everyone Is A Trading Genius In A Bull Market'.
Detach Emotionally
Yes, you and your investments weathered hard times together, but it's time to outgrow your infatuation. Unless your strategy was to never sell, consider taking profits at some point instead of enduring another multi-year bear cycle. The moment to realize profits for long-term investors might still be far off, but it's time to start distancing emotionally from your investments. I adore Bitcoin and Ethereum, but when the time comes, I won't hesitate to realize some gains - feel free to criticize me!
Stay Within Your Narrative
Hopping between narratives is a surefire way to miss trends. Investors who switched from crypto to AI probably arrived late, and will be late again when they scramble back to crypto. If you've done your research, hold your ground and resist chasing every shiny object. Patience is vital in both bull and bear markets, and the same applies to discipline. If you followed a strict strategy during the bear market, adhere to one during the bull market too – making drastic changes is unnecessary.
Crypto is still evolving. There will be many bull markets, so breathe easy knowing there will be more ups and downs. That said, it's time to strategize for a bull market. If you're still in bear hibernation mode, you're going to fall behind or already have – wake up and start making choices that optimize your growth in bullish conditions.
This message may be more bullish than my usual ones, but that's because I'm generally bullish. While I can't predict tomorrow, next week, or next year, my inclination leans more towards growth – it's an exciting time to own crypto.
Sincerely,
Wolf
- The 'Back Door'
By Scott Melker who is known the Wolf of All Streets
Despite the often baffling world of cryptocurrency, the intricacies of market dynamics frequently echo the mundane human experience. For instance, in my previous newsletter, I discussed navigating the 'wall of worry.' I have also delved into terms such as 'buying on sale,' 'rising tides,' 'diversifying your portfolio,' and 'even a broken clock is right twice a day.'
These analogies are valuable for investors because they transform an unfamiliar and emotional subject into something comprehensible and rational. However, crypto is an entirely different entity, and crafting relatable, simplifying methods for investors is a demanding task. This calls for us to abandon traditional frameworks and start from scratch - the crypto markets necessitate fresh analogies. Here's an attempt.
I liken the crypto market to a revolving door. While it spins in one direction, it theoretically facilitates investors entering and exiting simultaneously. However, when circumstances become critical, one flow usually overpowers the other. If you were to visualize this door, what would you see?
From my perspective, I envision beleaguered investors jostling their way to the exit, colliding with each other, and leaving newcomers in queue for an opening. I picture a door moving not at breakneck speed but at an irksomely rapid pace, close to its maximum capacity. In this context, when the bidirectional door becomes a one-way exit, it could signify we are nearing a market bottom.
The analogy might sound disheartening initially, but the beauty of crypto lies in its ability to pivot in just a matter of moments. As those exiting dominate the traffic flow, newcomers gradually cultivate anticipation. Once the last person exits, a wave of exhilaration ensues as newcomers finally take their turn through the revolving door - this concept holds up.
The revolving door analogy is relatively simple to understand, but imagine if I told you about another door, hidden and exclusively reserved for privileged participants - let's call it the 'back door.' Unlike the revolving door, there's no waiting at the 'back door,' but the rules of entrance and exit differ. It is governed by politics and vested interests, where your connections and knowledge play crucial roles, and favorites always come out on top.
Given the relative immaturity of the crypto market, the 'back door' sometimes swings open and shut without garnering attention, while at other times it's unignorable. After last year's massive exit of crypto native firms, I suspect that in the coming years, the 'back door' will admit a significant number of carefully selected entrants, the most recent being BlackRock.
Yesterday, a CoinDesk report announced that BlackRock, the world's biggest asset manager, was nearing a Bitcoin ETF filing, partnering with Coinbase as the custodian. Shortly after, it was confirmed that BlackRock is applying for a spot Bitcoin ETF, becoming the strongest contender thus far.
It's evident that BlackRock intends to enter through the 'back door.'
Numerous ETF applications by crypto friendly companies have been rejected. Would anyone be surprised to see BlackRock move to the front of the line and get approval?
Do you remember this tweet, that I sent right after the FTX debacle?
This is an example of what I was talking about… companies that are cozy with the government will get the first crack at dominating the future of crypto.
I've discussed doors extensively, so I'll conclude here. The 'entrance door' has always exerted a stronger influence on crypto; it's the reason Bitcoin stands $25,000 above zero, and why the overall market value exceeds null trillion. The 'exit door' may appear more active at times, but that's merely psychological maneuvering - don't be misled.
As an investor, my decisions stem from observable phenomena. Starting with distressed sellers is a reasonable approach. While it's impossible to buy the last exiter's position, patient decisions based on flow are achievable. Also, I may never fully understand the 'back door' operations, but speculation and significant announcements are excellent indicators.
The crypto market is truly a unique phenomenon - everyone has a shot, but only a few will succeed. I hope you have a fantastic weekend, and I eagerly anticipate engaging with you all at the upcoming Crypto Town Hall. This is an exciting time in the world of cryptocurrency, and I look forward to navigating these uncharted waters together. Let's seize the opportunities that this dynamic market offers, and remember, even the revolving door of crypto swings both ways - every exit could be a potential entrance. Stay vigilant, stay informed, and most importantly, keep revolving!
- OPERATION END OF CRYPTO
By Scott Melker who is known the Wolf of All Streets
Let's not waste time - the SEC is suing Coinbase. Over the past 48 hours, the SEC has taken the offensive, initiating a war on all fronts against the largest centralized entities in crypto. Not only is the world's largest exchange, Binance (including Binance.US), being sued, but so is the largest exchange in the United States. This is no longer Operation Choke Point; it's Operation End Crypto.
For the record, the Binance lawsuit and the Coinbase lawsuit are not the same. If you disagree, I recommend starting with the Binance complaint and then moving onto the Coinbase complaint. Before I delve into what makes the Coinbase lawsuit unique, I'd like to step back and discuss some overlooked context.
Whether we like it or not, Coinbase appears to have slipped through the SEC's cracks, according to Gary Gensler's perspective. Please consult the timeline below.
May 4, 2017 – December 23, 2020: SEC Chairman Jay Clayton is in office
December 17, 2020: Coinbase confidentially files for an IPO with the SEC.
January 18, 2021: Joe Biden announces his intention to nominate Gary Gensler as Chairman of the SEC.
January 28, 2021: The SEC approves Coinbase's S-1 registration statement, clearing the way for the company to go public.
March 10, 2021: The Senate Banking Committee approves Gensler's nomination and sends it to the full Senate for consideration.
March 23, 2021: Coinbase announces that it will go public through a direct listing on the Nasdaq stock exchange.
April 14, 2021: The Senate confirms Gensler's nomination as SEC Chairman with a vote of 53-45.
April 14, 2021: Coinbase goes public on the Nasdaq under the ticker symbol COIN.
I am a user of Coinbase, a shareholder, and a supporter. However, in the spirit of fairness, it should be noted that Coinbase sought to gain SEC approval before the arrival of a new gatekeeper, securing its position before there was any possibility of its entrance being reconsidered or revoked. Do I fault them for this? Absolutely not. If I were in Brian Armstrong's shoes, I would have done the same. I am grateful for what Coinbase has achieved and stand ready to support them in this battle with the SEC.
Before I proceed, I want to clarify that none of the content in this letter constitutes financial advice. The contents of this letter, along with all other letters I have written and will write, are intended strictly for entertainment and educational purposes, and should not be interpreted as financial advice.
So what is the SEC alleging in the Coinbase case? Here’s the SEC’s most broad overview, taken from the official SEC press release.
“The Securities and Exchange Commission today charged Coinbase, Inc. with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency. The SEC also charged Coinbase for failing to register the offer and sale of its crypto asset staking-as-a-service program.”
And to briefly expand, the SEC is targeting Coinbase because, “since at least 2019, Coinbase has made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities” and, “engaging in an unregistered securities offering through its staking-as-a-service program.”
The SEC's contention with Coinbase primarily revolves around issues of improper registration, offering of securities, and staking. These are serious accusations, albeit far less severe than those leveled at Binance. Nothing in the Coinbase suit suggests criminal behavior, unlike the allegations against Binance by the SEC. Also, we KNEW THIS WAS COMING after Coinbase received a Wells Notice from the SEC, and there is really nothing new in the suit.
To avoid repetition and monotony, I'll bypass the details regarding "unregistered exchange, broker, and clearing agency," and concentrate on the staking allegations the SEC has put forward. Let's examine the major claims the SEC is making against Coinbase's staking service, each of which can be found in the complaint as marked below.
