Crypto Newsletter: April 8th '22
Bitcoin, Cybersecurity & the Denver Crypto Club for investors
This newsletter is focused on current events in the crypto space, sharing projects and people I find interesting, and serving as a resource for upcoming crypto events; locally here in Colorado and also larger events across the U.S.
Howdy crypto-heads! For this edition I want to cover recent Bitcoin price action, why you need to take your cybersecurity seriously and some updates/announcements for the Denver Crypto Club investors group.
Bitcoin pimples causing break out?
Cybersecurity and data breaches
Denver Crypto Club announcements
1. Bitcoin does a thing
As Bitcoin retraces after breaking out of the bearish pennant from the last few months it’s time to be cautious. Apparently the absence of negative news is causing some positive sentiment but I also think the stock market appreciating since the Fed meeting in mid-March has something to do with BTC also rallying up until recently…
This current chart for BTC is showing something I’ve seen quite a few times before - namely a bullish breakout that gets chopped off and eventually leads to a sharp decline in price. To confirm this pattern I’d want to see the price retrace to the upper yellow trend line at $40-41k and get stuck on it for a few days. If this happens and is followed by the price re-entering the pennant I think we’re in a seriously bearish scenario and likely to drop below the lower trend line around $35k.
Since this pattern is yet to be confirmed though I still want to talk about a bullish continuation (less likely in my opinion as I give BTC a 25% of continuing to rally). If we bounce off the trend line and start heading up a key price to watch is definitely the psychological level at $50,000 USD for Bitcoin. I expect some heavy resistance here but if we somehow manage to clear it the next target is going to be near/at the all-time-highs in the upper $60k’s.
So why am I still bearish after my bearish call on March 11th went the other way? Mainly because the correlation between crypto markets and Wall St. is still very tight and the release of minutes from the FED’s March meeting dropped yesterday causing Finance Bro Street to also drop.
Two big things that caught my attention from the FED minutes:
Many of the FED meeting participants wanted to raise rates by 0.50% instead of the 0.25% we got. Main logic behind this is to combat inflation with higher interest rates.
FED balance sheet is going to start Quantitative Tightening or selling off at double the rate (~$95B per month) it did last time in 2018. The ‘18 sell-off directly contributed to a recession. Also, they are likely going to include Mortgage Backed Securities in the sell-off which many investors did not think they would.
So what does this mean for crypto? Basically the same thing I’ve been saying - crypto is a risk-on asset and when interest rates go up money flows from risky stuff to bonds. This outflow will likely also be reflected in the stock markets and so far we’ve seen both stocks and crypto heading down after the release of these minutes as investors prepare for increasingly hawkish actions.
Also, taxes are due April 18th which could cause some sell-offs to cover capital gains from 2021. Overall I am still bearish on crypto for the short-medium term. Time to sit on some cash and accumulate!
2. Cybersecurity will only become more important
How many of you received the phishing emails from Trezor? Or earlier last year from Ledger? It seems like every time I turn on my computer there’s a new data breach and with the recent Mail Chimp hack it was confirmed that crypto users were specifically targeted.
Even outside of crypto the number of data breaches and hacks into people’s online accounts is on the rise, and with Russia being cut out of the global economy I expect their robust hacking community to really start doing some nasty things to the Western world.
So how do you protect yourself from phishing emails, data breaches, viruses and all of these horrifying digital bugs?
You buy my $8,000 cybersecurity course where I teach you how to never go to sleep like a Navy SEAL in case someone gets into your computer while you’re snoozing!
Well, if you ask any cybersecurity professional “How do I stay safe?!” they usually say, “It depends…”
This is because the best way to secure yourself is to create a “threat model” of the most likely/scariest things that you want to stay safe from. Once you know what you’re trying to prevent it’s much easier to know what actions you should take to stay safe, and with a bit of research you’ll find great information available around most facets of cybersecurity (and especially crypto-focused cybersecurity).
Here’s what you should do…
As a cryptocurrency owner the minimum you should be doing are these 4 things:
Create a new, secure and encrypted email account. Make sure your password…
Sign up for a free password manager using your new email account. Create a new password using the same method as #1 above. I like Lastpass and Dashlane as they’re the most user friendly, but if you want something that’s open source KeePassXC is your best bet.
Lastpass and Dashlane both have Android/iOS apps for mobile.
KeePassXC will save your password in an encrypted file that you can access on mobile with:
Save your email password inside your new password manager!
