Monday, May 13, 2024

BTC moves, crypto gets political, the bitcoin spin, India’s crypto support

“Civilizations die from suicide, not by murder.” – Arnold Toynbee

Hi all! I hope you had a great weekend! Anyone watch Eurovision? I think Croatia should have won. Finland’s entry had to be seen to be believed.

Programming note: this newsletter will not be publishing on Wednesday, as it’s a holiday where I live – the holiday of the patron saint of Madrid, and it’s a big deal involving street parties and local fairs and lots of drinking and dancing.

For those not familiar, let me tell you about San Isidro. Lore has it that he was a humble shepherd who was feeling particularly exhausted one day, but had so much work to do. After a modest lunch, he sat down under a tree and fell asleep. When he woke, he found that the angels had done his work for him. You can see why the Spanish would want to elevate him to sainthood. (Of course, the actual legend is more complex than that, and I may have shortened the chain of events, but that’s how stories get passed on, right?)

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

IN THIS NEWSLETTER:

• BTC moves: CPI or China?

• Oh no, BTC is a PR tool again

• Crypto gets political

• India’s crypto support

• BTC bull run timing

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 moves: CPI or China?

After what feels like weeks of aimlessly drifting with the occasional glimpse of dramatic activity, the crypto mood seems to be seizing the beginning of a new week with some enthusiasm.

Earlier today, the BTC price jumped back up to over $63,000, walking back Friday afternoon’s sharp drop.

(chart via TradingView)

One driver could be building expectations of a US rate cut signal when we get April’s CPI data on Wednesday. Expectations are for a slight slowdown in both headline and core year-on-year increases, which – if these are met – could send a ripple of relief through an uncertain market. Of course, any surprise to the downside would be met with jubilation, and the consensus hope seems to be that the housing market is stabilizing, the employment slowdown is dampening spending, and the oil price moves have been gentle.

Also, tucked away in an article in the Financial Times this morning on China’s bond issuance plans was a snippet that suggested a type of QE could soon be used to keep Chinese rates low. Roughly Rmb 1 trillion (~$140 billion) of long-dated bonds is poised to hit the market, to finance stimulus spending. The last time Chinese authorities attempted such a targeted issuance was in 2020, to finance Covid support and boost infrastructure investment.