321 C. Coinbase Has Marketed the Coinbase Staking Program as an Investment Opportunity.
338 E. The Coinbase Staking Program as It Applies to Each of the Five Stakeable Crypto Assets Is a Security. (XTZ, ATOM, ETH, ADA, and SOL)
356 iii. Coinbase Staking Program Investors Reasonably Expect to Profit from Coinbase’s Efforts.
367 F. Coinbase Has Failed to Register Its Offers and Sales of the Coinbase Staking Program as It Applies to Each of the Five Stakeable Crypto Assets.
The argument presented by the SEC is clear, yet I stand firm in my belief that securing a network via staking should not be categorized as engaging with securities in any capacity. You are, of course, free to disagree with my perspective. Staking as a service can be viewed as a security - Kraken settled a case about this exact product. If the entity is taking a profit on your staking, then I can understand the SEC’s position.
The next point I need to bring up is something we should all try to keep under the radar from the SEC. In the complaint, the SEC targets five different tokens listed above, stating, "today, the Staking Program enables investors to stake five different assets: XTZ (Tezos), ATOM (Cosmos), ETH (Ethereum), ADA (Cardano), and SOL (Solana)." However, Coinbase offers more than just these five through Coinbase Prime, as you can see below. While I don't view this as a major point, it's a detail that warrants clarification.
Let's now delve into the implications. In the worst-case scenario, Coinbase could be forced to shut down its staking service. Fearmongerers may suggest that Coinbase funds could be locked or sold off, and kept away from customers, but there is no supporting evidence that this will happen. If Coinbase is compelled to terminate its staking program, it would be a significant blow to its current business model, but it wouldn't spell disaster. The company's most lucrative ventures are trading fees and earning interest income from USDC; a hit to these would be far more detrimental.
Regardless, Ethereum is currently being staked at a rapid pace, and Coinbase capitalizing on this trend is crucial for their business model. It'll be intriguing to observe how stakers react to this news in the coming days and weeks.
Speaking of USDC, let's ponder where the SEC might strike next. The prevailing consensus is that Tether is likely next in line, but it wouldn't surprise me if the SEC goes for the bigger fish and targets Ethereum directly. The SEC understands that Ethereum is a much larger target than Coinbase, with a market cap of $225 billion versus Coinbase's $12 billion, but nothing is guaranteed. Tether could be sued today at noon and Ethereum tomorrow at dinner time; the SEC doesn't care about timing. I doubt Operation End Crypto will conclude with Coinbase; the SEC seems intent on pursuing us by any means necessary.
A unique aspect of the Coinbase case is that the SEC is supported by a multi-state task force of ten state securities regulators, led by California and including Alabama, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin. This adds more regulatory complexity for Coinbase to navigate. Each state has issued its own cease-and-desist demands—for instance, here's Alabama's.
Coinbase apparently has 27 days to respond to these individual requests, making this a fascinating development to track.
Finally, let's address the SEC's ultimate demands.
Ordering Defendants to disgorge on a joint and several basis all ill-gotten gains resulting
from their Exchange Act violations, and ordering Coinbase to disgorge all ill-gotten gains resulting from its Securities Act violations (doubt this is paid in full)
Ordering Defendants to pay civil money penalties (reasonable)
Granting any other and further relief this Court may deem appropriate or necessary for the benefit of investors (possible)
The Commission demands trial by jury (will happen)
With the lawsuit summarized, let's now turn our attention to the market. Coinbase's stock took a significant hit, which was anticipated. However, the crypto market remained largely indifferent, and that speaks volumes. Bitcoin recaptured all losses from the Binance news the day before.
Below, I explain why I believe the markets remain resilient.
Firstly, the SEC's behavior is a U.S. issue, and crypto has evolved to the point where it can continue to grow with or without the SEC's endorsement.
Secondly, and related to the first point, it's evident that crypto's longevity surpasses that of the SEC. Gary Gensler's tenure has an expiration date, whereas crypto does not.
Thirdly, surviving this onslaught virtually guarantees a bull market. There's no larger hurdle than the SEC, and overcoming the SEC is the ultimate goal. Let’s get this fight going.
Fourthly, the industry has long awaited this battle, and now we finally have it. In an ideal world, we wouldn't have to engage in this fight, but given our current circumstances, confrontation seems to be the only path forward.
Lastly, the fifth point is that the market appears to believe that crypto will triumph, and initiating this battle was a crucial first step toward that victory - the truth and freedom are on our side.
I'm eager to observe how the industry unites to counteract this challenge. If anything, the SEC has inadvertently served us by rallying us against a common adversary. This isn't likely to end favorably for them. Consider the potential we can achieve if we put aside our differences and collaborate as a united front; the possibilities are limitless. I look forward to standing alongside Coinbase and Binance in this fight; we are all in this together.
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- The Most Anticipated Recession Ever
By Scott Melker who is known the Wolf of All Streets
As we approach mid-year, one might feel that something seems off. Weren't we meant to be bracing for a recession? Do you recall the buzz in the news predicting a looming recession, often citing renowned economists for validation? Yet, this narrative seems to have fizzled out.
Let's revisit some of the bold assertions made:
“It would surely be the most-anticipated recession in US history.” - Bloomberg
“Survey after survey shows fears of recession are high. It's easy to see why.” - NPR
“We believe a recession is likely in the U.S. in 2023. A recession has been our base case since mid-June 2022, and our conviction has hardened in the months since.” - Forbes
“With a deep red signal emanating from the ClearBridge Recession Risk Dashboard and a Fed clearly willing to tolerate economic pain in order to restore price stability, we believe a recession is likely in 2023.” - Clearbridge Investments
We often strive to predict recessions, but they are inherently unpredictable, often striking when least expected. Save for a handful of prescient analysts, the COVID-19 recession, the Great Recession, or the early 2000s recession caught most investors by surprise.
As a contrarian, I propose the following: anticipation equates to mitigation. Digging into crowd psychology, if the consensus believes in a forthcoming recession, wouldn't it be more surprising to those on the sidelines or shorting the market if it doesn't occur? We know the inverse holds true during market booms, reflecting the cyclical nature of markets.
Consider the discourse surrounding recessions. There is no established time frame dictating a recession must follow interest rate hikes after a set period. The effects of these hikes can take months or years to permeate the economy. Similarly, a yield curve inversion doesn't necessarily precipitate a recession. Take, for example, the 1995 yield curve inversion, which led to an extended phase of economic growth. A surefire recession checklist simply doesn't exist.
The concept of a clear-cut recession definition is another myth. The official definition, as vague as it might seem, is left intentionally open-ended for interpretation:
The National Bureau of Economic Research’s Business Cycle Dating Committee defines a recession as - “a significant decline in economic activity that is spread across the economy and that lasts more than a few months. The variables the committee typically tracks include real personal income minus government transfers, employment, various forms of real consumer spending, and industrial production.”
If Janet Yellen and Jerome Powell decide there will be a recession, we will have one. Conversely, if they don't, we won't. If public anticipation of a recession is high, this might be enough to prevent its occurrence. Likewise, should we overlook the possibility, our complacency might prompt a recession. Contrary to what experts may claim, a recession largely hinges on the interplay between public economic perception, market behavior, and policymakers' sentiments.
Let's not share this with our leaders - they might not be too pleased.
This poses the question: Does our anticipation of a recession serve as a self-fulfilling or self-defeating prophecy? Do our expectations create a recession, or do they diminish the odds of one occurring? As a contrarian, I believe a recession is more likely when it isn't the talk of the town. However, signs of systemic fragility are essential; the probability of a recession doesn't increase just because we've stopped discussing it. Contrarianism for its own sake isn't sufficient; we need evidence.
I'm personally keeping tabs on rate hikes, yield curves, inflation data, potential bank failures, and the political landscape to gauge the likelihood of a recession. Still, I remain committed to my cryptocurrency thesis and seize opportunities to buy the dips. If crypto is here for the long haul, a recession would be a mere hiccup. My primary focus is earning fiat and bolstering my crypto position. Frankly, discussions of a 'recession' are largely a diversion from the core issue: finding alternatives to a faltering fiat system.
- Times Are Changing
By Scott Melker who is known the Wolf of All Streets
We have seen many hype cycles around different technological advancements fall a bit flat over the past few years. The year 2021 brought a slew of exciting possibilities - NFTs, the metaverse, leaps in vehicle automation, VR technology, and the allure of 5G connectivity. Yet, these advancements felt like overpromises underdelivered.
