Stockmoney Lizards Newsletter - Issue #3

Editorial

Dear stockmoney hunters and biotech lovers,

Actually, our newsletter is about biotech stocks and bitcoin. But unfortunately we have to write something briefly about geopolitics, because this also has an impact on our investments. The Ukraine conflict has turned into a war. The worst fears have come true - Russia has launched a major attack on Ukraine. Main figure of the tensions: Russia's President Vladimir Putin. But what makes the Kremlin leader tick? China apparently asked Putin not to start the invasion during the Olympics and launches 1 day after. All hardly bearable. Moreover, a de-escalation without Vladimir Putin losing face is hardly conceivable and suggests the worst. Russia threatens with nuclear bombs, nuclear power plants are burning today and a russian withdrawal from Ukraine is not conceivable. On the other hand, the West is united as never before. What course the conflict will take, is not foreseeable, but some things are certain: The war will go on for a while and the markets therefore remain volatile. We are seeing a real historical turning point, the West is united as never before after World War II and the world is realigning itself. It is the beginning of the end of still-President Vladimir Putin.

It is striking that the Corona pandemic has ended as quickly as it began because of the war. Volatile days remain in the stock markets and we expect Russia to remain isolated for an extended period of time, and the West to pull together. We see implications of drug development in biotech as rather unlikely because neither investors nor large CRO/clinical sites are located in Russia. There continues to be other geopolitical tension as well (China vs. Taiwan), which might be an issue this year.  However, we hope to get into calm political waters soon.

Interestingly, the conflict is a clear driver for cryptocurrencies. In the midst of an international conflict, people are turning to cryptocurrencies. The reason here is not so much to invest in new technologies, but because it is the easiest way to keep one's assets safe. This is probably one of the most underestimated advantages of cryptocurrencies, the independence from politics and the current place of living. So let's start with the newsletter and take a closer look at some things.

Stay tuned, your Lizards

Biocoin ETF - Is approval coming now?

One of the biggest drivers in 2022 will be a U.S. approved Bitcoin ETF.  While a number of futures-based Bitcoin ETFs have already been approved by the U.S. Securities and Exchange Commission (SEC) in the fall of 2021, a so-called Spot ETF is still waiting for confirmation. A spot ETF tracks the bitcoin price, not the futures price. However, a look at the SEC's website reveals widespread support for the plan (https://www.sec.gov/comments/sr-nysearca-2021-90/srnysearca202190.htm).

There, citizens can submit comments on the proposal. As Eric Balchunas, an ETF analyst at Bloomberg, writes on Twitter: “95% are in favor of it and most using real names and pointing to the stupefying fact that futures ETF ok but spot not.”  One thing is clear, the approval will come and we expect it still in 2022. Hester Maria Peirce (Commissioner on the Securities and Exchange Commission (SEC) is amazed a #Bitcoin ETF hasn't been approved yet.  For example, on Feb. 26, the U.S. Securities and Exchange Commission (SEC) pushed back the final decision date for the Valkyrie XBTO Levered BTC Futures ETF to May 7, according to recent SEC documents.

Why are ETFs having such a big effect on the crypto market?

Bitcoin ETFs could provide access to cryptocurrencies for a whole new group of investors, including private investors as well as investors and pension funds. This is because many have found it too risky to store crypto assets themselves until now. ETFs offer convenient access - which is also approved and controlled by the US Securities and Exchange Commission.

SWIFT exclusion of Russia

In another package of sanctions for Russia, the decision was finally made to ban Russia from the SWIFT payment network. From now on, banks will no longer be allowed to use the payment system. Bitcoin and other cryptocurrencies could benefit from this. Cryptocurrency could act as a vehicle in the short term to park assets and protect them from sanctions. Decentralized cryptocurrencies seem the best choice to protect assets from third-party access. However, since cryptos are hardly accepted in Russia, their use in the real economy is likely to be impractical.

Bitcoin - current technical analysis

Bitcoin crossed the $45k line earlier this week. With the situation being aggravated in Ukraine and a general drop in stock prices, Bitcoin couldn’t keep uptrending either. We are now back in the channel between $38 and $42k. The next important support line is the 0.5 Fibonacci retracement at $40k. Once we break $45k resistance level, we might be seeing another significant uptrend.

When looking at the makro trendline, we can see signs of accumulation and short-term trading (Figure 3). Bitcoin is currently waiting for a breakdown and the next leg-up. Of note, geopolitical influences may lead to increased volatility. However, we are convinced that - besides the technical breakout that is due - the fundamental value of Bitcoin is once more underlined these days.

The short.term chart shows strong support lines at ~ $40k and ~ $38k. As stated above, we may trade in the orange corridor shown in Figure 4 for a while until the current geopolitical tensions begin to ease up.

Eight profound reasons to stack Bitcoin

There are several fundamental reasons why we believe that Bitcoin is going to continue to significantly increase in value. Check out our new video on youtube, follow us and comment. Spread the word, the lizards are coming.

Sample portfolio - Follow our trades

We have added a portion of VNDA to our portfolio. The ANAB position stays strong in the currently red market. We may add more if prices go down further. Also, we believe in the fundamental undervaluation of the whole biotech sector, so we added the $XBI at $83.90.

Besides Bitcoin, we plan to add some more positions from different sectors in order to stay diversified. This seems to be of great importance considering there is so much uncertainty at the markets at the moment.

And biotech...?

Like all other sectors, biotech is suffering as well. The XBI couldn’t regain the $90 level which is now an important resistance line. Support lines are seen at  $83.89 and $81.71

Well, fundamentally, we're still more convinced than ever that biotech has a great year ahead. Let's take a closer look at the chart:

As you can see, XBI is still in a trading channel between its previous lows and $90 which now represents an important resistance level. A support zone is found at between $81.89 and $83.96. Usually, XBI tends to break through these support lines temporarily (e.g. on 24 February 2022).

Conclusion

A current breakout has been stopped by the global crisis. We believe that the biotech sector is - as opposed to many others - not really affected by the crisis. Of course, this segment will also be affected by panic selling, so in principle even lower prices around $76-78 (next support zone) are possible. Nevertheless: we see current prices as opportunities to buy.

Disclaimer

We may have beneficial long & short positions in the shares of the stocks presented here. It expresses our own opinions regarding trades. It’s no investment advice. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned here.