Weekly Rundown - May 5, 2024

Kalshi and chill

Thanks to my sponsor, Kalshi. Trade on Anything!

Kalshi is the first US federally regulated exchange that lets you trade on anything.

You can trade on inflation, interest rates, whether TikTok will be banned, when Tesla FSD or ChatGPT5 will be rolled out, and hundreds of other events.

Kalshi recently launched a ton of crypto markets where you can trade on price movements and events that are most relevant to crypto, like when Bitcoin will hit $100k.

Starting in June, the US Federal Reserve will sell less of its assets. This should reduce downward pressure on the bond market and potentially drive interest rates lower.

While not a big shift in absolute terms—only $25 billion less “quantitative easing” each month—a little goes a long way. It's not hyperbole to say this is a significant change in a long-standing central bank policy.

The US government waved its magic wand and POOF! You have to change your whole investment thesis for the rest of the year.

We’ve talked about the similarities between crypto in early 2024 and crypto in mid-2019 for a while. In mid-2019, the Fed found itself in a similar situation and did not reduce its asset sales. The banking system almost ran out of money later that year. I’m certain Jay Powell wants to avoid a similar fate.

At least, let's hope that's why the Fed is taking this action. Otherwise, you'd have to believe they are concerned about a liquidity problem that already exists (something that’s the opposite of bullish).

What does this have to do with crypto?

We will see. I’ll talk about that in my next market update.

Until then, make sure you got my trade alert from earlier this week.

If you took that trade, enjoy a little extra cash that you can use when Bitcoin’s price goes back into my buying zone.

In that update, I shared some perspective and data that should make you question the assumption that “the sideways price action is bullish because it proves today’s inflows are strong enough to support Bitcoin’s price.”

Also, I looked into changes in HODLing behavior and Bitcoin activities that you need to see before you jump on the bull or bear bandwagon.

While you’re at it, get the April monthly issue, Steady Hands, Clear Mind.

In that post (free!), I look at the importance of sticking to a plan, preparing for market fluctuations, and focusing on long-term wealth accumulation despite the uncertainty and unpredictability of the market.

If you missed those posts or any of the premium content, upgrade to the premium plan now so you don’t miss anything else. You’ll also get:

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No audio today because I’m traveling. Look for a new altcoin report soon, plus other goodies in the coming months.

Scroll down for some content you may enjoy.

Bottom line: Russia’s government seems set to approve a ban on the general use of cryptocurrency, with exceptions for cryptocurrency miners and projects sponsored by its central bank. Exchanges can continue to operate under government supervision.

My take: It's not clear to me whether the decision is as pre-ordained as the commentary suggests. I’m not sure it will matter anyway. Miners can keep mining and no crypto ban has ever stopped people from buying, selling, or using it—even in countries where it’s banned.

Governments ban all sorts of activities they don’t like. Money gets where it wants to go anyway.

Why we care: If the ban goes through, it won’t matter as much as you think.

Bottom line: Dune has a dashboard that tracks VC funds and their exposure, unrealized profits, and vesting schedules for projects in which they hold tokens.

My take: VCs bring money and attention to crypto, but they also pump projects and then sell tokens to you at elevated prices. They buy early at massive discounts so they don’t have to wait for moonshots to make money. If you can find out which projects they’re buying, you’ll know which ones will launch at bloated valuations or have insiders who dump on you after shilling them for months.

(Sometimes, these are great projects to get into after the token price drops or before it pumps.)

Why you should care: You want to be aware of altcoin risks.

Relax and enjoy the ride!

A note before you go

I’m looking to finalize my next list of sponsors!

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