Ukraine Invasion – Issue 8

A weekly news and trading piece by Scott “Shooter” Henderson covering crypto currencies.

Kirk & Shooter’s Crypto Thesis

The short story is that most cryptocurrencies are going to zero, but there will be survivors that rise to much higher price ranges. This is a journey of separating winners from losers.

We expect Bitcoin and Ethereum to be among the biggest, if not the biggest, winners. Along the way, we can trade the larger moves for added gains.

In the News

Here’s what caught our attention this week…

PayPal Established Advisory Council

Some big names, Peter Briger (Fortress), Chris Brummer (ULC), Shafi Goldwasser (WIFS), Timothy Massad (x FTC), Antoinette Schoar (MIT), and Neha Narula (MIT) join PayPal’s advisory board. You may recall that Briger was an adviser for Masayoshi Son (SoftBank) before the 2017 bull run. Narula also consulted with Federal Reserve Bank of Boston on building a digital currency and is believed to have played a significant role in what has been proposed by White House.

Intel Joins the Party

According to COINTELEGRAPH and Raja M. Koduri from Intel’s (Nasdaq: INTC) Accelerated Computing Systems. Intel will produce an energy-efficient crypto mining accelerator that’s believed to deliver 1000x better performance per watt. That could be a game changer from a cost perspective.

NFL spends $600,000 lobbying Congress

Apparently, CNBC had the scoop. Between July & Dec Roger Williams spent $600,000 trying to determine if crypto was viable business for the NFL. I can just hear the noise already the news about an NFL NFT launch on the horizon.

EBANG Register Crypto Exchange in Australia

According to CoinDesk. Ebang (Nasdaq: EBON) a prominent Chinese mining-rig registered a new digital currency exchange (DCE) with the AUSTRAC. We will need to follow this one because they have deep connections in the mining space.

Ubisoft Quartz Backlash Heats Up

Maker of Assassin’s Creed Ubisoft Entertainment SA (OTCMKTS: UBSFY) recently launched Ubiosft Quartz a token based platform that uses a nonfungible token where players can buy and sell certain equipment. Apparently, according to Blomberg, its an internal strife with some staff members that has bled over in to the gaming community. Despite the noise, Ubisoft is moving ahead despite the turmoil. This will be interesting to see how it plays out because this is blueprint for other game designers to see how excited fans will adapt to additional payment schemes.

Russia Agrees to Regulate Cryptocurrencies

The Block, reported on an unexpected turn of events when that Russian News paper Kommersant tweeted stated that Russian Government and the Bank of Russia agreed to regulate Cryptocurrencies. I was shocked. I never expected such a shift.

Research (Supporting Evidence)

Will Crypto Survive a Ukraine Invasion?

Absolutely! Net Entity Growth seems to agree with 18.5K new entities reported by glassnode.

Short Term Momentum Positive / Does it hold?

It was a profitable week for Short-term Holder (SOPR) as momentum headed upwards. Though, I’m not exactly sure how deep any drawdown will be. But I suspect well see a minor flush that ends by mid-week. A momentum shift was very constructive, even if it was short-lived.

Historic Adoption Rate is on the Horizon

Adoption rates of cryptocurrencies and the internet. As we dig into methodology on estimating adoption rates, all we need to do is look at history for some insight. Shooter feels the best way to calculate adoption rates is to use known internet users divided by the active crypto wallets. To date, this seems to be the most accurate method to project future cryptocurrencies adoption rates. At the current rate, future adoption rates should be at least 3x from here.

In the Know

What is PTE (P2E)?

PTE (or “play-to-Earn“) The idea of earning money through video games’ in-game economies is not new. As long as game economies have existed, players have found ways to make money. 

What is Defi?

Decentralized finance (DeFi) is a sector term for financial services on the blockchains, primarily Ethereum. The idea of DeFi, is to create the ability to do most things that banks support and more — lend, borrow, earn interest, buy insurance, trade, etc. — it’s fast and doesn’t require paperwork to complete a transaction. Just like crypto as a whole, the DeFi concept is a global, operating on a peer-to-peer network, in an open to all decentralized concept.  The Mega caps are Ethereum, (ETHUSD), Wrapped Bitcoin (WBTCUSD), Chainlink (LINK) and Uniswap (UNIUSD). See a complete list DeFi cryptocurrencies here.

