Hey guys,
I hope you are all doing well and are having a nice start to 2022!
It’s been lovely few weeks, with the skies finally clearing, to let the sunshine through, creating some beautiful sunsets. I’ve made the most of it with a few walks into the hills, some swims and even a little surf.
Dad’s energy has been a bit up and down recently, so I’ve made him quit caffeine. He’s been relying on coffee to keep him going for the last 20 years so it’s like have a living zombie in the house! He’s starting to get better now. I think the Bitcoin volatility was finally getting to him…
As for Bitcoin, nothing new on the surface but a lot is going on behind the scenes. A legendary hedge fund manager has joined the Bitcoin revolution and a CEO of a major bank has also switched sides… More on this in the news section.
Finding honest information in the crypto space can be quite challenging, especially for newcomers. Luckily, there are some individuals who spend their time finding and exposing dishonest influencers and this is what I’ll be discussing this week.
I’m moved emailing platforms, so the old sign-up link will no longer work, but you can use this nice-looking button to share instead.
And you can subscribe with this other nice-looking button:
I’ve also decided to switch up the format a bit. The beginner’s section will be in a separate post and I’m going to put the main topic of the newsletter at the top.
And lastly, the next newsletter be delayed by a few days as it coincides with some plans.
Be Careful Where You Get Information
People are getting scammed every day in the world of cryptocurrencies, and you could be one of them.
I don’t mean people hacking into your wallets, I mean the classic pump and dump, 1000x ‘gems’ which are hyped up by influencers, and ‘experienced’ traders screaming at you to buy Bitcoin when price is clearly overheated. I have fallen for these influencers in the past but overtime I have managed to filter out the noise by restricting where I get my information to a select few sources. I’ll save you some time and tell you who to avoid and who I like to follow.
In a world where information is abundant, you must be selective.
First, follow @Zachxbt. He is like a crypto detective who dives into influencers wallets and accounts, and dodgy projects to find out if they are doing sneaky business. Here is his master thread of all the research he has shared so far. It’s quite long, so I will summarise the biggest names below.
Shady Youtubers
Ben Armstrong @Bitboy_Crypto (Do I even need to say this…?)
Crypto Banter @crypto_banter (I used to love this show…)
Sheldon The Sniper @Sheldon_Sniper
Ran Neuner @cryptomanran
Lark Davis @TheCryptoLark (I even used to pay for his newsletter!)
EllioTrades @elliotrades
MMCrypto @MMCrypto (My dad actually used to watch him…)
JRNY Crypto @JRNYcrypto (Not 100% sure what he did to get on the list)
The Moon @TheMoonCarl
Ivan on Tech @IvanOnTech
That Martini Guy @MartiniGuyYT (Tbf he has also made quite a few good calls)
The Wolf Of All Streets @scottmelker (The name says it all)
Koroush AK @KoroushAK (Great podcast but…)
Coach K @Coachkcrypto
Shady Twitter Influencers
BULLRUN GRAVANO @Bullrun_Gravano
Kale @kale_abe
COLΞ @ColeThereum
Zhi Ko @NekozTek
Beanie @beaniemaxi
Flur @flurnft
artchick.eth @digitalartchick
Simon Dedic @scoinaldo - Managing partner at Moonrock Capital and you can literally see messages from here about the pump and dump schemes.
YellowBlock Team
The ₿irb Nest @TheBirbNest
NFTeddy @TeddyCleps
The Crypto Monk.Ξth @thecryptomonk
TANG @cryptorangutang
SPECTRE GRP
JohnnyZcash @JohnnyZcash
ⓟolⓚad⬡t ₿🅡own @bitcoin_brown
They call me capo @IAMLLUCIANA
Biz @Adouble212
Walsh Wealth Group - I was a member of this ages ago. I thought it was the most amazing thing to have access to so many traders’ thoughts and trades when I first joined. There ended up being no value and it led me to worse investing decisions. - You don’t make long term wealth copying someone else’s trades.
Johnny @CryptoGodJohn
EliZ¥ @eliz883
A lot of these influencers are not all bad and can offer some useful information, but like anything, you should be aware of the risks.
For example, to give credit where it’s due, Bitboy revealing his investment portfolio for 2021 was ironically one of the most impactful videos we watched last year from a profit perspective, and Martini Guy was also calling MATIC well before it rocketed up 10x.
However, all of them have all shilled low tier VC scam coins as ‘gems’, like POLK or KASTA, and have mislead followers in one way or another.
They also try to catch you attention by over hyping every bit of price action and talking about how much money you can make. Herein lies the problem, as these are the most attractive kind of videos for retail investors. - Please don’t watch videos about how much Cardano you need to become a millionaire.
