IN THIS NEWSLETTER

• Coming up this week: central banks, CLARITY, consumer data

• Stepping on to the slippery slope

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

Production note: Apologies, I have to miss publication tomorrow, I’ll be away from my desk most of the morning. Back on Wednesday with a new episode of Stablecoins Around the World – I reveal which region further down. 🌎

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

Onchain, there are three ways to take a position on OpenAI before any listing exists. 1) A spot token tracking a claim. 2) A perp offering leverage on that price. 3) A prediction market pricing whether the listing happens at all. Each delivers something different, and those differences matter more than the headline exposure.

Allium Research wrote up what each one actually gives you.

Get weekly onchain data and more analysis like this from the Allium Research team on Substack.

WHAT I’M WATCHING

Coming up this week

It’s Fed week! And possibly the beginning of a new hiking cycle in the world’s largest economy. Plus, rate decisions in the UK and Japan. Even apart from potential developments in the Gulf, this should be a volatile week for bonds.

On Tuesday, the US Senate votes on the cloture motion for the CLARITY Act. If it passes (at least 60 votes in support), debate has to draw to a close and the bill moves to a full floor vote. If it fails, it’s back to the drawing board.

Also tomorrow, we get China’s latest retail sales data, unemployment rate and industrial production. Consensus points to a slight improvement, except for the unemployment rate which should hold steady at 5.2%.

On Wednesday, we find out: will the FOMC decide to hike US interest rates? Whether they do or not, Fed Chair Warsh’s comments in the press conference afterwards – possibly soon to become a rare occurrence – will be parsed for hints as to whether this is a one-off or the beginning of several. Equally interesting is whether or not he will give any hint at all, or will he continue to insist on “we’ll see”.

We also get updated economic projections from the Federal Reserve, which should sketch the prevailing mood, but which carry less weight in the face of Warsh’s vocal scepticism of their utility.

We get US retail sales data for August as well as US import and export prices – all are expected to show a notable pickup.

And Circle’s Arc layer-1 blockchain opens to the public.

On Thursday, the Bank of England decides on rate hikes – expectations are for another hold.

And on Friday, it’s the turn of the Bank of Japan. A hike is widely expected – this would be the second of the year, and would take the official rate up to 1.25%, the highest level since 1995.

Russia’s Duma elections (the Duma is Russia’s lower house of parliament) kick off on Friday and last until Sunday. The outcome is not really in question, but of interest is the overall vibe – Putin is hoping to project strong support for the war effort – and whether elections in Russia-occupied parts of Ukraine (Crimea plus portions of Donetsk, Luhansk, Kherson and Zaporizhzhia) transpire peacefully, helping to normalize the annexation.

Monday musings: Stepping on to the slippery slope

(what’s on my mind as we head into the week)

Of all the signals we’ve seen over the past couple of years that politics has pushed economic stability off the rails, none have shrilled louder than President Trump’s blatant attempt to buy votes.

Speaking at last week’s Republican Party convention, Trump promised all Americans a “dividend” of $5,000 each if the Republicans won both the House and the Senate.

In retrospect, the event itself should have given us a hint as to the desperation – the Republican Party has never before, at least not in the modern era, held a national rally just before the midterm elections. What’s more, it’s the first ruling party to ever do so. The Democratic Party has only held one, while in opposition in 1982 (Ronald Reagan was President), and by all accounts it was unsuccessful – they increased their comfortable majority in the House, but failed to win control of the Senate.

But even cynics among us thought that a blatant vote-buying promise would be a step too far.

We were wrong.

Of course, we know that votes are bought in every election via implicit and explicit vows to improve individual financial conditions: lower taxes, more income, better housing, free groceries and so on. And behind the bulk of government spending is a decision to paper over growing inequality with benefits, subsidies, easy credit and other forms of politically motivated financial assistance. As we have seen, even a whiff of a suggestion to remove any of those bandaids would lead to political uproar. Ever since the violent demise of DOGE, this is not even being talked about, while the US fiscal situation continues to worsen.

But there is a line between the politics-as-usual vote buying that assumes at least an attempt at economic contribution from beneficiaries, and “I’ll pay you for voting Republican”.

To be fair, that’s not exactly what Trump said, but it’s close enough.

Will it work? It’s unlikely to sway loyal votes. But those self-classifying as “Independent” are increasing in number as disaffection with both parties deepens.

(chart via Gallup)

And we have to acknowledge that voters, especially the young, are disillusioned and so why shouldn’t they vote for some “free” money? We also can’t deny that, for way too many, $5,000 would solve some short-term cash flow problems. For those worried about tomorrow, the longer term can take care of itself.

Even for those not in short-term financial stress, why think about the longer term since there’s a 10% chance AI will kill us all anyway, right? Put differently, even those that may instinctively feel votes are a hard-won right that should not be cheapened by a payout, even those that would not normally think of voting Republican, may decide “whatever, it’s just a stupid election and we’re all screwed anyway”. It wouldn’t take much of a conspiracy theorist to wonder about the timing of the social media fuss around a looming AI apocalypse.

Of course I am not advocating for this line of thought, and I fervently hope that common sense prevails.

And Trump has promised dividends before without delivering, which might mean susceptible voters view his speech with the appropriate scepticism.

But this latest offer comes with a implied condition: a decision at the polling booth. That hits different.

It also sets up a tantalizing yet treacherous path. If it looks like the plan worked, even a little bit, the next frightened ruling party or recklessly ambitious candidate will promise more. And the next one, even more. Of course, each will give a palatable explanation of how it will be paid for. But, in the end, it will come from adding on debt.

That would be a hard sell for the bond market, especially given the likely boost to inflation.

Plus, it wouldn’t be hard to argue for a more productive use of roughly $1 trillion dollars, the estimated total cost of this escapade. For instance, there’s no way of ensuring that the payout is spent in the US, despite Trump’s assurance that it would have to be. A retail CBDC with use restrictions embedded in the code could do it, but the US doesn’t have one and nor will it, since Congress recently passed a law banning the Federal Reserve from issuing a digital currency.

And there’s the probable damage to global confidence in US democracy, which should impact investment flows.

So, it’s unlikely the promise would get the necessary Congressional approval. Hopefully enough sensible officials would understand the fiscal and political consequences and would say no, even if the promise helped win them their midterm race. After all, the Senators that take their seats in January are not up for re-election until 2032, and they will be judged according to how the US economy, markets, currency and world standing are doing then.

But the words were said, the idea was planted, and some elected officials are excitedly preparing the necessary bill.

As a standalone, this is alarming, but not nearly as much as the idea of voter payouts becoming normalized. Once that happens, the debt problem explodes. To keep the economy running, money printing accelerates, so does inflation. The net payout will seem like copper cents compared to the collective wealth destruction.

This is not a slippery slope we want to be on.

Especially because the biggest threat to democracy today isn’t an autocratic populist figure: it’s rising unemployment, and the loss of value in savings as well as fixed incomes either from runaway inflation or an economic slowdown.

And whether or not Trump’s reckless promise gets anywhere, it adds fuel to the fire of uncertainty. True, he says a lot of stuff, usually noise rather than substance and usually not worth more than a passing glance. But this one alarmed me, because it won’t be easy to put this genie back in the bottle.

Which means the debasement play is going to get even more real. Good for gold, good for Bitcoin.

But not good for democracy or the cultural fabric we increasingly take for granted.

Read more

You’re reading the free weekly send of the premium daily Crypto is Macro Now, where I re-share one or two of the week’s posts and add some non-crypto and non-macro links since it’s the weekend. 🌼

In this newsletter:

• Introducing: Stablecoins Around the World

• CBDCs: What Brazil can teach the EU

• Assorted links: “progress”, marginalia, retro games

• Weekend: TV series from the ‘70s

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

Onchain, there are three ways to take a position on OpenAI before any listing exists. 1) A spot token tracking a claim. 2) A perp offering leverage on that price. 3) A prediction market pricing whether the listing happens at all. Each delivers something different, and those differences matter more than the headline exposure.

Allium Research wrote up what each one actually gives you: https://allium.so/reports/gain-exposure-to-anthropic-and-openai-before-the-ipo

And get weekly onchain data and more analysis like this from the Allium Research team on Substack.

Introducing: Stablecoins Around the World

Hello everyone! I finally did it, I finally started work on something I’ve been wanting to do for ages but kept putting off because the flood of events kept pushing it down the priority list. Well, it climbed its way back up, and this week I shared the first episode in a new video/podcast series: Stablecoins Around the World.

In this limited series, I hope to cover most of the main stablecoin hot spots outside the US. My goal is to highlight that while the US may have the largest market and its currency may anchor the bulk of stablecoin supply, stablecoins are a global phenomenon and will potentially end up changing marketplaces everywhere.

To do that, I’ll be talking to experts about their impressions of the stablecoin regulation, institutional involvement, infrastructure and use cases in the regions they’re familiar with.

The inaugural episode is on stablecoins in Japan, and I can think of no-one better positioned to talk about that than Emily Parker. To see why, have a listen!

And you can find out more about Emily here.

For now, this is available only on Substack (I’ve also uploaded it as a separate video), but I am working on broader podcast distribution.

Some of the topics discussed in this week’s premium dailies:

Tuesday, Sept 8

• Coming up this week: inflation, politics and geopolitics

• Clipping stablecoin reach

Wednesday, Sept 9

• Grab bag: Tokenized money market funds, deposit tokens, gold market infrastructure

• Term of the day: Regulation Q

• Markets: the narrative in the divergence

Thursday, Sept 10

• Introducing a new podcast: Stablecoins Around the World

• Stablecoins in Japan – inaugural episode!

• Takeaways from the show

• Stablecoin regulation in Japan

• The main players + the authorized stablecoins

• Timeline

Friday, Sept 11

• CBDCs: What Brazil can teach the EU

• Term of the day: Section 301

• Macro: US CPI

CBDCs: What Brazil can teach the EU

While the European Central Bank is spending considerable political and monetary capital on developing a digital euro that most of us don’t want, Brazil has the Pix system.

Created and operated by the central bank (Banco Central do Brasil, or BCB), it enables near-instant 24/7 payments by connecting bank accounts behind the interface. There is no Pix app – rather, Pix powers commercial bank apps and digital wallets. Recipients are identified by their Pix key which is the same throughout the system and means senders don’t have to type in full banking details. Transfers between individuals are free, and relatively low for businesses.

Although it launched just six years ago, Pix today has more than 170 million users, roughly 80% of the total population. This past December, almost 90% of Brazilian adults used Pix at least once. Cash use is dropping sharply, even though Pix also facilitates the withdrawal of cash without a card via participating merchants and ATMs. By all accounts, it has been phenomenally successful.

And it is popular: there appears to be relatively little concern over central bank control and the possibility that the system’s ubiquity creates a dependency. Rather, concern is more about protecting access. There is currently a constitutional amendment under consideration by the Brazilian parliament that would give the BCB exclusive power to regulate and operate Pix, would ban its transfer to another private or public entity, and would enshrine free use for individuals.

Here is what Pix is not: it is not a CBDC, despite Paul Krugman’s insistence to the contrary (bewildering, really). Pix is a payments rail. It does not change the nature of money, nor the relationship between the central bank and consumers, nor the relationship between consumer banks and their clients. It moves digital reals, but it does not create them nor represent them.

And yet, it has managed to reduce Brazil’s dependence on US platforms while broadening financial inclusion.

Yes, those are the very same targets espoused by the European Central Bank (ECB) in its push for a CBDC. It has positioned its digital euro project as the only way to defend European interests against US hegemony in the form of payment platform dominance (Visa, Mastercard, etc.) and the likely popularity of dollar stablecoins.

Brazil shows that there are less intrusive, more popular ways to do so.

Brazil’s CBDC

It also highlights the CBDC trilemma: a trade-off between efficiency, programmability and privacy.

At around the same time Pix was launching, Brazil’s central bank started working on a CBDC study. Originally known as the “real digital”, the project envisioned three token categories running on a permissioned ledger:

• A wholesale token issued by the central bank, for settlement between institutions

• A deposit token for businesses and individuals, issued by commercial banks

• Tokenized assets such as government bonds and other securities

The goal was a more flexible and programmable monetary layer and cheaper collateralized credit, not retail or normal business-to-business payments.

A series of limited pilots kicked off in early 2023 and soon after, the project rebranded to Drex (digital + real + experimental). But, after testing several configurations, the central bank had to acknowledge that it could not achieve the desired level of privacy while retaining optimal programmability. Even on a permissioned ledger (the Drex network was based on Hyperledger Besu), all validating nodes can see the state which violates bank secrecy rules. Hide some of the data, and smart contract potential becomes limited.

In November 2025, the central bank announced that the project was being paused, and the network was being shut down.