NFTs, though a success in the art world, didn't find extensive applicability; the metaverse remained an elusive concept; Tesla battled continuous criticism; VR couldn't enchant the gaming world as expected; and 5G's promised connectivity revolution largely disappointed. The ideas were indeed appealing, but the execution and practical implementation lacked the luster we craved. Perhaps it was just early.
Yet, as the saying goes, bear markets are fertile ground for building. And build we did. The year 2022 had its fair share of surprises, and 2023 has been nothing short of mind-blowing. As someone who's typically measured in his excitement about tech advancements, I find myself giddy with anticipation at what we're seeing in AI.
Take ChatGPT, for instance. Sure, having a virtual assistant explain concepts is impressive, but the real game-changer is the integration of APIs, enabling experimentation beyond mere conversation. We're only a few months in, and already the results are staggering.
Then there's Generative Fill, the new AI tool in Photoshop. Have you seen what it can do? We're finally uncovering the hidden context behind memes!
And it doesn't stop with art. The music industry is poised to be the next frontier for AI. Picture a brand new Beatles album, or a new Prince hit, all produced by AI. The thought may divide music enthusiasts, but it's likely on the horizon, like it or not.
In the realm of automation, Tesla has secured its position as the world's most valuable automotive brand, with the Model Y now the world's best-selling car. The naysayers may continue to doubt Tesla's full self-driving capabilities, but mark my words, it's happening.
On the crypto front, we're on the brink of our next big thing since the NFT boom. Ordinals and Layer 2s are showing promise, quietly progressing under the radar. And thanks to Twitter Spaces and the rise of citizen journalism, when the breakthrough does occur, its echo will resound across the globe quicker than ever before.
Our own Crypto Town Hall (hosted by Ran, Mario, and myself) is already drawing in viewership comparable to prime-time CNN and Fox - and we've only just begun. I believe Twitter Spaces remains an underappreciated gem, largely unknown to non-Twitter users. Yahoo Finance encapsulated this sentiment well in an article about us:
Moreover, Fox made an insightful point about the potential impact of Spaces on the upcoming elections:
We're standing on an unprecedented platform - Spaces is the killer feature Twitter needed, and we plan to exploit it to the fullest.
In short, it's an exhilarating time for technology. The S&P 500 and DJIA have room to grow, AI is having its moment in the spotlight, and crypto is poised for its next viral sensation. My advice? Don't just jump on the bandwagon when it happens. If you believe in the tech behind crypto, stay faithful - innovation is just around the corner. The future is bright, and it's ours for the taking.
- Fun!
- Time is flowing!!
- Worldcoin's 2024 Mirrors Orwell's 1984
By Scott Melker who is known the Wolf of All Streets
Approximately a week and a half ago, I highlighted a brief section on Worldcoin, stating that the project was in "advanced negotiations" with potential investors ready to infuse $100 million into the venture. Although tempted to delve into AI, biometrics, or dystopian conspiracy theories, I refrained, keeping my opinions to myself. Today, my plan is to go somewhat deeper while keeping the focus primarily on facts. We're gaining knowledge about Worldcoin swiftly, but there's a sense that we're still largely navigating in the dark. Let's delve into that.
It's now publicly confirmed that the parties engaged in these "advanced negotiations" with Worldcoin include Blockchain Capital (who spearheaded the fundraise), along with other prestigious investors such as a16z crypto, Bain Capital Crypto, and Distributed Global. With such influential backers and already exceeding 1.7M signups, it's fair to say that Worldcoin has evolved beyond a mere concept. It's a significant player that we're likely to hear more about in the upcoming months and years. So, prepare yourself, because the future has arrived.
Worldcoin first made its debut in October 2021, co-founded by Sam Altman (known for his work on OpenAI and ChatGPT) and Alex Blania (Tools For Humanity). Rather than offering a simplified version of what Worldcoin represents, the following are key points from their launch announcement.
“To rapidly get its new currency into the hands of as many people as possible, Worldcoin will allow everyone to claim a share of it for free. For this to happen, we first had to solve one major challenge: ensuring that every person on Earth can prove that they are indeed human (not a bot), and that they have not claimed their free share of Worldcoin already.
To address it, we built a new device called the Orb. It solves the problem through biometrics: the Orb captures an image of a person’s eyes, which is converted into a short numeric code, making it possible to check whether the person has signed up already. If not, they receive their free share of Worldcoin.
We are only a few months away from a global launch and are currently running field tests in many locations around the world. It is still early, but the results of these field tests make us optimistic that Worldcoin will soon connect the first billion users in one commonly owned crypto network.
Nothing like this has ever been done before and the outcome is uncertain. But we are obsessed with the idea that revolutionary new technologies like blockchain and cryptography can let us do something collectively that even governments have not been able to: increase individual empowerment and equality of opportunity on a global scale.”
Intriguing, isn't it? Eye scanning technology, $WLD token, the Orb, and a projected one billion users – these elements herald an exciting future, don't they? Yet, despite this, many of us may be excluded from participating, including myself. An examination of their terms of service reveals the reason.
“In addition, WLD tokens are not intended to be available for use, purchase, or access by US persons, including US citizens, residents, or persons in the United States, or companies incorporated, located, or resident in the United States, or who have a registered agent in the United States. We do not make WLD available to such US persons.
You are not located in, under the control of, a national, or resident of: Syria, the Crimea, Donetsk, Luhansk, Kherson and Zaporizhzhia regions of Ukraine, North Korea, Iran, Cuba, or any other country or region with whom the United States, the European Union, or any other country or jurisdiction has restricted trade in goods or services.”
Worldcoin presents itself as "accessible to everyone, irrespective of their country, background, or economic status," yet their terms of service exclude certain countries from participation. This is troubling in itself, but it doesn't address my primary concern: Worldcoin is intent on ensuring 'universal' access to the coin, but what about the next steps?
With a multitude of apps and tokens already available, is there a pressing need for another one? It appears that Worldcoin's primary interest lies in executing a 'fair' launch rather than considering the subsequent progression. Crypto projects are notorious for their grand unveilings, often followed by a disappointing lack of substance - a typical trope in the crypto world.
The screenshot below offers details on potential uses for the tokens.

So, the plan is to distribute tokens that govern more tokens and potentially enable purchases? Wonderful, great, terrific, hooray.
They literally don’t seem to know why the token should exist, and are waiting for users the determine the use cases? And in exchange for tokens you have to literally scan your eyeballs and deliver biometric data to a company that is inextricably tied to OpenAI, which is training artificial intelligence on new data?
Yikes.
I will keep my eyeballs to myself, thank you very much.
El Salvador's government distributed $30 of Bitcoin to its citizens to stimulate adoption, but the situation largely remained the same. Issues like gang violence, political corruption, drug abuse, homelessness, and food insecurity continue to hold more relevance for the people of El Salvador than a new currency. Will Worldcoin secure better adoption than Bitcoin? It's doubtful. The experience in El Salvador suggests that simply offering a minor financial incentive isn't enough to prompt people to adopt a new currency. Given that much of Worldcoin's current adoption is in South America, it's doubtful that a new cryptocurrency is what people there are yearning for.
Once again, it's a scenario where I'd be pleased to be proven wrong, but I must express my skepticism. While I appreciate the concept of a world where everyone has a recognized identity and a common currency, I question whether Worldcoin is the real solution. To be entirely candid, Worldcoin bears semblance to the kind of technology George Orwell cautioned us about in his novel, 1984. Although I'm eager for a future where crypto integrates with AI, I believe we shouldn't hasten the process.
The experiences of the past year have reinforced that no entity in the crypto world gets a free pass, and that's a lesson I don't intend to forget.
- Funny!
- The Steve Jobs Of Crypto
By Scott Melker who is known the Wolf of All Streets
In 2007, Steve Jobs, during his keynote at the Macworld Conference & Expo, delivered one of the most unforgettable presentations in history. He began…
“This is a day I’ve been looking forward to for two-and-a-half years. Every once in a while, a revolutionary product comes along that changes everything.”
Inside his pocket, unbeknownst to the world, was the inaugural iPhone. Jobs continued…
“Apple’s been very fortunate. It’s been able to introduce a few of these into the world. 1984, introduced the Macintosh. It didn’t just change Apple. It changed the whole computer industry. In 2001, we introduced the first iPod, and it didn’t just change the way we all listen to music, it changed the entire music industry. Well, today, we’re introducing three revolutionary products of this class.”
The audience buzzed with anticipation.
“The first one is a widescreen iPod with touch controls. The second is a revolutionary mobile phone. And the third is a breakthrough Internet communications device. So, three things: a widescreen iPod with touch controls; a revolutionary mobile phone; and a breakthrough Internet communications device.”
