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The Wolf Den #621 - The Power Of Greed

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November 15 · Issue #621 · View online
The Wolf Den Crypto Newsletter
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In This Issue:
  1. The Power Of Greed
  2. Bitcoin Thoughts And Analysis
  3. Legacy Markets
  4. The Crypto Cycle & Leverage
  5. Crypto.com Withdrawals
  6. Alameda Was Frontrunning FTX Customers
  7. Did Vitalik Sell ETH?
  8. My Recommended Platforms And Tools
The Power Of Greed
“Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful.”
- Warren Buffett
Buffett explains exactly what investors should do. But they rarely listen.
We have all been there - refusing to take profit because we believe there’s a bit more juice to squeeze or that the bull market will never end. We believe our own hype, selling ourselves the idea that we are god-tier traders and have the market puzzle solved.
When greed hits the crypto market, Bitcoiners no longer hate Ethereans, DeFi and CeFi hold hands for long walks in the park, and absolute shitcoins are championed for their creativity. When everything is going right, it is nearly impossible to force yourself to sell. The Human OS has never had a greed update.
Greed is dangerous.
And greed goes both ways. It is equally present on the way down as it is on the way up.
Despite the current rage, frustration, panic, and capitulation across the market, there are a growing number of traders and investors who are salivating over the potential for lower prices. There’s nothing wrong with wanting to buy lower, but being greedy and attempting to buy the generational bottom has the same effect on your portfolio as attempting to sell the very top. Neither of these strategies are consistently profitable.
Right now, most of us are still in shock and have a hard time thinking about our next move. But as the dust settles, those willing to take risk are going to multiply. This group is liable to create a hive-mind of greedy speculators attempting to “time the bottom.”
The best way to combat this greed, while also maintaining patience is to honestly assess your skill level. If you managed to sell a small portion of your portfolio near the top, then set this accomplishment as your benchmark and attempt to invest a small portion near the bottom. If you entirely missed out on the way up, don’t expect to be a hero on the way down.
Be humble.
To be clear, this isn’t financial advice. It is an exercise to help consider your skill level and ability to time an extremely difficult market. 
Greed is your blindspot. It overrides your solid analysis and rational assessment of the situation. It is the reason why 95% of traders fail.
Greed goes both ways.
Don’t be that guy that didn’t buy Bitcoin at $16,000 because $14,000 sounded better. When it is at $100,000 or higher, your entry won’t matter very much.
Bitcoin Thoughts And Analysis
DAILY CHART
Bitcoin is chopping sideways and consolidating after reacting to the FTX crash. There was major buying volume yesterday to make a slightly higher local low, which is positive but not enough for bulls to get excited about. For now, there’s nothing to do but watch and wait.
Legacy Markets
Stock Market Today: Dow, S&P Live Updates for Nov. 15 - Bloomberg
“Bulls piled back into global stock markets, encouraged by an easing in Sino-US tensions and growing confidence that the Federal Reserve will be able to slow its rate hiking pace.
Markets have turned risk-on in recent days, trading off a softer-than-expected US data print that many reckon will allow the Fed to raise rates in 50 basis-point increment, after three 75 basis-point hikes. That view was encouraged by Vice Chair Lael Brainard who said on Monday it would probably be “appropriate soon to move to a slower pace of increases.”
“The issue the market has to wrestle with is how long is the Fed going to keep rates at that level and I think there is some positive sentiment out there that the Fed is going to pivot sometime in 2023,” Peter Kraus, Chairman and CEO at Aperture Investors, told Bloomberg Television.
Key events this week:
  • Former US President Donald Trump plans to make an announcement, Tuesday
  • US empire manufacturing, PPI, Tuesday
  • US business inventories, cross-border investment, retail sales, industrial production, Wednesday
  • Fed’s John Williams, Lael Brainard and SEC Chair Gary Gensler speak, Wednesday
  • ECB President Christine Lagarde speaks, Wednesday
  • Eurozone CPI, Thursday
  • US housing starts, initial jobless claims, Thursday
  • Fed’s Neel Kashkari, Loretta Mester speak, Thursday
  • US Conference Board leading index, existing home sales, Friday
Some of the main moves in markets:
Stocks
  • Futures on the S&P 500 rose 0.7% as of 5:49 a.m. New York time
  • Futures on the Nasdaq 100 rose 1.2%
  • Futures on the Dow Jones Industrial Average rose 0.4%
  • The Stoxx Europe 600 was little changed
  • The MSCI World index rose 0.5%
Currencies
  • The Bloomberg Dollar Spot Index fell 0.6%
  • The euro rose 1% to $1.0430
  • The British pound rose 0.8% to $1.1853
  • The Japanese yen rose 0.4% to 139.30 per dollar
Cryptocurrencies
  • Bitcoin rose 2.6% to $16,817.15
  • Ether rose 2.9% to $1,262.08
Bonds
  • The yield on 10-year Treasuries declined four basis points to 3.82%
  • Germany’s 10-year yield declined four basis points to 2.11%
  • Britain’s 10-year yield declined one basis point to 3.35%
Commodities
  • West Texas Intermediate crude fell 0.8% to $85.22 a barrel
  • Gold futures rose 0.1% to $1,778.90 an ounce”
The Crypto Cycle & Leverage
Raoul Pal
The Crypto Cycle & Leverage and where we are now...

