WHAT COULD ROCK THE CRYPTO BOAT IN JUNE?

Happy Saturday fellow crypto conquerors!

We are into a brand new month - and basically into the start of the summer season 🌞!

Holidays will be planned, sun-cream purchased, and bags packed, but as we edge towards a notorious period of low volume, we can't take our foot off the gas when it comes to crypto.

So, let's get ahead of the curve and...

Recognise - 3 Things That Could Rock the Crypto Boat in June ⛵?
Respond - Time in the Market vs Timing the Market: A Battle of Strategies ⌚
Research - Interoperability: A Narrative in the Shadows 👉 + New Crypto to Watch

RECOGNISE - 3 THINGS THAT COULD ROCK THE CRYPTO BOAT IN JUNE ⛵

We are into a brand new month. And with a brand new month, comes brand new opportunities.

So, it's important to evaluate if there is anything on the horizon that could potentially rock the crypto boat.

And first on the list of things we need to recognise is the...

US Debt Ceiling Resolution

An agreement was finally made regarding the US debt ceiling last Sunday. Whoop 🥳! No default!

It was agreed that the debt limit would be removed until 2025 - which means the US government can continue spending as much as it would like until 2025.

The agreement was then approved in the House of Representatives on Wednesday. It's now being passed to the Senate and then eventually to the President.

So, in principle, it's looking like a done deal.

The fallout for crypto? Well, the US treasury is going to have to reimburse their bank account - also known as their Treasury General Account (TGA) - by approximately $500 billion.

And how do they do that? Well, they need to take it from somewhere in the financial system.

This could hit risk-on assets, like crypto, hard.

So, while the agreement on a US debt ceiling should be bullish - the uncertainty regarding liquidity in the market could be a bearish factor that hangs over investor's heads.

However, liquidity issues could also affect the next...

Fed Interest Rate Decision

The Fed is scheduled to make its next interest rate decision on June 13th.

With a liquidity issue potentially unfolding from the US debt ceiling saga, the favoured expectation is for the Fed to pause rate hikes in June.

Inflation has continued to remain pretty high, so before US debt ceiling talks, the Fed had openly stated that more rate hikes might be needed.

But now the landscape has changed once again - that's why I have this newsletter - so, the Fed may need to reevaluate and pause.

And what would happen if the Fed paused hikes? Well, market participants could see this as a bullish signal and start buying risk-on assets.

So, on the one hand, we have the US debt ceiling deal sucking liquidity out of the market, and on the other, we have the Fed potentially pausing interest rate hikes (to be decided).

Now, the final thing to watch for in June is the development of...

Bitcoin's Weekly Golden Cross

For the first time ever on the Bitcoin weekly chart, the 50-week moving average crossed under the 200-week moving average in February 2023.

This event is better known as a ''death cross" ☠️ .

While many were expecting the bottom to fall out of the market, Bitcoin remained extremely resilient and, although dropping slightly in March, actually pushed higher overall - reaching a yearly high of $31,000.

Because of the bullish price moves, the 50-week moving average is now starting the turn once again.

Based on industry estimates, if Bitcoin prices can remain buoyant, the 50-week moving average might cross back above the 200-week moving average in August 2023.

And this event is better known as a "golden cross".

Now, this has never happened before on the weekly time frame.

But historically, when this happens on the daily chart, 60-70% of the time, a bullish rally follows.

So, over the course of June, I'll be watching the relationship between the 50-week MA and the 200-week MA like a hawk 🦅.

RESPOND - TIME IN THE MARKET VS TIMING THE MARKET: A BATTLE OF STRATEGIES ⌚

If you've been investing for a while, chances are you will have come across the old saying...

"...it's not about timing the market, but about time in the market."

It's an eternal debate. But, does that statement hold true for crypto?

Well, in this week's 'respond' section I want to help you determine if you would prefer one method over the other.

Time in the Market (A.K.A Buy and Hold)

Tactic: Buy regularly, ignore price fluctuations, and let the magic happen 🎇.

