Friday, May 17, 2024

SAB 121 repeal gets closer, Xi-Putin embrace, market sentiment, CME and spot BTC and more

“I like nonsense; it wakes up the brain cells.” – Dr. Seuss  ||

Hello everyone, and Happy Friday! I hope you have fun things planned for the weekend – a recharge will come in handy if things continue to pick up.

If you find this newsletter useful, would you mind sharing it with your friends and colleagues? ❤

IN THIS NEWSLETTER:

• The making of…

• CME and spot bitcoin

• SAB 121’s repeal moves forward

• The big Putin-Xi embrace

• Market sentiment risk-on

• Metaverse flop

If you’re not a subscriber to the premium daily, I hope you’ll consider becoming one! You’ll get ~daily insight into the growing overlap between the crypto and macro landscapes, as well as some useful links. And there’s a free trial!

WHAT I’M WATCHING:

The making of…

A brief glimpse at how this newsletter gets produced every morning: I skim the news on several websites, open around 200 articles on individual tabs (exaggerating a bit, but not much) and then start ploughing through them, taking notes and keeping tabs open for things I want to poke into. That’s the fun part.

Then, at 1:45pm CEST I start loading into Substack, and whatever I haven’t written about will get pushed to the next day, or lost on the river of “things I would have liked to have covered but couldn’t get to”. That’s the frustrating part.

On weekends, I’ll often have time to get to one or two of the topics that were drifting away, which is why you’ll sometimes see me cover things that happened the previous week or even the previous month. I tend to include these when I have a schedule crunch and am away from my desk for part of the morning and there’s room within the Substack word limit (ok, there isn’t technically a word limit but the platform does flash aggressively green banners at you when you’re over the cut-off applied by many email clients, which is intimidating but appreciated).

Right, on to why I’m telling you all this…

CME and spot bitcoin

One item I almost skipped, because I didn’t at first glance grasp the significance, was the report yesterday that the CME is working on launching a spot BTC exchange.

The CME is the leading US-based institutional platform for BTC and ETH derivatives, but I know that crypto traders don’t much like its products for their low margin, high fees and limited selection. I figured the CME spot crypto market would also be largely shunned by the real volume movers, and anyway, wake me up when there’s a firm announcement.

It was only when a smart friend said “spot and futures on the same platform for US tradfi institutions” that I thought “ooooooo”. It’s not so much the ability to take spot positions and hedge with derivatives that grabbed me, although that could potentially be significant – it’s the basis trade.