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The Wolf Den #499 - Crypto After Death

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May 13 · Issue #499 · View online
The Wolf Den Crypto Newsletter
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The market continues to do its thing and there’s not a damn thing we can do about it. Today’s newsletter will feel a little more normal and hopefully not too morbid. I’m going to give my best answer to the question following question: what happens to your crypto after you die?
In the eyes of the law, cryptocurrencies are treated no differently than any other asset of value when an investor dies. However, there is no guarantee that the crypto can easily be redeemed, accessed, or locate, even if the law deems you the new owner.
In the U.S., it’s standard practice for investors to hire a lawyer, establish an estate, write a will, and name beneficiaries. It’s important that crypto is an active part of the discussion. Preparing your estate does not mean the funds are accessible. This is why responsible storage and forethought matter.
Legally compliant exchanges in the U.S. are required by law to hand over accounts when requested by the authorities. This doesn’t mean they are capable of doing so. Exchanges make their own rules on how much of your information they hold. In some cases, you could be completely out of luck if you left your fortune entirely on an exchange depending on their terms of service. This is why I prefer to take matters into my own hands.
With foreign exchanges, custodial wallets, and self-serviced platforms the responsibility of transferring assets post-death is entirely on you. If you don’t share your private keys when you are alive, you likely won’t be able to share them when you are dead. Deciding whether or not to share a private key is entirely a personal question and a matter of trust. Any decision regarding sovereignty and privacy is entirely case-by-case.
Creating an elaborate scheme that keeps your crypto secret, safe, and secure until the moment of death, only to then share it with a specific person at the right time and assume they will have access is risky. This is the strategy that most people take, leaving a trail of bread crumbs like Hansel and Gretel. The last thing your loved ones want to do after you pass is go on a scavenger hunt in search of your wealth, but this is currently a necessity for many.
Crypto inheritance services may not be the answer you are looking for either, as they are often middlemen looking to scrape a fee. The point of crypto is eliminating friction, not adding more - which is why this question is so challenging. 
If you do have a sizable stash, it’s always a good time to consider what would happen if you weren’t around. No amount of money is worth leaving to chance.
This article is actually a solid quick summary of the issues with each approach, for both crypto and stock accounts.
What happens to your crypto when you die?
I am a customer of Casa, and they have also created an innovative solution, specifically for Bitcoin. You can read more about that here, but again this does not cover most of your holdings if you have a diverse portfolio like me.
Announcing Casa Covenant: Bitcoin Inheritance Service and Protocol
The bottom line is that this is a big problem that is yet to be properly solved. Like everything else in crypto, we are early and the solutions are inevitably forthcoming. For now, you need to make sure to have a system that you are comfortable with in place.
In This Issue:
  1. Crypto After Death
  2. Key Metrics Of The UST Depeg - IntoTheBlock
  3. Bitcoin Thoughts And Analysis
  4. Altcoin Charts
  5. Legacy Markets
  6. Are BlackRock And Citadel Responsible?
  7. Raoul Pal’s Macro Vision
  8. Germany Announces No Tax On Crypto Sales
  9. My Recommended Platforms And Tools
Monday will be the 500th Issue of The Wolf Den Newsletter! I will be doing a bunch of giveaways next week to celebrate. All you have to do is be a subscriber, so you are all already entered! At the very minimum, I will be giving away $500 to 10 people, a total of $5000. It is likely that Bitget will also have some giveaways!
Key Metrics Of The UST Depeg - IntoTheBlock
In this report, we bring to you the latest in on-chain cryptocurrency analysis. We look at the blockchain directly and analyze balances, transactions, and the overall activity of market participants. This gives us a unique insight into the future of the market.
This section is written in conjunction with IntoTheBlock (ITB).  ITB is an intelligence company that leverages machine learning and advanced statistics to extract intelligent signals tailored to crypto-assets. IntoTheBlock tackles one of the hardest problems in crypto: to provide investors with a view of a crypto asset that goes beyond price and volume data. 
The Wolf Den research team uses IntoTheBlock to dig deeper and get the most important insights about the crypto market.