Excitement mounted.
“An iPod, a phone, and an Internet communicator. An iPod, a phone … are you getting it? These are not three separate devices, this is one device, and we are calling it iPhone.”
Excitement erupted.
Jobs proceeded to introduce this revolutionary product, evoking gasps and applause with each feature - a camera, map, email, web browser, app store, and music, all available without a stylus or mouse. The notion of such immense power within their grasp was captivating. To demonstrate, Jobs searched for the nearest Starbucks and pranked them with an order of 4,000 lattes to go - the potential was limitless.
Steve Jobs’ legacy is one I deeply admire, and I could spend hours discussing it. However, this intro isn't about the iPhone or Apple's mission, but about crypto today, and the standard set by Steve Jobs. We remember him fondly.
What if I told you that someone in our sector reminds me of Steve Jobs, and their product evokes memories of Apple's early days? The inspiration for today’s intro comes from a recently released eight-part video series. As I watched the opening moments, I was reminded of the indelible legacy Jobs left, and I wondered who among us could fill those monumental shoes.
The individual who comes to mind is Brian Armstrong, CEO of Coinbase.
This is indeed a bold statement, and agreement is not expected, but I cannot suppress my intuition that Coinbase may emulate Apple’s success from the early 2000s. If Coinbase maintains its dominance during the next crypto bull run and fulfills its promises—defending against the SEC, bringing a billion people to crypto, successfully launching Base, and expanding Coinbase International—we'll soon consider it 'normal', not 'early'.
Should Coinbase realize this vision and continue innovating, there will be no doubt about its potential trajectory. In the video series that inspired this intro, Armstrong's poignant message is singularly focused: “It’s Time To Update The System.” His explanation of crypto's potential mirrors Steve Jobs' narrative about the iPhone—the similarity is uncanny.
Armstrong explains: “The naive view of crypto is that this is some speculative asset that people are trading and they are going to lose their shirts. That’s missing the forest through the trees. It’s early days, yes, some people are trading it as an asset class, but they are also starting to use it in many novel ways.
What happens is they often get a little bit of crypto and they start to use it, send some payments, use some decentralized applications, and the next step and the next step and they go down the rabbit hole. And eventually, they start to think, this feels like the early days when I first started using the internet.
Fundamentally, crypto is not a financial product, it’s a technology that can update all kinds of financial products. It can improve settlement times, make it cheaper to send money to your family overseas in another country and be a new way for artists to get paid and have a direct relationship with their fans.
Cryptocurrency regardless of what you think about it is not going anywhere, it can’t be uninvented.”
Piqued your interest? That's just the tip of the iceberg. Imagine if you could rewind time to watch Steve Jobs’ 2007 speech again. What if you paid closer attention, took a calculated risk—could your life have been different? While time travel is impossible, you can watch this series and contemplate what this means for technology's trajectory in the coming decade. That’s what I'm doing.
Steve Jobs is irreplaceable, but every so often, powerful disruptors appear—individuals capable of more than merely pushing boundaries, they alter the course entirely. Brian Armstrong is one such individual.
Apple's market cap today is $2.75 trillion. Jobs’ 2007 speech drove it to roughly $165 billion, a dramatic surge from $80 billion earlier that year. Coinbase's current market cap stands at $14.32 billion—a mere scratch on the surface. Just 10% of Apple's market cap is $275 billion, nearly 19 times greater than Coinbase's current standing. Digest these figures, ponder what Coinbase is set to achieve. Re-read this paragraph, because history may be in the making.
Every now and then, the system needs an update—now is such a time
- Have a nice day!!
- Will Crypto Loans Ever Make A Comeback?
By Scott Melker who is known the Wolf of All Streets
One year ago, the crypto loan industry was thriving. Investors hesitant to liquidate their assets flocked to decentralized finance ('DeFi') platforms offering lucrative loan options. They also flocked to CeFi - BlockFi, Celsius, Voyager, and Nexo saw a surge in user engagement as investors scrambled to secure loans against their burgeoning portfolios.
We are all familiar with the aftermath.
Today's discussion, however, is not a lament over past failures, but a contemplation on whether our industry can recover from this setback. Regardless of your stance on crypto loans – a contentious topic, admittedly – it's difficult to dismiss the notion that we were heading in the right direction.
I candidly acknowledge that we, as an industry, faltered. Yet, I can't help but wonder if we were merely ahead of our time, suffering from a lack of regulation and preparation? Astute investors realize that they should anticipate a 20% to 40% tax rate in the United States upon the sale of any asset, including cryptocurrency. This tax burden underscores the persistent demand for legal tax mitigation strategies, hence, the continual relevance of loan services.
"But what about Coinbase?" you may ask, "didn't they terminate their loan program just six days ago? And aren't banks that used to service our industry closing their doors? Aren't these signs that the industry is pivoting?" My resolute answer is, 'No.'
Allow me to elaborate.
If the crypto industry is set to achieve the milestones we project – BTC surpassing $100,000, ETH hitting over $10,000, a bull run in NFTs, mass adoption of stablecoins, and so forth – there will undoubtedly be a significant and pressing demand for a resurgence of safe loan services. Prominent investors like Warren Buffet, Elon Musk, Larry Ellison, not to mention millions of everyday millionaires worldwide, utilize loans extensively. They're a cornerstone of finance, and cryptocurrency is not exempt from this rule.
Crypto loans persist even now, albeit sidelined in favor of more captivating trends. Nevertheless, I foresee a natural resurgence in loan services as asset prices soar and investors seek increased liquidity. While there will always be a segment of investors who swear off crypto loans, it's essential to remember that fresh investors will enter the market, and the phenomenon of short-term memory loss in investing is very real. I'm confident that crypto loans will reclaim their prominence, this time hopefully fortified by robust safety measures.
To clarify, I am not endorsing any specific platform, nor am I advising you to secure a loan immediately, or at all. I never even considered taking one myself. Loans carry inherent risks, and it's crucial to consult a financial advisor before making such decisions. We still have a long road ahead to ensure we get it right the next time. But if we're going to surpass previous record highs, the popularity of loans will inevitably make a comeback – that's my thesis
- BELLY BUTTON!!
- Roll Out The Red Carpet
By Scott Melker who is known the Wolf of All Streets
What if I told you that a new massive crypto project is underway, backed by top-tier tech, finance, and crypto firms, but I'm not excited? Would you call me crazy?
What if I told you that Microsoft, Goldman Sachs, Deloitte, S&P Global, Digital Asset, Cboe Global Markets, and VERT Capital are just a few of the names behind this project, and I'm still not impressed?
Maybe you think I'm just jaded to 'MAJOR ANNOUNCEMENTS,' but actually, no – I think I've learned to see through them. Let me explain.
Before diving into the recent 'big' news story, let's revisit September of last year when EDX Markets was announced. Does this name ring a bell for you? For me, it's just an old name filed away in the back of my mind. When the announcement was made, I thought it was a revolutionary moment for crypto – spoiler alert, I was wrong.
There’s no shame in my game. Take a look at my previous coverage below.
I don't think I was crazy for thinking that a non-traditional exchange built by traditional finance titans with multi-trillion dollar firms' backing was a big deal. But have you heard of anyone using EDX since it launched? I didn't even know the platform was live until I started writing this article, and to find out, I had to hunt down the press release.
I don't mean to pick on any particular crypto platform unnecessarily, but the EDX story is relevant today. The website is underwhelming, there's just one press release, press articles about the exchange have been deleted, and there's no team mentioned on the site. It's shocking to compare what was promised to what exists now.
So, let's talk about today's news. Initially, I was eager to cover a story with substance: the Canton Network. It does exist! You can read the official press release and view their website here. It is also being covered by crypto media.
To briefly explain, the Canton Network aims to capture institutional adoption specifically for blockchains. Market participants can join the network to synchronize with each other and build upon the infrastructure Canton provides, offering benefits like legal and regulatory guarantees, privacy, control, and scalability.
Here are their exact words:
It creates a ‘network of networks’, allowing previously siloed systems in financial markets to interoperate with the appropriate governance, privacy, permissioning and controls required for highly regulated industries. For example, asset registers and cash payment systems are distinct and siloed systems in today's markets.
With the Canton Network, a digital bond and a digital payment can be composed across two separate applications into a single atomic transaction, guaranteeing simultaneous exchange without operational risk. Likewise, a digital asset could be used in a collateralized financial transaction via connection to a repo or leveraged loan application.
However, as I read through the Canton announcement, I couldn't help but notice similarities to the EDX story:
Big names - Yes.
Big promises - Yes.
Major legacy backing - Yes.
More products we don't need - Yes.
Although EDX and Canton have different goals, I worry their outcomes might be the same. I'd like to be proven wrong, but I fear that's less likely.
Major legacy institutions aren't meant to build crypto platforms, nor should they seek out non-crypto platforms either. Crypto doesn't need more platforms; we need regulatory clarity. Coinbase, Fidelity, Binance, Amazon, and BlackRock already offer excellent crypto products. Another exchange or a shiny new blockchain isn't the answer. The infrastructure is here; we just need to continue building on it.
It's time for the community to be more critical about what we release and how we praise it. Not a single crypto press release covering the Canton Network raised even a hint of suspicion.
We live in an era of obsessive news consumption and regurgitation, thirsting for the next story. While I'm bullish on the platforms guiding us, I'm bearish on futile attempts to reinvent the crypto wheel.
Progress isn't always about blazing new trails or following others blindly. Sometimes, it's nurturing the path behind us and advocating for the roadmap that aligns with our goals.
I'm not discouraged, and neither should you be. We just need to be better.
- ESPRESSO IS LEADING THE COFFEE WORLD!!
WHAT A UNIQUE INVENTION!!
- Fun with my princess!!
- Funny!!
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- Let Your Conviction Run Deep
By Scott Melker who is known the Wolf of All Streets
How deep is your conviction in crypto?
Seriously, take a moment and consider the core of your investment beliefs. This may not be an easy task, but it is a necessary challenge that should result in a clear answer.
For many investors, this ise a particularly challenging exercise. Conviction is defined as a deep opinion or belief, and we all hold convictions in our everyday life. Rarely do we need to defend and rely on them actively and consistently.
Crypto demands this 24/7.
One of the most common pitfalls I have noticed in new traders and investors, especially in the crypto space, is weakness in the roots of their convictions. It is common to find people who believe in the long-term success of crypto, but for the wrong reasons. Weak conviction is relying on what one "expert" said, believing prices can only go up, and being certain of what you think.
A newcomer, under the false impression of strong conviction, maintains their beliefs on shakier grounds. Typically their sense of hope and conviction is solely built on price. This is a dangerous situation when money and emotions are on the line and is the reason that there are panic sellers on any significant drop.
Is this you? When you deeply consider your reason for being here, is it simply to make a profit?
When asked about their convictions, seasoned investors may point to the long history of fiat's failures, the advancements in blockchain technology, the similarities between Bitcoin and gold, the parallels between Ethereum and the internet, or the historical price channels that Bitcoin has followed. It's easy to recognize when someone knows what they are talking about because they exude confidence, but they also understand the importance of avoiding certainty in investing, as it often leads to failure.
In summary, newcomers to the crypto space often maintain their beliefs on shakier grounds, with their sense of hope and conviction solely built on price. In contrast, seasoned investors rely on a wide range of factors such as history, philosophy, economics, psychology, technical analysis, and sentiment to establish their beliefs, which are firmly grounded and difficult to shake.
Regardless of your investing style or level of participation, it's crucial to find a reason deeper than price to stay invested, regardless of the size of your investment.
As we move further into 2023 and approach events such as the Bitcoin halving and Ethereum's consistent deflation, it's essential to resist the temptation to join the panic-selling or FOMO-buying crowds. Instead, focus on finding your "why" and remain committed to your convictions. This mindset will place you ahead of the majority.
Let your conviction run deep.
- This Blood Isn't Red, It's Silver
By Scott Melker who is known the Wolf of All Streets
The crypto world woke up yesterday morning to a horrific murder scene.
*Graphic imagery ahead*
Silvergate is currently lying on the floor nearly dead, gasping for air and gushing blood. There’s nothing we can do but watch in horror. This is crypto, so I don't think there will be anyone coming to help anytime soon.
Silvergate Bank has been left for dead.
This is the story of how crypto’s (once) most relied-upon bank died a sudden and painful death.
I have covered Silvergate numerous times in the past few months, but have yet to put together a full story. Well, now’s the time. Silvergate Capital (Silvergate) is the parent company of Silvergate Bank. Silvergate Capital Corporation - the full name of the company - is listed as SI on the stock exchange.
Let's take a look at what Silvergate claims to be in order to understand this company. According to their website: “We began pursuing digital asset customers in 2013 and have been deliberate in our approach to serving this community since then. We leverage our technology platform and our management team's expertise to develop solutions for many of the largest U.S. digital asset exchanges and investors around the globe.”
However, this summary now requires an update or post-mortem due to the dire situation that Silvergate currently faces. In just a matter of hours, the bank has lost nearly all of its crypto customers. As of yesterday, Coinbase, Bitstamp, Paxos, Circle, Crypto.com, Galaxy, Gemini, and the CBOE have all pulled away from Silvergate Bank. Ledger left last week, and Kraken left a while ago. In short, Silvergate no longer has any crypto customers left to serve. Additionally, a few months ago, they lost one of their largest customers, FTX, and likely other smaller bankrupt exchanges and funds that we may not even be aware of.
So why is this exodus happening?
Here is a list of everything that went wrong, which largely stems back to crypto contagion.
SI wrote off its acquisition of Diem.
A net loss of null billion was reported for Q4.
The Department of Justice initiated a fraud probe into the bank for its relationship with FTX.
SI was involved in suspicious Binance.US transfers.
A bipartisan group of Senators is investigating SI.
40% of the workforce was laid off.
Withdrawals spiked after FTX ($8.1 billion).
SI was forced to sell $5.2 billion in debt securities to counter the outflows.
A board member left.
SI became the most-shorted stock in the U.S.
There are multiple layers to the issues that have plagued Silvergate, but I will provide a broad overview of what went wrong. Despite the company's rot and decay, it seems that institutions saw something that we did not. Susquehanna Advisors Group invested $35 million for a 7.5% stake in Silvergate, and more recently, Ken Griffin's Citadel Securities purchased a 5.5% stake. BlackRock also increased its stake from 5.9% to 7.2% on January 31st, and State Street Bank holds the largest position at 9.3%. In hindsight, it appears that these non-crypto financial institutions felt compelled to make a bold move, but it does not look good now.
Although these shares were purchased at low prices in February, the stock has since plummeted. The news of the mass exodus caused Silvergate's stock to drop by more than 50% in one day, and there may be more skeletons in the closet. Upon reviewing some of Silvergate's old filings, this is what I found.
8-K Filing (Company Events) (A loan to MacroStrategy)
On March 29, 2022, Silvergate Bank, a subsidiary of Silvergate Capital Corporation (the "Company"), issued a press release announcing its issuance of a $205 million Bitcoin-secured term loan under its SEN Leverage program to MacroStrategy LLC, a subsidiary of MicroStrategy Incorporated (Nasdaq: MSTR). A copy of the press release is attached hereto as Exhibit 99.1. The press release is also available on the Company’s website at https://ir.silvergate.com in the Investor Relations section.
And here’s another one.
11-07-22 (Quarterly Financials) ((The possibility of more loans))
The outstanding balance of gross SEN Leverage loans was $302.2 million and $335.9 million at September 30, 2022 and December 31, 2021, respectively of the Company’s gross loans held-for-investment was collateralized primarily by bitcoin and U.S. dollars. Unfunded commitments on SEN Leverage loans were null.2 billion and $234.6 million at September 30, 2022 and December 31, 2021, respectively.
There are two significant issues at play in the situation with Silvergate. Firstly, the company currently has a loan out to Macrostrategy, a subsidiary of MicroStrategy. If Silvergate is forced to claw back this loan to cover new expenses or losses, MicroStrategy may need to post more collateral or sell Bitcoin to return the loan. This could trigger wider panic selling and result in an even larger unwind for Silvergate or MicroStrategy. While it is not certain that this will happen, it is a possibility that needs to be considered.
To address concerns, MicroStrategy has tweeted that the loan from Silvergate is not due until Q1 2025 and would not accelerate due to Silvergate's insolvency or bankruptcy. Furthermore, MicroStrategy's BTC collateral is not custodied with Silvergate, and the two companies have no other financial relationship. However, the outcome of Silvergate's potential bankruptcy remains uncertain.
The second issue is that Silvergate has loaned money to more than just MacroStrategy, and its commitments for loans were massive as of September 2022. It is unclear if those commitments were funded, but if they were, this could add to Silvergate's financial troubles. Moreover, the company announced that it would not be able to file its quarterly reports on time, leaving investors in the dark and causing further concern.
