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The Wolf Den #610 - Crypto Adoption In 2022

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October 31 · Issue #610 · View online
The Wolf Den Crypto Newsletter
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In This Issue:
  1. Crypto Adoption In 2022
  2. YouTube Update!
  3. Bitcoin Thoughts And Analysis
  4. Altcoin Charts
  5. Legacy Markets
  6. Binance Finances The Twitter Takeover
  7. Layoffs Spark A Web3 Migration
  8. You Can Use NFTs To Buy A House Today | Sanjay Raghavan, Head of Structured Securities At RoofStock
  9. My Recommended Platforms And Tools
Crypto Adoption In 2022
It is easy to speculate about the habits, interests, investment activities and general dispositions of institutional investors. It is even easier to just look at the data.
Numbers never lie.
As the end of the year approaches, major research groups will begin to release their annual findings.
To quote Sir John Templeton, “the four most dangerous words in investing are this time it’s different.”
But when it comes to the numbers surrounding 2022 in crypto, those words ring true.
I am a huge fan of Fidelity, and can always count on them to give us the real dirt.
They wrote a report entitled “Institutional Investor Digital Assets Study: Key Findings.”
The crypto market exploded this year, with contagion spreading from Luna to 3AC to Celsius and beyond. As a result of this contagion and changing macro conditions in the back half of the year, and because it is only October, Fidelity focused on the first six months of 2022, with the promise of doing another report for the second half of the year.
The report is a compilation of data from 1,052 blind interviews covering the overall attitudes and behaviors of institutional investors from January 2nd to June 24th. Here are some of the major takeaways, separated into three categories.
Perception and Adoption
Despite market headwinds, institutional investors surveyed in the U.S. and Europe reported increased familiarity, improved perception, and more digital asset investments.
Adoption and consideration of digital assets among those surveyed is highest among high-net-worth investors, crypto hedge funds/venture capital, and financial advisors.
Adoption is lower among family offices, pensions/defined benefit (DB) plans, traditional hedge funds, and endowments and foundations.
Institutional Appeal
Institutional investors surveyed report that the features of digital assets that they find most appealing are the high potential upside, innovative tech play, and enablement of decentralization.
While pension funds and defined benefit (DB) plans surveyed reported slightly negative changes in future investment preference, there was a large increase in the number of U.S. investors surveyed who indicated they would allocate in the future.
In total, 74% of investors plan to buy or invest in digital assets in the future, up slightly from 71% in 2021.
Obstacles and Desires
Price volatility is the greatest overall barrier to investment reported by investors surveyed (50%), consistent with prior years of the study. 
Other concerns cited by investors surveyed include lack of fundamentals to gauge appropriate value (37%), concerns around security (35%) and market manipulation (35%), and concerns around regulatory classification of certain coins as unregistered securities (33%).
A Bitcoin ETF and multidigital asset funds (both actively and passively managed) are among the most appealing product concepts, according to surveyed investors.
My general conclusion is that 2022 was a bit of a throw away year, and that we will likely see more negative data and commentary for the back half.
That’s the reality of a bear market and will not stop the inevitable crypto train from reaching full speed.
You can read the full study HERE.
YouTube Update!
I am making changes to my daily livestream agenda! To deliver more structured, high quality content, we are focusing on a different consistent topic each day of the week. The first week is awesome, take a look below.
Macro Monday - This week’s guest - Mike McGlone
Trading Tuesday - This week’s guest - Texas West Capital (Christopher Inks)
On-Chain Wednesday - This week’s guest - Will Clemente
Thursday Roundtable - The United States Vs. DeFi. Who Will Win?
Friday - Week In Review, News
To get in on the action and see the livestreams, you can click subscribe below.
Scott Melker
Bitcoin Thoughts And Analysis
MONTHLY CHART
Yes, you have seen this monthly chart 100 times. Yes, I am sharing it again, because the month ends today.
This candle looks extremely likely to hold the bottom of the channel as support. That’s very encouraging.
WEEKLY CHART
Last week’s candle was definitely bullish, with a large grey body bouncing off of support at $19,666. Cool, but price is still sideways and ranging. Not much to see here, but a step in the right direction.
RSI failed to break resistance on the weekly close, but is working on it for this week. 6 days to see what happens.
DAILY CHART
Bitcoin looks decent. It has broken the descending black resistance and moved away, while also holding well above the 50 MA. $20,469 is the key local support, which it is trading above. It is clear that $21,000 is a key resistance.
Zooming out slightly, it is clear that price is still ranging and we need a much bigger move to really draw any longer term conclusions.
4-HOUR CHART
Significant bearish divergence coming out of overbought RSI on the 4-hour chart, which should give every trader a warning to be cautious. Perhaps this has largely played out already, but usually this sends RSI to oversold once again.
Pretty clear we are still ranging and not much has changed yet.
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.
DOT/USDT
As always, I look well in advance for potential trade ideas, knowing that most may never trigger. But I will rarely show you a chart that is a “buy now” situation.
DOT is slowly approaching a key resistance that would signal the end of the downtrend. That is, of course, the descending blue line with multiple touches. There is NOTHING to do now but set an alarm. High risk traders would buy the breakout through this line, while more conservative traders would wait for confirmation in the form of a candle close above. Even more conservative traders would wait for a retest of the blue line as support, knowing that it may not happen and they could miss the trade.
