Crypto and China + in from the margins

plus: signals from a political earthquake, Powell pressure, markets and more

“The greatest challenge to any thinker is stating the problem in a way that will allow a solution.” – Bertrand Russell ||

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IN THIS NEWSLETTER:

• Signals from a political earthquake

• China and crypto

• Crypto comes in from the margins

• Macro-Crypto bits: markets, Powell pressure, systemic cracks

COMING TOMORROW: the BIS is scared of stablecoins, South Korea isn’t, Barclays is scared of clients investing unwisely, SoFi is getting into crypto, and possibly more unless something else happens and again I run out of time – unlikely, right?

If you’re not a premium subscriber, I hope you’ll consider becoming one! You get ~daily commentary on markets, tokenization, regulation and other signs that crypto IS impacting the macro landscape. As well as relevant links and music recommendations ‘cos why not.

WHAT I’M WATCHING:

Signals from a political earthquake

In keeping with the rhythm of now-frequent signs of the “old order” breaking down that I often write about here, yesterday delivered a big one. Zohran Mamdani won the Democratic primary for November’s New York mayor election, sending shockwaves through the political as well as financial establishment and executing what is being called the “greatest political upset in New York City politics in a generation”.

Even ignoring his social media posts in favour of “globalizing the intifada”, what has alarmed analysts and investors is his support for rent freezes, state-run supermarkets and free public transit, to name just a few of his more controversial campaign promises.

If implemented, of course these would be disastrous for New York’s economy, as anyone who has lived in places with these policies can tell you. But our collective focus on the economic outcome of what he wants to do is missing the point.

Mamdani won for a reason. Or, more likely, several. We may not agree with them, but we can’t ignore them, and until they are understood and dealt with, we will see more electoral results like this.

It certainly helps that he comes across as attractive and likeable, and in this social media age, that matters more than sound policy, at least for now. This is not new, as television is credited with being influential in John F. Kennedy’s victory. But Mamdani’s team does great videos which end up in the palm of everyone’s hand – a different level of impact. (Not for nothing, his mother is film producer Mira Nair, behind Monsoon Wedding, Queen of Katwe, Vanity Fair and many more).

And he represents more than a nice smile. I asked my son (a borderline millennial) what he thought – he’s excited, he said, by the energy Mamdani brings. It “feels good”. I don’t think he’s ever said that about a candidate before, and we talk about politics quite a lot at home.

This highlights what many of us have been saying for a while – politics has increasingly felt “other”, the arena for the rich, the old, the entrenched. More about continuity than change. Here is someone who can channel voters’ frustration with the lack of affordable housing, the debt from student loans in a wobbly jobs market, the threat to careers from new technologies and the lack of clarity as to what to do about it. Not to mention the possibility of higher prices due to tariffs, the flip-flopping on trade and the uncertain outcome of the initiative to bring industry back to the US.

Their grievances are not invalid, and calling Mamdani voters “entitled”, “envious” and “stupid” may feel righteous but it is not going to help win over anyone, it just further polarizes the issue. What would win over his voters? Addressing the grievances, with sincerity. Unfortunately, that looks like an impossible task for anyone part of the “establishment”, since they will first have to explain how the establishment is not part of the problem.

Now, Mamdani hasn’t won yet, there’s still the actual November election to get through and I imagine a ton of money is coming Eric Adams’ way. But, although I’m on record as saying I didn’t think Mamdani would win (I also thought that about Trump in 2016 for the same mistaken reasons), I now think he might. If he doesn’t, it will have been a close call. The takeaway is that we all have to listen to the message his primary win is sending: for most Democrat New York voters, the current system isn’t working.

China and crypto

I’ve written before about how it appears China is warming to the idea of regulated (and observable) crypto trading, rather than continuing to pretend it doesn’t happen.