Thursday, Oct 5, 2023

Markets breathe, bitcoin's asymmetric downside, PayPal and more

“Most books about the future are really books about the present.” – James Dale Davidson ||

Hello everyone! You’re reading the daily premium Crypto is Macro Now newsletter, where I look at the growing overlap between the crypto and macro landscapes. There’s also usually some market commentary, but nothing I say is investment advice!

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IN THIS NEWSLETTER:

• Markets breathe easier

• Bitcoin’s asymmetric downside

• The real impact of the PayPal stablecoin

• Stock market concentration

• Trump for Speaker, are you kidding?  

WHAT I’M WATCHING:

Breathing easier

After the noise of the first couple of days of this week, yesterday was a relative oasis of calm. Yields retreated, shares recovered, the oil price fell. BTC drifted up, ETH drifted down. All quite normal. And yet…

Take a look at that oil price drop. The Brent crude benchmark fell 5.6% during the trading day, its largest one-day drop in over a year.

(chart via TradingView)

Why it matters:

What triggered the market’s change of heart?

There’s some trading-related moves in there, with speculative froth deflating and some leveraged positions being unwound. But overall, it seems that concerns about global economic growth are suppressing fears of a supply shortage. In part, this is self-fulfilling – the higher the price of oil, the more consumers seek alternatives or reduce activity. You might have heard the saying: “The best cure for a high oil price is a high oil price.”