GM. This is Ponder Crypto.
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Your supportive crypto parent helping walk a straight path.
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📈 The Tides Have Officially Turned
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🚨 Comparing 2008 Banking Crisis to Now
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📰 Crypto Chronicles 2023: Week 13
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🎥 This Week on PonderTube
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📈 The Tides Have Officially Turned
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After 14 months, I got my first official sign that the bear market is over.
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This is my secret sauce so turn you back for a second...
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...Ok here, look at this!
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A custom trading algorithm I wrote had the last official trade close back in NOVEMBER of 2021.
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And then, like a phoenix rising from the ashes 13 months later, I received the next buy trigger.
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My algorithm looks at a few market factors but is based on volume, price movement, sentiment and flipped price floors, it appears that we may have finally leveled off and are positioned right at the beginning of the next bull market!
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I am working on enabling subscribers to receive my trade alerts in real time, so be on the lookout for that.
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🚨 Comparing 2008 Banking Crisis to Now
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The whispers of bank runs and crumbling financial institutions have been growing louder in recent weeks, fueling concerns that we may be witnessing the beginning of a widespread contagion. A contagion that begins with a few banks but soon engulfs the entire financial system.
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Take a look back at the 2008 mortgage-backed crisis and the monumental collapse of Washington Mutual, along with the numerous local banks and credit unions that met a similar fate. What many might not realize is that the domino effect of these collapses continued for years after the initial shockwave.
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Fast forward to the present day, as we see Silicon Valley and Signature Bank collapsing, it's difficult to predict whether this is the start of a continuous chain of failures.
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Where did this issue start?
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During Covid, the FED injected trillions of dollars into our economy.
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Irrespective of whether the funds were transferred to an individual or a corporation, the vast majority, if not all, of those dollars ultimately found their way into a bank.
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With the banks sitting on a large surplus of cash, they had to figure out WHAT to do with it.
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Many chose to buy government bonds, which at the time, were trading at a reasonably low rate because if you remember, Powell thought it was a good idea to bring the FED rate down to 0%.
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Over the last year, the FED has raised the Federal Funds rate to 5%, causing most of the treasuries purchased in 2020 to be "underwater".
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When the public learned about the balance sheet of some of the banks, they realized that there was not enough funds to cover everyone's deposits. So, massive withdrawals start happening.
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With the bonds sitting below market value, the banks couldn't liquidate them to cover the client withdrawals without finding themselves insolvent.
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These events created the liquidity crunch the FED is trying to help soften.
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The key takeaway: The absence of daily bank collapses doesn't mean the storm has passed. If rates keep rising, banks could face added withdrawal pressure and shrinking balance sheets, putting the entire financial system at risk.
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Ultimately, funds will be protected through FDIC or the FED but the question is, will additional money need to be printed to cover the liquidity needed.
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📰 Crypto Chronicles 2023: Week 13
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Top stories you should know this week.
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Brief Summary: The US Government now holds over 205,515 bitcoins (over 1% of the circulating supply), confiscated from three high-profile cases. The first case involved the seizure of 69,369 bitcoins from an unknown individual connected to The Silk Road marketplace. The second case saw the seizure of 94,636 bitcoins linked to the 2016 Bitfinex hack. The third case resulted in the confiscation of over 50,000 bitcoins when James Zhong pleaded guilty to committing wire fraud in connection with The Silk Road. Comparatively, the US Government's bitcoin holdings are less than those of Coinbase (10.34%), Satoshi Nakamoto (5.69%), Grayscale (3.32%), and Binance (1.28%), but surpass holdings of MicroStrategy (0.64%), Winklevoss Twins (0.36%), Tesla (0.22%), and El Salvador (0.012%).
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Ponder Crypto's Take: Should the US alter its position on Bitcoin; there are quite a lot of coins in its custody to "permanently" seize. I could see the US doing a "like-kind" exchange to retain custody of their Bitcoin should they decide to put some on the balance sheet in the future.