No one wants to watch the guy who says Bitcoin isn’t going to the moon every and provides calm objective analysis without hype. Yet hese are the people you want to be watching. The more ‘boring’ content is often the most valuable.
The only youtubers I now watch regularly:
Benjamin Cowen - Objective data analysis on Bitcoin and a select few altcoins. He has been ahead of the curve for all of 2021 and I look forward to following him closely in 2022. Signing up to his premium list has been one of the best investments.
Invest Answers - Regular updates on price, news and a select few altcoin and stocks. A great way to keep up with the markets as a whole. He can be slightly deterministic, but that is just his style and serves as a nice pairing with Ben Cowen.
Bob Loukas - He doesn’t post often, but it’s always insightful when he does.
Robert Breedlove - Great interviews all about the fundamentals of money and Bitcoin. I’m working my way through the Saylor Series at the moment, which I highly recommend to anyone, especially if the idea behind Bitcoin has yet to click.
Honourable Mentions:
Finematics - Great content, explaining how cryptocurrencies work.
CTO Larsson - Watch the occasional video as he’s just a funny guy with some nice honest content.
Coin Bureau - A fair bit of clickbait but I will occasionally watch a video if the topic interests me. Great for beginners and has made some good altcoin calls in the past. I always take note of his top picks and like to follow what he does with his portfolio in his newsletter, which you can sign up to here.
MDX Crypto - Clickbait titles and he shilled the ‘scam’ coin KASTA, but he has a nice objective view of the markets. I tend to only watch the first 15 minutes of his livestreams and ignore most things which aren’t about Bitcoin or Ethereum.
I have found that one of the best places to keep up to date with the markets is newsletters. Here are the ones I follow:
Lyn Alden Investment Strategy - Provides extremely objective and in-depth analysis on both the traditional markets and blockchain. She offers both a free and premium newsletter. For £12.20 a month this is another one of the best investments. Her article ‘3 Reasons I’m Investing In Bitcoin’ was actually used by Michael Saylor of Microstrategy to help his board understand Bitcoin. - Here is her latest newsletter, which I really recommend reading, especially if you are investing, or thinking of investing, into stocks:
My January 2022 public newsletter is now available: lynalden.com/january-2022-n… The focus is on the major factors that stuffed capital into US equities in recent years.Blockware Intelligence - An excellent free newsletter written by Will Clemente. It is mostly a mixture of on-chain and derivatives analysis.
Glassnode Insights - Another free newsletter focusing on on-chain analysis, provided by one of the main on-chain analysis platforms.
The Macro Compass - A free macroeconomic and investing newsletter by a former Head of a $20 bn Investment Portfolio at a large bank, and passionate global macro investor, Alf.
VeradiVerdict - A free weekly newsletter by Paul Veradittakit, a partner at Pantera Capital, one of the oldest and largest institutions that focuses on blockchain companies and cryptocurrencies. He focuses on early investments and shares his thoughts on what is going on in the crypto industry.
Rekt Capital Newsletter - An affordable newsletter by a clear trader and analyst. He analyses Bitcoin as well as some alt coins.
Coin Bureau - As I mentioned earlier, I like seeing what he’s doing with his portfolio.
I think that’s about it. If you do follow some of the shadier influencers, just make sure that you take what they say with a pinch of salt. If you find yourself feeling FOMO whilst watching them, do yourself a favour and watch someone else.
If anyone has any other useful sources of information, please let me know!
News Highlights
CEO of Wealth Management and Investments at Barclays, Dirk Klee, has left to join Bitcoin Suisse, a Swiss cryptocurrency investment platform. Source
Klee said: "In the coming years, a once-in-a-lifetime opportunity awaits Bitcoin Suisse, our clients, investors, and employees.
"I am honoured to have been appointed and very much look forward to helping shape the future."
If you can’t beat them, join them… On this note:
And a study of 90 banking institutions revealed that 68% of private banks intend to offer cryptocurrency services to their clients.
The pile of money looking to enter this space keeps growing, and we have all been given the chance to get in before it does.
Legendary Investor Biller Miller has 50% of his Net Worth in Bitcoin
Bill Miller is best known for his impressive investing record of beating the S&P500 for 15 consecutive years. He is the only fund manager to ever achieve this. His fund, Miller Value Partners, also emerged as one of the best performers in the hedge fund history in 2019 by generating a 119% return. He recently revealed in the interview below, that he has put 50% of his entire net worth in Bitcoin. The other half is primarily Amazon stock.
One of his main reasons for doing so is that Bitcoin is the only macro asset who’s supply, is not affected by its demand. No matter how high the price of Bitcoin goes, the supply will remain the same. This is different to gold, where if the price goes up, miners have increased cash flow, which can allow them to expand or upgrade their facilities, and in turn mine more gold, increasing the supply.
He first bought Bitcoin back in 2014 and a few times after that, but then didn’t buy it for years until the dip in May that crashed the price down to $30,000 where he thought it was a good time to buy the dip. This ties in with what Greg Foss believes, which is that with the current levels of adoption and the increase in money supply due to covid, Bitcoin is currently a better trade from a risk/reward perspective than it was back in 2016.
Fed Vice Chair Is Latest Official to Quit in Trading Scandal. Source
Yet another member of the Fed has had to resign early due to a trading scandal. Vice chair, Richard Clarida, bought shares in a stock fund in February 2020, then sold these shares as the pandemic spread and markets started to fall. A few days after the markets crashed, he moved his money back into the fund, just before the Fed announced it would step in and provide new economic supports to the financial system. He initially disclosed his buying of the fund, but kept the fact that he had sold the fund and rebought it a secret.
It’s not just the Fed, politicians are also involved:
Do you know how hard it is to beat the market? The average hedge fund last year underperformed the market by over 50%, so these politicians are killing it. They must be some well-trained traders….
Bitcoin Legal Defence Fund
This is how amazing the Bitcoin ecosystem is. Jack Dorsey (former CEO of Twitter and the founder and CEO of Block, Inc.), Alex Morcos (Chaincode Labs CEO), and Martin White (an academic at the University of Sussex) have formalised a non-profit fund to protect Bitcoin developers from lawsuits. An example of the antifragility of Bitcoin. You can read the details below:
Bitcoin Game Theory is in play.
Uruguay installs its first Bitcoin ATM
The Kingdom of Tonga to Adopt Bitcoin as Legal Tender
Rio to Invest 1% of Treasury Into Cryptocurrencies
Fidelity, one of the largest asset managers in the world, has even been discussing this in a recent financial report of theirs. You can read the section below:
Bitcoin In 2022
‘Bitcoin continues in its large accumulation between $30 and $60k.’
But what does that actually mean? It means that all the new retail who bought during the last parabolic run, looking for a get-rich-quick scheme are selling, and the more experienced investors and believers in Bitcoin are buying or hodling.
The new retail can be thought of as short-term holders, the ones who are likely to buy at peaks and panic sell when price takes a downturn, and the more experienced players can be thought of as long-term holders. These guys are less fazed by market downturns and tend to be buying for the long term until price eventually gets overvalued again, when they will begin selling again to short-term holders.
Here is a chart that Will Clemente shared on this very topic. It shows that the longer a coin has not moved, the less likely it is to be sold. Using this, coins that have not moved for 155 days (black dashed line), are classed as being held by long term holders, as there is little chance of them spending.
To get an idea of what these long-term holders are doing, we can use the HODL Waves. These show the percentage of Bitcoin in existence which were last moved (been sold or transferred) within specific time periods. This can help us discern whether or not long term holders are selling or accumilating.
I.e. If a coin has not ‘moved’ for 6 months, it will be part of the 6m-1y age group.
Now let’s only look only at the coins of long-term holders, coins that haven’t moved for 6 months or more (over the 155-day threshold).
The green arrows show that the number of coins being hodled for atleast 6 months is increasing, meaning an increasing amount of supply is held by long-term holders, and the red arrows represent distribution (selling) by long-term holders. We can see that the best time to start buying is when the wave has moved up and has started to flatten, and the best time to sell is after the wave has moved down significantly.
Right now, we are at the peak of a recent accumulation phase. This doesn’t mean we can’t go lower; it means that with a 2-5 year view in mind, it’s an attractive time to DCA.
It also shows us, that it wouldn’t be surprising for Bitcoin to continue sideways for some time as well. After huge selling by long-term holders, it takes a while for Bitcoin to build out a new base before beginning its next run up.
Benjamin Cowen also shared this chart which supports this idea. Whenever the 6m-1y supply peaks, it precedes the building of a long base before the next run. Right now, it is forming a peak.
I have started this week with some on-chain analysis, as there really isn’t much going on in the charts. Looking at the weekly Heiken Ashi candles, it is clear we are still very much in a downtrend. Learn more about Heiken Ashi candles here.
Until there is a momentum shift to the upside, like the impulse upwards back in July, the trend remains down.
Looking at the key levels we spoke of a few weeks ago, we have had a perfect breakdown, bounce, and retest.
$40k is a significant area of support and should put up a good fight, but whether it holds is anyone’s guess. If it is the bottom, it’s possible we get some wicking action below it. If we do break lower, it’s harder to see where it will bounce, but it’s likely to be anywhere around $30k, as this is the bottom of the range that it is has been in for the past year.