What is GameFI?

GamFi (GAFI) is an amalgam of gaming and DeFi. The notion of GameFi builds on the connection of blockchain technology, decentralized financial products, and gaming. Such as non-fungible tokens (NFTs), borrowing and lending, yield farming and stablecoins, among others. The largest market share resides in the rising stars AXSUSD, MANAUSD, SANDUSD. See a complete list GameFI cryptocurrencies here.

What are NFT’s?

NFT’s (or “non-fungible tokens”) are the latest crypto phenomenon that transform digital works of art and other collectibles into unique one-of-a-kind, verifiable assets that are easy to trade on the blockchain. Christie’s auction house sold the first-ever NFT artwork. Beeple sold a collage of images for a staggering $69.3 million and even Crypto Kitty has a collection. Our rising stars are Decentraland (MANAUSD), The Sandbox (SANDUSD), FLOW (FLOWUSD), Enjin Coin (ENJUSD), and ECOMI (OMIUSD). See a complete list NFT-related cryptocurrencies here.

What is the Metaverse?

Metaverse is a digital world, where users interact with each other much like real life yet in a virtual environment. You use an avatar versus your person. One neat feature is that you get the best of both worlds, business, pleasure, social, and even gaming. Some Metaverse crypto and stocks are pure plays, that is, companies who do nothing but the metaverse. Others are hardware companies that already have successful businesses but we’ve found they will likely benefit from a new revenue stream. In many instances, the metaverse requires the use of augmented reality (AR) or virtual reality (VR) headsets. Software companies can also be metaverse stocks. Several growth stocks are poised to benefit from the metaverse trend, while other stocks are already members of the Tech universe with history and new technology. 

Shooter’s Not So Quite Mind (Watchlist)

Note: LINK and FLOW still looks ready. Once DeFi regulation comes in I think LINK starts to lead DeFi. While FLOW has gained on both SAND and MANA. MANA/USD (Decentraland) needs some time and so doe’s ADA (Cardano). BLOK is still a micro while its held very well in the past drawdowns. ENJ and OMI are on my radar in the NFT space but I’ve not added a position. I encourage you to go create a profile and explore Decentraland and explore FLOW on Twitter or if your a Baller VC check out Flowverse.

Shooter’s Crypto Picks and Sector Stocks (Wave Counts)

It’s time to seriously consider what percentage of your portfolio should be held in the Cryptoverse. Crypto is still very speculative. However, the risk and rewards are unprecedented. Stay tuned as I jump into DeFi, Pay-to-Earn gaming, and other shining stars in the new year.

Make sure to adhere to a rules based approach to trading using technical indicators. And, we highly recommend trailing stops and/or stops at preset technical levels.

Follow along in chat if you are going to swing trade a portion of your account. We recommend starting with trading 5% or less of your total portfolio and no more than 20% even as you gain experience.

USER GUIDE

Continue to scale in small on all entries!

“Next Entry Window Long label” or “Set-up Long Label”.

Crypto Elliot Wave Counts / Set-ups / Next Entries Long or Short

MARA (COVRED) the Entry Short…Rolled back into the Mar Calls (Shooter Proxy for BTC leverage).

XBT/USD (BTCUSD) Bitcoin had a nice week. Until the Ukraine news dropped. I think whatever weakness we see will be short-lived. Or that’s my hope! Anyhow, we opened the week higher at $41,418.21. Again, Crypto led most of the week and equities followed. Last week I was thinking a huge range; we hit $45,684.97 as a range, not quite my $7k. Close enough! We noted $45k as a lot of resistance last week and we came off a bit higher at $45,837.02. The weeks high. I suspect we will come off over the weekend on Ukraine events. So, thinking we maybe an inside week. However, if ETFs history of leading the underlying assets prove supportive, its steady as is as of this writing.

If you don’t have a Crypto account you can also buy Grayscale GBTC this is the prospectus.