Regardless, I have an alarm on that descending blue line and will revisit if we get there.
We would want to see a meaningful increase in volume on the break, if it happens.
Legacy Markets
Stock Market Today: Dow, S&P Live Updates for Oct. 31, 2022 - Bloomberg
This will be another week of key earnings reports from major companies, as well as central bank interest rates hike decisions. The Fed meeting is this Wednesday, November 2nd. The odds are still on another 75bps rate hike.
Key events this week:
  • Companies reporting earnings this week include: Moderna, Pfizer, Airbnb, AIG, Maersk, Barrick Gold, BMW, Bharti Airtel, BP, ConocoPhillips, Estee Lauder, Ferrari, ING, Intercontinental Exchange, KKR, Mitsui, Newmont, Petrobras, Qualcomm, Restaurant Brands, Saudi Arabian Oil, SoftBank, Sony, Starbucks, Toyota, Uber and Yum! Brands.
  • Reserve Bank of Australia policy decision, Tuesday
  • US construction spending, ISM manufacturing index, Tuesday
  • EIA crude oil inventory report, Wednesday
  • Federal Reserve rate decision, Wednesday
  • US MBA mortgage applications, ADP employment, Wednesday
  • Bank of England rate decision, Thursday
  • US factory orders, durable goods, trade, initial jobless claims, ISM services index, Thursday
  • ECB President Christine Lagarde speaks, Thursday
  • US nonfarm payrolls, unemployment, Friday
Some of the main moves in markets:
Stocks
  • The Stoxx Europe 600 was little changed as of 10:15 a.m. London time
  • Futures on the S&P 500 fell 0.5%
  • Futures on the Nasdaq 100 fell 0.7%
  • Futures on the Dow Jones Industrial Average fell 0.4%
  • The MSCI Asia Pacific Index fell 1.7%
  • The MSCI Emerging Markets Index fell 1.6%
Currencies
  • The Bloomberg Dollar Spot Index rose 0.4%
  • The euro fell 0.3% to $0.9936
  • The Japanese yen fell 0.6% to 148.49 per dollar
  • The offshore yuan fell 0.7% to 7.3172 per dollar
  • The British pound fell 0.5% to $1.1553
Cryptocurrencies
  • Bitcoin rose 0.2% to $20,731.43
  • Ether rose 1.4% to $1,618.01
Bonds
  • The yield on 10-year Treasuries advanced five basis points to 4.06%
  • Germany’s 10-year yield advanced four basis points to 2.15%
  • Britain’s 10-year yield advanced one basis point to 3.49%
Commodities
  • Brent crude fell 1.3% to $94.52 a barrel
  • Spot gold fell 0.4% to $1,637.73 an ounce
Binance Helps Finance The Twitter Takeover
Binance wired $500M to back Musk’s Twitter takeover — CZ
Binance made headlines for co-investing in Elon’s Twitter takeover, but they weren’t the only company to contribute. Binance’s $500m commitment was the 4th largest, alongside 18 other investors from various sectors and firms around the world. Larry Ellison, the largest contributor, wrote a billion-dollar check, and Qatar Holding, a sovereign wealth fund, also made a major contribution.
The crypto sector was particularly eager to assist in financing the takeover. After the deal was completed, we learned that FTX tried to participate, which didn’t pan out, and that Sequoia and Fidelity did contribute. This news will likely be forgotten in a couple of days, but the crypto influence will still be there. Our industry lives on Twitter, so it’s no surprise that these firms were willing to hand over their money to get a piece of the action.
Layoffs Spark A Web3 Migration
Tech talent migrates to Web3 as large companies face layoffs
Nearly 100,000 employees from over 700 tech startups have been laid off this year, leading to a major Web3 migration. Getting fired sucks, but this might be a blessing in disguise for the fortunate employees that do find a new home in our sector. Bear markets are a time to build, especially in crypto.
Major tech companies (mostly outdated ones) downsize during bear markets, giving hopeful entrepreneurs an excuse to pool their talents and build new things. Inevitably, this kickstarts a new bull market based on the next wave of innovation. Web3 companies happen to be on the receiving end of this talent migration.
It is a Web2 brain drain while web3 is hiring.
We welcome you.
You Can Use NFTs To Buy A House Today | Sanjay Raghavan, Head of Structured Securities At RoofStock
Podcast - The Wolf of All Streets
You Can Use NFTs To Buy A House Today | Sanjay Raghavan, Head of Structured Securities At RoofStock
Web3 can automate real estate purchases while cutting out the middlemen and minimizing the costs. With NFTs you can do the entire thing in 15 seconds! Sanjay Raghavan, Head of Structured Securities At RoofStock, explains.
In this episode with Sanjay, we discussed:
  • What is Roofstock
  • Buying property with NFT
  • Can your house get hacked?
  • NFTs for real-world assets
  • The middlemen problem
  • DeFi loans for real estate
  • Innovation in real estate and web3
  • Pudgy Penguins
  • Community is the key
  • Regulatory issues for NFT real estate
  • Roofstock in 10 years
My Recommended Platforms And Tools
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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.
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