Key Metrics Of The UST Depeg
Algorithmic stablecoins require demand and utility in order to maintain their peg. Anchor, a Terra native borrowing and lending protocol offers 19.5% yield for deposits on UST. This has led historically to over 70% of UST’s circulating supply to be deposited onto the protocol. This also led to UST being Anchor’s main deposit, and made the protocol susceptible to the FUD experienced by the recent market. Investors wanting to secure their positions withdrew their deposits, hence a 65% reduction of the protocol’s TVL.
Anchor’s TVL reduction signals a reduction in Terra’s economic activity. Users withdrawing from Anchor are faced with two potential options. First one is to take the financial loss of the depegged UST and exchange it into a different asset. Secondly is to use Terra’s mechanism to convert each UST for $1 US dollar worth of $LUNA. The second option described potentially leads to a sell off of the LUNA token, spiking unseen trading volumes and plummeting price.
Massive selling pressure on the LUNA token triggered record spot trading volume highs, reaching $6 billion on Tuesday May 10th. As the depeg continues, LUNA’s circulating supply is increased by the burning of UST. As a consequence, we have see hyper inflation and price continues to decrease into all time lows. The price of Luna is currently .000037. Fractions of a penny.
Bitcoin Thoughts And Analysis
I made the case yesterday that I believed the bottom was in for Bitcoin, at least for the moment. This tweet sums up the thinking, and was long before we had the daily close for further confirmation of that candle.
The Wolf Of All Streets
Bottom should be in... for now. Huge volume spike on the last push down, nice long wick on the 4-hour, massively oversold conditions, divergences brewing everywhere, people are absolutely beaten down.

Probably see price float up for a bit before the next major move either way. https://t.co/zFkat7lsxR
We have seen great follow through so far today, but it’s early. Let’s take a look at the charts.
WEEKLY CHART
Bulls are breathing a temporary sigh of relief. It is too early to call it, but the weekly candle at the moment looks great. Historic volume, long wick down, tons of demand at the bottom, and holding support from the June 2021 bottom.
I talk about the idea of bullish SFPs often. Well, this is as good of an example as you will ever see, assuming the candle closes like this.
The idea of a swing failure pattern (SFP) is that whales push price to area of liquidity. This is called engineering liquidity. If you are looking to fill huge orders on an asset, you need to find willing buyers or sellers on the other side. How do you do this?
In the case of a bullish SFP, you actually sell aggressively down past a key level of support. If you want to fill buy orders, you need a TON of sellers. Many people short a breakdown of support. Those are sell orders. Countless traders were certainly looking to sort a breakdown of the most obvious support level on the chart, right around $28,800. This is how we get these “sweeps of the lows.”
Leveraged longs were heavily piled in as well. Where would they naturally put their stop losses? Slightly below or at (if they are amateurs) support. And what is a stop loss on a long? It is a sell order.
By pushing price below this key level, whales were able to fill a massive amount of buy orders that were unavailable above. That’s why price wicks below support, finds a ton of volume, and bounces above.
The best SFPs are one a MAJOR support (or resistance, because you can have bearish SFPs too) that has not been tested in a long time on a high time frame. People incorrectly identify these patterns on low time frame charts, when really the example above is superior.
A close above $28,800 (depending on the exchange) would confirm. A close above $33,000 would be far better and would created the biggest bottoming candle ever above another key support.
Bitcoin tapped the 200 EMA (exponential moving average) on the weekly chart for the first time since March 2020. Price wicked below this line in 2020 as well, for two consecutive weeks. That marked the bottom. The only other tap of this line before was in 2018, and also marked the dead bottom of the market.
The 200 MA (moving average, not exponential, not shown) has not been tested.
DAILY CHART
Yesterday’s candle DOUBLED the volume from December 4th, 2021, when Bitcoin dropped quickly from the low 50Ks to 42K and bounced. Absurd volume, and exactly what we wanted to see for a sign of likely capitulation. Huge wick down on major volume, showing that demand has finally stepped in and bears are finally losing the battle. The daily confirmed the bullish SFP already, closing above $26,600 on Bitstamp, which is the chart above. So far, we are seeing a nice bullish candle today, which would act as further confirmation of the reversal.
That daily candle close yesterday was almost as much as bulls could hope for. It also gave us monster bullish divergence on almost every time frame.
Encouraging.