Bitcoin / US Dollar Pair Monthly Chart
Bitcoin / US Dollar Pair Weekly Chart
Bitcoin / US Dollar Pair Daily Chart
Bitcoin / US Dollar Pair 90 minute Chart

GBTC (Bitcoin ETF) Weekly Chart

GBTC (Bitcoin ETF) Daily Chart

GBTC (Bitcoin Trust) 90 Min Chart

ETH/USD Counts are really distorted now! Let this play out in the Ukraine here.

If you don’t have a Crypto account you can also buy Grayscale ETHE this is the prospectus.

Ethereum / US Dollar Pair Monthly Chart
Ethereum / US Dollar Pair Weekly Chart
Ethereum / US Dollar Pair Daily Chart
Ethereum / US Dollar Pair 90 Min Chart

FLOW/USD I covered on Ukraine news! Alts. do not weather certain disruptions like power well. Flow is a fast, decentralized, and developer-friendly blockchain, designed as the foundation for a new generation of games, apps, and the digital assets that power them. It is based on a unique, multi-role architecture, and designed to scale without sharding, allowing for massive improvements in speed and throughput while preserving a developer-friendly, ACID-compliant environment. The chart speaks for itself.

LINK/USD Securely connect smart contracts with off-chain data and services. Chainlink decentralized  oracle networks provide tamper-proof inputs, outputs, and computations to support advanced smart contracts on any blockchain. What has gained a lot of traction and my attention is the CCIP bridge which is intent on connecting all Crypto platforms to the hub, LINK. A unified Decentralized Contract Hub so to speak! Not only, does Oracle have a sound history in Banking, they are well established as a secure government provider. So, its my belief that when Banking goes blockchain they become  the top tier provider in Decentralized financial contracts. If not more! All were waiting for supervision by the bank regulator, the Comptroller of Currencies, and were off to the races.

CRV/USD Reset the NEXT ENTRY LONG down a bit. I’ve view that level as a gift. Wait for Ukraine to settle. I’m thinking a few days it should be old news as far as Crypto is concerned.

Curve DAO Token / US Dollar Pair Weekly Chart
Curve DAO Token / US Dollar Pair Daily Chart

MANA/USD (Decentraland) Lots of noise on growth here. Came off on Ukraine as well! NEXT ENTRY LONG is still the $1.29557. I’ve will continue to cost averaging in.

MANA (Decentraland) Weekly Chart
MANA (Decentraland) Daily Chart

ADA/USD is still the best looking chart of the bunch and you know I will continue to cost averaging into this again when it prints that 0.702222.

AXS/USD Unphased by the Ukraine. As long as that stop hold I think the low is in.

AXES US Dollar Pair Daily Chart
AXES US Dollar Pair 90 Min Chart

SAND/USD Next Entry Window Long is now $1.9798. Were nearing that $5.1582 and then we retrace to put in a (C) around that $1.9798. The Stop is $0.5811. Should be able to chase up to $5.1582. Again, use cost avg. to build a position once we reach $1.9798.

SANDBOX / US Dollar Pair Weekly Chart
SANDBOX / US Dollar Pair Daily Chart
SANDBOX / US Dollar Pair 90 Min Chart

Metaverse Contenders

Roblox GTA V advanced to third spot of the top 10 streaming Games this past week. Just imagine when Play-to-Earn manifests in the Metaverse with games like Grand Theft Auto and Battle Royale. More about RBLX games here.

According to Stream Hatchet Battle Royale Games reached 539 million hours in Feb 2021.

Roblox (RBLX) Hold! I’m still chomping at the bit to add. We had continuation this week and ran to $73.39. his past weeks run to $69.25 just support the count and its accuracy.

ROBLOX Corp Daily Chart

Good Reads

What is Cryptocurrency Less than 10 minute read

Digital Assets / Investor.gov Less than 1 hour read (The Fed’s Opinion on Risk)

SEC Expands Alternative Trading Systems Definition (25 day to a vote) Less than 15 minutes

Internal Revenue Service (IRS) and Staking Less than 5 minute read

The Future of Crypto Banking Less than 10 minute read

Avoiding FOMO & FUD Less than 5 minute read

Regulation of Exchanges and Alternative Trading Systems Less than 1 hour read

CTS Article Archive

Scott Henderson’s Risk Disclosure & Disclaimers

Follow Shooter on Twitter @swingtradenotes for his quick thoughts.