Daily Ramble
The kids are at it again. And the adults are getting bloody irked. I’m laughing with glee as I watch the pomp and austere of public markets turn into the thing they’ve mocked — the crypto markets.
What am I talking about? Let’s buildup to that answer. WallStreetBets is a Reddit channel. Reddit is a social network where groups of like-minded groups gather to share ideas through bulletin board messaging. There is no organizing agent and it’s lightly moderated compared to Facebook and Twitter. WallStreetBets has self-organized around the principle of giving companies, gutted by covid policy decisions, a second chance by piling into a stock to drive the price up. The group targeted GameStop because many are video gamers and feel loyalty to the business. But equally important, it’s been targeted because a Wall Street hedge fund called Melvin Capital has a large short position against Gamestop, i.e. betting the price will go down. Piling into the stock has caused the price to soar costing Melvin Capital in their short-position. Today Melvin Capital finally threw in the towel, costing them several billion dollars on the trade.
If you’ve ever seen a flock of birds chasing away a hawk, that’s basically what happened. This is activist capitalism at its finest. Wall Street has gotten more than its fair share of stimulus money and the internet has opened up the way markets work to millions. It’s no longer cloak and dagger how to manipulate the markets. A group of people similarly frustrated by the inequity of governmental money distribution took matters into their own hands in a completely legitimate way by hitting the big boys in their pocketbooks.
Most certainly, you will hear the media machine wind up about these retail traders violating SEC principles. But what the media won’t talk about is how they’re the pot calling the kettle black — on a daily basis they roll out biased analysts to convince their audience a stock is worth purchasing or not. What I love most about this entire situation is how obvious it’s becoming to the average person that the system is royally effed up…and just like that, the gap between normal and cryptoville closed a little bit more.
Favorite Thing on the Interwebs Today
If you want all the insights into what I wrote about above, follow this thread. Phenomenally entertaining reading.
Bitcoin Price Prediction
Yesterday: $28.5k - $34k
Today: $28.5k - $32k
Tomorrow: $26k-$32k
So far the predicted price movement is playing out: the coin-flip yesterday went for the bears and the support holding price around $32k gave way allowing a retest of the very bottom of the range at $29.2k today. If we’re going to stay in the range, the bulls need to start making up some ground soon. But if not, the next zone where we could look for a bottom is the $25.9-$27.1k zone. My suspicion is if it breaks down further, it will strongly be bought up. I realize I’ve been banging the drum on this for a while now, but all signs point to us being very very close to finding the bottom. Just keep repeating: “Bitcoin bull markets are not for the faint of heart. 30-40% pullbacks are normal. Breathe.”
Bitcoin Ed Bite
Q: What Bitcoin wallets do you recommend?
A: My answers are based on being user friendly and security-focused which is often a difficult balance in designing crypto products.
Mobile: Blue Wallet — it has a tremendous amount of features without being custodial.
Desktop: Exodus — although it supports more than Bitcoin, it’s easy to use and even has a mobile app.
Hardware: Ledger Nano S and Trezor One — both have stood the test of time and support more than just Bitcoin.
Thanks for reading,
Kent
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