View profile

The Wolf Den #588 - Cracks In The Foundation

September 27 · Issue #588 · 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.
Trade all spot pairs on Bitget for ZERO fees! You read that right, zero fees…
Bitget is the best crypto exchange for both spot and leverage, world’s largest crypto copy trading platform, the official partner of Juventus Football Club and a top 5 exchange by volume as listed on CoinMarketCap!
Sign up using my link to Bitget and you will get:
• Up to an $8000 sign up bonus 
• 15% discount on ALL futures trading fees 
• 0 fees on ALL spot market pairs
In This Issue:
  1. Cracks In The Foundation
  2. Legacy Markets
  3. California Cracks Down On Nexo
  4. FTX Wins Voyager Bid
  5. Kraken’s New CEO Won’t Give In To The SEC
  6. My Recommended Platforms And Tools
Cracks In The Foundation
Crypto markets are notoriously volatile, famously dumping harder than everything else in a macro downturn.
Forex markets were sick of being out-dumped and said “hold my beer.”
Foreign exchange markets are breaking. The macro situation was already devastating, but now we have yet another narrative for further panic - the breaking of fiat currencies. Take a look at any currency chart against the dollar and you will see a disgusting free fall.
Here are a few charts.
The Euro collapse was the first sign of disaster earlier this year. Now it has gotten far worse. The Euro has yet to find support.
The Not-So-Great British Pound has fallen to all-time lows against the dollar.
India’s Rupee has hit an all-time low against the dollar.
The Japanese Yen is on its way to all-time lows. The chart shows USD Vs. JPY, so you can see the dollar strength.
The Canadian Dollar is preparing to test major support.
And even China’s fixed Renminbi is weakening fast.
These are just a few of the major pairs I looked at, but we have clearly hit the point where effectively everything looks bad. We can criticize the U.S. government for their “failed” monetary policy, but holding USD right now is a privilege. The USD is strengthening like never before.
Or, you could say that it’s weakening at a slower rate than other currencies. 
It’s all about perspective.
What is the point of discussing this?
There is an immediate and easy fix to this global problem for many people, and it relates to crypto. Most of the world is starving for dollars, and is yet to realize the solution. Stablecoins denominated in USD are an instant fix. Fiat currencies are failing, but USD exposure has never been easier thanks to crypto. Don’t like USDC? Well, there is also Tether, and other stablecoins with different types of USD backing.
Pick your poison.
As Bitcoiners, we ultimately want to opt out of global markets and the USD, but for the time being, stablecoins offer a strong bandaid.
Crypto has become the most obvious risk-on asset, but stablecoins backed by USD are a great escape hatch. Yes, the dollar will continue to weaken, but if things continue as they are, there should be a mad rush to stablecoins. Not only will this bring more of the world’s liquidity one step closer to Bitcoin, but it should also improve the world’s perception of crypto, which can help to heal the broken system in numerous ways.
Legacy Markets
Stocks Mixed, Pound Gains as Global Selloff Pauses: Markets Wrap - Bloomberg
“Global markets remained on edge Tuesday as investors braced for a heightened risk of global recession, even as dip buyers emerged.
Stocks were mixed as Goldman Sachs Group Inc. and BlackRock Inc. soured on equities for the short term and Citigroup Inc. said bearish positioning continues to rise. Europe’s Stoxx 600 rebounded with US futures, while Asian shares fell.”