Aside from its crypto holdings, Silvergate also has extensive real estate loans and positions, which are likely struggling due to the recent dip in the market. The company is now on life support, and its collapse could have significant implications for institutions that invested in it. While the crypto market is holding steady for now, if Silvergate goes down, it could set back the market's recovery clock.
The events surrounding Silvergate serve as a reminder that leverage in crypto markets does not always work. Silvergate has been heavily exposed to crypto markets and has freely handed out leverage, contributing to the collapse of FTX. While it dodged a bullet on that occasion, the contagion it helped create has come back to sign off on its death certificate.
It appears that Silvergate is on its last legs, and there is little that can be done to prevent its demise. As spectators, all we can do is watch and hope that the fallout from its collapse does not spread too far. Rest in peace, Silvergate.
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- CRYTPO WILL RULE THE WORLD!
By Scott Melker who is known the Wolf of All Streets
If you had told me just 3 years ago that Bitcoin, CBDCs, and DeFi would be at the center of geopolitical events around the world, I would have checked you into a mental health facility. And who in their right mind could have predicted that in 2023, China would ease up on crypto restrictions while the U.S. cracks down?
Yet here we are.
Cryptocurrencies have become a key player in world events across several countries, with attitudes towards them fluctuating between positive and negative. If you search for any country followed by "crypto" on Google, you're likely to find dozens of articles covering a range of news.
2023 is set to be a pivotal year for the adoption of digital asset technology. China is expected to release its CBDC, and Russia may legalize crypto for trade. India plans to discuss crypto legislation with G20 countries, while Singapore, Vietnam, and the Philippines have each taken their own unique approach to crypto adoption. And let's not forget the United States, a country whose financial output, input, and throughput far surpasses any other in the world, with a GDP of almost $21 trillion in 2022. China comes in second with $14.7 trillion, followed by India with $2.66 trillion. The other countries mentioned don’t even have GDP in the trillions. Given this context, it's clear that crypto adoption matters significantly in both the US and China.
However, several other mid-range economies, such as Japan, Germany, the United Kingdom, France, and Italy, are beginning to increase their pace of adoption. A quick Google search will reveal how far these countries have come in recent years.
While there are certainly negative aspects to the adoption of cryptocurrencies, such as regulation, rules, and restrictions, it's important to remember that adoption will always be a struggle and progress towards economic freedom will almost always flow in one direction.
The most important takeaway from the intersection of crypto and geopolitics is the pivotal role played by the US and China, whose combined GDPs of $35.7 trillion and populations of 1.7 billion far exceed any other country in the world. While it's exciting to see favorable crypto adoption in smaller nations, the US and China are of paramount importance for the future trajectory of crypto.
Both the US and China understand this, and I believe 2023 will be the start of a new narrative. Eventually, there will be a point where crypto does not depend on countries' approval, but rather it will dictate their actions. This will come from mainstream adoption by the citizens, particularly in the US. Crypto won't need the US and China; rather, the US and China will need crypto. While this reality is still far off, we're certainly on the right track when we consider how far we've come.
To put it plainly, when this happens, we'll all be rich
- Driverless cars shifted up gear!!
[Waymo’s driverless cars were involved in two crashes and 18 “minor contact events” over 1 million miles](https://www.theverge.com/2023/2/28/23617278/waymo-self-driving-driverless-crashes-av)
Waymo says human drivers are mostly to blame.
- Snowboard season is coming to end!
- BTC BOUNCE WHATEVER WHO SAYS EVEN SECS OR FEDS!!
- Wall Street Has No Clue!
By Scott Melker who is known the Wolf of All Streets
Yesterday morning, a middle-aged investment banker on Wall Street made his way to his desk and sifted through the news his interns had prepared for him. At the bottom of the pile was a story labeled "potential junk."
The headline read: "Coinbase to Launch Layer 2 Solution."
Perplexed, the banker scratched his head and took a chance on opening the folder his interns had prepared. This is what he found inside.
Overview:
“ꌃꍏꌗꍟ ꀤꌗ ꍏ ꌗꍟꉓꀎꋪꍟ, ꒒ꂦꅏ-ꉓꂦꌗ꓄, ꀸꍟᐯꍟ꒒ꂦᖘꍟꋪ-ꎇꋪꀤꍟꈤꀸ꒒ꌩ ꍟ꓄ꃅꍟꋪꍟꀎꎭ ꒒2 ꌃꀎꀤ꒒꓄ ꓄ꂦ ꌃꋪꀤꈤꁅ ꓄ꃅꍟ ꈤꍟꊼ꓄ ꌃꀤ꒒꒒ꀤꂦꈤ ꀎꌗꍟꋪꌗ ꓄ꂦ ꅏꍟꌃ3. ꌗ꓄ꍏꋪ꓄ ꌃꀎꀤ꒒ꀸꀤꈤꁅ ꂦꈤ ꓄ꃅꍟ ꌃꍏꌗꍟ ꓄ꍟꌗ꓄ꈤꍟ꓄ ꓄ꂦꀸꍏꌩ ꍏꈤꀸ ꌗ꓄ꍏꌩ ꓄ꀎꈤꍟꀸ ꎇꂦꋪ ꓄ꃅꍟ ꀎᖘꉓꂦꎭꀤꈤꁅ ꎭꍏꀤꈤꈤꍟ꓄ ꒒ꍏꀎꈤꉓꃅ.”
After realizing the potential significance of the last story he had just read, our banker begrudgingly decided to clear his head by using a few eyedrops and give the overview one more chance, putting all his brainpower into understanding the implications of the news.
“Base is a secure, low-cost, developer-friendly Ethereum L2 built to bring the next billion users to web3. Start building on the Base testnet today and stay tuned for the upcoming mainnet launch.”
Feeling bewildered by the technical jargon in the story about "Coinbase launching a layer 2 solution," and not having any prior knowledge about Ethereum, L2, or the third web, our fund manager frustratingly decided to defer to the notes prepared by his interns. Perhaps they had a better understanding of what this all meant.
Intern Notes:
The latest news reveals that Coinbase is launching a new product called "Base," which is a layer 2 network built on Ethereum and powered by Optimism. This developer-friendly platform aims to onboard the next one billion users into the cryptoeconomy and supports Coinbase's mission to be the most accessible crypto platform, with the ability to serve over 110 million users and $80 billion in assets.
It is important to note that Base is not an isolated network; rather, it is a bridge within the cryptoeconomy. As it is built on Ethereum, developers from various ecosystems are encouraged to use Base and bring their innovations with them. The software will be open-source with a full commitment to decentralization.
Through Base, developers will have access to the tools necessary to create lending platforms, decentralized exchanges (DEXs), non-fungible tokens (NFTs), games, stablecoins, wallets, and other applications. The layer 2 network will be permissionless, and infrastructure will be provided for all types of applications. There will be no token, and ETH will be the base layer. The platform will be freely available, scalable, secure, and open source, much like Polygon, Optimism, and Arbitrum, combined with the Coinbase fanbase and developer army.
Additionally, there will be a Base Ecosystem Fund that supports early-stage projects. The roadmap for the mainnet is expected to be released in the coming weeks.
Our annoyed fund manager slams the folder on his desk, curses like a sailor, and accuses Coinbase of trying to replace him. Surprisingly, our banker is right for once. Coinbase is, in fact, replacing him, his fund, and his clients through the democratization and open availability of pure digital finance, all at the same time.
Of course, this story is made up, but it's not too far from the truth. The reality is that only a fraction of Wall Street actually understands what Coinbase is aiming to do with Base, and it took me, a crypto-native, a second take to understand it. However, this isn't a bad thing, and let me explain why.
We must remind ourselves that Coinbase has always prioritized being a "beginner-friendly" platform. Therefore, Coinbase will not launch anything they believe their users are incapable of using or benefiting from. Although Coinbase would love for all 110 million users to utilize Base, realistically, only a fraction of them will use it. But the majority of us will still benefit, making it a huge win-win.
I particularly like the simple motto that Base uses to describe its vision, "onchain is the new online."
Here are my takeaways from Base. First, it is a significant win for the entire industry. Coinbase will benefit from the success of Ethereum, and vice versa. Second, Coinbase has an entirely new revenue stream that we are only beginning to understand. BSC did $342 million in volume and null.28 million in fees all within the last 24 hours. On the news of the announcement, COIN was down but eventually recovered to end the day slightly positive. Wall Street still has no idea what is coming.
