No More Losses #105

🔥 Build wealth in the company of both bears and bulls.

Dear Meditators

There has been blood on the streets recently 📉 From liquidations to corrections and tax season, there seemingly hasn’t been a lot to be overjoyed about 🚫

📣 We propose a shift of tone. Let us reflect on each of these recent events and draw takeaways on how to become even better traders and investors.

Read, enjoy and share with your network. Let’s all grow richer together.

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MARKET BRIEFING


Utrust allows you to start accepting cryptocurrencies like you accept traditional fiat currency 🚀 If you want the benefit of accepting crypto from over 50 million global users but wish to avoid the hassle of storing and converting it into fiat and you are looking for such a solution with built in protection to curb fraud, then we can confidently recommend our partner Utrust as the powerful solution.

What’s more, you can now use 👉 shopping_io to shop on Amazon, eBay or Walmart using Crypto.


CRYPTO NEWS & ANALYSIS

Square Buys $170 Million Bitcoin

The company Square led by Jack Dorsey (Co-founder of Twitter) announced on Tuesday that it had purchased an additional 3,318 bitcoin at an average purchase price of $51,235. The USD equivalent is approximately $170 million. 

We know that markets are simply a function of supply and demand. The supply of Bitcoin is fixed at $21 million, but when institutions like Square, Microstrategy, Tesla, and more announce they are purchasing Bitcoin, it reinforces the fact that significant demand is present. 

  • For Investors: laws of economics suggest more demand with fixed supply will lead to a rise in price of the asset over time. In other words, HODL’ing Bitcoin could prove to be a wise decision over time as institutions continue pouring in.

  • For Traders: it’s important to remember that bullish fundamentals like institutional investment do not always lead to short term bullish price movement. For example, this week the market crashed from $58000 to $44000 despite the fact that Tesla, Square, and Microstrategy were all buying Bitcoin. 

Whilst investors may simply look at fundamentals, traders need to combine fundamental analysis with technical analysis and risk management to form a system. Check out my FREE Technical Analysis course here and FREE Risk Management course here to learn more!

With more and more institutional investors in the space, the best traders and investors will also have an eye on the legacy markets 👇


STOCK MARKET NEWS & ANALYSIS

Crypto, Tech and the US Economy

Current overall sentiment in the legacy markets serves to strengthen cryptocurrency markets ✅

On Tuesday, Chairman of the Federal Reserve Jerome Powell delivered his testimonyon the state of the U.S. economy 🇺🇸 He signalled that the central bank is nowhere near close to tightening monetary and fiscal policy. Loose policy was one of the main drivers of increased demand for cryptocurrencies across institutions. It follows that, for long as it prevails, so too will institutional demand remain. 

What’s more, there has been a significant tech sell-off in legacy markets 📉

Nasdaq, largely made up of tech companies, has been lagging behind (with Google, Microsoft, Amazon and Apple all slipping). Around the time of the main dip displayed above, “buy the dip” began trending on Twitter 🐦, as day traders took to their screens. Events like GameStop have certainly conveyed the power of individual investors.

When tech markets lag, institutional investors looking for yield may well cast an eye to cryptocurrencies, commodities and other anti-inflationary assets. Commodity markets have indeed been enjoying a rally, with many investors and traders calling a new supercycle.

Let’s move on to personal finance. All the best crypto and stock market insights are no good at all if they cannot be articulated into a coherent trading and investing strategy 👇


PERSONAL FINANCE

Bitcoin Crashes 23% from All-Time Highs: Don’t Panic!

This week, Bitcoin experienced extreme volatility, crashing 23% from All-Time Highs before encountering psychological resistance at $60,000. Did you panic?

If so, author of The Intelligent Investor Benjamin Graham recommends two great options that will allow you to invest without fear:

1) Read every edition of Market Meditations. Our regular readers were warned of this price action last Friday! (Ok... maybe this recommendation comes from us)

2) Use Dollar Cost Averaging (“DCA”)

In essence, DCA is where you invest a fixed amount of capital at regular intervals, for example straight after you get your salary, and is the Bitcoin buying strategy we suggest to many people.

DCA more or less guarantees an average purchasing price of the asset meaning you don’t have to fear short-term volatility however still benefit from long-term price increases.

Are all things as fun as seeing your bags pump through DCA? Crypto taxes probably aren't. But that doesn’t make them any less significant and we deliver the full package for Market Meditators 👇


📊 If you’re serious about building wealth, consider joining our community and gaining access to the full range of insights and analysis 👇


CRYPTO REGULATION

Crypto Tax Season

Before we begin, let’s ensure full transparency: we are not financial advisors or tax professionals, further to that we hold no relevant qualifications. For any legal, financial or tax related advice speak to a professional.

Tax season is a good reminder for us traders and investors that there is more to Bitcoin than buying it. We need to make sure we have appropriate measures in place not only for trading, but for accounting and security. 

Kathryn Hauer, a certified financial planner, states “It could be a real tax mess for folks who try to hide crypto earnings from the IRS.” But tax laws will differ based on where you live and the regulation your country’s government has put into place. What we’ve written here are simply the basics you need to know. One of the most important things, however, is knowing which transactions are taxable and which transactions are not. 

Taxable transactions include:

  • Selling cryptocurrency for fiat (selling 1 BTC for $50,000)

  • Exchanging one cryptocurrency for another (selling 1 BTC for 31 ETH)

  • Buying goods or services with cryptocurrency (selling 0.5 Bitcoin for a new car)

  • Receiving any cryptocurrency (gifts, mining rewards, staking reward, etc)

Non taxable transactions include:

  • Buying cryptocurrency with fiat (using $50,000 to buy 1 BTC)

  • Transferring cryptocurrency between wallets (sending 1 BTC you own from one exchange to your hardware wallet)

Here are some additional things to consider that will vary depending on your situation.

  • Amount of tax that you have to pay (i.e. tax rate)

  • When you must pay that tax (i.e. annually, quarterly, etc)

  • What forms you must submit to pay the tax

Make sure to check out my Beginner's Guide to Owning Cryptocurrency where I walk you through everything you need to know step by step.


MARKET MEDITATION

Ethereum and Leverage Trading


PODCAST

Investing Strategies from a $200m Crypto Fund with Jason Choi


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Disclaimer: The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision.