Monday, August 14, 2023

“It has been said that man is a rational animal. All my life I have been searching for evidence which could support this.” – Bertrand Russell  ||

Hello everyone! You’re reading the premium daily version of Crypto is Macro Now. In this newsletter, I give some depth on factors I’m keeping an eye on that highlight the growing overlap between the crypto and macro landscapes – my focus is on how crypto is affecting the global economy, and vice versa. There is often a market discussion as well, because that is an important piece, not just for the structural changes but also for investor sentiment, which impacts attention and funding. Nothing I say is investment advice!

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Programming note: It’s a public holiday where I live tomorrow, August 15th (Asunción de la Virgen, in case you’re curious), so this newsletter will be taking a break – back in your inbox on Wednesday. I also will be taking a short holiday from the 19th to the 26th of August. Maybe the BTC price will have moved by the time I get back?  

IN THIS NEWSLETTER

• Signs that inflation is coming back?

• China easing – maybe

• A BIS study on the pricing impact of blockchain-based issuance

• Crypto in Kenya: trading is still the main use case

WHAT I’M WATCHING

China easing  - maybe

Tomorrow, Chinese policy loans worth ~400 billion yuan (~$55 billion) are set to mature, the highest amount since January. The PBOC is likely to roll them over to avoid withdrawing liquidity from the financial system, and it may even take the opportunity to adjust the banks’ reserve ratio, which could inject more liquidity into the market. Expectations of a reduction in lending rates, however, are waning.

Why it matters:

The crypto market has largely been counting on Chinese stimulus, which in theory would benefit bitcoin and other tokens more than it would other risk assets such as US-based tech stocks. It is starting to look like that stimulus might not be forthcoming.