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The Wolf Den #176 - How To Invest

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As a musician and NFT collector, I am thrilled to announce this newsletter is sponsored by MakersPlac
 
February 11 · Issue #176 · View online
The Wolf Den Crypto Newsletter
As a musician and NFT collector, I am thrilled to announce this newsletter is sponsored by MakersPlaceMakersPlace is the go-to premium marketplace for purchasing rare digital artworks from the world’s top creators like comic art legend José Delbo, Trevor Jones, digital wizard Pak, artists collected by MOMA, Guggenheim, and many others. They have new artwork drops twice a week where collectors have the opportunity to add a coveted piece of rare digital art to their portfolio. Collectors can subscribe for exclusive drop notifications on Makersplace.com/thewolf. I have been eyeing a few pieces there myself and recently commissioned a painting and NFT from Trevor Jones!
Two of the most frequent questions that I get from people in the crypto community are: what do you invest in and what are the best investing strategies? As a general rule, the best investment strategy focuses on maximizing gains while minimizing risk. 
Historically, the best assets that fit this profile have been stocks, bonds, and real estate. A well balanced portfolio has always had an allocation of all three. In the past year, crypto has finally become a viable 4th part of any portfolio. Many now view an allocation to Bitcoin as an absolute must and as an increasing percentage of the overall holdings.
Every investment strategy should always have a long-term horizon and investors that begin putting money away in their 20s have an exponential advantage over those who begin to save later. Furthermore, investing money that is not needed to cover expenses and leaving it in the market for as long as possible is the primary method for accruing wealth faster than any other single strategy. Ultimately, this is the secret to getting rich!
To show how this works in reality, let’s take a look at an easily achievable scenario. If a person invests $250 a month at an 8 percent average annual investment return the following retirement outcomes are achieved. 
A person starting at age:
— 25 will accumulate $878,570 by age 65.
— 35 will accumulate $375,073 by age 65.
— 45 will accumulate $148,236 by age 65.
As you can see, an investor who begins putting money away at 25 will end up with roughly 7 times as much money at age 65 as an investor who begins at 45. This is a result of compound interest and the key to successful long term investing. 
Long-term versus short-term investing
There is a significant difference between long-term and short-term investing. A lot of people, particularly millennials, don’t invest in stocks because they are afraid of losing money in the short term. If one is investing for the long term, then there is very little risk. Stocks can go down, but over any 10 year period in history they are always up at least 7% per year when the gains and losses are averaged out. With a longer term horizon, stocks have literally never been a bad investment. 
In our episode of Trade Gods, Peter Brandt said that he tells his kids to buy stock in good companies, then hope it drops 50% so that they can buy more. Buying the dip has always worked over a long time period.
I invest as much as possible in tax shelters like Roth and SEP IRAs to avoid paying taxes on the gains and to increase the amount that is compounding. I also trade commission-free on E-Trade and try to only invest in index funds that have the lowest possible fees. I also dollar cost average in each investment, meaning that I buy most of these investments on a fixed date, with a fixed amount regardless of price. 
Compound, compound, compound!
As Albert Einstein once said: “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t pays it.”
The world’s most famous scientist issued this comment about compound interest and time has shown that Einstein was correct. As defined by Investopedia, “Compounding is the process in which an asset’s earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will generate earnings from both its initial principal and the accumulated earnings from preceding periods. Compounding, therefore, differs from linear growth, where only the principal earns interest each period.” 
As mentioned earlier, compounding one’s gains is the key to accumulating wealth, period.
There are three key rules to maximize the advantages of compounding: 
— Reinvest dividends or interest into the asset. 
— Add more to the investment whenever possible.
— Invest over a long period, the younger one starts, the more powerful compounding will be. 
Compounding interest has become exceptionally easy in crypto, by simply holding coins on platforms like Voyager (my favorite) and BlockFi. You can make upwards of 9% a year simply holding USDC, compounding weekly or monthly depending on where you do it. You can also earn yield on your Bitcoin - earning 6% on Bitcoin while the prices rises is incredible.