Pros:

It makes you much more emotion-proof. If you have a 'time in the market' attitude, it is far easier to navigate FUD (Fear, Uncertainty, and Doubt) 🙉.
You can endure downtrends like a boss. A 50% dump? Pfft, a walk in the park.
You become immune to news. "Bitcoin is dead"? Yeah, tell that to the resilient market.
History shows that markets reward discipline and patience - if you'd been patient with Bitcoin since 2016 (even with the current bear trend), you'd be sitting pretty right about now.

Cons:

Time in the market can mean that capital is not liquid and can't be used for anything else. So long flashy luxuries!
Results depend entirely on discipline and consistency. Buying a small amount over a long period and holding seems like a simple thing to do - but it isn't for the majority.

So, that's the time in the market option, now let's take a look at the alternative.

Timing the Market (A.K.A. Catching Lightning in a Bottle)

Tactic: Channel your inner market wizard 🧙‍♂️. Time those cycles like a pro and protect your capital from major downturns.

Pros:

With this option, you become extremely liquid. You can move in and out of assets when opportunities arise - which can significantly increase profits 📈.
You can also say "Bye-bye" to painful downtrends. Successfully timing the market allows you to preserve your precious capital during bear markets and sleep like a baby.

Cons:

Warning: fakeouts ahead ☠️. The market loves to mess with your head and your money. Which means you have to be on your toes (all of the time).
Prepare for trading fees and taxes. Moving in and out of the market consistently can lead to far higher fees and also capital gains taxes.
It requires a well-tested trading system implemented by a very experienced trader. You need both elements to succeed.

So, there are positives and negatives with both strategies - just like everything in life.

But here are some additional points to help you think about which strategy might be best for you:

Discipline. Both strategies require innate amounts of discipline. Without discipline, you're toast whatever you do.
Relativity. Time in the market might not be a viable option for those that are older - so, taking the time to learn how to trade the market might be a better option. Likewise, those younger have time on their side - use it! So, it's important to adapt strategies depending on age.
Why not do both? Who's to say you can't have a portfolio of both strategies - which is exactly what I do. Have capital allocated to long term buy and holds. AND have capital allocated to short term opportunities.

Like I say, I implement both strategies, but if I had to come down on a side, I personally prefer the idea of time in the market.

Time in the market allows me to put my time and effort into searching for cryptocurrencies with solid fundamentals - rather than trading.

Solid projects can return 100x anyway in crypto, so I feel that timing the market becomes less attractive.

RESEARCH - INTEROPERABILITY: A NARRATIVE IN THE SHADOWS 👉 + NEW CRYPTO TO WATCH

With so many narratives developing in the world of crypto, it can be easy to take your eye off the ball when it comes to foundational narratives.

And they don't get more foundational that the issue of interoperability.

In the future, I think there will still be an abundance of layer-1 and layer-2 ecosystems - because each target something slightly different. Maybe they use a unique piece of technology? Or maybe they target a specific industry?

Whatever the scenario, applications will need to be able to function cross-chain.

This means interoperability infrastructure is still a narrative I'm continuing to look at.

And buried within that narrative is a project called the Router Protocol (ROUTE).

The Router Protocol is a layer-1 blockchain that was built within the Cosmos ecosystem that can connect Ethereum-Virtual Machine (EVM)-compatible and non-EVM compatible layer-1 and layer-2 blockchains.

Now, that is a lot of jargon - but what's important to know is that it's a powerful offering.

It basically means that any decentralised app built on the Router Protocol can interact with any blockchain ecosystem without the need for bridges - which are clunky and exceptionally hackable!

In addition to a valuable use case, the project is backed by entities such as Coinbase Ventures and Polygon Labs - not a bad backing team.

The market cap is relatively small, it's relatively unheard of, it has good tokenomics, and the fact that it sits squarely in the infrastructure niche, it is one I've had on my watch list for a while now.

And with that interoperability bombshell 💥, that brings us to the end of this week's newsletter!

So, keep those eyes peeled for the remainder of June. There is a lot on the horizon that could move those markets we love.

As always, thank you so much for subscribing, and if you ever have any thoughts, or suggestions or would like a particular topic covered, ping me an email or a message on socials any time 🙌.

Have a great weekend and I'll see you for the next one.