The Wolf Den Crypto Newsletter

By Scott Melker aka The Wolf Of All Streets

The Wolf Den #585 - Rich vs. Wealthy





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September 22 · Issue #585 · View online
The Wolf Den Crypto Newsletter
Welcome to The Wolf Den! This is where I share my ideas about the market, technical analysis, education and advice regarding trader psychology and emotional control. The newsletter is released every weekday and is completely FREE.
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In This Issue:
  1. Rich vs. Wealthy
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. Legacy Markets
  5. Stablecoin Regulation Is Coming
  6. Mastercard Launches Cryptocard In Spain
  7. The Fed Plays It “Safe”
  8. My Recommended Platforms And Tools
Rich vs. Wealthy
The words “rich” and “wealthy” are used interchangeably, but have vastly different meanings.
The Oxford Dictionary disagrees with my assessment. Rich can be defined as, “having a great deal of money or assets; wealthy.” Wealthy can be defined as, “having a great deal of money, resources, or assets; rich.
Circular logic.
Investment gurus and self-help experts fail to offer much more clarity. This quote is a good example:
“The real measure of our wealth is how much we’d be worth if we lost all our money” - John Henry Jowett
This quote might be good to print out, frame and give to your favorite Aunt as a birthday gift, but it doesn’t help much in an investing newsletter.
So what’s the difference?
Let’s talk about what it means to be rich.
The starting point is location. Rich in Phuket, Thailand looks very different from rich in Manhattan. On paper, rich means that you have a high income relative to your expenses, have some assets to show for your efforts, and live a lifestyle that allows for exorbitant spending. Rich is unpredictably volatile and can come and go over time. The rich often make a fortune, only to see it disappear. Think MC Hammer, Michael Jackson and Nick Cage. They made it big just to give it all back.
Lottery winners are generally rich, not wealthy.
Wealth is not location-dependent. Being wealthy has less to do with money and more to do with abundance and opportunity. A wealthy person has an abundance of free time with their family, an abundance of knowledge beyond their area of expertise and an abundance of assets that are either 100% owned or financed on intelligently assumed debt. It’s this abundance that allows someone of wealth to pass along what they own and leave a legacy after they are gone. Think Bill and Melinda Gates, Lebron James, the Rockefellers, and Henry Ford.
A wealthy person is no longer under pressure to make perfect financial decisions. They can happily choose to buy their dream home with little concern for a “better investment” that they could have made with the money. The wealthy know how to balance their desires and their needs.
Someone who is rich is often over-leveraged. They buy their dream home, but take on tremendous debt and risk to do so. They own a lot of things, but can lose it all on the drop of a hat.
Rich is about the individual. Wealth is about future generations.
Yes, these are generalizations, but you get the point.
Acquiring money only to see it lost is a classic example of being rich. Understanding the balance, the importance and power of saving and investing and retaining your wealth to pass on is a hallmark of the wealthy.
Which would you rather be?
Bitcoin Thoughts And Analysis
Bitcoin came about as close as possible to forming bullish divergence on the 4-hour and 6-hour charts, with a 12-hour divergence confirmed.
That said, even if the second low on price is now a lower low, it is still equal - exaggerated bullish divergence.
Things are looking decent short term after the Fed shakeout.
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.
Ethereum confirmed the bullish divergence that I was watching for yesterday on the 4-hour chart. Oversold RSI with bullish divergence on the 4-hour chart is my favorite short term trade signal.
What’s better? This divergence exists on the 12-hour and 6-hour charts as well.
Nothing is guaranteed, but statistically the local bottom is likely in. Now we look for the trip to overbought.
Legacy Markets
US Futures Waver; Yen Rallies as Japan Intervenes: Markets Wrap - Bloomberg
“US equity futures wavered amid some optimism a recession will act to moderate a regime of aggressive rate hikes. The yen rallied after Japan moved to prop it up.
Contracts on the S&P 500 swung between losses and gains after the benchmark’s tumble Wednesday when the Fed unleashed a third consecutive 75 basis-point hike and indicated another of the same magnitude could be in store for November.
The yen rose after Japan’s first intervention since 1998 shored up the currency’s 20% slide against the dollar this year. In contrast to the Fed, the Bank of Japan stuck steadfastly to its rock-bottom interest rate policy Thursday, pushing the yen lower versus the US currency. ”
Here are some of the main moves in markets:
  • Futures on the S&P 500 fell 0.1% as of 7:20 a.m. New York time
  • Futures on the Nasdaq 100 fell 0.3%
  • Futures on the Dow Jones Industrial Average were little changed
  • The Stoxx Europe 600 fell 1%
  • The MSCI World index fell 0.3%
  • The Bloomberg Dollar Spot Index was little changed
  • The euro rose 0.3% to $0.9866
  • The British pound rose 0.3% to $1.1305
  • The Japanese yen rose 0.9% to 142.70 per dollar
  • The yield on 10-year Treasuries advanced three basis points to 3.56%
  • Germany’s 10-year yield declined two basis points to 1.87%
  • Britain’s 10-year yield advanced five basis points to 3.36%
  • West Texas Intermediate crude rose 1.1% to $83.86 a barrel
  • Gold futures fell 0.1% to $1,673.50 an ounce
Stablecoin Regulation Is Coming
US Stablecoin Bill Negotiations Wrestled Over Digital Dollar Approval: Source
Congress is soon to become a hotbed for legislation pertaining to CBDCs and stablecoins. According to reports from inside the House, the Fed is ready to explore the creation of a CBDC, but lacks authorization from Congress. The Fed has been directed to produce more research before asking for a green light.
Stablecoin legislation is moving faster, with it appearing likely that algorithmic stablecoins could receive a two-year moratorium, effectively pausing their issuance to allow more time for legislators and regulators to do their research. While seeing innovation stifled is a hard pill to swallow, algorithmic stablecoins were the most likely target and arguably the most necessary asset to be regulated after the Luna implosion. Reports indicate that the House Financial Services Committee could finalize the proposal by next week.
Mastercard Launches Cryptocard In Spain
Eurocoinpay Partners With Mastercard to Launch One of the First Cryptocurrency Based Cards in Spain – Exchanges Bitcoin News
The amount of massive companies adopting crypto is staggering. Yesterday we discussed the Nasdaq opening a crypto shop. Last week it was Fidelity partnering up with Citadel to create EDX markets. This week, Mastercard has announced a crypto card to be launched in Spain, made possible by Eurocoinpay (a Spanish crypto exchange). The card can be used to acquire products in more than 90 million establishments across the European Union. Eurocoinpay is registered with the bank of Spain and has successfully passed all of Mastercard’s money laundering tests.
The Fed Plays It "Safe"
Fed raises rates by another three-quarters of a percentage point to fight inflation
The Fed chose to avoid max pain by opting for a 75 bps hike instead of 100 bps. Immediately following the announcement, markets whipsawed, stopping out both shorts and longs, making sure that anyone who was trading was a loser. The 100 bps hike narrative can likely be put to rest unless September inflation numbers are staggeringly high. Although the 75 bps hike wasn’t a shocker, economists were surprised to see 4.6% as the new projected terminal rate, up from 3.9%. In other words, the Fed is going to continue to aggressively hike, but without delivering a single massive blow.
My Recommended Platforms And Tools
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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. 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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