A weekly news and trading piece by Scott “Shooter” Henderson covering crypto currencies. Read my Future Of Money Primer and Using Crypto Trade Shots for the basics to follow along.
It’s time to seriously consider what percentage of your portfolio should be held in the Cryptoverse. Crypto is still very speculative, but, the risks and rewards are unprecedented. Travel with me as I navigate crypto, NFTs, DeFi and the Metaverse.
Shooter’s & Kirk Spano’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.
We also agree that NFTs and the Metaverse will be have multitrillion dollar flows. That’s a total addressable market worth getting to know very well.
Crypto News Bytes (Huge Week!)
Here’s what caught our attention this week…
SEC Approves Teucrium’s Bitcoin Futures ETF (Is GBTC next?)
The U.S. Securities and Exchange Commission has allowed NYSE Arca and Teucrium to issue a bitcoin futures exchange-traded fund. (CoinDesk)
The Bipartisan Caucus Will Promote Financial Inclusion, Technology & Consumer Protection
The caucus will focus on a number of issues critical to the future of banking and U.S. competitiveness on the global stage, including:
- Responsible financial innovation
- Distributed ledger technology (blockchain)
- Digital assets
- Artificial intelligence and machine learning
- Data management
- Consumer protection
- Combating money laundering
- Faster payments
- Central bank digital currencies
- Promoting financial inclusion and opportunity for all
I encourage believers in Crypto to get involved reach out to your Senators and encourage them to support the Caucus.
Cash App Launches Bitcoin Paycheck Conversion Feature at Bitcoin Miami.
Cash lunches its “Paid in Bitcoin” feature means users can opt to automatically convert a percentage of their income into Bitcoin. Offering a new dollar-cost averaging concept to save in Bitcoin. (Fool)
Peter Thiel lists bitcoin enemies at Bitcoin Miami.
Peter Thiel listed Blackrock, JPMorgan Chase, and Warren Buffet as enemies of Bitcoin. As he rips up a $100 bill on stage at Bitcoin 2022, he is essentially declaring war on powerful old people and established financial institutions. I don’t know that I agree with confrontation, but someone is funding the opposition. (GIZMODO)
Roatan, Honduras, Portugal, and maybe Maderia, Mexico will accept Bitcoin as legal tender as well.
Samson Mow, former chief strategy officer of Blockstream, named three new jurisdictions that would be adopting or proposing to adopt Bitcoin (BTC) as legal tender. As told by Mow, the first is that of the Caribbean island of Roatán, which is part of Honduras. Honduras Prospera Inc. is the organizer and promoter of the jurisdiction. (COINTELEGRAPH)
Shopify, Strike, BitPay, Square, and Robinhood integration with Lightning Payments.
On the heels of Bitpay and Square this week, Robinhood has become the latest big player to announce its integration of Bitcoin’s Lightning Network, which enables faster transactions involving the cryptocurrency. (Yahoo) Strike CEO Jack Mallers unveiled a litany of high-powered partnerships for Bitcoin’s Lightning Network at the Bitcoin 2022 conference in Miami on Thursday – including an integration with ecommerce giant Shopify. (COINDESK)
Russia is considering accepting Bitcoin for oil and gas.
Mr. Zavalny, who heads Russia’s State Duma committee on energy, said on Thursday that the country has been exploring alternative ways to receive payment for energy exports. (BBC)
More Good Reads…
Bitcoin Halving Cycle Resumes Less than 5 minute read
How Black Thursday Decimated Cryptocurrency Order Books Less than 10 minute read
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
Research: Supporting Evidence
There is less than 9.25% of the 21 million supply of Bitcoin left to mine and we saw another week of accumulation even with market turbulence. This is a significant milestone and warrants some focus. This, coupled with continued adoption advances, can only lead to higher prices.
Are we running out of Bitcoin?
According to Glassnode we are seeing sustained outflows in that the total balance held on exchanges has fallen to multi-year lows. Over the course of March, over 96k BTC flowed out of the exchanges we track, reaching levels last seen in August 2018. Note that this represents a notable break downwards from the generally sideways plateau in exchange balances that was established from September 2021.