The ECB assumes it won’t come up against the same issues. We’re told that the digital euro will offer “cash-like privacy”. But just last month, ECB Executive Board Member Piero Cipollone confirmed that banks would be able to identify users behind transactions – not very cash-like at all.

(from the ECB’s Digital Euro and Privacy page)

In the same interview, Cipollone went on to say:

“The digital euro guarantees the maximum level of privacy that current technology can offer.”

Apart from not even a little bit credible, this raises the question of trade-offs. Is the plan to limit the digital euro’s programmability?

A dose of trade drama

So, Brazil doesn’t have a live CBDC, largely due to the difficulty of achieving satisfactory privacy protection. It does have a working, successful payments network built and operated by the central bank.

President Trump is not happy about this. In July of last year, the Office of the United States Trade Representative (USTR) opened up a Section 301 investigation (see below) that led to the imposition this past July of a 25% tariff on a range of Brazilian imports.

Electronic payments were on the list of US complaints, and official fact sheets describe Pix as a “national champion” that has “unfairly disadvantaged” US payment firms.

The USTR argues that Pix’s advantage is discriminatory because it is operated by the central bank, which also regulates payment platforms. Where is the opportunity for competition?

Rather than get bogged down in calling out the inconsistency of erecting tariffs to favour American industries and then screaming foul play when other countries give home-court advantage to their local systems, I want to focus on an even more glaring and more relevant inconsistency, that is being largely overlooked.

The Trump Administration is clearly singling out a central bank-operated payments system as prejudicial to US interests. And yet he has so far said nothing about the European Central Bank’s digital euro initiative.

This is despite streams of official statements justifying the digital euro as an anti-dollar move. The ECB has made it clear: the digital euro is necessary to reduce European use on American platforms, and to combat the likely popularity of dollar stablecoins.

Like Pix, this too would be a “burden or restriction on US commerce”, no?

Of course, Pix is operational today, the digital euro isn’t and won’t be until 2029 at the earliest.

The inconsistency highlights, though, the potential political divide coming up in the European halls of power. On the one hand, there seems to be sufficient political support for the digital euro project as both the European Parliament and the European Council have voted to move it forward. On the other hand, the EU is trying to navigate the political minefield of trade relations with the world’s largest economy – if President Trump were to take note of what the ECB is saying regarding the digital euro, there could be an economic price to pay.

True, it’s unlikely he will as he no doubt has more pressing issues than a complex project still in development phase.

But it’s not out of the question, even if it’s just to flex. Would EU political support for the digital euro be able to withstand trade threats?

In Brazil, the political and public support is clearly there. President Lula has sworn to defend Pix and, from what I hear, public pride in the platform has elevated the US pressure to an issue of sovereignty.

In Europe, if the digital euro project were to be dropped, I doubt anyone outside the team working on it would care. European banks would celebrate.

In sum, it’s a puzzlement that the ECB is not looking at the Brazilian system with envy, or at least with enough humility to explore the lessons learned with both Drex and Pix. Such as: a CBDC is not necessary to move the needle on financial inclusion and platform use; it is possible for a central bank to boost its image by building and operating a system benefitting banks, businesses and individuals; and digital privacy is easy to promise but hard to deliver without compromising future functionality.

ASSORTED LINKS

(A selection of reads I came across this week that I think are worth sharing, not about crypto nor macro. I try to choose links without a paywall, but when I feel it’s worth making an exception, I specify.)

• Whatever Sinead O’Sullivan writes is worth reading. This post offers an essential, eye-opening and beautifully written take on the double-edged sword of “progress”, and a sober, well-reasoned antidote to the “hyper-growth” brainwashing we are all subjected to. (Trojan Horses – But This Time It’s Different)

• Do you underline in books? I do in non-fiction, when I know I’ll want to remember a certain point or come back to an eye-opening passage. My cookbooks have both scribbles and stains, a testament to what I’ve made, how I changed it, and whether people liked it. And when I come across a book in which someone else has scribbled in the margins, I feel like I’m getting two stories in one. Jörgen Löwenfeldt writes about the magic and the heresy of marginalia. (I WAS HERE: The Subtle Art of Underlining – The Bagatelles)

• I’m not a gamer, but if I were, I expect a farming simulator would be my speed – I love maps, I love vegetables, and if I could pretend to ride a horse, I’d be thrilled. The FT wrote about the climbing popularity of farming games while reviewing a newcomer to the scene which appears to be based on 1990s anime – this hits so many nostalgia buttons that the comfort of planting pixelated carrots feels almost natural. (The wild and unexpected delight of being a virtual farmer – Financial Times, paywall)

HAVE A GREAT WEEKEND!

(in this section, I share stuff that has NOTHING to do with macro or crypto, ‘cos it’s the weekend and life is interesting)

Some of you messaged me in outrage that I missed certain gems in last week’s share of iconic TV series opening credits from the 1970s, and you’re totally right.

So, here are four more:

• Mary Tyler Moore

• Dallas

• The Six Million Dollar Man

• The Rockford Files

DISCLAIMER: I never give trading ideas, and NOTHING I say is investment advice! I hold some BTC, ETH and a tiny amount of some smaller tokens, but they’re all long-term holdings – I don’t trade. Also, I often use AI for research instead of Google, but never for writing.

IN THIS NEWSLETTER

• CBDCs: What Brazil can teach the EU

• Term of the day: Section 301

• Macro: US CPI

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

Solana accounts for 12% of onchain RWA market cap, but 32% of RWA spot volume. Allium Research worked with Solana to look beyond assets issued and ask a different question: how are RWAs being used onchain? The full report maps 37 issuers across fixed income, private funds, equities, commodities and active strategies, and looks at where issuance, ownership and trading are actually happening.

Read the full report: https://allium.so/reports/solana-rwa-ecosystem

And get weekly onchain data and more analysis like this from the Allium Research team on Substack.

WHAT I’M WATCHING

Hello everyone! I hope you’re all taking care of yourselves. A heavy day today, for those that remember… After 25 years, it still feels recent.

If you missed yesterday’s email, check out the first episode of a new video/podcast series: Stablecoins Around the World.

CBDCs: What Brazil can teach the EU

While the European Central Bank is spending considerable political and monetary capital on developing a digital euro that most of us don’t want, Brazil has the Pix system.

Created and operated by the central bank (Banco Central do Brasil, or BCB), it enables near-instant 24/7 payments by connecting bank accounts behind the interface. There is no Pix app – rather, Pix powers commercial bank apps and digital wallets. Recipients are identified by their Pix key which is the same throughout the system and means senders don’t have to type in full banking details. Transfers between individuals are free, and relatively low for businesses.

Although it launched just six years ago, Pix today has more than 170 million users, roughly 80% of the total population. This past December, almost 90% of Brazilian adults used Pix at least once. Cash use is dropping sharply, even though Pix also facilitates the withdrawal of cash without a card via participating merchants and ATMs. By all accounts, it has been phenomenally successful.

And it is popular: there appears to be relatively little concern over central bank control and the possibility that the system’s ubiquity creates a dependency. Rather, concern is more about protecting access. There is currently a constitutional amendment under consideration by the Brazilian parliament that would give the BCB exclusive power to regulate and operate Pix, would ban its transfer to another private or public entity, and would enshrine free use for individuals.

Here is what Pix is not: it is not a CBDC, despite Paul Krugman’s insistence to the contrary (bewildering, really). Pix is a payments rail. It does not change the nature of money, nor the relationship between the central bank and consumers, nor the relationship between consumer banks and their clients. It moves digital reals, but it does not create them nor represent them.

And yet, it has managed to reduce Brazil’s dependence on US platforms while broadening financial inclusion.

Yes, those are the very same targets espoused by the European Central Bank (ECB) in its push for a CBDC. It has positioned its digital euro project as the only way to defend European interests against US hegemony in the form of payment platform dominance (Visa, Mastercard, etc.) and the likely popularity of dollar stablecoins.

Brazil shows that there are less intrusive, more popular ways to do so.

Brazil’s CBDC

It also highlights the CBDC trilemma: a trade-off between efficiency, programmability and privacy.

Read more

IN THIS NEWSLETTER

• Introducing a new podcast: Stablecoins Around the World

• Stablecoins in Japan – inaugural episode!

• Takeaways from the show

• Stablecoin regulation in Japan

• The main players + the authorized stablecoins

• Timeline

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

Solana accounts for 12% of onchain RWA market cap, But 32% of RWA spot volume. Allium Research worked with Solana to look beyond assets issued and ask a different question: how are RWAs being used onchain? The full report maps 37 issuers across fixed income, private funds, equities, commodities and active strategies – and looks at where issuance, ownership and trading are actually happening.

Read the full report: https://allium.so/reports/solana-rwa-ecosystem

And get weekly onchain data and more analysis like this from the Allium Research team on Substack.

WHAT I’M WATCHING

Introducing: Stablecoins Around the World

Hello everyone! I finally did it, I finally started work on something I’ve been wanting to do for ages but kept putting off because the flood of events kept pushing it down the priority list. Well, it climbed its way back up, and today I can share the first episode in a new video/podcast series: Stablecoins Around the World.

In this limited series, I hope to cover most of the main stablecoin hot spots outside the US. My goal is to highlight that while the US may have the largest market and its currency may anchor the bulk of stablecoin supply, stablecoins are a global phenomenon and will potentially end up changing marketplaces everywhere.

To do that, I’ll be talking to experts about their impressions of the stablecoin regulation, institutional involvement, infrastructure and use cases in the regions they’re familiar with.

(If that’s you and you’d like to get involved, reach out, either commenting below and/or at noelle@cryptoismacro.com – I’m not looking for pitches on how important individual infrastructure projects are, I’m interested in overviews of local ecosystems and how they fit into the bigger market.)

For now, this is available only on Substack (I’ve also uploaded it as a separate video with open access), but I am working on broader podcast distribution.

The inaugural episode is on stablecoins in Japan, and I can think of no-one better positioned to talk about that than Emily Parker. To see why, have a listen!

And you can find out more about Emily here.

🏵 Below, I share some takeaways, and more detail on Japan’s regulation, issuers and the tokens themselves. 🏵

My takeaways from the show:

Read more

Hello everyone! I finally did it, I finally started work on something I’ve been wanting to do for ages but kept putting off because the flood of events kept pushing it down the priority list. Well, it climbed its way back up, and today I can share the first episode in a new video/podcast series: Stablecoins Around the World.

In this limited series, I hope to cover most of the main stablecoin hot spots outside the US. My goal is to highlight that while the US may have the largest market and its currency may anchor the bulk of stablecoin supply, stablecoins are a global phenomenon and will potentially end up changing marketplaces everywhere.

To do that, I’ll be talking to experts about their impressions of the stablecoin regulation, institutional involvement, infrastructure and use cases in the regions they’re familiar with.

The inaugural episode is on stablecoins in Japan, and I can think of no-one better positioned to talk about that than Emily Parker. To see why, have a listen!

And you can find out more about Emily here.

STABLECOINS IN JAPAN

For this inaugural episode of Stablecoins Around the World, Noelle is joined by Emily Parker, advisor to global firms on their crypto and stablecoin strategies and China and Japan Advisor to the Global Blockchain Business Council.

They talk about why Japan moved early on stablecoin regulation, why adoption has still been slow, and what recent tax and regulatory changes could mean for institutions, ETFs, and tokenized assets.

Timestamps

03:52 - Why Japan led on stablecoin regulation
05:49 - Why only a few yen-backed stablecoins exist
09:10 - Why Japan is pro-crypto but tightly controlled
13:04 - Why regulation is Japan’s version of crypto support
15:30 - Corporate blockchain interest in Japan
17:21 - Why Japan’s stablecoin rules may be changing
19:20 – The taxation shift
21:52 - Why Japan’s ETF timeline points to 2028
24:45 - Why domestic stablecoin demand is still weak
27:07 - Why RWA tokenization is the next area to watch

DISCLAIMER: I never give trading ideas, and NOTHING I say is investment advice! I hold some BTC, ETH and a tiny amount of some smaller tokens, but they’re all long-term holdings – I don’t trade.

AI policy: I often use AI (Grok and Gemini) for research instead of Google, always double-checking facts. I never, and will never, use AI for writing.

IN THIS NEWSLETTER

• Grab bag: Tokenized money market funds, deposit tokens, gold market infrastructure

• Term of the day: Regulation Q

• Markets: the narrative in the divergence

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

Crypto buybacks are having a moment. But the headline numbers can be misleading. $638M has been spent on buybacks YTD, yet HYPE and PUMP buybacks currently represent <2.5% of trading volume. At that scale, the buybacks matter more for reducing supply than for supporting prices.

