Danger, MEMES!

$PEPE is now down more than 60% from ATH. Do you think the story of memes and greed is over?
Well, not yet: people finally stopped sending money to the shady crypto influencer "ben_eth". He was raising funds for the presale of his own meme coin, and an astonishing $6.2m was sent to his wallet address by Twitter users.

This influencer has already pump&dumped the previous meme coin that he launched and now is simply asking people to buy a new one that is literally called $PSYOPS (psychological operation).
This new coin has no contract, no website, no roadmap, only the name.

It is yet to be seen how far this can go, but usually, such activity by market participants is warning us about something.

Last month in crypto was full of spectacular events, especially for the meme coins. We've seen traders turn $40 into millions of dollars, and other crazy stories. But the truth is that all of these insane gains were and will only be possible because of other, less lucky greedy traders losing it all.

👇 Market sentiment, and how it can help you to become a more efficient trader or investor.

Markets are driven by two powerful emotions: FEAR and GREED. Rules are simple:
1. Most people lose money trading.
2. Most traders are driven by irrational feelings.

In continuation to the previous post: one of the very indicative signals of the high level of risk tolerance and greed in the market is a "meme coins season". Market participants are saying "screw it, I can afford to lose $100 on this, but maybe I will make 1000x just like that guy".
Danger! For the last couple of years, this behavior was not healthy for bullish momentum and very often signaled the local market top. Last month was not an exemption - random meme coins started pumping and BTC topped at 31k.

Probably everyone heard a famous quote by Warren Buffett: “Be fearful when others are greedy, and greedy when others are fearful.” This simple truth is often overlooked by so many beginners, partly because it's really hard for people to stay rational in the noise of different opinions and be able to act against their own nature.

By learning how to utilize market sentiment signals, you can get a great advantage. Try to be more attentive to your own feelings, and the behavior of other market participants.
Three simple examples:

🚩 Got a profitable trade, cheered for yourself, and feel like a genius investor? - Better be careful most likely you are about to make some serious mistakes and lose money, maybe it's time to stop trading for a few days/weeks and hedge your positions.

🚩 See many people literally gambling with their last $1000 while trying to catch "the next big thing"? - Watch out, probably the market is driven by an unhealthy amount of greed and you need to stay away from the herd.

🚩 Newspapers are writing that "crypto is dead", people start fearmongering and explaining why "it's all going to zero". - Better start looking for opportunities that others are missing, there are high chances that the amount of fear is irrational, and the market will soon find a bottom.

Of course, there are never 100% possibilities, especially in the financial markets, but always remember: overconfidence in your trades, investments, skills, and knowledge almost never ends well in the long term, just like a constant feeling of fear will paralyze you and stop you from finding good trades/investments. Be cautious of the signals the market is sending you and act accordingly, even tho sometimes it may feel counterintuitive.

#trading_tips

Charles Hoskinson is pumping Cardano meme coin SNEK 🚀

Since last month there has been a meme coin mania happening in crypto. Even on Cardano, there is a meme coin $SNEK. A week ago Cardano's CEO twitted about it.

Is it bullish for SNEK?

- Tweet will gain more attention
- Binance has a guide how to buy SNEK
- It is the first meme coin on Cardano chain, which had a lot of audience

Personally, I think SNEK has potential to go UP. Cardano DeFi is growing so its bullish. But remember: the more gains — the more risk 👀

What's going on with Ledger and why it's important? ⚠️

Ledger just released a new update for Nano X that allows the "social recovery" of your seed phrase. If "Ledger Recover" is enabled, it backs up your Secret Recovery Phrase by encrypting it in 3 shards, sending it to different entities, and linking it to your identity verification that you have to complete in order to enable this feature.

❗ Key takes:

1. When the recovery feature is activated the 3 shards created by encrypting your seed phrase are then sent out of your Ledger to the 3 corporations. It totally brokes the ideology of a cold wallet.

2. Identity theft is very common. If something is secured by ID verification - it is inherently insecure.

Yes, the feature is optional. But the trade of the potential of a permissionless, anonymous, secure, and unrestrained way of storing your assets for convenience is an alien idea to the spirit of crypto 👀

Will the market repeat the 1929 crash? 🤔

In 1929, Roger Babson gave a speech at the National Business Conference. He proclaimed:

"More people are borrowing and speculating today than ever in our history. Sooner or later a crash is coming, and it may be terrific..."

Wall Street vilified Babson's speech, experts rebuffed the claims and assured people of an imminent market boom, while President Hoover declared the market sound.

Little did they know that 55 days after Babson's speech the market would go into a free-fall and drop 12%, it would continue to go down until 1932 when it finally bottomed, losing 89% of its value from ATH.

Will the market repeat the 1929 crash?

Nobody really knows. Nowadays, we have enough Babsons telling everyone about upcoming catastrophes. Predicting crashes became a good advertisement, but just like in the story about the boy who cried wolf when the wolf will be real, no one will believe them.

✅ The market is slowly bleeding, no big moves for today

Day summary:

🔸 The European Union's crypto regulation (MiCA) has been approved by the finance ministers of the EU

🔸 Individual wallets holding at least one bitcoin set a milestone figure - 1 million. Around 5% of all bitcoins that will ever exist are owned by just 0.0125% of the world population, something to think about
 
🔸 CEO of the Federal Reserve Bank of Richmond Tom Barkin says he’s willing to raise interest rates again if needed

🔸 The SEC claims that Jump Trading played a key role in the UST stablecoin case. The high-frequency crypto trading firm propped up Do Kwon’s the failed TerraUSD a year before its collapse

🔸 🤨 FDIC claims that the collapse of Signature Bank was largely due to its reliance on uninsured deposits and exposure to crypto

🔸 Ledger company will launch "Ledger Recover" a new product: a subscription for users who want a backup of their Secret Recovery Phrase.

