Gm friends,
Multiple US financial indicators are flashing red, while Bitcoin hits a new all-time high. Coincidence? Think again, Sunshine.
So pour that coffee and buckle up, because here’s your mid-week crypto update. ☕️📰
Here’s what’s in today’s issue:
- Chart of the day: BTC ATH!
- David shares his thoughts on Bitcoin, Us government crypto updates & the anticipation of alt coin season.
- Today on chain.
- Altcoin Alpha.
- Lark’s technical analysis on the market.
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Chart of the Day
Bitcoin hit a new all-time high yesterday morning, at $109,874. So a big congratulations to all the BTC holders reading this. Bitcoin had been consolidating in the lower $100Ks for the last ten days. But on Sunday, we saw a huge uptick in volumes, so our suspicion was that a big move was coming. And now it’s here.
Now notice Bitcoin’s previous all-time high candle on January 20th. That candle was a shooting star. And our current candle is tentatively showing the same now. Shooting stars have long upper wicks, with small bodies at the candle’s bottom. They signal bearish reversals, because the bulls tried to push prices up, but the bears overwhelmed them and slammed prices back down.
Understand that at the time of this writing, this candle hasn’t closed (i.e. there’s another six hours to go). But by the time you’re reading this, you can be the judge. A nasty confirmed shooting star is a clue that we might be due for a retrace. However, a confirmed bullish Marubozu (i.e. long bodied green candle with short upper wick) tells us the bulls are still in control.
News Now
Bitcoin is Your Life Raft
Several economic events have occurred recently indicating that the US financial system is beginning to crack. And Bitcoin is the life raft out. Let’s discuss.
Late last week, Moody’s downgraded US sovereign debt from the gold-standard “Aaa” rating to the “Aa1”. The latter still signifies high quality credit, but it’s riskier. Moody’s justified the downgrade citing the US’ $36T national debt, and projections that the country’s debt burden will increase by another $22T over the next decade. Also note that Moody’s was the last holdout. S&P and Fitch issued the same downgrades in 2011 and 2023, respectively, over similar concerns.
In practice, this all signals growing skepticism about the US government’s ability to repay its debts. So anyone holding US treasuries is taking notice.
That brings us to the US treasuries market. The alarm bells are ringing here too. On Monday, the US 30-year yield crossed above 5%, which is the upper limit for the last twenty years. Now that yield did peak over 5% in early April over Trump’s tariffs, but those have eased for now. The cause this time is the US’ downgraded rating.
So basically, investors are selling off US treasuries over these credit concerns. And when treasuries get sold off, prices fall, which means effective yields rise.
Now how will the US Government get out of this? Will they bite the bullet and drastically slash spending, or will they take the codeine and print their way out? Well historically, most governments take the codeine, which results in a loss of purchasing power for the country’s currency.
And that brings us to Bitcoin. While these US fiscal alarms are ringing, Bitcoin is making new all-time highs. And remember that many bright minds have said for years now that Bitcoin might serve as a monetary life raft to get off this sinking ship. So it appears that we’re watching this dynamic play out in real time.
Corporate Bitcoin Adoption Updates
We’ve been running these updates every Thursday, and they’re jaw-dropping. Also, it’s become increasingly clear that this Bitcoin bullrun is being driven by public companies, corporations, and institutions. Not retail. There’s now 108 public companies that hold Bitcoin. With that said, here’s your updates.
- Strategy: Bought another 7.3K BTC on Monday. Now the total is 576K BTC at a $69.7K average purchase price (APP).
- Metaplanet: Bought another 1K BTC on Monday. Now the total is 7.8K BTC at a $94.5K APP.
- KULR: Bought another 83 BTC on Tuesday. Now the total is 800 BTC at a $97.5K APP.
- DigiAsia: Announced a plan to raise $100M to buy Bitcoin, along with allocating up to 50% of future net profits towards additional purchases. This is a Singapore-based company that’s traded on the Nasdaq (i.e. FAAS).
- Strive: Vivik Ramaswamy’s Strive, which is planning to merge with Asset Entities (ASST), is looking to acquire a significant portion of distressed Mt. Gox Bitcoin. Mt. Gox still holds 75K BTC that are stuck in bankruptcy proceedings, and Strive is planning to raise $1B to buy some of them.
- JPMorgan: Long-time critic Jamie Dimon announced Monday that JPMorgan clients can now buy Bitcoin. Another one bites the dust.
US Government Crypto Updates
Turning to the US government, we’ve got two crypto updates for you. You’ll want both on your radar because they’re bigly.
GENIUS Act Clears Key Senate Vote
On Monday, the US Senate voted 66-32 to advance the GENIUS Act, which is a landmark stablecoin bill. The voting support was bipartisan with 16 Democrats flipping to back the legislation. Now if you’re yawning over this being another boring piece of legal news that doesn’t make number go up, stop now because you’re wrong.
What the GENIUS Act does is relatively simple. But if signed into law, the effects on our industry will be profound.
The legislation mandates that stablecoin issuers must fully back their tokens with US treasuries or the equivalent, register with the proper authorities, submit to annual audits, and enforce AML rules. Or to put it another way, it brings stablecoins into the inner circle of the US traditional finance system.
Now what does that mean in practice? Well, it transforms this $236B market into a trusted asset class, which probably means all the major US banks, institutions, and retail groups start using them. And that leads people like Bitwise’s Matt Hougan to predict that stablecoins could balloon into a $2.5T market.
