“A moral monopoly is the antithesis of a marketplace of ideas.” – Thomas Sowell ||
Hello everyone, and welcome to July!! (Really??? July already????)
I knew it, two days of not publishing and a ton of stuff happens. There is so much to talk about that I’m not going to be able to fit it all in today, so some – Coinbase/Stripe, MiCA, macro, Sony, my takeaways from HedgeWeek – will be pushed to tomorrow and Wednesday.
Also, given the flurry of significant activity in crypto regulation last week, I’m bringing that monthly recap forward by a week.
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Programming note: It’s a short weekend in the US because of the July 4th holiday, so this newsletter won’t publish on the 4th or the 5th.
IN THIS NEWSLETTER:
The Q2 close
Regulation update: what a week – Chevron, Jarkesy, MetaMask, Binance
Not discussing the debate – ok, just a bit
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WHAT I’M WATCHING:
The Q2 close
Well, that sure was an interesting quarter:
US economic data is finally albeit tentatively showing signs of a slowdown, leading to a revival of rate cut expectations.
Some large economies actually did cut rates.
We had some astonishing upsets in key elections that highlight an uncomfortable level of political turmoil which in turn is adding to market uncertainty.
Meanwhile, US tech stock valuations continue to climb and no-one really seems to understand why.
And crypto narratives shifted, although only at the very top of the cap table.
In terms of performance, BTC lagged despite strengthening conviction in easier monetary policy, as the post-halving miner blues kicked in and as the US and Germany have reportedly been selling seized assets.
The below chart suggests, however, it was the unexpected approval of the ETH spot ETFs that pushed the second largest crypto asset into outperformance – were it not for that, it would probably still be BTC’s market given macro and geopolitical shifts.
(chart via TradingView)
Indeed, BTC’s market dominance (its percentage of total crypto market cap) is higher than at the start of the quarter, despite the sell pressure described above.
(chart via TradingView)
Keep an eye out for when it starts to trend down – that will be a sign that risk appetite is truly back.
A further hint that this is still a relatively optimistic albeit cautious market is the dominance of BTC and ETH together – a year ago it was around 57%; now it is almost 20 percentage points higher. With roughly three quarters of total crypto market cap in the top two assets, this is hardly a frothy market just yet.
(chart via TradingView)
Regulation update: what a week
I was going to share a summary of key CBDC developments today, per the new “overview” schedule (a Monday roundup of developments from the previous month in tokenization, stablecoins, CBDCs and regulation, in rotating order), but so much happened last week on the regulation front that I’m swapping the categories around. I mean, really, where to start, just the past week could fill volumes…
Chevron
The biggest overall impact, and the one I’ll spend the most time on here, arguably comes from the Supreme Court overturn of the “Chevron deference”, which had given executive agencies considerable leeway in setting rules based on their interpretation of the law, without judicial review.
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