See more: Crypto Buybacks Are 2.5% of Trading Volume, Too Small to Drive Prices

And get weekly onchain data and more analysis like this from the Allium Research team on Substack.

Hello everyone! To my fellow symmetry lovers, happy 9th of the 9th.

WHAT I’M WATCHING

Grab bag: TMMFs, deposit tokens, gold market infrastructure

Back with the regular roundup of some interesting recent crypto/macro pieces written by others.

Stuart Cook – Money at Rest, Money in Motion

Like most of us, you’re probably tired of hearing about stablecoin yield in the US – should it be allowed, what about rewards, but the damage to deposits, and on and on.

So it’s worth noting when an original take emerges.

In a recent post in his newsletter Atomic Settlement, Stuart Cook maps the yield issue onto functionality, and in so doing, highlights a threat the bank lobbies seem to have overlooked.

First, he divides the onchain money landscape into stablecoins, which can move freely but can’t earn yield, and deposit tokens, which can earn yield but can’t move freely.

There’s a trade-off here: yield vs flexibility.

Then Stuart introduces an overlooked monetary asset: tokenized money market funds (TMMFs). These don’t directly represent dollars, although they are similar in form and value to a stablecoin backed by cash and short-term government debt. But they aren’t stablecoins, which means they can earn a yield. And they can sit next to stablecoins in digital wallets, holding and remunerating idle balances.

Regular readers will know that I’ve written about this often before: in my view, stablecoins shouldn’t earn yield as that distorts incentives, and they won’t need to once tokenized money market funds become more accessible to all.

Stuart adds an interesting twist to this argument.

He suggests that the debate is essentially dividing “money” into distinct buckets according to function – which, in turn, highlights that our understanding of the term “money” needs to evolve.

Money that earns yield doesn’t move. Money that moves doesn’t earn yield.

But the real battle, he points out, isn’t between banks and stablecoins. It’s between banks and capital markets.

Money market funds (MMFs) emerged in the 1970s as a workaround to legal limits on what banks were allowed to pay on deposits (see below for more on Regulation Q). They passed through to holders the bulk of the interest earned on short-term government and corporate debt, repo agreements, etc., giving savers a market-based yield on their savings, notably more than what they could get from their bank.

By 1980, they held $77 billion in funds; today that total has multiplied by more than 100x.

But MMFs are securities, not checking accounts – a very different functionality. However, in 1977, Merrill Lynch started offering a checkbook and card along with its money market fund. The difference narrowed.

Today, the evolution is similar, but heading in a different direction. Rather than give tokenized MMFs a checking-like interface, we’re bringing them into existing wallet formats. It’s not checking account activity being pasted onto MMFs, it’s MMFs coming into the new type of checking account. Now your digital wallet can offer a checking account-like service (stablecoins) and a yield-earning savings option (tokenized MMF). What’s more, wallets can be configured to automatically move funds between the two, as needed.

This, Stuart suggests, is the real threat to banks: the convenient format combined with programmability. In a wallet, depositors can combine checking and saving, and not even have to think about the separation. They can just know that idle balances are earning, up until they are needed.

Having access to the two functions (yield and payments) in a bank usually requires two sets of paperwork, two management strategies, more operational friction and, probably, a lower return.

So, banks are focused on stablecoins when the real threat is elsewhere. They can’t fight tokenized MMFs just like they couldn’t fight the original money market funds (which, by the way, turned out to be phenomenally popular but did not lead to the collapse of the banking industry). Banks can’t fight capital markets.

Instead, they could push for smoother yield-payment hybrid services for their existing customers, before these customers discover that a more convenient solution exists. For now, tokenized MMFs are still a bit clunky, subject to transfer restrictions and investment minimums. But this is changing.

See also:

• Big moves in tokenized MMFs (May 2026)

• Stablecoin rewards and bank deceit (Mar 2026)

• Tokenized money market funds get more money-like (Feb 2026)

Dallas Fed – Tokenized deposits could affect bank liquidity, maturity transformation

It turns out that tokenized bank deposits are not bank deposit-neutral. They may not change the overall amount of deposits on a bank’s balance sheet, but they do change the nature of a bank’s liabilities.

This is the main argument in a paper published last month by researchers (Rosie Levy and Srini Ramaswamy) at the Federal Reserve Bank of Dallas. It got my attention because it’s a departure from the usual efficiency hype, and it highlights an overlooked yet relevant structural feature of banking. What’s more, it ties in with what Stuart was saying above.

To start with, deposit tokens may be less flexible than stablecoins in that they don’t have freedom of movement – but, unlike stablecoins, they exist within a mature regulatory structure, which large incumbent institutions will find reassuring. So, as tokenized markets expand, we can expect their popularity to also grow.

This will matter for wholesale deposit duration. Wait, aren’t all wholesale (business) deposits short-term bank liabilities that can be withdrawn at any time?

Technically, yes, but banks don’t see them as all the same. Rather than just rely on product categories, banks classify deposits according to behaviour:

Operational wholesale deposits are funds in business accounts that are required for cash management. Non-operational wholesale deposits are surplus balances.

Operational deposits tend to be “sticky” as business clients usually use a range of banking services, which adds friction to changing banks. But non-operational balances are less so, and are more likely to move where they’ll earn more, such as in money market funds. If the non-operational balances are held in tokenized form, instant settlement into tokenized money market funds (TMMFs) would make this move easier and therefore more likely. It could even be automated.

Also, greater use of instant payments via tokenized deposits could bring down the optimal level of operational deposits for businesses. This would push more of an account’s balance into the non-operational classification, with the same yield-seeking risk mentioned above.

The thing is, non-operational wholesale deposits typically have a longer average duration, or lifespan, than operational ones. From a bank’s point of view, a longer weighted average life (WAL) narrows the maturity mismatch between liabilities and deposits. Reduce the amount of funds in non-operational deposits, and the mismatch widens, in theory shrinking the capacity for long-term lending. This could be at least partially offset by boosting longer-term liabilities such as debt issuance; but this is more expensive for banks and could lift the cost of credit for businesses and consumers.

So, meaningful adoption of tokenized deposits would increase the volatility of deposit balances. Greater uncertainty as to deposit outflows means a bank would need to hold a greater proportion of high-quality short-term liquid assets in its portfolio. This would, in theory, push more demand into short-term Treasuries, Fed reserves or similar, to the detriment of longer-term assets and the overall yield earned.

Combine the lower portfolio returns with competitive hikes in deposit rates in an attempt to hold onto customer funds, and you’re looking at an overall squeeze on bank margins. This, in turn, could incentivize banks to invest more in higher-yielding assets of lower quality, potentially weakening bank resilience.

I know, banks are likely to be fine – as an industry, they are doing spectacularly well, going by Q2 results. For now, they can afford a margin squeeze. But the paper does remind us that any shift in consumer behaviour will have consequences. And if these aren’t monitored, they could bite.

OMFIF – Gold’s return as monetary collateral

One of the areas of focus of this newsletter is the emergence of a new global monetary order, with greater fragmentation and a return to a more commodity-based system. More trade settling in local currencies on new rails, often blockchain-based, is one manifestation. Greater reserve diversification into commodities is another.

Throughout history, the key commodity monetary reserve has been gold – this is unlikely to change any time soon given its scarcity, durability and (sort of) fungibility. But currencies have a key advantage over a shiny metal: lively marketplaces with fast settlement enabling almost instant realization of their value when needed.

In comparison, the gold market is clunky and inefficient.

This was the focus of a recent piece by Steven Feldman for central bank think tank OMFIF, in which he points out that we are moving away from a fully fiat system, but market infrastructure is not keeping up.

Some demand data to back this up:

• Central banks bought nearly 1,000 tonnes of gold per year between 2022-2024, nearly 3x the average for the previous 11 years.

• Official gold holdings are approaching their Bretton Woods peak of 38,000 tonnes.

• According to the IMF, last year gold surpassed US Treasuries in share of official reserves. A recent World Gold Council survey showed that 95% of central banks expect official gold reserves to grow over the coming year, the highest reading in the survey’s history.

• This trend is also reflected in the world’s leading stablecoin: gold is now over 10% of Tether’s USDT backing reserves, up from 5% a year ago even as the total amount of reserves has increased.

But for gold to truly become an efficient global reserve asset, it needs a global, transparent and efficient market. It doesn’t have one:

• Custody is spread out across vaults around the world that cannot reconcile with each other in real time.

• Most gold trading happens over-the-counter (OTC) in bilateral trades rather than on a public exchange.

• More than 90% of gold OTC trading clears through unallocated accounts, which means the holder has a contractual claim against the clearer rather than title to specific bars – systemic counterparty risk for an asset in demand to counter counterparty risk.

Steven doesn’t address how the gold infrastructure can improve (I’m assuming, going by the average length of their articles, it’s because OMFIF asks for a word limit).

But keep an eye on what Singapore and Hong Kong are doing to establish themselves as international gold clearing and storage hubs, essentially setting up a bridge between global and Asian bullion markets.

Steven is right: buying strategies are ahead of the infrastructure development gold would need to be a monetary asset in modern markets. But the gap could soon narrow.

Term of the day: Regulation Q

Read more

IN THIS NEWSLETTER

• Coming up this week: inflation, politics and geopolitics

• Clipping stablecoin reach

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

Crypto buybacks are having a moment. But the headline numbers can be misleading. $638M has been spent on buybacks YTD, yet HYPE and PUMP buybacks currently represent <2.5% of trading volume. At that scale, the buybacks matter more for reducing supply than for supporting prices.

See more: Crypto Buybacks Are 2.5% of Trading Volume, Too Small to Drive Prices

And get weekly onchain data and more analysis like this from the Allium Research team on Substack.

Hello everyone! With the US Labor Day behind us, we can now – sadly – close the chapter of summer. On cue, temperatures outside my window are cooling (mercifully). Watermelon is still available in the supermarket but I expect not for much longer. Plums are already taking up more display space in the fruit section. And there’s a back-to-school buzz in the air.

Coming up this week: inflation, politics and geopolitics

Tomorrow (Wednesday), we get China’s inflation rate, expected to accelerate slightly to 0.8% annualized. That’s… not a lot.

And the first-ever Republican midterm convention kicks off in Dallas. President Trump will address attendees on both nights, although reports suggest turnout will be low.

On Thursday, the European Central Bank is expected to deliver a 25bp rate hike – this would be its second in three months and could set a tightening tone for the US Fed and Bank of Japan rate-setting meetings next week.

Also on Thursday, we get the August US Producer Price Index (PPI), a gauge of wholesale inflation – this is expected to show a notable acceleration, both for the headline figure (5.3% vs 4.7% year-on-year) and the core index, ex-food and energy (4.6% vs 4.2%). Even coming in line with consensus forecasts should be enough to rattle inflation watchers.

On Friday, the US CPI report for August could calm some of that rattling… or not. Estimates suggest that the headline index year-on-year increase will hold steady at 3.4%, while the core index increase decelerates slightly from 2.5% to 2.4%. That would be good news, and could give the FOMC pause in voting for a hike at next week’s meeting.

Also on Friday, we get the preliminary consumer sentiment report for September from the University of Michigan.

On Saturday, the two-day BRICS 2026 Summit kicks off in New Delhi, bringing together leaders of both member and invited countries to discuss global issues. China’s President Xi Jinping will attend, his first visit to India in six years. Also expected are Russia’s President Vladimir Putin, Iranian President Masoud Pezeshkian, UN Secretary-General António Guterres and the heads of state of South Africa, Egypt, Ethiopia, Nigeria, Indonesia, Malaysia, Thailand, Belarus, Kazakhstan and others. Brazil’s President Luiz Inácio Lula da Silva will not attend due to upcoming elections. And the UAE will be represented by the Crown Prince of Abu Dhabi rather than the President, possibly to avoid a punch-up with the Iranian delegation. On the agenda is BRICS Pay, an alternative cross-border payments system that will enable settlement of bilateral trade in local currencies. An intriguing idea, but it’s hard to imagine such a disparate group executing on something like this, especially as it continues to expand.

Clipping stablecoin reach

While powering through the substantial stack of crypto-relevant papers that were published in August, I came across one with pedigree and likely influence that makes some alarming recommendations.

Last month, the Aspen Economic Strategy Group published a paper called “Stablecoins After GENIUS: Private Money, Public Debt, and the Global Dollar”, authored by Nellie Liang and Brent Neiman. The provenance of the paper is significant, I’ll explain why further down.

First, though, I’ll outline what the paper says. As the title implies, it tackles the state of stablecoin policy, with a view to influencing the ongoing rule-setting from the various regulatory agencies. For that reason, its suggestions are worth paying attention to.