Now think about what that means for the L1 blockchains that have to service these transactions (i.e. Ethereum, Solana, etc). They will get 10X the traffic. And that definitely means number go up.
Texas Legislature Passes Bitcoin Strategic Reserve Bill
On Wednesday, the Texas Legislature passed Senate Bill 21, which is the Texas Strategic Bitcoin Reserve and Investment Act. The bill now heads to Governor Greg Abbot’s (R) desk for a signature.
It’s likely that he’ll sign it.
If signed into law, the bill will establish a state-managed Bitcoin reserve that allows the State comptroller to hold Bitcoin or any other eligible cryptos as a hedge against inflation and economic volatility. Eligibility here means cryptos that have held at least a $500B market cap for over 24 months. Right now, only Bitcoin makes that cut.
The bill further states that the comptroller must submit a report to the legislature every two years, which gives all the details on the State’s holdings, and the comptroller must work with a crypto-expert advisory committee when making investment decisions.
If Governor Abbot signs the bill, Texas becomes the second US state with a Bitcoin reserve, after New Hampshire. Texas has the world’s eighth largest economy.
All Eyes Now Watching if Altcoins Will Follow
Bitcoin hit a new all-time high yesterday, but most altcoins aren’t even close. So now the big question is if alts will show up and start pumping. Well, the good news is we should know very quickly. As in, today or tomorrow quickly. Here’s why.
So check out the Bitcoin dominance chart below, on May 8th. Bitcoin pumped from $97K to $104K, but its dominance started dropping hard that same day. Now look at yesterday’s candle (i.e. unconfirmed at the time of this writing). Bitcoin hit a new all-time high, but its dominance isn’t falling. This means that altcoins aren’t making an outsized move relative to Bitcoin, yet.
So I think we’ll know today or tomorrow if altcoins are going to turn up. However, if they are going to pump, then it’s absolutely necessary that Bitcoin holds above $107K-ish. If Bitcoin can do this, then I think we’ll see alts rise. But if Bitcoin falls back below $106K, then alts will probably need to wait for glory another day.
Today On Chain
This isn’t your kid brother’s favorite memecoin, this is the real world asset TVL. And it’s currently at $12.3B, which is a 57% increase since the beginning of the year.
And what’s causing this increase, you ask? Well look no further than the institutions. BlackRock, Franklin Templeton, and whoever’s behind Ethena, Ondo, Superstate, and Centrifuge Protocol.
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Altcoin Alpha
- Avalanche [AVAX] announced this week that Vaneck is launching “Purposebuilt” on their blockchain. Purposebuilt will be a dedicated fund that backs Avalanche RWA apps.
- Chainlink [LINK] is now live on Solana. This means that Solana’s devs can leverage Chainlink for data feeds, streams, and the CCIP. And all that means increased demand for LINK.
- Ethereum [ETH] holds over 95% of BlackRock’s RWA assets on its chain. Bullish.
- Jupiter [JUP] dropped two big announcements this week. First, Jupiter Mobile is the official wallet for the PSG1 gaming console. And second, Jupiter just released a completely redesigned portfolio management tool for all Solana-based DeFi apps.
- SEI dropped an insane tech upgrade on Monday. The world’s first multi-proposer EVM L1 with ~200K TPS. Watch out.
Market Analysis
A big Bitcoin move is upon us. The significant increase in volumes is telling us that it’s here. And most of the altcoins are either in sideways or falling wedge consolidating patterns, just waiting for the King to tell them which way to go.
That’s your high-level summary, except for gold. The yellow metal has found support at the 50D EMA, and it can serve as a good hedge for crypto heavy bags.
OK, let’s dive in.
Bitcoin (BTC)
We’re on the four-hour chart here for Bitcoin. Last week, we ended the discussion with a volume and price analysis. And that’s where I want to pick back up now.
So we discussed the idea that Bitcoin has been getting into these consolidating patterns (i.e. technically rectangles), and as price consolidates, volume falls. Then, as price prepares for a break out, volume turns the corner, it increases, and then Bitcoin breaks out.
Now it’s helpful to step back and ask why this happens. It’s part collective market psychology, part self-fulfilling prophecy. When price starts consolidating, a lot of participants stop trading, because they know price might not move much for a while. So, volume falls. But this can only last so long. At some point, price makes a small move, some traders enter again, volume picks back up, and then a snowball effect occurs. And that leads to a breakout, accompanied by huge volumes, as traders, who were waiting for a move, are now piling back in.
But in practice, here’s the key to understand: when we’re in these consolidating patterns, an uptick in volumes is your leading indicator that a big move is coming. It’s your signal to get ready. And Bitcoin is giving us that signal right now.
SIGNAL: Trade this breakout. I think we get it this week, or within the next day or two. Go long when you see a daily close above…
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Final Notes
Thank you so much for your support, and I truly hope that today’s issue will give you insights needed to help you master your wealth.
If you are reading this it means you are on the free version of the Wealth Mastery Investor Report, which is great for news and tips on the crypto markets.
If you really want to take advantage of fastest growing asset class EVER, I highly recommend that you check out my new altcoin course: Mastering Altcoin Investing
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See you next time!
Lark and the Wealth Mastery Team
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Legal Disclaimer
Wealth Mastery (Lark Davis, and the Wealth Mastery writing team) are not providing you individually tailored investment advice. Nor is Wealth Mastery registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. Wealth Mastery is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.
You can find a full disclosure of all my crypto & venture investments here.
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
