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The Wolf Den #515 - The “Mistake” We All Made

June 6 · Issue #515 · View online
The Wolf Den Crypto Newsletter
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In This Issue:
  1. The “Mistake” We All Made
  2. Bitcoin Thoughts And Analysis
  3. Legacy Markets
  4. Consider A Wash Sale
  5. The Merge Nears And Staked Capital Grows
  6. India’s Tax Nightmare
  7. Volatility Is Good
  8. The Wolf Of All Streets Podcast Ft. Michael Moro
  9. My Recommended Platforms And Tools
A moment of silence for our portfolio tops that could have become realized gains if we had just sold everything at the perfect moment. Imagine all of the profit that we could have locked into our bank accounts had we just been a little less greedy, that thing that we want that we could have bought, that island we would be living on. Consider that elusive number that was just a few clicks away from becoming reality, the greatest missed opportunity there ever was…
I am joking, this is utter nonsense. 
The time has come to forget this fictitious, “should have, would have, could have” number. Bury it and forget about it, because it was never real in the first place. It’s a demon to be exorcised forever.
This demon tortures all of us. Everyone is haunted by some form of a financial nightmare. For those of us who have been HODLing, there’s nearly a 100% chance that this specific demon lives in your mind. It feeds off of your longing for that magical, perfect number. It thrives by reminding us that we are down 85%, 87%, 89%, and then some. The more we think about it, the more it grows.
What if I told you there is a way to kill this demon for good?
Your answer lies in the acceptance of one simple truth. 
Absolutely nobody can consistently predict a top or a bottom.
Understanding this is the demon killer.
Taking that a step further, even if they can predict the top of bottom, the odds that they can perfectly trade it in the moment are slim to none.
Dwelling on the past is futile. Nothing about it can be changed. But we can learn lessons.
It is time to focus solely on the present and the future. Do everything that you can today to be successful. Dollar-cost average, rebalance, study, paper trade. In correcting the past, I do not mean attempting to sell everything at the next “cycle top,” or attempting to buy everything at the next “cycle bottom.” This is impossible. Instead, practice setting your emotions aside and questioning your biases one-by-one as they creep into your mind. Sharpen the other tools in your box.
Lastly, don’t beat yourself up. Be proud that you are here. Few people have seen this light. The rest will come.
Bitcoin Thoughts And Analysis
All streaks eventually come to an end. There will be no 10 week red streak for now.
We FINALLY saw a green week, albeit on a candle that closed very close to it’s open.
Still, Bitcoin printed a green inverted hammer. Many beginning traders believe that any candle with a long wick up is bearish. This is not the case. Candle placement and context are as important as candle structure. At the bottom of a trend, this candle is considered bullish. It is a signal that bulls are willing to step in and test bears, and that sellers are unable for a period to advance price further down. The next candle acts as confirmation. We have a decent start.
There’s nothing to celebrate yet. Last Monday, price had a similar move to the upside, turning many people bullish for no apparent reason. Price is still ranging sideways, under key resistance around $33,000 and above key support at $28,600. A move above or below these levels is worth discussing. Everything else is noise.
We are still very much in a bear market until we make a higher high.
Legacy Markets
Stock Market Today: Dow, S&P Live Updates for June 6, 2022 - Bloomberg
Key events to watch this week:
  • Reserve Bank of Australia policy decision Tuesday
  • World Bank’s “Global Economic Prospects” report Tuesday
  • Reserve Bank of India rate decision Wednesday
  • OECD Economic Outlook, a twice-yearly analysis of major global economic trends and prospects for the next two years. Wednesday
  • European Central Bank rate decision, Christine Lagarde briefing, Thursday
  • China trade, new yuan loans, money supply, aggregate financing. Thursday
  • US CPI, University of Michigan consumer sentiment Friday
  • China CPI, PPI Friday
Some of the main moves in markets:
  • The Stoxx Europe 600 rose 0.9% as of 10:30 a.m. London time
  • Futures on the S&P 500 rose 1%
  • Futures on the Nasdaq 100 rose 1.4%
  • Futures on the Dow Jones Industrial Average rose 0.8%
  • The MSCI Asia Pacific Index rose 0.6%
  • The MSCI Emerging Markets Index rose 1%
  • The Bloomberg Dollar Spot Index fell 0.2%
  • The euro rose 0.2% to $1.0745
  • The Japanese yen rose 0.1% to 130.74 per dollar
  • The offshore yuan was little changed at 6.6506 per dollar
  • The British pound rose 0.6% to $1.2568
  • The yield on 10-year Treasuries advanced two basis points to 2.96%
  • Germany’s 10-year yield advanced two basis points to 1.29%
  • Britain’s 10-year yield advanced four basis points to 2.20%
  • Brent crude rose 0.2% to $119.92 a barrel
  • Spot gold was little changed
Consider A Wash Sale
What's the Cryptocurrency Wash Sale Law? - SmartAsset
“The wash sale rule is an IRS guideline that specifies when and how investors can buy and sell securities to harvest tax losses. Tax-loss harvesting means selling assets at a capital loss to offset capital gains. This strategy is commonly used to minimize investment tax liability. When you deduct capital losses, you can offset up to $3,000 in ordinary income. Losses can be carried forward to offset future income for additional tax benefits.
Specifically, the wash sale rule prevents investors from selling a stock at a loss, then repurchasing a “substantially identical” asset in the 30 days before or after the sale. So you couldn’t sell 100 shares of XYZ stock on Monday, then turn around and buy 100 shares of that same stock on Tuesday and still be able to harvest any associated tax losses. The wash sale rule covers both taxable brokerage accounts and individual retirement accounts (IRAs).”
The rule applies to stocks, bonds, options, futures, and ETFs, but not crypto (yet). For now, you can literally sell your coins, take a loss, and immediately buy them back. You cost basis is the same, but you have a sizable write off.
This is 100% legal. Typically, this is a popular topic come tax time, but it’s just as valid when your investments are low. Something to consider now, when the entire market is depressed.
I recommend consulting with your financial advisor to see if this makes sense, as the laws can change and there are different view. I am not an accountant or financial advisor.
The Merge Nears And Staked Capital Grows
Total Value Staked In Eth2 Deposit Contract Soars To New Highs As The Merge Nears ⋆ ZyCrypto
Some important Ethereum stats:
  • Nearly 400,000 unique validators
  • Almost 11% of the circulating supply is staked
  • 2.4M Ethereum has been burned
  • 12.7M Ethereum is staked
  • The best of the best is on Ethereum - NFTs, Lending, Stablecoins, Swapping, Wallets.
  • The merge is coming soon!
India's Tax Nightmare
Indian Crypto Holders Face 30% Tax on LUNA 2.0 Airdrop
Indian crypto enthusiasts will pay a 30% tax on their Luna 2.0 airdrop, even if they did not sell it and realize a gain. This is the same structure in the United States, but crypto is taxed the same here as other income and assets.
Further, Indian traders cannot write off losses against those gains, which is brutal.
It is clear that India’s tax policy is extremely heavy handed and causing many Indians to avoid the market altogether.
Volatility Is Good
How Should We Value Crypto? By How Volatile Crypto Assets Are - Bloomberg
This is a great read. I will share the conclusion, but you should take the time to read the entire article.
“The bottom line: Even risk-averse investors can seek out some volatile price movements. This means that the future of crypto assets will be more persistent than many people expect, and will not require those assets to become more stable or fully satisfy a long list of practical uses. That said, when greater stability does eventually come, crypto will lose some of its luster — and future prices may disappoint some of crypto’s most ardent advocates.”
The Wolf Of All Streets Podcast Ft. Michael Moro
Podcast - The Wolf of All Streets
How are institutions currently approaching Bitcoin? No one better to answer that question than Michael Moro (@michaelmoro), the CEO of Genesis Trading / Genesis Capital. Genesis is a global leader in institutional asset trading, lending, derivatives, custody and prime brokerage services. Michael joins us today to talk about Bitcoin’s infrastructure, the “Bitcoin to Zero” narrative (and whether or not it still exists), the trader cycle, and why he’s excited for what’s to come.
In this episode with Michael, we discussed:
  • The infrastructure of Bitcoin with Michael Moro, the CEO of Genesis
  • What is a Prime Brokerage?
  • Bridging Institutional Capital and Crypto
  • Why building trust used to be so difficult
  • The Bitcoin to Zero fear
  • Threats to Bitcoin’s momentu
  • Politicians: are they listening?
  • Institutional investments: what we’re seeing today
  • Market neutral trades
  • The trader cycle and keeping up with Crypto
  • Why we’re excited for what’s to come
  • Shorting Sheba and where to follow Michael
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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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