Playing devil's advocate, we must consider how the SEC could interfere with Base. Although Base is smart to not release a token, it is still possible for the SEC to find an angle to claim that Base enables the creation and/or sale of securities. I'm not prepared to answer this question, but I imagine Coinbase's legal team has already considered it. Coinbase has been denied before by offering products that the SEC didn't like, and I doubt they want to make the same mistake twice. As we've learned, Coinbase is ready to go to court if need be.
Wall Street is so f**ked. Base for the win.
- Lessons Learned - A Look Back In Time
By Scott Melker who is known the Wolf of All Streets
The entirety of my knowledge is within these letters. Every day, I am grateful for the opportunity to work through my ideas and share them with each one of you. While new ideas emerge, old ones become buried deep within the Wolf Den Archive - a stack of 683 editions tall and counting. It's important to look back to prevent losing touch with the past, even amid the lightning speed of the crypto market. Today, I want to reflect on some of the older and even ancient ideas that I'm most proud of.
Each of the five sections below contains the newsletter name, lesson, and brief summary. You can access these letters through your inbox or Substack. Although not all letters copied over perfectly, they are saved, and nothing is lost. These lessons must be committed to memory or written down. They'll be most helpful in the market's chaos.
The Wolf Den #172 - Everyone Is A Genius In A Bull Market
Lesson - Anyone can be right and profitable in an upward-trending market.
Repeated small gains across rising assets are likely to give the false impression to new traders that they are consecutively profitable and skilled at trading. More than likely they are in the right place at the right time and are actually underperforming the market. For this reason, holding through a bull run is more profitable for a strong majority of people.
The Wolf Den #375 - Patience Pays Off
Lesson - Live to see another day and focus on doubling up.
I would rather take a slow and steady 2x on my investment portfolio than roll the dice and risk my hard-earned money. If you do feel that urge to gamble, it probably isn't worth your time because trades should only be taken with a very small percentage of your trading portfolio. The solution isn't adding more to make the investment 5% or 10% of your net worth. Usually, the answer is to walk away and find something else that looks better.
The Wolf Den #402 - Stacking Is The Name Of The Game
Lesson - Push very hard when the opportunity presents itself.
This is how I approach trading. I like to strike while the iron is hot. It doesn't work for everyone and requires being early and acting with conviction when others are fearful. It also means selling when others are finally jumping on the bandwagon and being willing to sit on your hands for long stretches.
The Wolf Den #486 - The Trader's Trap
Lesson - Do you want to be profitable or right?
Trading isn't like electing an official, measuring sugar for a soufflé, or following the law. Being right as a trader doesn't matter much at all. A good trader can be wrong 7 or 8 times out of 10 and still make a living by managing their position properly - small losses cut early, big wins that require patience. This is the result of caring about being profitable, rather than being right.
The Wolf Den #550 - The Contrarian Trap
Lesson - Being a contrarian is not enough, you must also be right.
Being a successful contrarian means questioning every herd you enter. It's a balancing act of constant reality checks to ensure contrarian thinking hasn't led you to a "contrarian trap."
These lessons offer valuable insights that traders and investors can use to navigate the volatile and rapidly changing world of cryptocurrencies. By remembering these lessons and drawing on their wisdom, traders can stay focused on what really matters - profitability, patience, and discipline - and avoid getting sidetracked by hype, fear, or herd mentality. Whether you are a seasoned trader or just starting out, these ideas can help you stay on track and make smart decisions that lead to success in the crypto market.
- The Legend Of Warren Buffett
By Scott Melker who is known the Wolf of All Streets
An aspiring, young, and laser-focused businessman was in the early days of building his financial empire. The year was 1958, and Warren Buffett narrowed his focus on his first major investment opportunity.
He was ready to strike.
Sanborn Maps was a simple, Midwestern map publishing company, that had seen its annual profit drop nearly 80% from the late 30s to the late 50s. Advancements in mapping technology pushed Sanborn against the wall and it was only a matter of time before disaster struck.
Buffett saw an opportunity.
Morale in the company was low, as the stock continued to plummet. But Buffett saw something different - a book value significantly exceeding the stock value. This was an opportunity for Buffett to make money with almost no risk. Buffett quickly devised a plan to raise capital, buy stock, win a board seat, and then convince the company to liquidate for a large profit.
But Buffett was met with serious resistance. His plan was rejected by the board.
After pleading with his parents, aunts, friends, and acquaintances to raise even more capital, Buffett went against the advice of his mentor and put everything he owned and borrowed into Sanborn to buy majority control. Buffett returned to Sanborn and notified the board of their new options - follow his lead or leave. Buffett proceeded to liquidate the company and walk away with a +45% return on his investment.
Sanborn was only the beginning.
For the next +65 years (and still going) Warren Buffett was the greatest investor the world had ever seen, earning the nickname, ‘the Oracle of Omaha’ along the way and attracting a devout following that will likely never be matched. This is the story of Warren Buffett, a story that crypto investors dismiss, but one that undeniably deserves our attention - and our respect.
The Oracle Of Omaha
The Great Depression began when Warren Buffett was only two years old. Although his once-affluent family lost almost everything, the Buffett mentality was born. During the depression, Buffett's father, Howard, came up with a brilliant idea to alleviate financial pain. Howard, a stockbroker, began selling stocks that he considered "safe" to protect clients' capital, which turned out to be successful.
“The best gift I was ever given was to have my father. In all ways, he was teaching me, never taught by telling me. He taught me by example. He had unlimited confidence in me, even when I screwed up and that takes you a long, long way.”
After selling newspapers, owning and operating a pinball machine, betting on horses, and excelling in school, all Warren needed was to meet the right person at the right time. As an aspiring entrepreneur, Buffett had many idols, but Benjamin Graham stood out, and Buffett was determined to cross paths with him.
And he did.
After scoring his first job at Graham’s firm, Buffett was assigned to find ‘cigar butt’ companies.
“Cigar butt companies are pathetic companies that sell so cheap, you think there is one good free puff left in it. We used to pick up a lot of soggy cigar butts.”
At that point in the story, Buffett's career began to take off. With $19,000, Buffett purchased Rockwood, a struggling cocoa company in New York. While Graham saw it as an opportunity to arbitrage differences between assets and stock, Buffet saw it as an opportunity to go long. Buffett quickly learned the meaning of "value investing" and did it better than his predecessors.
At age 26, Buffett set up his own firm with his profits and network and was off to the races. For the next five years, Buffett hunted for bargain companies by analyzing pink sheets and traveling far and wide to find the right deals. He was a fast success, netting over 100% annually each year. By 1962, Buffett had $7.2 million in AUM.
During the 1960s, Buffett navigated through social, economic, and political volatility well. Companies like Disney, American Express, Hochschild Kohn, Dempster, and Berkshire Hathaway were some of the companies he invested in. He was viewed by some as a corporate raider and ruthless liquidator and by others as an activist investor and profitable savior. It was during this time that Buffett mastered his craft and learned to manage his reputation as a pillar of financial good.
As Berkshire Hathaway transformed from a failing textile company into a multinational conglomerate holding company or financial empire, Buffett invested in companies like Coca-Cola, Apple, Bank of America, and See's Candies. Buffet teamed up with Charlie Munger, and together they turned Berkshire Hathaway into a company with hundreds of billions in AUM. It would not be surprising to see Berkshire Hathaway break the trillion-dollar mark this decade. Buffett's success story was a lifetime story, making him the best investor ever.
There's much more to Buffett's success story, but let's wrap it up here. Despite Buffett's quirks like eating a McDonald's breakfast every day and not understanding crypto, he is a financial genius and the greatest investor ever, likely never to be rivaled. It's helpful to step back and appreciate experts in their field, and Warren Buffett truly is the best of the best. I look forward to sharing more stories about other great investors in the future.
The inspiration behind this intro and its framework originated from this documentary by FINAiUS. It’s an excellent film produced by an even better filmmaker. I highly suggest you check out his channel.
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- Decentralization Nation
By Scott Melker who is known the Wolf of All Streets
Have you ever noticed how the words "cryptocurrency" and "decentralization" are often used interchangeably, yet there seems to be no consensus on what decentralization truly means? While there is a clear definition for what constitutes a cryptocurrency, the same cannot be said for decentralization.
In my opinion, both Bitcoin and Ethereum are decentralized enough, despite differing opinions from maximalists, self-proclaimed experts, and even cab drivers. When it comes to measuring decentralization at a technical level, there are certain aspects that can be agreed upon. However, attempting to quantify or measure decentralization in a broad sense of fundamental analysis is incredibly challenging.
