Thursday, June 29, 2023

Inflation, fedspeak, EU crypto infrastructure investment and more...

“Communications tools don’t get socially interesting until they get technologically boring.” – Clay Shirky  ||  

Hello everyone! Thanks for reading, I’m very glad you’re here. And for all of you celebrating the end of Ramadan, Eid Mubarak!

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WHAT I’M WATCHING

Inflation signals. Europe’s inflation is spinning off good news in some regions, bad news in others, which puts the ECB in a difficult position. More on this below.

Higher for longer. Fed Chair Jerome Powell spoke at an event in Madrid this morning, and introduced a couple of new and disquieting phrases into his usual discourse. More on this below.

More ETFs. The Block reported a couple of days ago that Fidelity is also preparing to submit a proposal to the SEC for a BTC spot ETF. Conviction in the market seems to be building that the current batch under consideration will get approval. Right now, it feels like it could go either way – there are plenty of reasons the SEC could again deny. Then again, it could lose the Grayscale suit, which would make future denials politically more difficult. More on this, and crypto markets, below.

Not-so-safe custody. CoinDesk reported yesterday that the Israeli government seized $1.7 million in crypto assets from wallets linked to the Iranian military and the Iran-backed Hezbollah militant group in Lebanon. It turns out that the bulk was held in on-exchange addresses, which is bewildering. This serves as a welcome reminder that crypto holdings can be tracked, more easily than cash transfers. It also serves as a warning against the perils of leaving crypto assets with centralized custodians.  

Crypto market infrastructure expands. Bitpanda Pro, formerly the institutional and professional trader arm of Europe-based crypto exchange Bitpanda, has rebranded as One Trading, spun out from Bitpanda, and closed a €30 million funding round led by US-based Valar Ventures, co-founded by Peter Thiel. I can’t remember the last time I saw a US-based crypto exchange successfully close a significant raise – and the fact that the lead investor is a US company (as are many of the other participants) is yet another sign that the regulatory gridlock in the world’s largest capital market is encouraging investment funds to move elsewhere.  

Lebanon. From a couple of days ago, here is a harrowing account of an economy in which people literally are holding up bank branches at gunpoint just to get out their own money. If there is a clearer example of how in some regions self-custody is a question of survival, I’d be interested in hearing about it. I haven’t come across any even half-reliable statistics about crypto usage in Lebanon, but plenty of anecdotal evidence suggests interest is small but growing. And, so far this year, BTC is up over 1,700% in Lebanese pounds.

MARKETS

Tension building