What’s the bottom line?
Invest early and often! This is the true key to investing success. Also seek low fee investments and exchanges that waive commissions. Take advantage of tax shelters like 401Ks and IRAs. Put your money to work for you and don’t touch it unless you absolutely need it! 
When you are young you can invest in almost any asset as younger investors should keep the long time-horizon in mind. Following these strategies is the surest way to leave you sitting financially pretty and you’ll have a nice stack when you need your money the most!
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In This Issue:
  1. How To Invest
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. Chart Requests
  5. Nord Finance
  6. JulSwap - First Glance
  7. The Feynman Technique
  8. What Platform Supports Token X?
  9. Will Twitter Be The Next Company To Buy Bitcoin?
  10. Mastercard Officially Announces Plans To Implement Crypto Through Merchants
  11. Mark Cuban Sees The Value In Bitcoin
  12. BNY Mellon Will Begin Financing Bitcoin
  13. The Wolf Of All Streets Podcast Ft. Alon Goren
  14. Phemex Launches “Earn Crypto”
  15. My Recommended Platforms And Tools

Bitcoin Thoughts And Analysis
Very little has changed on my Bitcoin analysis over the past few days, but some of you have obviously not seen the paid issues. Bottom line - everything is macro bullish.
MONTHLY CHART
Quick reminder that the monthly chart LOOKS LIKE THIS! It just broke and retested the EQ of this massive ascending channel in the past 2 months. That flip to support should technically target the top of the channel. On a macro level, we want to see that dashed line continue to hold as support. This is the path to 6 figure Bitcoin, and it’s not far fetched at all.
People were freaking out about the last monthly candle, because of the long wick. That doesn’t matter unless the next candle is bad. For now, not a concern.
DAILY CHART
When in doubt, zoom out. We just broke out of this huge bull flag within the past week. The target is around 63K. Be patient.
4-HOUR CHART
While the community was in a panic yesterday, I calmly stated that this looked like bullish accumulation. The flag ended up being imperfect - price dropped below but did stop at the demand structure and form tweezer bottoms, a nice bottom signal. Regardless of the pattern, price has broken through the top resistance. That’s bullish. And it did so on increasing volume with large candle spread.
I would stop trying to short Bitcoin. There may be quick opportunities, but the trend is up.
Altcoin Charts
I have shared more altcoins setups in the past few weeks that are in profit than I can even remember. “Everyone is a genius in a bull market.” The reality is, most coins will do well if this continues, so finding something that hasn’t pumped yet or is about ready to break out is the ideal move.
Important note for people who are new here. I DO NOT TELL YOU WHAT TO BUY OR WHEN. My goal is to show you what I am looking at in advance. These are SETUPS, not SIGNALS. If a certain criteria is met, then you consider taking a trade. Many never trigger. It has to work within your own system, but this is for education. You cannot copy trades or jump in because they are listed here without understanding why or when you will exit.
Here are a couple more I am watching today, but far from a comprehensive list. Watch the chart requests video, most that were close to breaking out have done so.
AKRO/BTC
I drew this wedge on the live stream yesterday and price has broken out since. There are 2 potential trades that I would be watching for here if I could actually trade this (I don’t have a Binance account anymore as an American). The pink path would be a retrace to support, which has already been tested a few times. The blue path would require a break of resistance and retest as support. I like that better, since that resistance is strong, with this move being stifled right at that line. The target of the wedge is the top black line at the beginning of the pattern. A break of that sends this coin into price discovery for a new all time high. I would not personally enter now, it’s between levels.