All of these password managers offer the ability to generate a password for you. I highly recommend that you use this feature for all new accounts and change the password on any old accounts that you want to protect.
Download a Time-based One-Time Password (TOTP) app on your phone. This app will function as a second form of authentication (2FA) and harden any online accounts it is used for. You will be required to enter your password and then your 2FA code to login to any account you enable this for. My favorites are:
AndOTP for Android (open source)
Raivo OTP for iOS (open source)
Start enabling 2FA for any online accounts you need extra security for. I recommend doing this for at least your new email account and all of your crypto exchange accounts.
If you setup 2FA for your password manager MAKE SURE you physically write down both the password and 2FA secret on paper or you could lock yourself out of all your accounts by losing either one of these.
Remember to back up the secret for every account you use 2FA on. The easiest way to do this is by storing the secret inside your password manager when you’re scanning the QR code for a specific account.
When enabling 2FA for any of your online accounts the secret is usually shown as a QR code that represent a string of letters or both letters/numbers. This secret string is specific to the account you’re enabling 2FA on so make sure you label it.
Backing up your secrets prevents loss of account access in the event your phone is destroyed.
Example for storing in your password manager:
Kraken.com 2FA secret: 2LWILGIWN7XF3EA3AEJRSJBX
Purchase a cryptocurrency hardware wallet. Both the Trezor and Ledger are popular options as they support the widest range of cryptocurrencies but with the recent data breaches compromising user emails for both companies you may want to look at alternatives…
Coldcard (Bitcoin only)
Full disclosure: I plan to continue using my Ledger Nano X despite the data breaches requiring me to be extra cautious about phishing emails seeming to come from Ledger.
Make sure you securely backup your 24 word secret seed phrase (don’t store it digitally) in at least 2 separate physical locations as this provides protection from fires/floods/etc. Keep in mind that anyone with access to these 24 words will be able to take all of the cryptocurrency held on this hardware wallet.
You can also add a passphrase on top of your 24 words to make it harder for someone to steal them. Be aware that if you forget this passphrase it is the same as forgetting the 24 words and your crypto will be gone forever. Make sure you backup the passphrase with the same amount of care as your 24 words.
If you are doing all 4 of these things it will be incredibly difficult for someone trying to get their hands on your crypto to do so. The added benefit to this is that your other important accounts like a bank or tax filing can also be easily secured using the same methods.
Notable mention - To all of you out there getting a code texted to your phone instead of using TOTP, you are at risk for SIM jacking and you should really switch over to one of the mobile apps listed in #3 above.
Lastly, here is a great video that walks you through creating a personal threat model - https://youtu.be/Hw7YBX6uivY
3. Announcements for Denver Crypto Club investors
After our detail oriented kick-off meeting back in March the next investors meeting for the Denver Crypto Club is taking place at 7pm on Tuesday, April 19th at the Smoky Hills Library in meeting room A (5430 S. Biscay Cir. Centennial, CO 80015).
Everyone who has signed the agreement form and submitted it to Rose will be allowed to vote on what we do with our first pot of funds. For those of you who gave me your email but haven’t registered please do so as soon as possible.
While this meeting will be open to non-registered members I ask that you are respectful of the paying members time and keep your questions to a minimum. A zoom link will only be provided for registered members and not for the general public (this has changed since our last discussion about it in March).
We will need the first payment prior to this meeting, but with some difficulties finding a bank to support us it may be next week before payments are up and running. Either Rose or myself will update you once the bank account is good to go. Alternatively you may mail a check that will be deposited after a banking solution is found.
If you aren’t familiar with the Denver Crypto Club here’s what we’re up to:
Formed as a Limited Liability Partnership the Denver Crypto Club is a general partnership whose purpose is to pool funds and invest in various cryptocurrency projects (similar to entities and clubs formed around stock or real estate investing).
We meet periodically (usually once per month) where members in good standing vote Yes/No to invest in the various cryptocurrency opportunities presented by myself or an approved person.
The partnership lasts until December 31, 2023 and has monthly dues of $25 that must be paid to maintain a status of “good standing”.
If you decide you want to leave the partnership you will have to sell your “seat” to a willing buyer. A seat represents your % share of the total investment pool.
At the dissolution of the partnership on December 31, 2023 all investments will be liquidated and paid out to the members based on their seat percentage.
If this is something you’re interested in please contact me through email@example.com for more information. You are also invited to attend in-person as a listener to this and subsequent meetings.
That’s it for this edition, stay happy and healthy and I’ll catch you soon!