Read more

In this newsletter:

• Why the next crypto cycle will feel very different

• Assorted links: AI predictions, detecting slop, geologists and the meaning of camp

• Weekend: TV series from the ‘70s

You’re reading the free weekly send of the premium daily Crypto is Macro Now, where I re-share one or two of the week’s posts and add some non-crypto and non-macro links since it’s the weekend. 🌼

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

A tokenized treasury fund earns its yield from the same short-term government paper as a money market fund. Settlement, transferability and who can hold it at which hour are what change. Smaller than the marketing suggests, larger than the sceptics allow.

Allium Research explains how they work: https://allium.so/blog/tokenized-treasuries-how-they-work-and-why-they-matter/

Get weekly onchain data and more analysis like this from the Allium Research team on Substack.

Some of the topics discussed in this week’s premium dailies:

Monday, August 24

• Coming up this week: central banks, inflation data

• Monday musings: why the next cycle will feel very different

Tuesday, August 25

• Some notable Bitcoin think-pieces

• Markets: now we’re talkin’

Wednesday, August 26

• Network incentives, digital euro design and bank mendacity

• What is co-badging?

• Podcast episode recommendations (they’re back!)

Monday, August 31

• Coming up this week: US jobs, geopolitics

• Reform vs change

• Markets: by “hike” I mean…

• Term of the day: Shanghai Cooperation Organization

Tuesday, September 1

• Can financial institutions use public blockchains?

• Markets: hopeful resilience

Thursday, September 3

• Shapes in the fog

• Term of the day: penny warrants

Friday, September 4

• Russia’s CBDC launches

• Macro: what should we be focusing on?

  ---

Why the next crypto cycle will feel very different

It’s sad to see people go. Over the past few months, I’ve lost count of the number of crypto contacts I’ve spoken to that have said they’re just tired of the industry. You’ve probably heard this from some friends and acquaintances also: frustration, disappointment, even disgust.

I’ve been dwelling on why, when arguably the industry has been successful.

Bitcoin has been powering itself for 18 years, with no technical hiccups in well over a decade. Its token is held by retail savers around the globe as well as by the occupants of some of the highest elected offices. Legacy institutions in the world’s largest financial markets have set up crypto trading desks and launched digital asset investment products. US financial regulators are drafting rules for more secure crypto market participation, and there may soon be approval (maybe, hopefully) on a Congressional law. No-one thinks the crypto ecosystem will disappear, and only a regressive few think it will fade into irrelevance. And there are enough meaningful battles ahead to maintain emotional engagement.

And yet, the mood has been bleak. It’s picking up a bit along with the price, but even so, the vibe among old-timers is largely one of “meh” or even “blech”.

Looking into what’s behind this despite achievements is a humbling exercise that says a lot about where the industry is in its development stage, while highlighting many of the features that still make it a fascinating space to watch.

Below, I’ll share my theories with you, and what they imply for the coming cycle. I have to stress that I, personally, am not at all disillusioned with the industry, and I acknowledge that everyone brings their own set of expectations to the table – here I have tried to understand why others are.

Asset prices

The bleak mood is, of course, partly about price. Crypto assets are in an extended slump, typical of the cycles that many of us thought were over. BTC, for instance, is still 35% below its October 2025 high, and many other tokens have done much worse. What’s more, BTC has been bouncing along within a narrow band for what feels like ages – the tedium has been enough to dent even the most resilient conviction.

The past couple of weeks have returned a glimmer of optimism that sentiment is turning – but only a glimmer, as we’ve seen many false bounces before.

(chart via TradingView)

Shrinking industry

While revenues at many of the crypto majors have been growing and some exciting funding rounds have been closed, the industry as a whole feels smaller.

This may sound counterintuitive as we hear a lot about real progress in tokenization, stablecoin adoption, infrastructure development, data services and more.

We don’t hear about the number of businesses winding down, or not getting funded.

According to Tracxn, 486 new startups have emerged in the “blockchain technology” category in 2026 so far, compared to more than 2,000 in 2024 and almost 10,000 in 2021. In the narrower “web3” category, the number dwindles to 35 vs almost 7,000 in 2021.

(chart by Tracxn)

According to cryptorank (via The Defiant), 651 firms participated in crypto rounds in Q2, less than a quarter the number writing checks in the same period four years ago.

And while there are active pockets of hiring with many firms growing teams, we’ve seen waves of layoffs making headlines. Many more have flown under the radar.

Asset prices are part of the problem; so is the migration of funding to AI, robotics and other sparklier areas.

No longer frontier

There’s also the migration of talent. Many visionary builders and developers joined the crypto industry early on because it was a frontier technology with blue sky potential to transform, if not quite the foundations of society, at least the functioning of money, markets and commerce.

According to Electric Capital, the number of those actively working on crypto networks and applications has been falling since last May, and is back to 2023 levels.

(chart via Electric Capital)

Arguably, the allure of frontier has moved on: AI, robotics, healthtech and other sectors are more attractive today for the type of funding and brains that want to work on the “new”. More than 18 years in, crypto has lost its “newness”.

Lost aura

It has also lost its ideological glow.

Several years after Sam Bankman-Fried, Do Kwon and others made crypto embarrassing, we are still struggling with what I call the “ick factor”. The Trump family institutionalizing the sector’s reputation for grift is not helping.

Today’s digital asset optimism seems to be coming from tokenization, from replicating traditional markets on new rails, a far cry from the ideology of breaking centralized shackles that fired the early years. Gone are the days when we were the cool rebels threatening the establishment.

For many, there’s the disappointment of seeing several of their heroic Bitcoin visionaries embracing the financial engineering of digital asset treasuries, using centralized structures to make more money and (unsuccessfully) try to boost Bitcoin’s price.

Even the promised opportunity of decentralized finance seems to have retreated. It still works and its potential is still strong, but excitement about its open access and lean set-up has largely morphed into a concern for KYC and authorization – understandable given the need for regulatory acceptance, but nevertheless a step away from the early motivation. And overall, interest has weakened. The market value of tokens locked in smart contracts on DeFi apps is back down to where it was in late 2024.

(chart via The Block Data)

No laughs

Finally, where has the fun gone? Not long ago, even the more financially sober among us could laugh at some of the memecoins, feel something for certain NFTs, chuckle at the DOGE price. Not long ago, crypto had a crazy side that made it culturally relevant, with the lack of fundamentals for some assets part of the iconoclastic point. These days, hardly anyone seems to care about the potential for fun.

What next?

Again, the above theories are not about my engagement with the crypto industry – I am as fascinated and more convinced than ever of its meaningful role in the evolving landscape. They’re also probably not about yours – you have your reasons for being a subscriber to this newsletter (thank you!!!!). Rather, the above is my attempt to understand why so many who have invested so much of their time and talent in this space are so glum or have already moved on.

In sum, it’s about the crypto industry leaving the childhood of games, parties, indulgence and an idealistic lens. It’s about crypto growing up and entering the adulthood of responsibility, boardrooms, playing within rules and monitoring the profit/loss. This matters a lot for the next cycle.

The thing about maturing is, you can’t undo it, no matter how many Lego sets you buy or kitesurfing vacations you take. Growing up is a one-way door.

Surely not, you say, surely we can get the original spark back?

Well, let’s look more closely at that.

Prices, yes, they will overall do well, and we have some exciting days ahead. Of course, they can go lower in the meantime – but the bear market in crypto is coming to an end.

But crypto is not all about prices.

True, they should help improve both funding and hiring, which will boost overall sentiment. Continued success in changing market structures around the world will stoke more conviction that what we’re doing is important. Spreading adoption of crypto assets as alternative savings and of blockchain rails as alternative financial access will encourage those of us that see the technology as a tool for resilience.

All that is good.

But the ideological spark of the early years is gone. The world has changed, and so have we. We’ve seen what we’ve seen, we know what we’ve learnt, and the industry has grown up.

This is also good. It feels more real – harder, perhaps, but more tangible. Our understanding of the potential has both narrowed and deepened. Those that are still here truly want to be.

It may feel more sober, but that’s also healthier. Growing up means losing some of the magic of youth, but it also brings longer-lasting opportunities. We may be devastated to learn the tooth fairy doesn’t really exist, but now we can buy our own ice cream. Perhaps it’s harder to become an astronaut or a lead ballet dancer than we thought, but we have a clearer idea of what our role in the world can be.

The next crypto cycle will be different, in part because we’ve changed but also because the newcomers will have very different profiles to those who drove the last bull run. Less ideology, less vindication, hopefully less crowing arrogance. But, probably, a lot more money to invest.

And, this time, crypto and digital assets will have earned a permanent, less speculative seat at the big league’s table.

📣 If you’re interested in how crypto fits into the changing macro and geopolitical landscape, I hope you’ll consider becoming a premium subscriber - for the cost of a weekly cup of coffee, you could be getting so much more out of these newsletters! And, you’d make my day. 😊

Subscribe now

ASSORTED LINKS

(A selection of reads I came across this week that I think are worth sharing, not about crypto nor macro. I try to choose links without a paywall, but when I feel it’s worth making an exception, I specify.)

• Ted Gioia’s AI predictions are not pretty. In that, he’s not alone, but the key signal here is that he is not a tech builder or VC investor – he’s best known for his depth in music and culture more broadly, so he can be considered an “outsider”. Which means he represents a cohort that does not have a vested interest in convincing us everything will be wonderful. There are some uplifting notes, however, especially around the increasing use of analogue devices and the embrace of real life experience. (10 Brutally Honest Predictions on the Future of AI – The Honest Broker)

• Derek Thomson interviews Pangram founder Max Spero on why the spread of AI content on our screens matters, just how bad is it, how Pangram works, what could disrupt it, and more. (We Can’t Let AI Writing Take Over the Internet – Derek Thompson)

• A fascinating report on the increasingly important role of geologists in combatting the impact of climate change, what post-flood investigations involve, why landslides are becoming more frequent, the particular challenge of the Himalayas, and more. (Nepal’s Catastrophic Flood Heralds a New Age of Disasters – Bloomberg, paywall)

• Robert Armstrong of the Financial Times does a lot more than comment on markets. He’s also pretty sharp on fashion. Here, he writes about camp, authenticity, values and Dolly Parton, while delivering crisp observations on human nature. (Notes on campy clothing (and Dolly Parton) – Financial Times, paywall)

“Everything from decor to advertising, the spirit of the age is knowingness, acting out things we do not fully identify with.”

HAVE A GREAT WEEKEND!

(in this section, I share stuff that has NOTHING to do with macro or crypto, ‘cos it’s the weekend and life is interesting)

Nostalgia seems to be in, not that it was ever out. I’m seeing it in fashion, movie styles, music, and I’ve even been hankering to watch some of the old TV series I grew up with. I’m not joking, the other day I happily sat through a clip from The Partridge Family.

In that spirit, today I’m going to share some of my favourite open credit music scores from the ‘70s, chosen more for the music than the series itself. There are so many that I will almost certainly do a part 2 at some point, and do please let me know your favourites.

• Happy Days

• Hawaii Five-0

• The Muppet Show

• Kojak

DISCLAIMER: I never give trading ideas, and NOTHING I say is investment advice! I hold some BTC, ETH and a tiny amount of some smaller tokens, but they’re all long-term holdings – I don’t trade. Also, I often use AI for research instead of Google, but never for writing.

👀 You’re reading Crypto is Macro Now, which covers the role of crypto in the changing landscapes of finance, economics, politics, culture and markets. 👀

Hello everyone, and happy Friday! The first Friday of September… it feels important, somehow.

Monday is the first Monday of September, which means Labor Day in the US, which means this newsletter will take a short break – back on Tuesday.

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

Every onchain analytics product runs the same four layers under the branding: ingestion, decoding, enrichment, and a query surface. Working out which of those a given vendor actually operates explains most of the confusion in the category, and most of the price spread.

Allium Research breaks it down: https://www.allium.so/blog/blockchain-analytics-stack-explained-architecture-layers-and-tools/

And get weekly onchain data and more analysis like this from the Allium Research team on Substack.

IN THIS NEWSLETTER

• Russia’s CBDC launches

• Macro: what should we be focusing on?

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

WHAT I’M WATCHING:

Russia’s CBDC launches

On Tuesday, Russia kicked off a large-scale rollout of its CBDC, the digital ruble. Individuals and businesses can now download wallets from participating banks (for now, all 12 of Russia’s large financial institutions), convert commercial bank rubles into their central bank digital equivalent, and use them at large retailers and service providers.

The initiative is unlikely to upend traditional finance, for reasons I’ll touch on below.

But it’s worth paying attention to as it highlights the confluence of drivers behind what may look like a payments efficiency but is fundamentally a vanity project (yes, looking at you, ECB).