GRT/BTC
This is from the livestream as well and you can see that it has already exploded from the range where it was trading (purple). It has officially entered price discovery for a new all time high, but there are two area that I would be interested in buying on a pull back - the previous all time high and the range highs (ideal, but less likely now). Ultimately this should continue to rise now that it’s broken the highs. If you are already in, you really want to see this candle close above that top line, or else it would be a pretty major bearish SFP. If you see a nice close higher than the current price, then consider bidding around that black line in case it drops to retest.
SUSHI/BTC
I shared this idea over a week ago, and now it seems to be squarely testing support. This COULD EASILY BREAK DOWN, but there’s really solid risk/reward on a trade here because the downside is so limited and the upside it somewhat infinite if this goes for another run. This is the BTC pair, but we have been in SUSHI for a 10X on the USD pair already. DeFi is generally bullish, this is a decent horse to bet on in the long term, in my opinion.
Again, I am already in this from WAY below. But I believe in it longer term, so if I was not in I would be hunting for a decent entry.
Chart Requests
Here are all of your charts requests, live streamed yesterday.
There are SO many good setups that popped today in this video, definitely worth watching and checking your favorite charts.
$AKRO $ALGO $ALPHA $AVAX $BADGER $BNB $BNT $BONDLY $CAKE $DFI $DOGE $EOS $FIL $GRT $HBAR $JUV $LRC $LTC $MRPH $NANO $NKLA $NU $ORAI $OXT $PAID $REEF $RUNE $SFP $SNOW $SOL $TRX $VGX $WAVES $WRX $XMR $ZIL
Altcoins To The Moon? Chart Request Session W/ Scott Melker
Nord Finance
Nord Finance: Overall Platform Review - The Wolf of All Streets
I just released a blog with a full review of the Nord Finance ecosystem. I have been watching this project for a few weeks and shared a monster trade recently in the altcoin charts section. Here are the main points I covered in the blog. Nord Finance, a blockchain agnostic platform, is an advanced decentralized financial ecosystem. Deployed on the Ethereum Network, it integrates multi-chain interoperability, thus proposing a plethora of financial primitives, which constitute savings, advisory, loans against assets, investment/funds management, and swaps. The four main products offered by Nord are Nord.Savings, Nord.Advisory, Nord.Swap, and Nord.Loans. Together these products offer investors and traders the ability to access liquidity pools, execute swaps, borrow against their crypto, eliminate fees, and stake coins. At the heart of these products is the $NORD token, which distribution was limited to large investors to avoid massive sell pressure. With a long list of partnerships and promises for upcoming announcements, the future is bright for Nord. Read the full review in the link above.
JulSwap - First Glance
JulSwap - AMM Pool on the Binance Smart Chain - julswap.com
I have been on the hunt for UniSwap competitors and finally had my team try out JulSwap, which I was looking at a few months ago. Most of the key info is in the quick video above.
As most of you know, trading on UniSwap has become prohibitively expensive for most people, with insane gas fees that make transacting pointless unless your trade is large. JulSwap is very similar to UniSwap, but built on the Binance smart chain, making it both faster and cheaper.
JulSwap
As you can see if you click on the link, it feels almost exactly like UniSwap, so the learning curve is minimal. If you are looking for another option, this is definitely worth testing and having on your radar.
The Feynman Technique
The Feynman Technique is a foundational mental model for unlocking growth in your career, startup, business, or writing.
A thread on how it works and how it can change your life…
Richard Feynman was an American theoretical physicist.
He won the Nobel Prize in Physics in 1965 for his groundbreaking work in quantum electrodynamics.
Feynman’s true genius, however, was in his ability to convey extremely complex ideas in simple, digestible ways.
Richard Feynman observed that complexity and jargon are often used to mask a lack of deep understanding.
The Feynman Technique is a learning framework that forces you to strip away needless complexity and develop a deep, elegant understanding of a given topic.
The Feynman Technique involves four key steps:
  1. Identify
  2. ELI5 (“Explain It To Me Like I’m 5”)
  3. Reflect & Study
  4. Organize, Convey & Review
Let’s cover each step and how you can make this powerful framework work for you…
Step 1: Identify
What is the topic you want to learn more about?