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Brief Summary: Senator Elizabeth Warren's reintroduction of the Digital Assets Anti-Money Laundering Act may hinder the cryptocurrency industry rather than protect Americans from scams. The proposed legislation, which requires stringent AML policies and threatens to shut down entities unable to comply, could drive cryptocurrency businesses overseas and limit consumer choice. Despite recent frauds and thefts highlighting the need for some regulation, the bill's harsh approach, particularly toward decentralized finance, may create an unreasonable regulatory burden and force many crypto businesses to close or leave the United States. This would reduce competition in financial services, benefiting traditional banks, and potentially drive the industry underground, increasing criminal activity. Instead, lawmakers should seek to promote the public good and avoid overly draconian measures against the crypto industry.
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Ponder Crypto's Take: If you watch 10 minutes of any disposition conducted by Elizabeth Warren, you can tell she is not about getting to the truth of the matter. She has a clear agenda and will do whatever she can to push it. She should be booted from her position ASAP.
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Brief Summary: Michael Saylor purchased another 6,455 Bitcoin, doubling down in his investment in Bitcoin amid a year long bear market.
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Ponder Crypto's Take: Michael Saylor understands the long-term implications of what investing in Bitcoin means in a world governed by fiat currencies. He is scheduled to conduct a conference highlighting how he navigated investing in Bitcoin as a corporation and continues to share his legal blueprint.
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Brief Summary: Coinbase executives are prepared to take on the SEC in court after receiving a Wells notice alleging securities violations. Despite multiple meetings with the SEC over the past nine months, Coinbase CEO Brian Armstrong expressed frustration at the lack of specific feedback from the regulator. As the SEC's actions suggest a growing belief that the crypto industry is exploiting regulatory loopholes, Armstrong believes that court intervention may be necessary to establish case law and enable a safe, regulated crypto environment in the US. With other countries embracing the crypto industry, the Blockchain Association urges the Biden administration to support innovation rather than hinder the global tech revolution.
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Ponder Crypto's Take: Coinbase is the best candidate to take on the SEC. They appear to be preparing for a big fight so that the outcome will be significant for the entire crypto space. I expect this to be a long, hard fight. My hope is that the US realizes that we need to take a pro-innovation stance before legislation sets us back globally.
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Brief Summary: Deutsche WertpapierService Bank AG (dwpbank) has unveiled its innovative wpNex platform, which empowers over 1,200 affiliated banks to provide Bitcoin trading to retail customers. The platform integrates crypto trading into users' online banking experience, displaying their cryptocurrency holdings alongside traditional securities without pre-funding. MLP Banking AG and DZ Bank are among the first to offer crypto trading, signifying a strong push for Bitcoin adoption in Germany. With wpNex, dwpbank is positioning the country as a major player in the world of crypto, and the platform's launch is expected to increase pressure on other German banks to accommodate the growing demand for accessible crypto trading and investment options.
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Ponder Crypto's Take: Banks are only resistant to crypto because they haven't figured out a way to profit from it. Once a clear path is there that the banks can leverage to increase their revenues, expect them to sing a different tune.
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🎥 This Week on PonderTube
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CRYPTO Is Now A Security: What Does It Mean For You?!
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The SEC is clearly going after crypto and the question is, say then win. What next? Let's discuss what the future would hold, who would be affected, and how the space may change if the SEC is able to challenge and win against the crypto space.
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This Real Estate Crash will Wipe Out the Banks
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We've all heard the familiar story about real estate. Interest rates were too low, people became overleveraged because of all the cheap money, bought a bunch of real estates, and then interest rates went higher than people were expecting; that meant they could no longer afford the future payments.
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But they also could not afford to liquidate their property because they would not have enough left to pay off their loan if they did. Their only option at that point was to default, which meant that the banks who had also become overexposed to these real estate loans were at risk of failure for having too many of these loans default.
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Now, you might think that I am describing the great financial crisis to you. However, what I am describing is what is going on right now.
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This is not financial advice. I am merely stating my own opinion on how I am perceiving the current market structure and conditions. Consult with a legal investment advisor and all the other good legal stuff that needs to be said.
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Disclosure: All content shared in the Ponder Crypto website, newsletters, video channels or any other medium are for entertainment purposes only and should not be received as legal or financial advice. We are not legal experts or financial planners so please, exercise proper due diligence and do your own research.
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