Read more

Hello everyone! I hope you’re all doing well. Sooo late today, apologies! Down a geopolitical rabbit hole, took much more time than I expected.

👀 You’re reading Crypto is Macro Now, which covers the role of crypto in the changing landscapes of finance, economics, politics, culture and markets. 👀

Tomorrow: the digital ruble, and a run down of interesting reads.

Production note: this newsletter will skip publication on Monday for the US Labor Day, picking up again on Tuesday.

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

Every onchain analytics product runs the same four layers under the branding: ingestion, decoding, enrichment, and a query surface. Working out which of those a given vendor actually operates explains most of the confusion in the category, and most of the price spread.

Allium Research breaks it down: https://www.allium.so/blog/blockchain-analytics-stack-explained-architecture-layers-and-tools/

And get weekly onchain data and more analysis like this from the Allium Research team on Substack.

IN THIS NEWSLETTER

• Shapes in the fog

• Term of the day: penny warrants

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

WHAT I’M WATCHING:

Shapes in the fog

Every week brings startling geopolitical developments, but few go as far in outlining the new world order as this one.

Below, I cover the top three main signals I think have been overlooked, starting with the one that got the most attention, but aimed at the wrong signal:

G20

First, the G20 finance minister’s summit in North Carolina. Most headlines, by far, have reiterated the official talking point that China “derailed” (or similarly disruptive word) a group statement, painting them as the enemy of agreement without considering what in the statement they objected to.

Apparently there was a lot, but a key sticking point was the call to “eliminate non-market policies and practices that exacerbate imbalances”. China also objected to any mention of “critical minerals”.

I mean, we can understand where China’s coming from here – and it has a right to point out the hypocrisy. But rather than the substance of the non-agreement, I was more intrigued by the blatant bias in the messaging – US Treasury Secretary Scott Bessent, host of the meeting, wants us to see China as the “bad guy” while the US and allies are on the side of fair trade.

Much less attention was paid to the unexpected appearance at the event of the Russian finance minister, at the invitation of the US. China’s “uncooperative” stance on trade led to plenty of negative press, but Russia’s rejection of accountability for the invasion of Ukraine was overlooked and the aggressor was invited back to the big table. Meanwhile, the war itself has tragically but inevitably become background noise.

So, has Russia been forgiven, or is that being dangled as a reward for pressuring China? Has war in Ukraine become the “new normal”, or is there a backroom deal being negotiated as I type? Let’s not forget that last week, CIA John Ratcliffe flew to Moscow. We don’t have detail on what was discussed, but there’s no way Ukraine was not part of the conversation.

The geopolitical message is that the US may pay lip service to western “values”, but it’s actually fine with redrawing maps to suit the strongest. It’s not hard to imagine where this might lead next. It’s probably not a coincidence that yesterday Reuters reported that, for the first time in recent history, Danish conscripts were being deployed to Greenland.

Perhaps part of the lack of attention on the Russia angle can be attributed to the US Treasury denying press accreditation to journalists from several large media outlets, including Bloomberg, the Wall Street Journal and the New York Times – the first time it has done so for a meeting of this stature. We have to wonder what it was hoping to avoid by doing so. And we have to raise a concerned eyebrow about the message that “uncooperative” media will be shut out.

True, this is not even close to the level of media censorship in authoritarian states – there was not, as far as I know, any direct attempt to influence coverage. But it’s a step in that direction, one that we can expect to see more of.

Venezuela

Another big geopolitical earthquake this week is the US-Venezuela oil expropriation, I mean deal.

Last week, Axios reported that the US Administration was close to an agreement to securing long-term access to some of Venezuela’s crude reserves via a type of lease to develop a number of oil fields.

After market close on Friday, President Trump posted that:

Read more

Hi everyone, and hello September!

👀 You’re reading Crypto is Macro Now, which covers the role of crypto in the changing landscapes of finance, economics, politics, culture and markets. 👀

It seems that last week a stack of intriguing crypto-related papers dropped – it will take me a while to get through them, but I’m on it, I’m on it…

Production note: this newsletter will skip production tomorrow as I have to be away from my desk for most of the morning for medical stuff. Back on Thursday!

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

A stablecoin is a claim on something, and the something varies far more than the price does. Cash and short-term treasuries at a regulated issuer. Other crypto. An algorithm and a promise. All of them sit near a dollar until the mechanism gets tested.

Allium Research explains how stablecoins differ: https://allium.so/blog/what-is-a-stablecoin-a-clear-guide-to-digital-dollars/

And get weekly onchain data and more analysis like this from the Allium Research team on Substack.

IN THIS NEWSLETTER

• Can financial institutions use public blockchains?

• Markets: hopeful resilience

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

WHAT I’M WATCHING:

Can financial institutions use public blockchains?

The ideological battle between decentralized and centralized networks rages on. Actually, it’s not even an ideological battle in that few deny the inherent advantages in a distributed, resilient, open network – rather, the debate comes down to practicality.

I’ve often argued that financial institutions may intellectually acknowledge that public networks offer intriguing advantages, but that their inherent caution will keep them in permissioned silos.

That might soon change. A paper published last week by Rebecca Rettig, Omid Malekan and Michael Mosier lays out how financial institutions could, legally, work with public blockchains. It’s an interesting read that dispels many of the myths around decentralized risk for regulated entities. The authors are well-known and well-respected names with deep experience in both traditional market and blockchain regulation. Put differently, they are credible, neutral observers of the tussle between risk vs protection, decentralization vs control, new vs old.

Below, I’ll summarize their main points, and then bring in some of the more technical public blockchain objections laid out in a JPMorgan paper published in June.

For the purposes of this post, I’m going to assume that you’re familiar with basic public blockchain functionality (validators/nodes programmatically process blocks of transactions and maintain the network’s universal state).

I’m also going to assume that you’re clear on the difference between permissionless and permissioned blockchains (it comes down to whether or not you need to ask permission to access a network). A reasonable question is why bother with a blockchain if you are limiting participation, why not use a faster, cheaper, more flexible distributed database? The point of a blockchain is that anyone can use it and build on top of it without altering its functionality. But I digress, this is not about permissioned networks, it’s about dismantling institutional barriers to using permissionless blockchains.

🌻

The main premise of the Rettig, Malekan and Mosier paper (“The Compatibility of Permissionless Networks and Financial Integrity A Practical Guide for Financial Institutions” – I’ll refer to this as the RMM paper from now on) is that open networks themselves are not the barrier. They are perfectly legal, and used by financial institutions around the world. The internet, for instance, is an open network upon which supervised businesses can build applications.

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Hey, everyone! I hope you all had a good weekend – and to readers in the UK, have a great Bank Holiday Monday!

👀 You’re reading Crypto is Macro Now, which covers the role of crypto in the changing landscapes of finance, economics, politics, culture and markets. 👀

I had a wonderful three-day break and feel ready to say goodbye to August, although with a heavy heart. I love the rhythm of summer, however hot it gets. And I have a feeling September is going to be intense.

A really long one today, lots going on… it’ll be shorter tomorrow.

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A stablecoin is a claim on something, and the something varies far more than the price does. Cash and short-term treasuries at a regulated issuer. Other crypto. An algorithm and a promise. All of them sit near a dollar until the mechanism gets tested.

Allium Research explains how stablecoins differ: https://allium.so/blog/what-is-a-stablecoin-a-clear-guide-to-digital-dollars/

And get weekly onchain data and more analysis like this from the Allium Research team on Substack.

IN THIS NEWSLETTER

• Coming up this week: US jobs, geopolitics

• Reform vs change

• Markets: by “hike” I mean…

• Term of the day: Shanghai Cooperation Organization

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

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WHAT I’M WATCHING:

Coming up this week:

It’s jobs week! Plus, some big-name geopolitical meetings and an election are bringing some drama to the timeline.

Starting today, the Shanghai Cooperation Organization (SCO, see below for background) holds its two-day annual summit in Bishkek, Kyrgyzstan. China’s President Xi Jinping, Russian President Putin and Indian Prime Minister Modi are attending in person, with Putin and Xi expected to hold their second face-to-face meeting this year. Also attending are the heads of state for Iran (Pezeshkian), Pakistan, Belarus, Kazakhstan and other regional members. Plus, Türkiye’s president and the secretaries-general of the UN and ASEAN. On Friday, the organization put out a statement warning against external “interference” in Iran’s governance, which sets a confrontational tone for the event in the face of US Treasury Secretary Scott Bessent’s threats about economic isolation for any country that trades with the SCO member.

Meanwhile, G20 finance ministers and central bank governors kick off a two-day meeting in North Carolina. We can expect a lot of hand wringing on tariffs, energy prices, inflation, tightening conditions and secondary Iran sanctions. Fed Chair Kevin Warsh is attending, so is US Treasury Secretary Scott Bessent, after missing last year’s meeting in South Africa. Strangely, Bloomberg, the Wall Street Journal and other media outlets have been barred from covering the event – an unusual move, and a first for the US as host.

On a smaller scale but also important for shifting geopolitics, the annual Pacific Island Forum begins in Palau, an archipelago of over 500 islands and one of the few countries that has maintained diplomatic ties with Taiwan. One of the main items on the agenda is how to deal with an increasingly assertive China, but at least five heads of state (out of 18 members) will not be attending. Analysts suspect political pressure. The US, China and Taiwan are sending senior officials as observers and “dialogue partners”.

Tuesday brings the latest US Job Openings and Labor Turnover Survey (JOLTS), with job openings expected to increase slightly.

And we get the latest US Purchasing Managers Index (PMI) reports for manufacturing, forecast to show a slight deceleration. Keep an eye on the “prices paid” component.

We also get the initial Europe inflation read for August, with consensus estimates pointing to a jump from 2.9% year-on-year to 3.2%, with core inflation holding steady at 2.5%.

On Wednesday, we get the private ADP US payrolls report for August, forecast to deliver a slight pickup from a 44,000 gain in July to 47,000.

Thursday brings the Challenger, Gray & Christmas report on announced US job cuts for August.

We also get US PMI reports for the services sector, forecast to show a slight acceleration.

And we get the US Federal Reserve’s Beige Book, which offers anecdotal reports gathered by each of the 12 regional central banks on current economic conditions

On Friday, we get the official US jobs report for August, forecast to show a 55,000 increase vs a drop of 23,000 in July. The unemployment rate is expected to remain at 4.1%, holding the lowest level since January 2025.

(chart via Bloomberg)

On Sunday, the German region of Saxony-Anhalt holds state elections. These are a big deal in that the AfD is way ahead in the polls at 42% voting intention, double that of the ruling Christian Democrat party. Unless there is an astonishing electoral upset, Germany will get its first far-right state governor since WWII, sending a strong message not just to Chancellor Merz but also other European countries with elections coming up (including France and Spain). Then again, if AfD loses despite its polling advantage, that’s a strong message of a different type.

Reform vs change

We can argue long into the night about when the imbalances that led to the Great Financial Crisis started, and where. Whatever our view, most of us will be at least partially right and partially wrong, and we can agree to disagree. Interpreting history is never as straightforward as it may seem.

Most of us can probably agree, however, that things don’t feel stable now:

• A banking sector fighting disruption from innovators while encouraging leverage, hiding risk and accelerating the upward flow of capital

• A younger generation more interested in market speculation than in saving for a home they’ll never be able to afford

• Professional investors placing outsized bets on an uncertain future, convinced there will be a public bailout if they’re wrong

• A currency market changing shape faster than fragmented data indicates

• Political divides fed by growing dissatisfaction with orthodox economics, patched over by more government spending

• I could go on…

We can debate which wobbly pillar will give way first, and what the response and outcome will be. Countless pixels a day are spent doing just that.

But there’s a bigger question we’re not addressing: why many of the systemic stresses feel eerily similar to those that crashed the global economy almost 20 years ago. Wearing different clothes, perhaps, brandishing different gadgets – but today’s imbalances and risks have similar if not the same roots as those we sought to quelch. Put differently: to recover from the Great Financial Crisis, rather than change the structural incentives, we kicked the can down the road.

Below, I want to sketch out why I think that is, and why it matters for the evolution of crypto in finance.

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👀 You’re reading Crypto is Macro Now, which covers the role of crypto in the changing landscapes of finance, economics, politics, culture and markets. 👀

Hey, everyone! I hope you’re all doing well.

Another last-week-of-summer format change today: yesterday I shared some good reads on Bitcoin, today the same but for stablecoins/CBDCs. I’m taking a short summer break from tomorrow until Saturday, back next week with deeper dives on Brazil, multicurrency platforms and more.

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Prediction markets are no longer a niche election product. Sports are turning them into a mass-market trading venue. Kalshi traded $41.1 billion in July, its biggest month ever. That’s more than 5x Polymarket International’s $7.9 billion.

