Monday, June 17, 2024

new features, BTC patterns, market liquidity, tokenization progress, telecoms

“If you look at history, innovation doesn't come just from giving people incentives; it comes from creating environments where their ideas can connect.” – Steven Johnson ||

Hello everyone, happy Monday!

Some new features to announce:

1) Starting today, Mondays will feature a roundup of what I see as the four most significant developments over the previous month in 1) tokenized assets, 2) stablecoins and 3) CBDCs, on a rotating basis with the fourth week selecting the most intriguing moves overall, in these and other areas. I hope this will help you to keep abreast of the widening overlap between the crypto and macro landscapes, and why it matters.

2) Y’all seem to like the music links I’ve been throwing in at the bottom. I’ll continue doing that – I enjoy sharing reminders that life can be beautiful, and that even old music takes us to new places.

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

IN THIS NEWSLETTER:

• BTC patterns and market liquidity

• Tokenization monthly roundup: JPMorgan, Franklin Templeton, DTCC, Deutsche Bank

• A telecoms giant mining Bitcoin?

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:

BTC patterns and market liquidity

As BTC continues to potter around within a relatively tight trading range, some have complained that it is not reacting to the halving as expected. Only, it is.

Here’s the performance of BTC 58 days after the 2020 halving vs the performance 58 days from April 20, 2024, along with relevant macro data:

As with the last halving, some miners are probably selling BTC after turning off mining rigs, or lightening their BTC treasuries to cover operating costs in the face of a much lower reward.

If a similar pattern holds this cycle (this is a big “if”), then we could remain in a gently upward trend (with dips) until September.

However, the macro environment is very different now. In 2020, US interest rates were at 0%; now, they are at 5.25%.

Back then, a wave of pandemic-related liquidity was incoming. In 2020 rates were poised to head up, in theory draining liquidity from the economy, although the market didn’t know it at the time. Ahead lay months of easy money that in theory was going to continue forever because inflation was “transitory”.