In last week’s poll, I asked “do US interest rates matter more than crypto market analysis?”
A full 50% of you said interest rates matter more than analysis. 30% said they don’t care about it at all.
I guess I serve the remaining 20%.
It’s a pretty simple equation: the Fed will stop raising interest rates once inflation goes below 4% or the target rate goes above 4% and not a moment sooner. The goal is to make everything you own worth less, whether that’s your house, cash, crypto, stocks, bonds, jewelry, furniture, and everything else, whether you live in the US or another country.
The brightest investing minds of our generation keep looking for a place to hide, seemingly to no avail. India and USD are crowded trades. Equities seem destined to underperform (or worse) in the coming years. Sovereign debt is as risky as it’s ever been. Commodity prices have either cratered or look like they’re about to fall off a cliff.
Sometimes, you just have to buckle up, take your licks, and prepare yourself for whatever happens on the other side.
No surrender, no escape.
(But short-term government bonds offer some refuge.)
If it’s any consolation, most financial assets are still overvalued relative to their historical benchmarks. Bitcoin is not.
(Most altcoins have no historical benchmarks.)
In my most recent update, I revisited the idea of a $14,000 bitcoin, showed you possible signs of new buyers (finally, barely) tip-toeing into the market, and gave my take on the altcoins ranked 11-20 on the ByteTree terminal. If you missed it, catch it now.
In my next update, I’ll look at some interesting patterns with stablecoins, whale behaviors, and a rise in new bitcoin addresses for the first time in a year. Look for that towards the end of the week. Expect the monthly issue within the next day or so.
Scroll down for a podcast and some other content you may enjoy.
Twitter isn’t the best place for financial analysis but this tweet seemed interesting. I’d love somebody to dig deeper into the data and tell me whether it’s legit.
If you have a knack for financial engineering, please read the thread and comment below with your own commentary on it.
Recent episode of The Scoop podcast, FTX’s Brett Harrison unpacked how regulatory uncertainty holds back the crypto industry. Listen to the episode, it’s less than 30 minutes long.
There’s some inside baseball and jargon in the conversation, but I found it pretty straightforward and illuminating.
Imagine it’s 1991 and the United States had a requirement that all Internet Service Providers kept a paper copy of emails that people send through their platforms.
That’s a straightforward law, unambiguous and operationally simple. But it makes no sense for email. In fact, it defeats the whole purpose of email while adding unnecessary costs, new risks, and severe constraints on innovation for any ISP operating in the US.
That’s the state of US regulations as they pertain to cryptocurrency. They make no sense and nobody’s proposed anything better yet.
At least the EU has something worth debating.
A recent video from Wolves of Crypo raises a red flag on central bank digital currencies.
I’m not big on alarmist content and WoC doesn’t usually do that kind of thing, but this one delivers a strong message.
TL;DW—beware government obsession with “blockchain not crypto.” Governments will use CBCDs to control your liberty and limit your freedom.
While I have a more nuanced and measured view on CBCDs, this video cuts right the heart of the matter in simple, clear terms.
(BTW, the US has no appetite for a CBCD. Our government has put too much time and effort into the FedNow payment infrastructure, the banking lobby is too powerful, and even anti-crypto people don’t like giving the government permission to reach into their bank accounts.)
Chainalysis 2022 Global Crypto Adoption Index
Bottom line: Chainalysis research shows the class of 2021 continues to invest in digital assets and cryptocurrency markets remain relatively active despite this year’s decline in prices. Big, long-term cryptocurrency holders continue to hold and remain optimistic the market will bounce back. The highest levels of grassroots engagement come from middle-income countries, though somehow China ranked #10 despite “banning” crypto.
My take: meshes with what we see on-chain and in various trends. Not much new money coming in but higher engagement/interest levels than 2020 and strong accumulation patterns among people who already have money in the market. Huge whales are still trimming while small hodlers disappear and pretty much everybody else continues to stack and grow (the “whale-eating fish” phenomenon). Most of the rest of the world still seems engaged or curious.
Why we care: it’s easy to believe crypto is dead because the news from DC and crypto prices seem scary. The truth is somewhere in between Peter Schiff and Anthony Pompliano (as always).
If you don’t want to read the whole thing, skip to the key takeaways.
Relax and enjoy the ride!
Weekly Rundown - September 25, 2022