Identify the topic and write down everything you know about it.
Read and research the topic and write down all of your new learnings (and the sources of each).
This first step sets the stage for what is to come.
Step 2: ELI5
Attempt to explain the topic to a child.
Once again, write down everything you know about your topic, but this time, pretend you are explaining it to a child.
Use simple language and terms.
Focus on brevity.
Step 3: Reflect & Study
Reflect on your performance in Step 2.
How well were you able to explain the topic to a child? Where did you get frustrated? Where did you resort to jargon or get stuck?
These are the gaps in your understanding.
Read and study to fill them.
Step 4: Organize, Convey & Review
Organize your elegant, simple language into a compelling story or narrative.
Convey it to others. Test-and-learn. Iterate and refine your story or narrative accordingly.
Review (and respect) your new, deeper understanding of the topic.
The Feynman Technique is an incredible framework for unlocking growth.
The best entrepreneurs, writers, thinkers, and operators have leveraged this technique (directly or indirectly).
They share a common genius - the ability to convey complex ideas in simple, digestible ways.
It is easy to overcomplicate and intimidate.
We all know the people - teachers, peers, bosses - who try to do this.
Do not be fooled - complexity and jargon are often used to mask a lack of deep understanding.
Remember The Feynman Technique. Find beauty in simplicity.
What Platform Supports Token X?
This is a question I receive a lot and there is a really simple solution. Go to either CoinMarketCap.com or CoinGecko.com and search for the token you want to know about. Once you are on that token’s page, you can scroll down to see the top spot and derivatives markets supporting that token. This method is far superior to sifting through old Google articles or logging into exchanges to check on support. Easy.
Will Twitter Be The Next Company To Buy Bitcoin?
Squawk Box
"We've done a lot of the upfront thinking to consider how we might pay employees should they ask to be paid in #bitcoin, how we might pay a vendor if they asked to be paid in #btc and whether we need to have #btc on our balance sheet," says @NedSegal $TWTR. https://t.co/KjIgnqDmYC
Ned Segal, the CFO of Twitter, recently stated that Twitter is closely watching what other companies are doing with their balance sheets. Segal continued to say, “We have done a lot of upfront thinking to consider how people want to be paid, and should we have Bitcoin on the balance sheet to make that happen.” Further, he added, “One of the key things we are looking at is if people want to transact with us in Bitcoin, then we might consider if we want Bitcoin on our balance sheet ready to complete that transaction. When we hedge currencies, do business in another country, when we think about all the different exposures we have, we really want to match our assets and liabilities and we take the same approach to Bitcoin as we do with all the other risks we have.”
Twitter, headed by Jack Dorsey - a longtime Bitcoin proponent - is seriously considering adding Bitcoin to their balance sheet. Of all the social media giants, Twitter is the most likely candidate to be the first mover in this realm. A move by Twitter would surely catch the attention of Facebook, YouTube, Instagram, WeChat, etc., forcing the hand of other leading social platforms.
The clock is ticking.
Mastercard Officially Announces Plans To Implement Crypto Through Merchants
Mastercard Will Let Merchants Accept Payments in Crypto This Year - CoinDesk
Mastercard has been hinting at their crypto related plans for quite a while. The current CEO, in a Q3 earnings call, said that the company has been collecting patents in the space, specifically preparing for the inevitable future when CBDCs are widespread. Their most recent announcement, stated that their merchants will have the option to accept cryptocurrency.
This is HUGE! Arguably even bigger than the Tesla Bitcoin investment.
Which coins will be accepted has not been disclosed. Mastercard is well aware that a “widespread crypto economy is far from reality” but that does not mean that they aren’t preparing for it. Mastercard currently holds “89 blockchain patents and is waiting for approval on an additional 285 around the world.”