🔸 G7 committee met in Japan and discussed financial implications for CBDCs and regulations of crypto

🔸 The three-nation Indo-Pacific excursion: Biden travels to Australia, Papua New Guinea, and Japan on an eight-day trip

🔹 Prices:

🌐 Bitcoin - $27,011 (↓1.3%)
⚙️ Ethereum - $1,824 (↓0.1%)
📉 S&P 500 - $4,109 (↓0.64%)
🌕 Gold - $1,990 (↓1.3%)

US banks when Powell starts talking during the next FOMC meeting in June.

Dollar index continues to go up, crypto is still bleeding

Apple allowed to add crypto game Axie Infinity to App Store. The company is launching the game on the App Store in a select number of countries throughout Latin America and Southeast Asia. $AXS pumps 23% in just a few minutes.

With a new the just-agreed MiCA EU crypto legislation, more than one hundred crypto companies could be registered in France. Secretary General of AMF: “If American players want to benefit, in the very short term, from the French regime, and from the start of 2025 from European arrangements, clearly they are welcome...”

Ripple gets a small win in the court. "A motion from the United States securities regulator to seal records of its internal deliberations following a speech by former director William Hinman has been denied — a move that has been seen as a win for the Ripple and crypto community."

🔹 Last 24 hours top 3 gainers:

AXS - $7.43 (↑9.4%) 
MANA - $0.509 (↑7.6%) 
XRP - $0.447 (↑5.9%) 

#cryptomorning

Today, Tether announced that they will allocate up to 15% of their realized operating profits toward purchasing Bitcoin

This way they plan to diversify their reserves without any risks for initial 100% collateral.

If you think about it, it turns out that the US government is indirectly sponsoring BTC investments 🤭

🚨 USDT will start investing in BTC, like UST did. Does this mean end for USDT?

Remember, when in 2022 Luna Foundation announced that they have a goal to acquire $10 billion in Bitcoin in order to use it as collateral for UST? At the peak, they were holding around $3 billion in BTC but then suddenly everything ended terribly wrong.

Two days ago, Tether company boasted of record profits in Q1 with $2.44 billion in surplus reserves. Today, they announced that they will regularly buy Bitcoin and use it as a USDT collateral.

With this news, many commentators began to compare USDT to Terra USD (UST) on social media, because UST was partly backed by BTC too.

👨‍🏫 In reality, this time the situation is completely different because the way how USDT is backed is not even closely similar to the way the UST-LUNA tandem was functioning.

Let's look at the 2 different models of stablecoins and understand why "this time is different":

❌ UST: had an algorithmic design, with a mint/burn dynamic between UST and LUNA tokens. By design, users could mint UST in exchange for LUNA and burn 1 UST in exchange for a $1 value of LUNA at any time, no matter the price of LUNA. Peg was meant to be maintained by the algorithm and incentivized arbitrageurs. BTC reserves that were bought by LFG were planned as a bonus to this initial design.

The design was very fragile and when UST depegged holders rushed to burn it in exchange for LUNA which caused hyperinflation of LUNA tokens, the LUNA price dropped drastically, and more and more LUNA tokens were minted which caused a "death-spiral" and ended in LUNA dropping by a number close to 100% and UST to lose more than 98% in its price from $1 peg 💀

✅ USDT: is a fiat-collateralized stablecoin, it's issued by Tether in exchange for real-world fiat money. Anyone can mint or burn USDT in a 1:1 ratio to the US dollar through the Tethers platform. This way, USDT peg is maintained by arbitrageurs.

Currently, USDT market capitalization is $88.8 billion, which means Tether company is in possession of around $89 billion of real-world money deposits that were used to mint those USDTs. But Tether company doesn't need to hold 100% of their reserves in cash, it can manage those deposits and diversify their holdings which they actively do and this is how the company profits.

According to their last report, Tether allocated more than 64% of their reserves in US Treasuries, which is around $53 billion. Treasuries earn yield and this way Tether will always have a passive income which turns into a surplus in their reserves. This surplus can then be used to buy BTC (which they started doing) 💰

When you hear someone comparing USDT to UST — simply send them this post 😼

UK regulators compared retail crypto traders to gamblers 🎲

The UK’s Treasury Committee says that retail crypto trading is more akin to betting on sports than investing and should be regulated as such.

Earlier this year on February 1st HM Treasury announced that the government will set out ambitious plans to robustly regulate crypto activities.

To be honest, it's pretty hard to disagree with the Committee, we can only hope that upcoming regulations will be fair, and will accelerate adoption among consumers and businesses while bringing clarity to how the UK positions itself for crypto.

✅ Bluechip crypto continues to move sideways while we can see big moves on some of the altcoins

Day summary:

🔸 UK Treasury Committee updates its opinion on crypto regulation
 
🔸 Tether announced they will systemically buy Bitcoin with realized profits

🔸 Apple allowed adding the Axie Infinity game to the App Store

🔸 Rumors: Pakistan to ban all cryptocurrency trading websites

🔸 Interior Ministry of Iraq issued a ban on US dollar transactions across the country

🔸 Venezuela’s President announced that his country will move forward and ditch the US dollar in economic transactions

🔸 Voyager could start returning cash and crypto to customers by June 1

🔸 Small victory for Ripple during the court process

🔹 Prices:

🌐 Bitcoin - $27,386 (↑1.3%)
⚙️ Ethereum - $1,823 (↓0.1%)
📉 S&P 500 - $4,152 (↑1.01%)
🌕 Gold - $1,983 (↓0.25%)