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IN THIS NEWSLETTER

• Network incentives, digital euro design and bank mendacity

• What is co-badging?

• Podcast episode recommendations (they’re back!)

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

WHAT I’M WATCHING:

Network incentives, digital euro design and bank mendacity

(Yesterday, I shared some good free access pieces I’ve read recently on Bitcoin; today’s the turn of stablecoins and CBDCs. This is a departure from my usual format – below, I ask you whether you’d like links to others’ work to be a regular feature, feedback please!)

Borja Neira – Food for Thought

In this thought-provoking X post, Borja outlines how the main barrier to greater global connectivity in payment networks is not technology, it’s incentives. Central banks don’t want to give up control of their settlement assets, commercial banks want to keep making money off deposits and credit, liquidity providers want to be paid for the risk they assume, corporates want privacy… all would benefit from greater efficiency, but at the cost of independence and self-determination? Unlikely.

Distributed ledger technology (DLT) can offer an “unbundling” of the connectivity trade-off: a shared network state, with participants retaining control over their contribution. Jurisdictions decide on settlement assets, banks could sell access, FX providers would earn from conversion, liquidity providers could decide how much to offer, and all could choose the risk they’re comfortable with.

Contributions to the network savings could be attributed transparently and remunerated accordingly.

Barriers still remain (such as cross-border bankruptcy risk) and new ones emerge (such as governance of a shared substrate), but DLTs can change how we think about incentives and interoperability by allowing for the separation of coordination from sovereignty.

Bottom line, Borja suggests that by focusing on how the technology could work, we’re overlooking the most important issue: efficiency is not necessarily the priority. His argument is especially relevant given widening cracks in existing currency blocs, friction in traditional cross-border payment alliances, and the geopolitical trend away from cooperation and towards stronger borders, economic security and defense.

Omid Malekan – The banking lobby’s bad faith campaign to kill the Clarity Act will backfire

In an op-ed published in Fortune, Omid brings his typical scathing wit to the lies told by the banking lobby in their fight to kill stablecoin rewards of any kind.

He points out that the banking industry’s pleas for government protection give the impression that it is struggling, in danger of collapse if it loses any deposits at all. But US bank profitability is strong, with $740 billion in net-interest income last year – this is more than the GDP of Australia. It’s also more than the combined net income of the Magnificent Seven tech companies, and you don’t see them clamouring for help. Yet we’re expected to believe stablecoins are a threat?

And there is no credible evidence at all that even direct remuneration to stablecoin holders would have a noticeable impact on bank deposits, any more than money market funds did.

Also, suppose the banks did have to start paying interest on deposit accounts in order to compete – that might dent their considerable profits, not their ability to lend.

Anyway, banks only account for around 20% of credit creation in the US economy, and the largest banks only lend out around half what they get from deposits – these are more likely to be parked at the Fed (earning interest) or used to buy Treasuries than go towards financing businesses.

Basically, the banks want to limit options available to savers, because they make more money from borrowers and there are not as many of them.

Omid asks the unspoken question: why does a highly profitable and highly protected industry need more protection, at the expense of savers and financial innovation?

“The industry that gave us Lehman and SVB would have you believe it’s really PayPal you should be worried about. It also wants you to believe that crypto is an unusual enabler of illicit activity, as if no bank ever moved money to facilitate any kind of illicit activity.”

I chuckled out loud at Omid’s comparison of the collective reverence for banks to a type of Stockholm syndrome. And I totally agree with him that this is likely to backfire as more of us start questioning the industry’s special status. I’ve written about this before, most recently a couple of weeks ago, but Omid brings up many points I hadn’t thought of, and does so with punchier prose.

See also:

• Why CLARITY’s delay hurts banks more than crypto (Aug 2026)

OMFIF – What makes or breaks the digital euro

The central bank think tank OMFIF teamed up with a researcher at Imperial College London to develop a model to simulate the impact of design choices on digital payment method adoption, and what they could mean for the digital euro.

Key factors:

Sign-up process. We have no insight yet into the European Central Bank’s thinking on this, but the study shows that users drop off if it takes more than 20 minutes. That sounds like a long time to me, I’d drop off after 10 minutes.

Time to execute a transfer. The ECB has indicated it will develop its own app – does this mean users will have to input the recipient’s banking details in order to send funds? Any additional data collected adds time and after 30 seconds, users drop off, especially if other payment methods are easier.

(It’s worth noting that the latest documentation from the ECB on the app stresses its accessibility for those with disabilities, which is good, but perhaps not enough to ensure users will choose it over other options. However, we’re told the digital euro will also be available via existing payment platforms.)

The authors acknowledge that the ECB’s decision to include a waterfall will reduce operational overhead – if a user receives funds that push the balance over the set limits, the excess will be siphoned off into a designated bank account. Useful, but it overlooks the friction of having balance limits in the first place.

Also, if the digital euro account does not have enough funds to fulfil a transaction, these can be automatically taken from a bank account. Again, useful, but I’m not convinced this does much to reduce the cognitive friction – wouldn’t it just be easier to make the transfer from your bank account?

Given the ECB’s promise of zero-fee transfers of the digital euro, plans to enable co-badging could be a successful hook (see below if you’re not familiar with the payments jargon) – credit/debit card payments could offer users a choice of which network they want their payments to route through, that of the card provider or that of the digital euro. But it would require a meaningful change to typical co-badging set-up (from one card => one bank account, to one card => both a bank and a digital euro account?). I’m struggling to see why card providers would welcome this.

The authors close by pointing out that the ECB has so far positioned the digital euro as a geopolitical imperative, but has failed to adequately explain to the public why they should use it when Europe already has plenty of excellent payment options. This makes design choices the secret to success – and it’s not clear (to me, anyway) that a central bank is best positioned to get that part right.

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👀 You’re reading Crypto is Macro Now, which covers the role of crypto in the changing landscapes of finance, economics, politics, culture and markets. 👀

Hello everyone! I hope you’re all doing well.

According to Substack, I am now a “bestseller” (I know, bewildering) which means I can offer my free subscribers access to three paid posts a month, of your choosing. The idea is you’ll like what you see and take out a full subscription, which would, you know, be awesome. But either way, I hope you find it useful.

For those of you who are premium subscribers, THANK YOU!!!! ❤ You are much appreciated. ❤

Production note: I’ll be taking a short summer break 🏖 Thursday-Saturday of this week.

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

x402 revives an HTTP status code that sat unused since the 1990s: 402 Payment Required. An API can answer a request by asking for payment, and a machine can settle it with no card, no account, and nobody approving it. Small protocol change, large consequences for how agents buy data.

→ Check out the explainer from Allium Research: https://allium.so/blog/x402-explained-the-internet-native-payments-standard-for-apis-data-and-agent-commerce/

And get weekly onchain data and more analysis like this from the Allium Research team on Substack.

IN THIS NEWSLETTER

• Some notable Bitcoin think-pieces

• Markets: now we’re talkin’

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

WHAT I’M WATCHING:

Some notable Bitcoin think-pieces

A relatively short and low-key email today as I had an unexpected schedule squeeze this morning. Below, I share three pieces on Bitcoin that are worth digesting, whether you care about the asset or not. Two touch on the relationship between Bitcoin and AI, one on how Bitcoin culture is changing for the better.

Jordi Visser: The Silent IPO Is Over: Bitcoin, AI, and the Collision of Time

Jordi starts out summarizing his view of the previous two years as Bitcoin’s “silent IPO”: the ETFs and political acceptance, then the October 2025 peak and subsequent slump, represented a redistribution of ownership from early believers to a broader, more institutional buyer base.

He then reframes the question of AI impact by suggesting traditional metrics no longer apply. Time, for instance – it was the old operating system, the hidden governor of output. AI disrupts this by replacing time with tokens, units of machine labour and cognition. How will GDP measure that?

As operating time compresses, so will economic time. The rails of an AI economy need to be continuous. Crypto will become the architecture that supports finance built for and run by machines, or run by humans on machine time.

“Stablecoins and specialized rails may do much of that work. But Bitcoin remains the proof and the foundation: a scarce, globally transferable digital bearer asset outside the discretionary expansion of any one credit system. It can become increasingly relevant as neutral collateral and long-duration savings while more transactional layers of crypto evolve above it.”

See also:

• Bitcoin benefits from AI wealth (Apr 2026)

• Bitcoin’s IPO (Nov 2025)

Erik Hersman: The Lunatic Line

The founder of Gridless reflects on what four years of powering rural electric grids with Bitcoin mining has taught him.

One is that the economics of energy distribution are largely misunderstood. An area can be abundant in the resources for renewable energy but lack the potential market size to make it viable. Until, that is, a location-agnostic industrial energy consumer that can pay for itself enters the scene.

Once grids are powering previously underserved communities, you know what else they can be used for? Powering datacentres. This doesn’t mean Bitcoin mining is replaced – it does mean a priority stack evolves, with Bitcoin the floor consumer.

(chart via Gridless)

Gridless’ proprietary software can route power to the highest-value use at any given time. This will usually be GPU compute, but not always as the equipment is more expensive and depreciates faster. The higher-value demand layer makes financing the build more attractive for partners while Bitcoin continues to monetize any surplus.

In sum, it’s an ingenious solution to both the poor economics of rural electrification and the unmet demand in Africa for small-scale local compute.

Nic Carter: A Second and Final Eulogy for Bitcoin Maximalism

Long one of the more sober early voices in Bitcoin, Nic puts a nail in the coffin for the asset’s maximalists by assigning a grade to their basic tenets:

• Altcoins will become irrelevant

• The stock-to-flow price appreciation model will dictate BTC’s price (wow, a blast from the past, haven’t heard S2F mentioned in ages!)

• Bitcoin will evolve from a store of value to a medium of exchange

• Fiat currencies

• The only consensus algorithm that works is Proof of Work

• Bitcoin is morally good and will transform society for the better

• Self-custody is essential

• And more…

(chart by Nic Carter)

He also acknowledges they were right about some things: Bitcoin has survived, while most alternatives haven’t.

But maximalism is on the ropes, and even applications built around Bitcoin (Lightning, Liquid, Nostr and others) are struggling to gain traction.

“Maximalism confuses Bitcoin’s success with the vindication of maximalism itself. The asset and protocol can succeed while the radical ideology around it fails. And, indeed, that is more or less what has happened. Bitcoin thrived and became a global monetary asset of consequence. The elaborate body of prophecy around it ended up being a poor description of what success would look like.”

Markets: now we’re talkin’

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Hello everyone! I hope that you all had a great weekend – one of the last of the summer where I am, before Madrid returns to work, kids return to school and the bustle kicks up to its usual decibels. Savouring every moment.

Programming note: speaking of which, I’ll be taking a few days off this week, so this newsletter will skip publication Thursday-Saturday.

👀 You’re reading Crypto is Macro Now, which covers the role of crypto in the changing landscapes of finance, economics, politics, culture and markets. 👀

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

US cash equities go dark for eight hours every weeknight and sixty five hours every weekend. Onchain perpetuals keep quoting the same underlyings straight through, which leaves a live price signal running while the official market sits silent.

Whether that signal carries information or thin-market noise is measurable. Allium Research ran it over sixty days.

→ Check out the report: https://allium.so/reports/when-wall-street-sleeps

And get weekly onchain data and more analysis like this from the Allium Research team on Substack.

IN THIS NEWSLETTER

• Coming up this week: central banks, inflation data

• Monday musings: why the next cycle will feel very different

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

WHAT I’M WATCHING:

Coming up this week: central banks, inflation data

At 2pm ET today, US Treasury Secretary Scott Bessent will host a news conference in which he is expected to offer more details on what he is calling an “economic D-Day” for Iran. This is a potentially huge escalation in the ongoing trade war as the US is threatening to also “isolate” any country trading with Iran, even if they are US allies and even if (I presume) they control global supply chains of some of the components the US desperately needs for its own technology and military investments.

On Tuesday, we get the latest US consumer confidence report from The Conference Board, expected to show some improvement.

On Wednesday, we get the US Personal Consumption Expenditures index for July. This is forecast to show a headline index increase of 3.6% year-on-year, the smallest annual increase in four months. The core index, ex-food and energy, is expected to show a year-on-year increase of 3.3%, flat on June’s read.

We also get inflation-adjusted personal spending data, as well as the first revision of the preliminary US Q2 growth figures (1.5%).

And NVIDIA releases Q2 earnings – I still find it wild that some corporate earnings can now be considered major macro events, but the chip manufacturer’s report will shed light on the outlook for the AI infrastructure build currently dominating US economic growth.

The annual central bank conference in Jackson Hole, Wyoming, kicks off on Thursday and will run until Saturday, so we can expect a flood of content on global monetary policy.