On the flip side…
It would have been better if the candle was green. These wicks have a tendency to be filled, meaning price goes back down one more time to test the lows. We still need confirmation with a green candle today at the close.
More importantly, potential hidden bearish divergence is in play if there’s no follow through on every time frame from the daily on down.
You can see that the bull div confirmed, which you can also see on every time frame down to the 4-hour. We also need price to break different levels depending on the time frame to avoid hidden bearish divergence. We want a daily close above $31,000 or so, but that does not have to happen today, as long as RSI does not make a clear elbow down.
BOTTOM LINE: I am cautiously optimistic that we have seen the bottom for a while, but I think it is too early to call a full reversal that will bring us into a new bull market. Step by step.
Altcoin Charts
I do NOT share signals in this section. I share setups and charts that I am watching, in an effort to help show you how I view a chart and what criteria would be necessary for me to consider taking a trade. NEVER blindly buy something because it is listed in a newsletter or posted on twitter. You need to have a plan when you enter a trade. These are just ideas, and are almost always “if, then” scenarios. If a certain set of things happen, then I would consider a trade.
Almost every altcoin chart looks like a version of the Bitcoin chart on steroids. Big volume, long daily wick on yesterday’s candle, nice bounce today. They are trading in unison. While some are slightly stronger or weaker, it’s basically a dart throw when everything is getting a strong bounce, even if it ends up just being relief.
If you are investing and were looking to buy dips, you likely have already done that over the past few days. I am not going to share any specific charts today, because, as I said, they all look the same. At this point, it’s up to you to decide whether you think the bottom is in and it’s worth getting back into the market if you are on the sideline. And to determine your plan if things go south again.
I have bought quite a few assets myself, largely “too early” in the week on altcoins. But I am willing to hold them for a long time and believe they will eventually trade much higher. I don’t need to buy the bottom.
Are BlackRock And Citadel Responsible?
BlackRock And Citadel Deny Trading Cratering Stablecoin
The rumor mill is alive and well, meaning there is supposedly a lot more to the Luna story than meets the eye. Below is my synopsis of the conspiracy theories at hand.
The idea is that BlackRock and Citadel coordinated an attack on Luna because they knew UST was vulnerable. Basically, the two combined acquired a large amount of Bitcoin and UST to dump simultaneously, causing a meltdown. By doing this, they put Anchor in a situation it couldn’t escape and the whole system collapsed. This plan then allows BlackRock and Citadel to buy back cheaply.
There is no reason to believe or not believe the above statement. The market is down and there is nothing we can do about it. Furthermore, all of the involved parties have denied all accusations. Call it market manipulation, call it a cleanse, call it whatever you want. Crypto is a free market, meaning these things can and will happen. It’s our job to set ourselves up for success.
Most importantly - a “stablecoin” should have been able to repel an attack, no matter who coordinated it.
Raoul Pal's Macro Vision
Raoul Pal
Macro Views:

As Ive talked a lot about, I think we are going into a pretty nasty recession (or are in one). Lay offs are coming as are house price falls. Demand destruction is everywhere due to the largest monetary tightening in history. 1/
It takes a special investor to see and act clearly during hard times, which is why I thought the above thread was worth sharing. Raoul Pal is one of the best at summarizing what is going on beyond crypto in a digestible and easy to understand manner. He makes the concise case that everything is undergoing a massive shift and that there aren’t many places to hide…for now. Read his thread, you won’t regret it. I will spoil one part for you here.
But, as I have pointed out time and time again, crypto is a long-term investment for me, not a trade. In the thesis is clear expectations of 60% corrections (which I have discussed at length). Without that kind of volatility you don’t get the exponential upside…
If you zoom out from the FUD you get BTC (as a proxy for the space over all) heading back to its long term Exponential Moving Average. Tough times like these are the times to buy, if you have any spare cash (not easy these days).
Germany Announces No Tax On Crypto Sales
Germany Announces, No Tax On Crypto Sales For Investors Holding For 1 Year | Bitcoinist.com
This is a huge announcement for German crypto traders and investors. There will be no long term capital gains taxes on crypto sales, as long as the investor has held for a year or more. See you at Oktoberfest?
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to “Buy,” “Sell,” or “Hold” an investment.
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