In the case of both Bitcoin and Ethereum, there are different ways to measure decentralization. For example, for Bitcoin, one could look at the ease of hardforks, the distribution of wealth, or the number of exchange pairs. Alternatively, one could examine mining pools, the distribution of hash power, or hardware manufacturer market share. Similarly, for Ethereum, decentralization could be measured by counting and analyzing the number and types of staking pools, the percentage of the supply staked, or the role of the Ethereum foundation.
The point I am trying to make is that decentralization means something different to every protocol and investor. As rational thinkers, we must be open to the idea that it is not an exact science. For those who prefer equations, the Nakamoto coefficient is a popular but complicated method that can be used to measure the decentralization of any blockchain. It takes into account various factors, such as mining, clients, developers, exchanges, nodes, and owners.
Here’s a quick excerpt I found on the Nakamoto coefficient:
“The Nakamoto coefficient measures decentralization and represents the minimum number of nodes required to disrupt the blockchain's network. A high Nakamoto coefficient means that a blockchain is more decentralized.”
“The Nakamoto coefficient was first formally described in 2017 by former Coinbase CTO Balaji Srinivasan. This measurement is named after Satoshi Nakamoto, the presumed founder of Bitcoin. However, the Nakamoto coefficient isn’t a Bitcoin-only measurement. Instead, a Nakamoto coefficient can be used for analyzing a variety of blockchains.”
As you can probably guess, Bitcoin ranks #1 for this method. Ethereum cannot be measured, which is convenient. Now that we know obtaining a complete picture is really difficult, I want to highlight a few of my favorite (simple) methods to compare the decentralization of Bitcoin and Ethereum. Often, simplicity is better.
- CHINA DOES A 180 AND BOOSTING THE BTC!
Thanks to the Scott Melker Who is known the Wolf of All Streets
As the US continues to tighten its restrictions on crypto, China has decided to change its stance and welcome crypto back into the country. In May 2021, China strictly banned all mining in the country, and in September of the same year, it banned all crypto trading. However, miners have slowly resumed operations in China, and major crypto institutions such as Samsung, DBS, and IB are beginning to feel more comfortable. Hong Kong has set ambitious plans to become an Asian crypto hub.
Paul Chan, the Financial Secretary of Hong Kong, has stated that, as certain crypto exchanges collapsed, Hong Kong can become a quality standing point for digital asset corporates. Although China's current law only allows those with +nullm bankable assets to trade crypto, on June 1, 2023, the retail floodgates will open in Hong Kong and mainland China, allowing for buying, selling, and trading at will. This news has even encouraged multiple ETFs to apply for approval and companies to submit applications for digital asset licenses.
Perhaps this move by China will prompt the US to reconsider its strict position on crypto.
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- Your Plan Is Your Life Raft!!
By Scott Melker who is known the Wolf of All Streets
I sound like a broken record, but I still can’t say this enough - make a plan for trading or investing and stick to it as if your life depends on it. That’s the motto for today, tomorrow, and the next 5 years. Tattoo it on your chest or write it on your bathroom wall. Just Don’t Forget It. EVER.
Markets are designed to separate you from your plans. And your money. Without a plan, your chances of survival are slim to none. And slim just walked out the door.
A well-constructed plan serves as a roadmap, providing stability and direction amidst market volatility. It is your life raft.
Despite the abundance of literature available on the topic of the ideal plan, it can be challenging to make sense of the various conflicting philosophies and data sets.
The end result is that investors often throw up their hands and say “F&$K it - I’ll just buy low and sell high.” This strategy is flawed as it fails to account for the multitude of variables that can impact market behavior.
Planning to “buy low” is a fool’s errand. These are the investors that swear Bitcoin will drop to $10,000 this cycle and promised us Bitcoin was headed to 3-figures back in 2018. Every now and then this group is right, but by the time price actually falls to their predicted level, they are under a new spell - calling for even lower prices.
Let’s see what this looks like in reverse.
Investors planning to “sell high” are the ones who swear every cycle will end in a super cycle. In 2017, these investors believed Bitcoin was headed to $100,000 and in 2021, they were convinced it was headed to $200,000 to +$500,000. Once this group starts to get the taste of being right, price is like a drug. The high from their “correct” prediction is so irresistible, it’s impossible to get off the bus. One more “high” literally and figuratively is all that matters until price leaves them in the dust as they too are under a spell of greed.
We are all guilty of succumbing to these lines of thought. The important thing is to learn enough to overcome this temptation or fight it, and edge out a win. That is where a plan comes in. A plan is effective because success is not determined by your ability to "buy low" or "sell high," but by sticking to your initial rational thoughts and following through with what you planned to do, even when you become emotional and irrational. A plan enables you to maintain your convictions amidst alluring temptations. Temptation is most likely to be strong at the same time when it is crucial to stick to your plan.
So does this mean that your plan is set and stone and you can never deviate?
Absolutely not.
Markets are constantly evolving and require us to reassess our investment strategy. That's why I write this newsletter every day, and my ideas shift along with the market. Adaptability is crucial, but some principles must remain constant. For example, I have a plan to never invest more than a certain percentage of my net worth and to trade with a specific percentage of it. However, I am open to modifying my approach when it comes to where I place my trust in this space. There's a lot that can be debated about what should change versus what should remain unchanged, but for now, I suggest you focus on creating a plan for the bull market.
The bear market is slowly fading, which means new opportunities for temptation are just around the corner. So, while we still have the chance, form a plan now so you won't be caught off guard. Your plan is your life raft in the investing game. It's crucial to have a plan in place to help you navigate through the rough waters.
- NETFLIX INCREASING ITS POPULARITY AND EFFECTIVENESS!!
[https://link.medium.com/HSFjmFVwaxb](https://link.medium.com/HSFjmFVwaxb)
- Is GOOGLE losing its leadership over the digital advertising media?
[Big Tech earnings show digital ads market not out of the woods](https://www.reuters.com/technology/big-tech-earnings-show-digital-ads-market-not-out-woods-2023-02-03/)
After a challenging 2022, fourth-quarter results from Alphabet, Meta Platforms and Snap showed they were not yet in the clear.
- Is The Fed Still Relevant?
By Scott Melker who is known the Wolf of All Streets
The Federal Reserve's decision to normalize monetary policy in March 2022 through a series of interest rate hikes sent shockwaves throughout the investment world. The focus of global markets shifted to the monthly Consumer Price Index and Fed Funds rate reports, leading to an influx of amateur analysts attempting to decipher the Fed's words and intentions.
One year on from the initial interest rate hike, the reaction to yesterday's 25 basis point increase was surprisingly subdued compared to previous hikes. This can be attributed to the Fed's increased transparency and efforts to communicate with the public, which has resulted in the market fully pricing in their behavior in real-time, rather than just reacting to announcements. It can also be attributed to an increasing indifference from investors towards Fed jawboning, who have quietly decided that the time has come to “fight the Fed.”
In 2019, Fed Chair Jerome Powell stated, "we have an obligation to explain ourselves," signaling a shift in the Fed's approach towards greater communication with the public. This change was reflected in the remarks of a Wharton professor who compared Powell's statement to The Wizard of Oz inviting visitors behind the curtain, suggesting that the Fed's once secretive and mystical reputation was being shed in favor of increased transparency.
“It wasn’t so long ago that the idea of a Fed trying to ‘explain’ itself was blasphemy. The Fed’s communication is a tortured history. I think of The Wizard of Oz. I think of the Fed trying to be the wizard to the citizens of Emerald City, but now trying to say, well, we should invite the visitors from Kansas behind the curtain.”
Powell's recent comment that "the disinflationary process is in its early stages" highlights the ongoing uncertainty in the economy and suggests that the market's focus is shifting away from the Fed's decisions. The cracks in the facade of Fed hawkishness are beginning to show, and markets are reacting positively.
In the realm of cryptocurrency, Bitcoin's resilience through the recent instability in the financial system only strengthens its use case. As the market begins to stabilize, Bitcoin has a unique opportunity to distance itself from macro events and establish itself as a standalone asset. Bitcoin has been the best performing asset in 2023, and always shows markedly higher upset when things start to rage.
With the Fed's "charade" ending, it is time to direct our attention towards other, potentially more promising investment prospects.
It's worth noting that the current state of the economy and financial markets is constantly evolving and subject to change. As such, it's important to continually reassess one's investment strategy and remain vigilant in the face of new information and developments. However, with the Fed's transparency increasing and the market's focus shifting away from their actions, the stage is set for new opportunities and potential growth in the financial world.
It’s going to be difficult for Bitcoin to decouple, but the seeds are being planted for it to do so. The Fed’s power is diminishing, so let’s focus our attention on brighter, oranger things.
- Snowy days finally arrived!!