On Friday, Kevin Warsh takes the podium at the annual central bank conference in Jackson Hole, Wyoming. He’s likely to use the opportunity to repeat his mantra of “we have a task force for that”, and to emphasize Fed independence, the benefit of less communication, and so on. He’s also likely to again emphasize his promises that the 2% inflation target will be reached – it’s doubtful markets will be impressed.

Also on Friday, the Bureau of Labor Statistics will issue its preliminary benchmark payrolls revision for the year ended in March, which will give us an idea of how accurate previous US jobs reports have been (no official adjustment until the final revision is in, early next year).

And we get Japan’s latest inflation data.

Monday musings: why the next cycle will feel very different

(what’s on my mind as we head into the week)

It’s sad to see people go. Over the past few months, I’ve lost count of the number of crypto contacts I’ve spoken to that have said they’re just tired of the industry. You’ve probably heard this from some friends and acquaintances also: frustration, disappointment, even disgust.

I’ve been dwelling on why, when arguably the industry has been successful.

Bitcoin has been powering itself for 18 years, with no technical hiccups in well over a decade. Its token is held by retail savers around the globe as well as by the occupants of some of the highest elected offices. Legacy institutions in the world’s largest financial markets have set up crypto trading desks and launched digital asset investment products. US financial regulators are drafting rules for more secure crypto market participation, and there may soon be approval (maybe, hopefully) on a Congressional law. No-one thinks the crypto ecosystem will disappear, and only a regressive few think it will fade into irrelevance. And there are enough meaningful battles ahead to maintain emotional engagement.

And yet, the mood has been bleak.

Looking into what’s behind this despite achievements is a humbling exercise that says a lot about where the industry is in its development stage, while highlighting many of the features that still make it a fascinating space to watch.

Below, I’ll share my theories with you, and what they imply for the coming cycle. I have to stress that I, personally, am not at all disillusioned with the industry, and I acknowledge that everyone brings their own set of expectations to the table – here I have tried to understand why others are, and what explains the overall vibe.

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You’re reading the free weekly send of the premium daily Crypto is Macro Now, where I re-share a couple of the week’s posts and add some non-crypto and non-macro links since it’s the weekend. 🌼

If you’re not a subscriber to the premium daily, I do hope you’ll consider becoming one! For $12/month, you’ll get ~daily commentary on how crypto is impacting the macro landscape, and vice versa. I talk about adoption, regulation, tokenization, stablecoins, CBDCs, market infrastructure shifts and more, as well as the economy and investment narratives.

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Every public ledger broadcasts its truth in raw, chaotic form. Turning that into structured data institutions can trust is its own discipline. Allium Research lifts the lid on how blockchain data providers actually work, and why the category keeps growing.

→ Check out the report: https://allium.so/blog/blockchain-data-providers-how-they-work/

And get weekly onchain data and analysis like this from the Allium Research team on Substack.

NEWSLETTER STUFF

🌻Some news! Substack seems to think I am a bestseller (I know, I’m also bewildered), which means I can now offer you, my valued reader, free access to some gated posts.

All subscribers to the free tier of Crypto is Macro Now will get free access to three posts a month, of their choosing. I think, this is all new to me.

Anyway, if any of you try it out (and I hope you will!) and it doesn’t work, let me know. Worth noting that you have to be logged in to Substack to unlock a post.

I think it’s a great idea, and I congratulate Substack for helping us do better for our readers. I would, of course, love to make all posts open to everyone, but this is my only source of income, and so I will keep hoping that one day it will cover my living expenses. Meanwhile, I love what I do, and I’m beyond grateful that you give me some of your time. 🌻

In this newsletter:

• Fed communication and the Maradona theory of interest rates

• What is the fiscal price theory of inflation?

• Assorted links: Data centres, AI predictions, slop and the “optimize” backlash

• Weekend: nostalgic yet iconic ‘70s-’80s movie soundtrack videos

Some of the topics discussed in this week’s premium dailies:

Monday, August 17

• Coming up this week: beyond a White House crypto event, not much

• What custody has to do with ownership

Tuesday, August 18

• A tale of two markets

Wednesday, August 19

• Fed communication and the Maradona theory of interest rates

• Term of the day: the fiscal price theory of inflation

Thursday, August 20

• The Treasury Twist accelerates

• Term of the day: yield curve control

Friday, August 21

• Opening doors: crypto rules and market reform

• Markets: a different vibe

Fed communication and the Maradona theory of interest rates

There are task forces, and there are task forces.

As you know, Fed Chair Kevin Warsh has set up a few of these to re-examine how the US central bank should do its job. There’s one on data, another on the Fed’s balance sheet, one on inflation frameworks, on the impact of AI on productivity and jobs… but arguably the most consequential for markets is the task force on communication.

Since markets price in likely future Fed actions, expectations matter. These are inevitably going to be influenced by communication from the central bank, whether deliberate or inadvertent – when deliberate, it can be used as a market lever. What’s more, consensus around expectations is likely to contribute to market stability. So, for the past couple of decades, we’ve gotten used to “forward guidance”, in which the Federal Reserve lets us know what it expects interest rates to be going forward. It guides the market’s expectations.

The new Fed Chair has made clear he would like to do away with forward guidance. He believes it locks in forecasts and slows central bank action when conditions change; that it should not be necessary outside of crises; and that the Fed should be taking signals from the market rather than the other way around.

Other officials have gone further, accusing journalists of being too lazy to analyse monetary policy on their own (not a journalist’s job, but whatever).

In sum, Fed communication is important, and it’s going to change.

To get an idea of what that might look like, I turned to the head of the communications task force Lord Mervyn King, former governor of the Bank of England and author of easily the best book I have read to date on the philosophy of finance – The End of Alchemy: Money, Banking and the Future of the Global Economy, published in 2016.

Given its renewed relevance, I pulled it off the shelf to see what Lord King has to say about how central banks should interact with the public.

To sum up his view in two words: they shouldn’t.

When King joined the Bank of England in 1991, he asked Paul Volcker for advice. Volcker was succinct: “mystique”.

This was in a time before social media, Substack, video everywhere – a time when newspapers and news anchors were trusted, when life was less financialized and money less mobile. Until 1994, the Federal Reserve did not even reveal what the official interest rate was, let alone whether it had changed.

Today, trust in almost all institutions has weakened – this may be well-deserved, but it adds friction to the effective functioning of society, weakening trust even further. The central bank has hoped that greater transparency would have restorative powers – let the public see how we do what we do, the theory goes, and they’ll be more understanding.

To some extent, I think it worked. We may strongly disagree with decisions taken, but feeling like we know what they’re thinking weakens our assumptions that they’re idiots. Former Fed Chair Jerome Powell’s folksy and grandfatherly image at the press conferences helped many overlook his involvement in Operation Choke Point 2.0 and the colossal “transitory inflation” error.

Put differently, transparency can open the book, but can also obfuscate important details with a flood of words.

King alludes to this in his book. Transparency, he argues, should not be the objective. It needs to be a tool: does it improve the quality of central bank decisions?

The publication of the FOMC meeting minutes, for example, adds a layer of accountability – but it can also hinder open and frank discussion as members know the public will pore over every word, and even just the suggestion of a change in approach could trigger market volatility.

As for “forward guidance”, King points out that it is misleading: there is no way FOMC members can know what’s ahead, but the issuance of guidance suggests that they do. And their attempt to reduce uncertainty has morphed into interest rate predictions, from the very people tasked with adjusting rates in the face of uncertainty. One of my favourite summer reads has been Carissa Véliz’s “Prophecy” in which she points out that predictions are really about control – they subliminally lock us into a certain path of behaviour, which can give the illusion of preparedness while making us more vulnerable before an unknowable future.

This is also a theme Lord King comes back to often, especially in his other excellent book, “Radical Uncertainty: Decision-making for an Unknowable Future”, co-authored with John Kay and published with ironically prescient timing in 2020.

So, we will most likely soon see the end of the dot plot which reveals FOMC member rate expectations (to which, tellingly, Chair Warsh refused to contribute in the most recent publication). This week’s publication of FOMC minutes could be one of the last, at least in the current format. We might even get fewer post-FOMC meeting press conferences – if they’re going to be as boring as the last one, I’m all for it.

Many will protest as we’re in a content-hungry age in which most of us toil under the illusion that more information will make us smarter and better prepared for what’s ahead.

King argues that, when it comes to monetary policy, it won’t. While he may not fit the typical profile of experts who spout sporting analogies, in “The End of Alchemy” he manages to tie in a football anecdote that will resonate with anyone missing the spectacle and tension now that the World Cup is over.

In the 1986 World Cup, Diego Maradona scored two goals against England to win Argentina the quarter-final victory (it would go on to win the championship). One should not have been allowed as he used his hand, but the referee’s attention was apparently elsewhere and did not catch the foul. Obviously, that doesn’t apply to monetary policy, but the second score, later voted the “Goal of the Century”, does: Maradona ran with the ball from his own half to the English goal in a straight line. How was that possible? It turns out the opposing team assumed he’d zig and zag. It did not occur to them he’d hold a steady path – and he was able to do so, because they were busy reacting to a different strategy.

Financial markets work in a similar way. They react to what they expect the central bank to do. This can be enough to stabilize private spending without the central bank having to do anything at all.

Put differently, expectations do the central bank’s work. And Warsh wants the market to derive its own expectations of what the central bank will do, based on its interpretation of the data.

In his first press conference as Fed Chair, Warsh was clear in his reasoning:

“I think financial markets perform best when they react to incoming data. I think the financial markets work less efficiently when they ask a question: How will the Federal Reserve react to that incoming information? … Financial market prices are probably the most important source of information to guide central bankers. But when all the financial markets are doing is reflecting back what we’ve said, then we’re taking the most important source of information, and we’re being blind to it.”

Combining Warsh’s views with those of the head of the Communications Task Force leaves little room for doubt as to where Fed transparency is heading – back into the murky recesses of the Eccles building.

A more relevant question is to what extent this key task force will be merely performative. Hopefully, it will allow enough debate to craft a workable compromise and a smooth transition to the new central bank regime.

See also:

• Warsh’s heavy-hitting task forces (July 2026)

• The performance (July 2026)

What is the fiscal price theory of inflation?

(In macro, crypto and geopolitics, there are so many terms we often use without fully understanding them, so many we regularly hear without knowing their meaning – so, most days, I choose one and do my best to explain it.)

The ideas behind the “fiscal price theory of inflation”, popularized by economist John Cochrane and others, have been gathering momentum in recent years along with the post-2008 and post-pandemic fiscal expansions.

The basic premise, as the term suggests, is that inflation is largely determined by fiscal policy.

This may feel intuitive – more government spending = more money sloshing around the economy = more inflation – but it flies in the face of the long-held assumption that monetary policy determines inflation.

The term may sound like a fancy way of saying “fiscal dominance”, which I’ve often written about before as it explains why, with US rates much higher than a few years ago, inflation is still above the 2% target and is resisting coming down further.

But there’s more to it. It’s about government liabilities relative to public trust in its ability to cover obligations via future revenues.

Economists like equations, and proponents of this theory came up with a relatively simple one to describe the mechanism:

• Real value of government IOUs = Present value of expected future repayments

Here, government IOUs include issued bonds and outstanding money.

Put differently, the amount of outstanding government debt adjusted for inflation has to equal the present value of expected future federal net income (excluding interest payments). Simplifying further, total liabilities must equal the ability to repay.

When the former climbs above the latter, people will want to reduce the value of the government IOUs they hold. They will do so by spending more. This pushes up prices which lowers the inflation-adjusted total value of the government IOUs, until the equation is again in balance.

Put differently, inflation increases when people don’t expect the government to be able to fully repay its debts. This brings down the real value of the total IOUs.

So, effectively, inflation is a function of a government’s debt and money issuance, and public trust.

This largely fits in with what we’re seeing now in the US: rates are much higher than a few years ago, and so is inflation. Continued fiscal stimulus will keep inflation high, whatever the Fed does on rates.

ASSORTED LINKS

(A selection of reads I came across this week that I think are worth sharing, not about crypto nor macro. I try to choose links without a paywall, but when I feel it’s worth making an exception, I specify.)

