The Wolf Den #696 – Fundamentals > Narratives


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In This Issue:

Fundamentals > Narratives

Twitter Spaces With Michael Saylor

Bitcoin Thoughts And Analysis

Legacy Markets

Goerli Fork and Further Thoughts on Ethereum

Binance Announces Plans To Buy Big

Is First Republic Bank Next?

Fundamentals > Narratives

For investors, fundamentals are imperative.It is essential to understand the underlying value and speed of adoption of an asset to maintain conviction.

However, investors are susceptible to conflating fundamentals with narratives, which are not the same.

As for Bitcoin, you likely know where I stand on narratives.I solely trade the chart when it comes to Bitcoin.I don’t pay attention to narratives because I have seen that these “events” do not move the market.

When it comes to investing, I maintain a working thesis that I hark back to when times are tough or the vision becomes blurry.

With all of this in mind, I have to give credit where credit is due.The current ‘narrative’makes a lot of sense.I put the word narrative in quotation marks because what we are seeing with the collapse of banking and Bitcoin’s appreciation is more than just a run-of-the-mill narrative.

Bitcoin is appreciating because we are slowly experiencing the very reason it was created.

The value proposition of Bitcoin is eliminating financial institutions that can’t be trusted.This is not a narrative; this is Bitcoin’s design.As Satoshi Nakamoto wrote, “The root problem with conventional currency is all the trust that’s required to make it work.The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”

Regional banks, major banks, and central banks are not acting as trusted institutions, and Bitcoin is benefiting.

However, we must be aware that Bitcoin could easily enter a deep correction if equities undergo a hard correction, a recession arrives, or new/stronger fears arise.Bitcoin will benefit in the long run from a deterioration in institutional trust, but let’s not get ahead of ourselves yet.

If we look at Bitcoin’s lifelong performance, we can further understand this point.

Bitcoin has existed for 4,827 days or roughly 13 years and three months.Only about 516 of those days were bad times to buy Bitcoin.

The other 4,311 days were profitable, which equals about 89.3%.

On the flip side, only 11% of Bitcoin’s lifespan has proven to yield negative returns for Bitcoin HODLERs.Most of the time, narratives lead investors into buying during the ‘bad’ 11% periods, while fundamentals lead to the 89% of ‘good’ periods.Bitcoin will be the world’s asset of choice as it continues to reliably work as intended.

However, until then, keep in mind that Bitcoin is volatile and can continue to adjust to exogenous events on a whim in ways we may not like.Fundamentally though, nothing changes.This will continue to be the case if Bitcoin explodes past $30,000 this week or drops and demolishes all of our current ideas.That’s the difference between narratives and fundamentals.

Narratives come and go, while fundamentals are here to stay.


I’m chatting with Michael Saylor and potentially Balaji on Twitter Spaces today at 11 AM EST.

Don’t miss it!

Bitcoin Thoughts And Analysis

Nothing has changed on the Bitcoin chart since yesterday! We will circle back tomorrow.

Legacy Markets

Stocks Extend Gains, Bonds Drop as Calm Returns: Markets Wrap

European shares rallied and US futures indicated a positive opening for Wall Street due to steps taken to stabilize the financial system.The Stoxx Europe 600 jumped 1.4%, boosted by a 3.5% rise in an index of banking shares.S&P 500 futures climbed after a report suggested US officials were considering temporarily guaranteeing all bank deposits.First Republic Bank’s shares rose 20% in premarket US trading after a proposal from JPMorgan to aid the struggling lender.

Investors are returning to riskier assets, and banks’ Additional Tier 1 bonds rebounded in Europe and Asia following reassurances from euro-zone and UK regulators.Market sentiment is improving, leading to increased yields on 10-year Treasury bonds and a steady dollar.

Investors anticipate the Federal Reserve adopting a more cautious policy approach during their interest rate decision on Wednesday, with a hike of around a quarter-point expected.Brent crude oil prices rose for a second day, while gold prices weakened.

