Archive for the ‘Crypto Corner – Bitcoin, ETC’ Category

Animal Spirits: Crypto’s Gateway Drug

 

Animal Spirits: Crypto’s Gateway Drug

Courtesy of Michael Batnick

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How Blockchain Can Change the World

 

How Blockchain Can Change the World

Courtesy of 

It feels like the NFT explosion came out of nowhere. Three weeks ago, almost nobody had heard of Solana. Now it’s got a $53 billion market cap. El Salvador just became the first country to adopt Bitcoin as legal tender. Things are happening fast.

Are they, though? The Bitcoin white paper was written 13 years ago. The first NFT was minted in 2014.

The pace at which progress happens often depends on your view of the world. For example, you know when you see a child for the first time in a few years, and your reaction is, “Oh my god. You got so big.” That makes sense because if you saw them at 2 and then not again until they’re 8, that’s a 300% increase. To the parent who is with them every day, however, the changes can be imperceptible.

Dave Nadig got me thinking about this concept of how fast and slow certain things happen in a new piece about NFTs, saying, “Big, big global change happens much more slowly than technology itself.”

Marc Andreesen wrote about the pace at which innovation occurs in a prescient 2014 article in the New York TimesWhy Bitcoin Matters.

A mysterious new technology emerges, seemingly out of nowhere, but actually the result of two decades of intense research and development by nearly anonymous researchers.

Political idealists project visions of liberation and revolution onto it; establishment elites heap contempt and scorn on it.

On the other hand, technologists – nerds – are transfixed by it. They see within it enormous potential and spend their nights and weekends tinkering with it.

Eventually mainstream products, companies and industries emerge to commercialize it; its effects become profound; and later, many people wonder why its powerful promise wasn’t more obvious from the start.

What technology am I talking about? Personal computers in 1975, the Internet in 1993, and – I believe – Bitcoin in 2014.

One of the complaints from people not steeped inside the crypto community is that the only use case for these projects


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Coinbase – Better Them Than Me…

 

Coinbase – Better Them Than Me…

Courtesy of Howard Lindzon

Last week it seemed nothing could stop crypto.

Life was grand.

Today, I woke to this tweet from Coinbase CEO Brian Armstrong:

Coinbase has received a ‘Wells Notice‘…

A “Wells Notice” is a letter sent by a securities regulator to a prospective respondent, notifying him of the substance of charges that the regulator intends to bring against the respondent, and affording the respondent with the opportunity to submit a written statement to the ultimate decision maker.

Now, usually it is the SEC that uses terms like ‘sketchy’.

As we say these days on social media …’shots fired’!

I sensed the SEC and Gensler have been gearing up for contact based on Gensler’s social media push. This weekend I wrote here:

The SEC has been quiet for what seems like 1,000 years. Gary Gensler the new head of SEC and of course former Goldman Sachs partner won’t shut up. He has a Twitter account and is having a lovely time sharing all his media appearances. I thought his Twitter account was a good idea at first because it showed he might be listening. Alas, it is just to push his confusing agenda.

While Gensler is on his media tour moving markets looking to help Goldman Sachs, the WSJ has a story about ‘The Social Media Stars Who Move Markets‘.

You can read the rest of Brian’s Twitter rant/plea/thread here.

I looked up the SEC and ‘what it is they do’:

The U. S. Securities and Exchange Commission (SEC) has a three-part mission: Protect investors. Maintain fair, orderly, and efficient markets. Facilitate capital formation.

With Gensler enjoying TV and Twitter, the definition above could [be] just about anything in a world where 100 million new traders and investors have apps and crypto markets are open 24/7.

Prepare for a lot more volatility if you own brokerage and crypto exchanges.





Bitcoin will soon be ‘legal tender’ in El Salvador – here’s what that means

 

Bitcoin will soon be ‘legal tender’ in El Salvador – here’s what that means

It’s all legal tender. Steven Puetzer/The Image Bank via Getty Images

Courtesy of Jay L. Zagorsky, Boston University

On Sept. 7, 2021, El Salvador will become the first country to make bitcoin legal tender.

The government even went a step further in promoting the cryptocurrency’s use by giving US$30 in free bitcoins to citizens who sign up for its national digital wallet, known as “Chivo,” or “cool” in English. Foreigners who invest three bitcoins in the country – currently about $140,000 – will be granted residency.

Panama is considering following El Salvador’s lead.

Does making bitcoin legal tender mean every store and merchant in El Salvador will now have to accept digital payments? If more countries do the same thing, what will this mean for consumers and businesses around the world?

As an economist who studies wealth and money, I believe that briefly explaining what legal tender is will help answer these questions.

A closeup of the $2 bill and the words 'this note is legal tender for all debts, public and private'

The $2 bill may be out of widespread circulation, but it’s still legal tender. Douglas Sacha/Moment via Getty Images

What is legal tender?

Legal tender refers to money – typically coins and banknotes – that must be accepted if offered in payment of a debt.

The front of every U.S. banknote states “This note is legal tender for all debts public and private.” This statement has been enshrined in federal law in various forms since the late 1800s.

The greenback is not legal tender in just the U.S. El Salvador, for example, switched from the colon, its previous currency, to the U.S. dollar in 2001. Ecuador, Panama, East Timor and the Federated States of Micronesia also all use the dollar as legal tender.

Do merchants have to accept legal tender?

But despite the definition above, legal tender doesn’t mean all businesses must accept it in payment for a good or service.


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SPACs Tank. Are NFTs Next?

 

SPACs Tank. Are NFTs Next?

Courtesy of John Rubino, Dollar Collapse

Towards the end of financial bubbles, two things generally happen. First, legitimate ways to put capital to work become scarce as prices outrun expected cash flows. Second, large numbers of traders, who have grown used to seeing everything they buy go up, start chasing “innovations” with exciting stories but (in retrospect) insanely high risks.

One recurring variation on this theme is the “dark pool” or “blank check fund,” which is someone with a well-known name saying “Hey, give me your money and I promise to do something cool with it.”

Today this con is known as a SPAC, for “special purpose acquisition company,” and generally takes the form of a publicly traded shell company that raises money with the intent of buying another company, in effect taking the acquisition target public. In other words, it’s a quicker, simpler version of an IPO, which appeals to the instant wealth mindset that dominates late-bubble markets.

SPACs emerged, boomed, and – inevitably because they don’t add any real value – are now tanking. From last week’s Wall Street Journal:

SPAC Rout Erases $75 Billion in Startup Value

The blank-check boom has turned into a rout.

More than six months after the SPAC craze crested, a broad selloff has wiped about $75 billion off the value of companies that came public through special-purpose acquisition companies, according to a Dow Jones Market Data analysis of figures from SPAC Research.

A group of 137 SPACs that closed mergers by mid-February have lost 25% of their combined value. At one point last month, the pullback topped $100 billion. The analysis doesn’t include companies that hadn’t closed mergers as of mid-February or those that are no longer trading.

Over the same span, an exchange-traded fund that tracks companies that recently went public through initial public offerings slid 12%. The Dow Jones Industrial Average gained 13%.

SPACs tank

SPAC declines are concentrated in companies tied to green energy and sustainability, though the damage is widespread. About 75% of the SPACs that have announced deals but haven’t completed them are trading below their listing price. Earlier this year, when the sector was perhaps


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Ethereum Explodes Higher On Furious Short Squeeze

Courtesy of ZeroHedge View original post here.

Just two days ago, when Ethereum suddenly broke away from the gravitational pull of its bitcoin correlation, we wrote that "Ethereum Blasts Higher, Decoupling From Bitcoin, As Attention Turns To Unprecedented NFT Frenzy", and pointing to the accelerating institutional adoption and surging one-month forward swap, we predicted much more upside for the second largest cryptocurrency which serves as the platform for the latest NFT craze.

Predictably, the post promptly generated the requisite critical commentary among the peanut gallery, where traders are so brilliant they can't be bothered to even consider an outside view. Maybe they should have, because fast forward two days when we find that not only did Bloomberg catch up to what we said on Monday

… but with Ethereum moving sharply higher this week, the moment it cross the critical resistance level of 3,600 it triggered a furious short squeeze which pushed it just shy of 3,800 - the highest price since May – and just a few hundred dollars away from its all time record high.

And yes, those who were busy explaining why Ethereum is garbage, shitcoin, etc, and why only they know better, would have been 10% richer in just 2 days. But they don't need the money…

Finally, those wondering what happens next, here are three observations.

First, the NFT frenzy is only just starting to move:

Second, the "max gamma" for Ether is far above the spot price and it could send the crypto currency as high as $6,000, if some enterprising market manipulator decided to force a gamma squeeze.

Finally, futures traders remain extremely bullish with the 1 month premium to spot near all time highs, while the ratio of ETH to BTC open interest is now matching record levels, meaning that not only is sentiment shifting even more away from BTC and toward ETH, but that the futures market see much more upside for ethereum in the coming weeks.

 





When you buy an NFT, you don’t completely own it – here’s why

 

When you buy an NFT, you don’t completely own it – here’s why

Welcome to the world of digital property. CreatorsTempe

Courtesy of Dinusha Mendis, Bournemouth University

NFTs or non-fungible tokens first captured the public imagination when a digital collage by an artist named Beeple sold for US$69 million (£51 million) at Christie’s in March 2021. Since then, there has been an explosion in the use of these units for storing digital content, which are bought and sold using online ledgers known as blockchains.

Since that initial connection with art, we are seeing NFTs being used in numerous other ways. Notably, many are being traded as collectables on exchanges like OpenSea and Rarible. Lately, for example, a series of 8,888 adorable “Pudgy Penguins” made a splash, each reflecting its own unique characteristic, with one selling for a record 150 ethereum (about US$500,000).

Pudgy Penguins for sale on OpenSea

Pssst, fancy a penguin? OpenSea

Yet whether it is a remarkable piece of digital artwork or a cute digital penguin, NFTs are essentially tradeable jpegs or gifs. Unlike physical collectables, an NFT owner will not be able to display the asset in their home – except on a screen. They might think they could display it on a website, but this isn’t necessarily the case. So what is someone actually getting when they buy an NFT, and what do they truly own from a legal perspective?

The new frontier

To understand NFTs, it is important to understand what is meant by “fungible”. Fungible is derived from the Latin verb fungi, meaning to perform. In the broader context, this means interchangeable and relates to whether something can be exchanged.

Money is fungible, in the sense that you can buy a commodity worth £10 with any £10 note; it doesn’t matter which one you use. On the other hand, NFTs cannot be exchanged like for like with another. They are each one of a kind, or one of a limited edition.

Content sold as NFTs can be created in many ways. It can be computer-generated, which was the…
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I Don’t F*ckn Get It

 

I Don’t F*ckn Get It

Courtesy of 

The last time I wrote about non-fungible tokens, activity peaked a few days later. Like many casual observers, I thought that when the volume dried up, that would be the last we heard about NFTs. At least for a while. Well, it turns out the rumors of their demise have been greatly exaggerated. NFTs, once again, are on absolute fire.

Remember back in February when a group of investors cobbled together $208,000 for a LeBron James moment. What seemed like an astronomical dollar amount just a few months ago seems quaint compared to some of the numbers we see today.

The most expensive CryptoPunk was bought for $7.58 million. It’s now listed for a cool 35,000 ETH, or $110 million. Most of these transactions happen on OpenSea, which just passed $100 billion in monthly trading volume.

The only thing crazier than how much some of these things are trading for is the speed at which they’re moving. Projects are going from “I’ve never heard of it” to selling for tens of thousands of dollars overnight. A few weeks ago, you could get a Bored Ape for less than 1 ETH. Now you can’t find one for less than 18 ETH ($58,373).

Last week, the token du jour was Pudgy PenguinsKevin Roose even wrote a piece about it in The New York Times.

This week it’s Ether Rock, or “pet rocks on the blockchain.”

 

It’s normal to see this stuff and shake your head. I did. I still am. But you have to understand what’s happening here. This is purely a status symbol. There are only 100, and the more they go up in price, the more a purchase conveys that you can afford it. Packy recently wrote about this, saying, “Owning a Punk is a status symbol, like owning a Ferrari or an expensive handbag.”

YOU CAN DRIVE A FERRARI. YOU CAN WEAR A HANDBAG.


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Ask yourself this: Why wouldn’t it go to $100,000?

 

Ask yourself this: Why wouldn’t it go to $100,000?

Courtesy of 

Can you think of a reason for why Bitcoin wouldn’t go to $100,000?

Don’t say because it’s worthless, it’s clearly worth over a trillion US dollars to lots and lots of people. They may change their minds, but right now, it’s worth what it’s worth. Remember what I said in February: “That sounds stupid, I’m buying some just in case…” is still the vibez.

Don’t say it’s overvalued, because, LOL, based on what? Have you a metric, ratio, formula, rule of thumb, yardstick, comparable or incantation that’s been demonstrably helpful at valuing this instrument in the past or present? I f***ing bet you don’t! You might pretend you do in front of other people, but I know what you say to yourself in your own head once you go home for the day. I am a professional pundit, don’t even try to convince me otherwise. I know what you say about your “models” and all the nonsensical variables that go into them. And then I know what you say to yourself in the shower. The two things don’t match up.  Here’s how JC Parets describes using the CNN Fear and Greed Indicator – and its seven non sequitur inputs – to predict the stock market:

Of the 7, I’d argue maybe 2 of them make sense to include in a sentiment composite.

The other 5 are different tools and data sets for completely different purposes.

This is like a Pitcher trying to figure out which pitch to throw a hitter by looking at the color of his shoe laces. Or by choosing your vegetables at the store using the expiration dates in the milk aisle.

What does one have to do with the other?

Nothing.