Mark Cuban Sees The Value In Bitcoin
Mark Cuban: Bitcoin is America 2.0 - Blockworks
Mark Cuban has been very vocal about the prospects of a post-pandemic America, or as he has been calling it “America 2.0.” A major facet revolves around the future of money and the extent to which it is at odds with traditional finance. In a recent interview, Cuban said in reference to the plethora of cryptocurrencies, “the only thing we don’t know is who will be the ‘Amazon’ and who will be the ‘pets.com.’” He further elaborated on the advantages of DeFi over traditional finance and how the principles at play in crypto will alleviate under collateralization as recently seen in the Robinhood debacle. Mark Cuban, one of America’s greatest investors, has quickly become a top thought leader and advocate for the crypto space.
BNY Mellon Will Begin Financing Bitcoin
BNY Mellon to offer bitcoin services, a validation of crypto from a key bank in the financial system
This may be the biggest news yet. The nation’s oldest bank will begin financing bitcoin and other crypto currencies. “It will eventually allow digital currencies to pass through the same financial network it currently uses for more traditional holdings like U.S. Treasury bonds and equities.”
The Wolf Of All Streets Podcast Ft. Alon Goren
Podcast - The Wolf of All Streets
Venture Capital and Funding The Future Of Crypto with Alon Goren of DraperGorenHolm
Deep in the punk rock scene as a kid, Alon Goren learned that raising money was the difference between putting out new music or failing as a band. It was his ability to raise money for his MySpace rock band that led Alon into the crypto startup scene, where he became a venture capitalist turning ideas into successful businesses. Now funding over 20 companies, DraperGorenHolm has become one of crypto’s greatest actualizers for brands, ideas, and concepts at early stages in the crypto scene.
Alon and I further discuss punk rock, working for Myspace, social fundraising platforms, blockchain and booze, the rate of failure for startups, the spray and pray investment technique, inside the venture capital world, founding DraperGorenHolm, strong and weak hands, doubling down on winners, averaging up as an investor, accredited investor laws and more.
Phemex Launches “Earn Crypto”
Bitcoin Futures Exchange|Phemex
Phemex, the anchor sponsor of the Wolf Den Newsletter, has launched “Earn Crypto.” You can earn up to 10% APY through Fixed and Flexible Saving options. Flexible accounts allow for instant withdrawals and deposits at any time. This is great opportunity to earn yield on your crypto holdings. Sign up for Phemex above or HERE, read more about the program below.
Earn Crypto | Up to 10% APY | How to Earn Crypto | Phemex
My Recommended Platforms And Tools
This is where I trade with leverage and can also trade spot with no fees.
This is where I spend my days teaching and learning! Our Discord group is a one stop shop for everything you need to learn to trade and control your emotions. Feel free to DM me on Twitter or respond to this email for questions.
This is where I invest, commission-free. They now let you earn interest on your Bitcoin held in Voyager, so you can compound while trading. Not only that, you’ll get $25 in free BTC when you download & fund.
Rewards Code: Scott25
I use RoundlyX to buy small amounts of Bitcoin every single day. They automatically round up my credit card purchases (with 10x multiplier) and invest them in crypto. Absolutely brilliant. Passively invest money you don’t need without a thought. Further, they have integrated with Voyager (see above) to offer commission-free purchases.
Rewards Code: WOLF
The platform I am using for my taxes. My trades were automatically imported after setup and displayed nicely. The tax report was quick and easy to create in the app. I can also track the performance of my assets in the app. With Blockpit, I no longer have to worry about realizing profits or losses in time. 10% discount using the link above!
Binance is finally available in Florida!
Concierge Phone Service for Americans that protects your from SIM Swaps and other phone related hacks. I cannot stress enough how amazing this service is.
Follow me on Twitter at @scottmelker. This is where I am constantly updating my trades and sharing ideas.
On-chain and fundamental analysis, research, predictions and indicators, all in one place. Highly recommend.
The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor.
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