Key events this week:

US existing home sales, Tuesday

US Treasury Secretary Janet Yellen to appear at Senate subcommittee hearing, Wednesday

FOMC rate decision, news conference from Chair Jerome Powell, Wednesday

EIA crude oil inventory report, Wednesday

Eurozone consumer confidence, Thursday

BOE interest rate decision, Thursday

Swiss National Bank rate decision and press conference, Thursday

US new home sales, initial jobless claims, Thursday

US Treasury Secretary Janet Yellen testifies to a House Appropriations subcommittee, Thursday

Eurozone S&P Global Eurozone Manufacturing PMI, S&P Global Eurozone Services PMI, Friday

US durable goods, Friday

Some of the main moves in markets:


S&P 500 futures rose 0.5% as of 5:37 a.m.New York time

Nasdaq 100 futures rose 0.2%

Futures on the Dow Jones Industrial Average rose 0.4%

The Stoxx Europe 600 rose 1.4%

The MSCI World index rose 0.3%

S&P 500 futures rose 0.5%

Nasdaq 100 futures rose 0.2%

The MSCI Asia Pacific Index rose 0.5%

The MSCI Emerging Markets Index rose 0.9%


The Bloomberg Dollar Spot Index was little changed

The euro rose 0.2% to $1.0739

The British pound fell 0.2% to $1.2248

The Japanese yen fell 0.6% to 132.13 per dollar

The offshore yuan was little changed at 6.8699 per dollar


Bitcoin fell 1.1% to $27,771.68

Ether fell 1.1% to $1,742.75


The yield on 10-year Treasuries advanced three basis points to 3.51%

Germany’s 10-year yield advanced seven basis points to 2.20%

Britain’s 10-year yield advanced three basis points to 3.34%


West Texas Intermediate crude rose 0.7% to $68.12 a barrel

Gold futures fell 0.6% to $1,987.10 an ounce

Goerli Fork and Further Thoughts on Ethereum

– Staked ETH Withdrawals Being Processed on Ethereum Goerli Testnet Ahead of Shanghai Fork

The current narrative seems to have shifted away from Ethereum, but we shouldn’t forget that it will enable withdrawals and complete the Shanghai upgrade in less than a month.While it would be nice for the narrative to favor Ethereum going into the hard fork, we must remember that it still looks strong.

Amidst the chaos of last week, Ethereum’s final dress rehearsal, Goerli, took place and simulated staked ETH withdrawals.The test was successful, but low validator participation caused some minor concerns.

Nonetheless, withdrawals are scheduled to go live on April 12, assuming a successful Shanghai hard fork.

As an ETH holder, there’s no reason to be concerned at the moment.Ethereum has almost always outperformed Bitcoin since its inception, and the current narrative simply favors Bitcoin over Ethereum.However, if altcoins catch a tailwind, I expect Ethereum to move strongly.The market is telling us that if there is a true banking collapse, Bitcoin will be the largest winner, but Ethereum will move with it.Let’s look forward to April and end the arguing, as I own BOTH assets and expect BOTH of them to do well over time.

Binance Announces Plans To Buy Big

– Binance tapped into its Industry Recovery Initiative funds to cover the move.

One of the major crypto stories that was glossed over last week was Binance’s announcement that they will convert $1 billion worth of BUSD into BTC, ETH, and BNB.

The decision to buy the crypto comes in the wake of regulatory scrutiny around stablecoins and the shutdown of BUSD.It’s hard to complain about this outcome.

CZ’s tweet on the matter was, “Given the changes in stablecoins and banks, #Binance will convert the remaining of the $1 billion Industry Recovery Initiative funds from BUSD to native crypto, including #BTC, #BNB, and ETH.Some fund movements will occur on-chain.Transparency.”

If you wish to track the funds yourself, below is the Binance: Industry Recovery Initiative Address.


Is First Republic Bank Next?

JPMorgan advising First Republic on strategic alternatives, including a capital raise, sources say

Efforts to save First Republic Bank have been unsuccessful.Just a few days ago, eleven major banks attempted a $30 billion infusion plan to rescue the failing bank, but the market had other ideas.

Shares of the bank plummeted 47% yesterday, and trading had to be halted once again.It’s hard to see how any depositor or equity holder can have any reasonable confidence in this bank.

Leading the emergency financing were JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and Truist, but it appears that more liquidity is needed.Although FRC doesn’t have as much of its total deposits over $250,000 as SVB did, it still has a significant amount, with 68% of its total deposits being over that limit.

The reported liability-to-deposit ratio is 111%, which is not a good sign.

The only deposits FRC is now receiving are from bigger banks with a vested interest.If something looks like, smells like, tastes like, and feels like shi*t , it’s probably sh* t.

The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice.

Every investment and trading move involves risk.You should conduct your own research when making a decision.

I am not a financial advisor.Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to “Buy,” “Sell,” or “Hold” an investment.

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