Key events this week:
  • US new home sales, Conference Board consumer confidence, durable goods, Tuesday
  • Fed Chair Jerome Powell and Charles Evans speak at events, Tuesday
  • Fed’s Mary Daly, Rafael Bostic, Charles Evans and ECB President Christine Lagarde speak at events, Wednesday
  • Euro zone economic confidence, consumer confidence, Germany CPI, Thursday
  • US initial jobless claims, GDP, Thursday
  • Fed’s Loretta Mester, Mary Daly speak at events, Thursday
  • China PMI, Friday
  • Euro zone CPI, unemployment, Friday
  • US consumer income , University of Michigan consumer sentiment, Friday
  • Fed’s Lael Brainard and John Williams speak, Friday
Some of the main moves in markets:
  • The Stoxx Europe 600 rose 1.2% as of 8:50 a.m. London time
  • Futures on the S&P 500 rose 1.5%
  • Futures on the Nasdaq 100 rose 1.6%
  • Futures on the Dow Jones Industrial Average rose 1.3%
  • The MSCI Asia Pacific Index fell 2.2%
  • The MSCI Emerging Markets Index fell 1.9%
  • The Bloomberg Dollar Spot Index fell 0.5%
  • The euro rose 0.5% to $0.9654
  • The Japanese yen rose 0.3% to 144.35 per dollar
  • The offshore yuan rose 0.3% to 7.1505 per dollar
  • The British pound rose 1.1% to $1.0803
  • Bitcoin rose 5.9% to $20,244.2
  • Ether rose 4.5% to $1,384.92
  • The yield on 10-year Treasuries declined eight basis points to 3.85%
  • Germany’s 10-year yield was little changed at 2.12%
  • Britain’s 10-year yield declined 17 basis points to 4.07%
  • Brent crude rose 1.8% to $85.57 a barrel
  • Spot gold rose 1% to $1,638.08 an ounce
California Cracks Down On Nexo
DFPI Joins Other State Securities Regulators To Bring Actions Against Another Crypto Interest Account Provider | The Department of Financial Protection and Innovation
California has officially become the 7th U.S. state to issue a cease and desist order against Nexo. The report comes from the DFPI (Department of Financial Protection and Innovation) joining New York, Kentucky, Arkansas, Texas, New Jersey, Alabama, Oklahoma, Vermont, Alaska, and Washington. With Celsius and Voyager going bankrupt, there’s likely now more focus on Nexo and other platforms that offer yield.
Here is the official statement.
The DFPI has undertaken aggressive enforcement efforts against unregistered interest-bearing cryptocurrency accounts. These crypto interest accounts are securities and are subject to investor protections under the law, including adequate disclosure of the risk involved. Collectively, these actions protect investors while ensuring that California remains an ideal setting for responsible financial innovation.
The DFPI has issued similar statements to BlockFi, Voyager, and Celsius, so this isn’t anything new.
FTX Wins Voyager Bid
Voyager Completes Successful Auction and Announces Agreement for FTX to Acquire Its Assets
After a two week auction, FTX has reportedly won, with a $1.4 billion bid to acquire Voyager’s assets. According to the official Newswire press release, Voyager currently has $1.3 billion worth of assets and an outstanding claim against 3AC. A New York bankruptcy court still has to approve the acquisition, but it appears likely to go through.
What this means for creditors like myself remains to be seen. I am personally far from optimistic, as this likely will result in Voyager being out of business, clients going to FTX.US, recoupment of a fraction of assets, repaid in USD rather than in coins.
Not ideal, but also not confirmed. We will see.
Kraken’s New CEO Won’t Give In To The SEC
Newly Appointed Kraken CEO Has No Intentions To Register With SEC |
Although Jesse Powell has stepped down from Kraken, the culture of the company appears entirely unaffected. Kraken’s new CEO, Dave Ripley, has made it clear that the exchange has no intentions to register with the SEC. According to Kraken, the exchange does not believe any of the tokens listed on the exchange are securities, so they have no business working with the SEC. It will be interesting to see which side capitulates first, as neither the SEC nor Kraken (and other exchanges) look willing to budge.
My Recommended Platforms, Tools And Podcast Sponsors
Proud sponsor of The Wolf Den Newsletter. The world’s biggest crypto copy trading platform, up to a $3000 bonus for signing up.
I have chosen Bullish as a sponsor for both my podcast and livestreams! They are an awesome exchange that incorporates all of the benefits of both centralized and decentralized exchanges. Your keys, your coins, but with a robust order book, complex orders and deep liquidity.
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.
Rewards Code: WOLF
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.
Subscribe to my YouTube channel for free daily content.
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.
Did you enjoy this issue?
In order to unsubscribe, click here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue