Tuesday, Dec 12, 2023

watch those supply chains; inflation expectations; holder signals

"Wise men put their trust in ideas and not in circumstances." – Ralph Waldo Emerson ||  

Hi all! This is a shorter email today since I have a scheduling squeeze (you’re welcome!).

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. For full disclosure, I have held the same long positions in BTC and ETH for years, and have no intention to either buy more or sell in the near future.

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Programming note: Apologies, but I have to miss tomorrow’s publication.

IN THIS NEWSLETTER:

• BTC holder temperature check

• So many inflation expectations

• About those supply chains 👀

WHAT I’M WATCHING:

BTC holder temperature check

Here’s a powerful table from the latest report from ARK Invest that analyzes the status of the various segments of bitcoin’s holder base:

(chart via ARK Invest)

Especially notable is the “time-weighted turnover” – this is dropping, which suggests that short-term holders account for more of the daily network action. It also means that longer-term holders account for less of the daily turnover.

This gets two green arrows from the ARK team, and it is indeed bullish. If longer-term holders increasingly hold on to their BTC, that means there is less readily available supply for new entrants.

So many inflation expectations

Over the past couple of days, we’ve had two separate reports on consumer inflation expectations. Both show a drop in the expected inflation rate 12 months out, which is good news, and is relevant because the Federal Reserve does pay attention to expectations – they are a significant tool in the battle against inflation, as they can influence spending habits and therefore inflation itself. I know, it’s recursive, but that’s economics for you.