Crypto is cyclical. Always has been. Its value is derived from a simple formula:

Value of the underlying technology
+
Global Liquidity

This is why I often say it trades like a call option on the future. 1/
This is a great thread from Raoul Pal.
Raoul points out how many times crypt has been deemed a “bubble” and “ponzi” in the past. He shows charts of Mt. Gox in the 2010/2011 cycle, Bitfinex in 2013/2015, the ETH DAO hack, ICO bust, the Bitcoin fork wars in 2018, and now the CeFi and FTX collapse. 
At all these phases, people tend to leave the space (and come back in the next bull run).
He points out that each “crash” ends with a significantly higher low in prices. The market continues to rise, even as it is declared dead on arrival.
To add to this thinking, every time there is a bust, it feels like the most disastrous event the market has ever seen. That is what we call recency bias.
When Mt. Gox was hacked, it was the ONLY major exchange. That was likely worse. A few years later, both Ethereum and Bitcoin were nearly wiped out by malicious actors. Remember the Covid crash to below $4,000.
At least this time around, few are questioning the technology or the assets, but rather are focused on the industry built around it.
There will always be scams, but Bitcoin and Ethereum keep chugging along as always.
Here is Raoul Pal’s final thought.
“It’s a game of survival. Have a long-term time horizon. Add on the despair lows (you’ll never get the exact low). Don’t use leverage. Store your shit on a cold wallet. Stay in the game. Filter out all the noise.
The "Scam! Ponzi!” crowd will be buyers in the next cycle. Repeat.“
Crypto.com Withdrawals
Crypto.com Withdrawals Rise After CEO Admits Transaction Problem - WSJ
This is an update to yesterday’s newsletter intro.
There has been wide speculation about problems at crypto.com. For now, withdrawals have slowed but have reportedly been processing. The CEO stated that they have now cleared 98% of the cue, but it is hard to parse what is fact and what is fiction.
Be careful out there.
Alameda Was Frontrunning FTX Customers
Alameda Research Was Frontrunning FTX Token Listings: Report - Decrypt
Alameda was not only trading and losing user funds, they were doing so with inside knowledge of the FTX order book. They were literally trading against their customers.
According to crypto compliance firm Argus, Alameda was using insider knowledge to trade coins prior to their listing on FTX, then dumping them when they hit the exchange. The report shows evidence that at least 18 different tokens were traded in this manner, starting in 2021.
Alameda and FTX were also supposed to he siloed, operating separately and in different offices. Insiders have shared that Caroline, the CEO of Alameda, had her desk within view of screens showing FTX customer orders.
This story just continues to get worse.
Did Vitalik Sell ETH?
Lookonchain
Vitalik Buterin( @VitalikButerin) sold 3,000 $ETH ($3.75M) on #Uniswap 2 days ago.

His selling price is $1,250.3.
https://t.co/3tsa4kaHNb https://t.co/ZdWcOaL86Q
Look, another likely false claim circulating like wild fire on Twitter!
This news was the talk of the community, but seemingly has been confirmed to be false. Vitalik has already stated that this is not his wallet.
Even if it is, what’s so bad about selling $3M worth of Ethereum to get liquid and enjoy life? The mentality of “never selling” is absurd. The point of having money, whether crypto or otherwise, is to enjoy your life and buy more free time. If you have hundreds of millions of dollars worth of an asset, then selling some to better your life is a rational move.
My Recommended Platforms And Tools
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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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