• Jasmine Sun paints a nuanced portrait of why there’s no “right” or “wrong” in the datacentre-in-my-backyard debate. A lot of municipal income is at stake; but many people just don’t want the hulking cement monstrosity in their neighbourhood, at any price. (no data centers in my backyard, @jasmine’s substack)

• Why are Americans against building more AI datacentres when the economy depends on it? Derek Thompson talks to Jasmine Sun about the relationship between the construction backlash, the Silicon Valley mindset, social media and non-disclosure agreements. Eye-opening. (The Great American AI Rebellion, Derek Thompson – paywall)

• A sample of AI-related predictions from the archives, all of them so definite and certain. (The Archive of Incorrect AI Predictions)

• A Pew Research report suggests that over a third of web pages published since the advent of ChatGPT are written by AI. That’s not surprising, but it’s also depressing. And we have to wonder if these pages are optimized for being picked up by AI queries. (How Much of the Internet Is Written With AI?, Pew Research)

• More signs that the social media-fuelled pressure to “optimize” is getting the long-awaited backlash, and that we’re getting tired of the influencer lifestyles. The article suggests that it’s out of boredom and over-flooding, and that may be – but my working theory is that the digital acceleration of AI everywhere is subliminally boosting our interest in the authentic and the personal, also seen in a growth spurt in retail spending at hobby-book-music stores. (The Optimization Backlash Has Begun, Bloomberg – paywall)

HAVE A GREAT WEEKEND!

(in this section, I share stuff that has NOTHING to do with macro or crypto, ‘cos it’s the weekend and life is interesting)

Time for some more iconic movie soundtrack songs from the ‘70s and ‘80s that are also fun (if somewhat dated) music videos. I last shared some back in January, can’t believe it’s been that long… Back then I said there were more coming, and here – finally – they are:

• Hot lunch, by Irene Cara (from Fame)

• Take My Breath Away, by Berlin (from Top Gun)

• The Power Of Love, by Huey Lewis & The News (from Back to the Future)

DISCLAIMER: I never give trading ideas, and NOTHING I say is investment advice! I hold some BTC, ETH and a tiny amount of some smaller tokens, but they’re all long-term holdings – I don’t trade. Also, I often use AI for research instead of Google, but never for writing.

Hello everyone, and happy Friday!!!

This will be a short email today as I have plumbers traipsing through the apartment and needing some attention – some of our key bathroom fixtures are old, really old, and have been making strange noises. So, I finally grappled with my years-long procrastination called a repair man who has shown up this morning with a full team. I find house maintenance stuff so stressful, which I’m sure is a sign of lingering immaturity, and no doubt a cognitive disconnect since I often write about how infrastructure needs to be updated.

👀 You’re reading Crypto is Macro Now, which covers the role of crypto in the changing landscapes of finance, economics, politics, culture and markets. 👀

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Trump just said the CFTC is working to bring Hyperliquid to the US legally. What started as a crypto platform is evolving into a house for all of finance, as equities, commodities, and pre-IPOs now account for over 50% of volume. 24/7, live Hyperliquid data will become a must-have for any serious trader.

→ Book a demo: https://www.allium.so/

And get weekly onchain data and more analysis like this from the Allium Research team on Substack.

IN THIS NEWSLETTER

• Opening doors: crypto rules and market reform

• Markets: a different vibe

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

WHAT I’M WATCHING:

Opening doors: crypto rules and market reform

Loud and clear, we’re getting the message that the US agencies aren’t going to wait for a decisive vote on the CLARITY Act before preparing their digital asset market frameworks.

Yesterday, CFTC Chair Michael Selig reiterated that his agency was ready to craft the necessary rules should CLARITY fail to pass. Meanwhile, it is working on a specific framework for perpetual futures, the structure for CFTC-regulated crypto trading platforms that offer leverage, prediction as well as compute markets, and more.

And on Tuesday, we got a 400-plus page document from the SEC called “Regulation Crypto Assets”.

This builds on the taxonomy of crypto assets published jointly by the agencies back in March – that covered what assets are, not how they can be sold to the general public.

The latest publication fills that gap. Basically, it cleans up and legalizes the ICO model of the early crypto days, by outlining two securities registration exemptions:

Read more

Hello everyone! I hope you’re all doing well and taking care of yourselves.

It looks like crypto markets are getting interesting again… 👀

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

Hyperliquid: from a crypto platform to the house of all finance

Trump just said the CFTC is working to bring Hyperliquid to the US legally. What started as a crypto platform is evolving into a house for all of finance, as equities, commodities, and pre-IPOs now account for over 50% of volume. 24/7, live Hyperliquid data will become a must-have for any serious trader.

→ Book a demo: https://www.allium.so/

And get weekly onchain data and more analysis like this from the Allium Research team on Substack.

IN THIS NEWSLETTER

• The Treasury Twist accelerates

• Term of the day: yield curve control

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

WHAT I’M WATCHING:

The Treasury Twist accelerates

Finally, we got a reaction.

Over the past few weeks, US long-term yields have been climbing and climbing, with the 30-year reaching its highest level since 2007 and no obvious catalyst on the horizon to bring them back down other than a market crisis or official intervention.

For now, we have the latter, in the hopes it will stave off the former – but the underlying problems remain.

What happened

Yesterday, the US Treasury announced that it was raising the maximum amount of bond buybacks from $2 billion per operation to “at least” $4 billion, from September 9 to the end of the current refunding quarter on November 4. (I’m not sure how a maximum can be “at least” a given number, but moving on…)

This move came just two weeks after the publication of the Treasury’s Quarterly Refunding Statement, which confirms it is an unplanned reaction to the market rather than part of a planned strategy.

The timing may have been a surprise, but the move itself is not: last year, Bessent said that bond buybacks were part of the department’s “big toolkit”, to be rolled out if needed.

Still, it’s unusual and significant which means there are a lot of bad takes and misinformation swirling around. So, here’s a breakdown of what it isn’t, what it is, and why it matters for markets.

What this is not

Read more

Hello, everyone! I hope you’re all doing well and making the most of what’s left of the summer, if you’re in the northern hemisphere. Personally, I don’t want summer to go, but I’d be okay with the temperature dropping a bit.

🎉 To everyone who helped me pass 7,000 subscribers, THANK YOU!!!! 🎉 I know it’s just a number, and to be clear, this is total subscribers, not paying ones. But it feels like a milestone, and I’m thrilled. I love what I do, and I so very much appreciate your support.

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

Blockchain Data Providers: How They Work

Every public ledger broadcasts its truth in raw, chaotic form. Turning that into structured data institutions can trust is its own discipline. Allium Research lifts the lid on how blockchain data providers actually work, and why the category keeps growing.

→ Check out the report: https://allium.so/blog/blockchain-data-providers-how-they-work/

And get weekly onchain data and analysis like this from the Allium Research team on Substack.

IN THIS NEWSLETTER

• Fed communication and the Maradona theory of interest rates

• Term of the day: the fiscal price theory of inflation

(I haven’t had time yet to look at the SEC statement on tokenization, so I’ll comment on that tomorrow.)

🌻 Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

WHAT I’M WATCHING:

Fed communication and the Maradona theory of interest rates

There are task forces, and there are task forces.

As you know, Fed Chair Kevin Warsh has set up a few of these to re-examine how the US central bank should do its job. There’s one on data, another on the Fed’s balance sheet, one on inflation frameworks, on the impact of AI on productivity and jobs… but arguably the most consequential for markets is the task force on communication.

Since markets price in likely future Fed actions, expectations matter. These are inevitably going to be influenced by communication from the central bank, whether deliberate or inadvertent – when deliberate, it can be used as a market lever. What’s more, consensus around expectations is likely to contribute to market stability. So, for the past couple of decades, we’ve gotten used to “forward guidance”, in which the Federal Reserve lets us know what it expects interest rates to be going forward. It guides the market’s expectations.

The new Fed Chair has made clear he would like to do away with forward guidance. He believes it locks in forecasts and slows central bank action when conditions change; that it should not be necessary outside of crises; and that the Fed should be taking signals from the market rather than the other way around.

Other officials have gone further, accusing journalists of being too lazy to analyse monetary policy on their own (not a journalist’s job, but whatever).

In sum, Fed communication is important, and it’s going to change.

To get an idea of what that might look like, I turned to the head of the communications task force Lord Mervyn King, former governor of the Bank of England and author of easily the best book I have read to date on the philosophy of finance – The End of Alchemy: Money, Banking and the Future of the Global Economy, published in 2016.

Given its renewed relevance, I pulled it off the shelf to see what Lord King has to say about how central banks should interact with the public.

To sum up his view in two words: they shouldn’t.

When King joined the Bank of England in 1991, he asked Paul Volcker for advice. Volcker was succinct: “mystique”.

Read more

Hello everyone! I hope you’re taking care of yourselves.

A macro/markets ramble today, with a ton of charts. I wasn’t able to add the usual “term of the day” as I’ve been valiantly battling an invasion of ants into my workspace – ok, “valiantly” is perhaps a stretch as my battle consisted of wielding a spray and beating a horrified retreat to work in the kitchen. I know that they’re tiny little creatures and I wish I could pretend to be cool and compassionate about this, but I’m not going to lie: a trail of them marching across my laptop keyboard freaks me out. Please wish me luck in this fight.

👀 You’re reading Crypto is Macro Now, which covers the role crypto is playing in the changing plates of finance, economics, politics, culture and markets. 👀

PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨

Tokenized Treasuries: How They Work and Why They Matter

Tokenized treasuries have become the largest category of real-world assets onchain. Allium Research breaks down how they actually work and why institutions are moving so fast to bring them onchain. The mechanics matter, and so does what happens next.

→ Check out the report: https://www.allium.so/blog/tokenized-treasuries-how-they-work-and-why-they-matter/

And get weekly onchain data and analysis like this from the Allium Research team on Substack.

IN THIS NEWSLETTER

• A tale of two markets

Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.

If you’re a premium subscriber, thank you so much!! ❤

WATCHING:

A tale of two markets

“It was the best of times, it was the worst of times…” So begins my favourite Charles Dickens novel, A Tale of Two Cities. This came to mind as I was wondering what to call today’s macro rambling, and while the full opening sentence is of course much more majestic than the snippet suggests, it does highlight the co-existence of diverging trends and our consequent confusion.

Over the past few days, we’ve had good economic reports, and also not-so-good. There are some market indicators that are glowing, others that are dire. Of course, this is all uncomfortable as us humans like to make sense of things – but with the jigsaw puzzle pieces up in the air, we’ll have to make do with small snapshots that just might eventually form a coherent landscape.

Below, for the sake of flow, I’ll separate the data I’m looking at on the macro front from market indicators. Since I prefer ending on a positive or at least neutral tone, let’s start with a glimpse of the not-so-good news.

Macro: Consumer sentiment

Friday’s report from the University of Michigan consumer survey showed sentiment falling for the first time in three months. One-year inflation expectations ticked up to 4.3%.

(chart via Bloomberg)

Gauges on current economic conditions and consumer expectations also dipped, coming in well below the consensus forecast.

(chart via @LizAnnSonders)

As always, the real story is in the details.

Check out the drop in sentiment from Republican respondents – this sub-index hit its lowest point since late 2024, before Donald Trump won the White House.

(chart via @fcastofthemonth)

What’s more, this dip coincides with the findings in a Financial Times poll published over the weekend: a significant percentage of Republicans are not happy with the Administration’s economic policies. Around 40% of Republican respondents think the economy is heading in the wrong direction, and almost a quarter feel worse off than before Trump took office. And this is with three months to go before the midterm elections.

(chart via the Financial Times)

Also, taking a look at the mean (average) 1-year inflation expectation rather than the median (midpoint) gives a better idea of the range – how many respondents expect higher vs lower inflation, and by how much?

The mean expectation of 1-year inflation is up to 7.9%, not far from its 2022 high of 8.2%.

(chart via @DannyDayan5)

And the proportion of respondents that expect interest rates to rise hit 53%, the highest since November 2023. No wonder the mood is grim.

(chart via @samueltombs)

Macro: US retail sales

You’d think that higher inflation expectations would boost spending as consumers bring forward plans. But the Friday US retail sales release showed that this did not happen in July, perhaps influenced by declining real wages (down 0.2% year-on-year).

The nominal value of retail purchases fell 0.6% month-on-month in July, the steepest drop since May 2025. Excluding autos and gasoline, the decrease was trimmed to 0.2%.

(chart via Bloomberg)

The slump in retail spending is also no doubt in part due to lower savings. At the end of June, the US savings rate was down to 2.7%, less than half where it was two years ago and close to the lowest on record for a data series that goes back to 1947.

(chart via Bloomberg)

If this continues to head lower, do consumers pull back even more on spending, or do they increase household debt?

There was an intriguing standout in the retail sales report, which leaves me hopeful about our resistance to the impact of AI on culture and mindset:

Looking at the category breakdown in retail sales, the steepest three-month spending increase vs a year ago – other than gasoline – came from hobby, musical instrument, sporting goods and book stores, up 11.5%. This compares to a year-on-year increase of 5.6% at the end of 2025, and a spending decline the previous two year. We’re spending a lot more on stuff that makes us feel more human. I love knowing that.

Macro: US PPI

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