CBDCs and an EU tussle of power

also, BTC, gold and the US dollar

“Conventional people are roused to fury by departure from convention, largely because they regard such departure as a criticism of themselves.” – Bertrand Russell  || 

Hello everyone! I hope you had a good weekend.

Whether today is Veteran’s Day for you, or Remembrance Day, or neither of the above, it’s humbling to remember the sacrifices throughout history that gave us the freedom we enjoy. Let’s always do our best to make sure these sacrifices weren’t in vain.

I know that I usually talk macro on Mondays, but I did so much of that last week that today I get back to a nerdy focus on how money is changing, specifically how the ECB’s approach to central bank digital currencies highlights building fault lines.

But obviously I do have to also discuss the weekend’s crypto moves, and what they have to do with gold and the dollar.

IN THIS NEWSLETTER:

• BTC, gold and the US dollar

• CBDCs and an EU tussle of power

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WHAT I’M WATCHING:

BTC, gold and the US dollar

Finally, crypto’s tailwinds are kicking in.

Since Trump’s victory was confirmed, BTC has been breaking consecutive new all-time highs, and as I type is above $82,000.

(BTC/USD chart via TradingView)

Gold, meanwhile, continues to drift lower.

(gold and BTC chart via TradingView)

I’ve suggested before that this could be because of rotation from gold into BTC to play the Trump bump. While we’re probably seeing some of that, the gold market is so vast relative to that of BTC, that we’d have seen even more wild price swings were rotation the main driver.

I’ve heard some analysts say that gold’s weakness since the election is because the macro outlook is still unclear and there are doubts Trump will have as big of an impact on inflation as many expect. I disagree that this is the cause of gold’s slump, because the forces behind gold accumulation are about much more than the inflation outlook.

I think it’s because the dollar is climbing.