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 have multitrillion dollar flows. That’s a total addressable market worth getting to know very well.
Crypto News Bytes
Here’s what caught our attention this week…
Cardano Spikes as Supporters Anticipate Vasil Hard Fork
During the last seven days, the cryptocurrency Cardano has increased in value by 17.3% against the U.S. dollar, as the community anticipates the upcoming Vasil hard fork, an upgrade that aims to improve the network’s throughput and enhance smart contract capabilities. Moreover, according to a poll involving 24,468 crypto enthusiasts, Cardano is predicted to reach $1 in value by the end of this month. (Bitcoin.com)
Canadians buy the dip as Spot Purpose Bitcoin ETF holdings reach new highs.
The Purpose Bitcoin ETF, launched in February 2021, has been seeing a consistent inflow over the last five trading days. The fund’s holdings have increased to 43,701.7 BTC as of Tuesday, according to Glassnode data reported by Jan Wustenfeld. That’s the highest level on record. (Cointelegraph)
Goldman Sachs is reportedly in talks with FTX to facilitate derivatives.
Goldman Sachs is discussing derivatives trading with bitcoin and other cryptocurrencies through a possible partnership with cryptocurrency exchange FTX, according to a report from Barron’s.
Stripe’s New Partnership Will Allow Instant Dollar-to-Bitcoin
The partnership between Stripe and OpenNode, a secure Bitcoin processing infrastructure, offers businesses low-cost Bitcoin payments and payouts and aims to make payments faster and more affordable allowing customers to convert fiat payments to Bitocin. The partnership lets Stripe customers convert fiat payments into Bitcoin and back again using the OpenNode app in real time, serving as a crypto marketplace, and offers third-party developers opportunities to build apps that support Stripe integrations in the launch of its Stripe App Marketplace, so developers can start building apps that support Stripe integrations. (fool.com)
The Ascent’s best crypto apps for 2022 (Bonuses, $0 commissions, and more)
George Soros Fund’s Fitzpatrick Prefers Ethereum Over Bitcoin
Fitzpatrick claims that climate impact will increasingly come into focus. This could hamper the adoption of Bitcoin, which relies on the energy-guzzling proof-of-work consensus algorithm.
Ethereum is expected to dramatically reduce its power consumption by transitioning to proof-of-stake later this year. As reported by U.Today, co-founder Vitalik Buterin said that the merge upgrade could take place as early as this August.
Bitfarms Mined 431 BTC In May
Bitfarms (NASDAQ: BITF, TSX: BITF), a publicly-traded bitcoin mining company, released its production and mining update for May 2022 showing 431 BTC mined worth about $16.6 million at time of writing, via a press release.
Fidelity’s Digital Assets Arm To Increase Manpower For Crypto Clients
Fidelity Investments’ digital assets division will increase its hiring this year to cater to its increasing list of clients who invest and trade in crypto assets. The company is looking to fill 210 new client service, technology, and operations positions. Currently, Fidelity Digital Assets employs nearly 200 people, who cater to clients who want to invest in crypto assets that trade continuously. (outlookindia.com
Tether Launches 4th Stablecoin Pegged To Mexican Peso; Cardano, Shiba Inu Up 11%
Tether (USDT), the third-largest crypto stablecoin in the world, launched a token pegged to the Mexican Peso with ticker ‘MXNT’, bringing its total pegged tokens count to four. Tether has
US dollar-pegged (USDT), Euro-pegged (EURT), and an offshore Chinese Yuan-pegged (CNHT) coins since quite some time now. (outlookindia.com)
More Good Reads…
The Complete Guide to Crypto Tax-Loss Harvesting less than 30 minute read
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
Bitcoin Whales Have Been Buying the $BTC Dip
Data from the Bitcoin ($BTC) blockchain shows that large whales on the network have been taking advantage of the cryptocurrency’s market downturn to accumulate more BTC after distributing their coins ahead of the recent sell-off.
According to Glassnode’s latest on-chain report, a metric known as the “Accumulation Trend Score” has been at a 0.9 high for nearly two weeks now. The metric reflects the aggregate accumulating or distribution trend seen by Bitcoin investors on-chain while filtering out miners and cryptocurrency trading platforms.
Only the HODLers Remain
Over recent months, we have highlighted how the on-chain activity for Bitcoin remains both lackluster, and stable. This is a typical characteristic of past bear markets, where the transaction activity of the network is dominated by the HODLer class, who are far more price insensitive.
After the May 2021 sell-off, we witnessed a modest ‘purge’ of wallets, as investors completely emptied out their coin holdings. This was followed by a four-month-long plateau in wallet growth as uncertainty crept into investor psychology and marginal buyers were flushed out of the market by the drawdown.
As we can see in the chart below, the poor price performance of late has put wallet growth on a near-term pause, although not on the same scale as in May 2021. (Glassnode)
The derivatives markets are still a tell! Cash-and-carry yields are still declining. As traders continue to chase yields, wherever liquidity and trade volume lurk, they follow.
Summing the week up!
I feel like I need to write a poem or something about Chop! It’s been a choppy week! LUNA 2.0 was launched with a little fanfare, while the stable of coins as a whole struggled with little volume all week. In the near term as a result of the TerraLuna collapse. It is still somewhat of a “ghost-town.”
Technicals (Elliott Wave) are expecting further downside after a back-test of $32,000.00 even with the positive tone. I’d suspect we will head towards that $20,900.00 rather quickly and put in our bottom there.
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 Major Pairs-Grayscale Trusts
XBT/USD (BTCUSD) Our destiny is $20,900 now! Or that’s how I see it!
GBTC (Bitcoin ETF)
Grayscale Bitcoin Trust (OTC GBTC) is an alternative for non-crypto account holders. See the prospectus.
ETH/USD Most of the Cryptoverse is trading with bitcoin and Ethereum looks destined for that $1350 range sooner than later.
If you don’t have a crypto account, you can also buy Grayscale Ethereum Trust.
Grayscale Ethereum Trust (OTC ETHE) is an alternative for non-crypto account holders. See the perspectus.
Alt. Coins
LINK/USD (revised profile March 6, 2022) 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 continued to show some relative strength in this last drawdown. Continue to average in. More on Curve here!
ADA (Cardano) needs some time.
Crypto Stocks
MARA still sitting on my hands! We did not push up enough to give the risk reward I needed. So, lets see what next week brings.
Scott Henderson’s Risk Disclosure & Disclaimers
Follow me on Twitter @swingtradenotes for charts, quick thoughts and smart remarks.