Here’s my chart of Bitcoin’s price versus the unemployment rate in Holland, apropos of absolutely nothing at all. Show me where on this chart to buy and where to sell:

What’s in your silly little equation to determine the price of an asset that trades…
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Coinbase CEO Confirms $500 Million Crypto Added To Balance Sheet, Will Reinvest Profits

Courtesy of ZeroHedge

Back in January 2021, we detailed Morgan Stanley's aggressive expansion of its Microstrategy holdings (whose strategy has shifted towards crypto when it became the first publicly-traded company to convert a substantial portion of its cash holdings to bitcoin), noting that it may be the catalyst that unlocks Bitcoin's door to rapidly crossing the psychological $100,000 level next.

Whereas share buyback announcements pump stock prices higher (whether they are buying them or not) as other front-run the C-suite, Crypto-purchases (on to corporate balance sheets) will create a more aggressive function by keeping cryptos elevated with shorts increasingly uncertain when the next huge buying wave will lift the price of Bitcoin or Ethereum vertically (like today)…

And today we see another entity more aggressively entering the crypto-purchasing wave.

As Decrypt.co's Jeff Benson reports, Coinbase CEO Brian Armstrong announced via Twitter today that the publicly traded cryptocurrency exchange received board approval to add $500 million of cryptocurrency assets to its balance sheet. Not just that, but it'll be placing 10% of all future profits into cryptocurrency.

In February, as it prepared to go public via direct listing, Coinbase published an S-1 filing showing it held somewhere in the range of $365 million in crypto. Of that, $230 million was in Bitcoin, $53 million in Ethereum, $49 million in stablecoins, and $34 million in other crypto assets.

Though it was good enough to rank Coinbase fourth among all companies for Bitcoin holdings, two of the three firms ahead of it – cloud software firm MicroStrategy and electric automaker Tesla – bought their first BTC within the last year; Coinbase has been around since 2012.

Some thought a crypto-native company should have accrued more over that span, although accounting rules and treasury management principles may have made that imprudent.

We recently received board approval to purchase over $500M of crypto on our balance sheet to add to our existing holdings. And we'll be investing 10% of all profit going forward in crypto. I expect this


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Phil's Favorites

Dallas Fed President Traded S&P 500 Futures. Dallas Fed Will Not Say If He Shorted the Market During Pandemic Crisis in 2020.

Courtesy of Pam Martens

Robert Kaplan, President of the Dallas Fed

A transaction that has been missed by major news outlets on the financial disclosure form for Dallas Fed President, Robert Kaplan, is a line item showing that Kaplan made “multiple” trades of more than $1 million in S&P 500 futures.

This is a stunning revelation for a multitude of reasons. First, Kaplan’s financial disclosure form shows that he already had exposur...



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Politics

'What Betrayal Looks Like': UN Report Says World on Track for 2.7°C of Warming by 2100

 

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Image by Gerd Altmann from Pixabay

'What Betrayal Looks Like': UN Report Says World on Track for 2.7°C of Warming by 2100

"Whatever our so-called 'leaders' are doing," said Swedish climate activist Greta Thunberg, "they are doing it wrong."

By Jake Johnson, Common Dreams

The United Nations warned Friday ...



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Biotech/COVID-19

FDA panel recommends limiting Pfizer booster shots to Americans 65 and older, and those at high risk of severe COVID-19

 

FDA panel recommends limiting Pfizer booster shots to Americans 65 and older, and those at high risk of severe COVID-19

No third dose for now. AP Photo/Robert F. Bukaty

Courtesy of Matthew Woodruff, Emory University

The key scientific advisory council of the Food and Drug Administration has voted to deny authorization of...



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Zero Hedge

How Genetically Similar Are We To Other Life Forms

Courtesy of ZeroHedge View original post here.

Of the three billion genetic building blocks that make us living things, only a handful are uniquely ours. In fact, as Visual Capitalist's Carmen Ang notes, despite our differences on the outside, humans are 99.9% genetically similar to one another.

...

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Digital Currencies

Animal Spirits: Crypto's Gateway Drug

 

Animal Spirits: Crypto’s Gateway Drug

Courtesy of Michael Batnick

Today’s Animal Spirits is brought to you by YCharts

On today’s show we discuss:

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Chart School

Gold and Silver Volume Waves Review

Courtesy of Read the Ticker

The sign says it all. The professionals want the public to focus on the words, to scare out the weak hands, but the color of the sign underlines the value in a money printing world, its gold stupid.

Point and figure (PnF) charts draw price waves with the sum of volume per wave. PnF charts high light true accumulation underneath price action. This is why Richard Wyckoff favored PnF charts.    

In the charts below we see price moving sideways to down, yet volume on up waves are greater than volume on down waves. At the moment there is no heavy selling on down waves. Or in other words price is being moved down at a low volume expense to allow accumulation at a lower price.

This action represents professionals building their...

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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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