Glassnode asked a grand question this week. Who is accumulating?
Glassnode identified a number of address that have been accumulating 1,800 BTC a day since Dec. 4th 2021 that includes large entities like FLG, MicroStrategy and larger custodians. The below graph represents those Bitcoin address.
As we take a deeper dive into those whale HODLers, Glassnode identified that the average holder has between 570 and 585 BTC per address. Furthermore, using the Galssnode Engine Room, they were able to indefy smaller whales (up to 100 BTC) that have been heavy accumulators since late January, with smaller piece accumulation of less than 1 BTC being the most aggressive.
The largest accumulator is Luna Foundation Guard who now holds 30,727 BTC. The LFG is primarily focused on Terra. Terra is a decentralized, open-source public blockchain built to support a suite of fiat-pegged, algorithmic stablecoins. Primarily, this includes TerraUSD (“UST”) – the flagship stablecoin of the Terra network and the leading decentralized stablecoin in DeFi by market cap. I don’t know about you, but for some reason, I like the fact that LFG buys BTC each in support of the network to back there stablecoins. Seems perpetual to me!
In summation this week, the fact that daily supply has now daily below daily issuance scarcity of Bitcoin will continue to play larger role as collateral seems to be destine to become a leader the space.
Shooter’s Crypto Picks And Sector Stocks
My conviction ideas on crypto and stocks with crypto exposure. Based on my AI assisted proprietary Elliott Wave technical analysis. Remember to follow along in chat if you are going to swing trade a portion of your account. I recommend trading no more than 20% of your account.
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.
Crypto Elliot Wave Counts / Set-ups / Next Entries Long or Short
XBT/USD (BTCUSD) Not a pretty weekly candle. Next Entry: Long says $41,400.29. I think I’d wait to see if that holds here… a few weeks back I had $38K and for some reason, failed manifestation in Elliott Wave materials after the fact.
GBTC (Bitcoin ETF)
If you don’t have a Crypto account you can also buy Grayscale Bitcoin Trust (OTC GBTC) this is the prospectus.
ETH/USD showed some relative strength this week. Next Entry: Long is $3090.31. I have a bit more conviction in Ethereum than in BTC here.
If you don’t have a crypto account, you can also buy Grayscale ETHE This is the prospectus.
Grayscale Ethereum Trust (ETHE)
Flowground: (FLOW) (revised profile March 6, 2022)
FLOW/USD weaker than what I’d like here, while the macro has not changed. Continue to average in.
LINK/USD (revised profile March 6, 2022) Well, it was out! Continue to average in. I expect some type of banking supervision soon. Once that drops, Bank of America will be all over these contracts.
CRV/USD showed some relative strength on this drawdown. Continue to average in. More on Curve here!
MANA/USD (Decentraland) The back-test needs to hold now! Continue to cost averaging in.
ADA/USD Its out! Count reset! Next Entry Long 1.06…
AXS/USD Its ready, continue to cost avg. in.
SAND/USD Still, constructive! It looks like it wants to get out… continue to average in.
SOL/USD is live on OpenSea as of Wed. Continue to average in.
Marathon Digital Holding, Inc. (NASDAQ: MARA) (revised earnings March 6, 2022)
MARA It still looks like it is breaking down! At this point, it looks like our exit is at that back-test around 29.17…
CORZ needs some time! (revised profile March 6, 2022)
Bitfarms (BITF) (A low cost producer under $7k a BTC) (revised profile March 6, 2022)
I will continue to cost avg. into Bitfarms (NASDAQ: BITF) now.
Roblex (RBLX) (revised profile March 6, 2022) —I’m leaving that alone—
Scott Henderson’s Risk Disclosure & Disclaimers
Follow me on Twitter @swingtradenotes for charts, quick thoughts and smart remarks.
The first chart under: CRV/USD showed some relative strength on this drawdown. Continue to average in. More on Curve here!
is for FLOW instead of CRV.
Same with the second SAND chart, it’s actually AXS