To paraphrase Ben Cowen:
You shouldn’t be asking whether $40k is the bottom. You should be making sure that you have the dry powder to invest if $40k breaks.
And if $40k does break, I will be investing heavily.
To finish this section on Bitcoin, here is an extract for Lyn Alden’s most recent premium newsletter:
The intermediate-term bear case for bitcoin is that at the moment it is positively correlated to equities and is treated as a risk-on asset, and given the purchasing manager’s index and copper/gold ratio rolling over, while the Fed tries to tighten monetary policy, that’s not good. As such, demand for bitcoin is weak.
The intermediate-term and long-term bull case for bitcoin is that after nearly a year of rangebound price action, many bitcoins have already moved from liquid weak hands to illiquid strong hands. Supply dynamics are rather tight, meaning there is comparatively little liquid float available. Whenever demand does reignite, the supply conditions are very favourable for bullish price action.
So in synthesis from a tactical perspective, I am neutral/cautious until we see demand come in, at which point I would likely become very bullish. The dry kindling is building (supply is increasingly tightly-held) but it needs a spark rather than rain (some sort of catalyst for demand coming back in, or merely ongoing mild demand eventually soaking up the liquid supply over time) to move from consolidation/correction back into a bull phase.
I continue to view dollar-cost averaging as the best way to get exposure to bitcoin for most people that want some.
Ethereum
I don’t see much point in charting Ethereum or other coins until Bitcoin gets back above the bull market support band as they will struggle to maintain any sustainable rally, but here’s a quick update anyway.
As you can see, it looks much the same as Bitcoin. It broke the first key levels and has had a perfect bounce from the bottom level, followed by a retest.
Ethereum’s macro range is between $2-$4k and if Bitcoin breaks $40k, it’s likely Ethereum’s visits the lower end of this range.
If you liked Ethereum at $4k, you should be liking it even more now.
I am still very bullish on Ethereum in the medium term, however in the long run I still think it is a much riskier investment compared to Bitcoin.
I recently read this excellent article by Lyn Alden, in which she dives into all the pros and cons of proof-of-stake compared to proof-of-work, and it underlines all the major risks with investing in Ethereum and any of the other Layer-1s. If you are thinking of investing in altcoins, or are invested in altcoins, I strongly recommend you read it, as you should always consider the risks in any investment you make.
Risk Dashboard
Not many changes to my portfolio at the moment. I bought a bit more Bitcoin for my little brother but that’s about it. I’m waiting on some stablecoins to finish staking, so I can start to DCA again.
If you are buying altcoins at the moment, I would be very picky until Bitcoin gets back above its bull market support band.
Personal
I haven’t been listening to as many podcasts since being home, as I no longer have the dogs to walk every day, so books have largely dominated the scene.
The books I’ve read recently have had a big impact on me, so I plan to do a little book review of my favourite ones in future newsletters.
One excellent podcast that I did manage to listen to was Ray Dalio’s interview with Lex Fridman.
Ray Dalio: Money, Power and the Collapse of Empires
Ray Dalio is a legendary investor and founder of the largest hedge fund in the world. He explains the collapse of past Empires as a way of understanding the battle between the US and China, and dives into the inevitable relationship between money and power.
I think that’s all for this week and I wish you all lovely a week.
All the best,
Tats
Library
Let me know if I forgot any other words or abbreviations and I'll include them next week.
Bullish - Causing, expecting, or characterized by rising stock market prices.
Bearish - Causing, expecting, or characterized by falling stock market prices.
Bear Trap - Tricking everyone that price is going to break down, before moving up.
Bull Trap - Tricking everyone that price is going to break up, before crashing down.
DCA - Dollar Cost Average. Investing incrementally on fixed schedule.
DEX - Decentralised exchange.
EMA - Exponential moving average
ETF - Exchange traded fund. A type of security that tracks an index, sector, commodity, or other asset, but which can be purchased or sold on a stock exchange the same way a regular stock can.
Fiat Currency - Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver.
FOMC - The Federal Open Market Committee (FOMC) is the monetary policymaking body of the Federal Reserve System.
Fractal - Repeating patterns from the past.
HODL - To hold your coins and not sell them despite crashes in price.
MA - Moving average.
S/R - Support/Resistance level.
Whale - A very large holder of Bitcoin
Thank you for the honorable mention. I try better to work myself up to your primary source of information. Larsson Line flipped blue (down) at $49,000 when most of the others on your list were still bullish. Just saying... 😆 Anyway, thanks for a great article! // CTO Larsson