Wednesday, Apr 26, 2023

Bitcoin narratives, banking crises, consumer confidence and more...

“Where there is power, there is resistance.” – Michel Foucault ||

Hello everyone! Geez, I miss one day of the newsletter and markets start moving again…  

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WHAT I’M WATCHING

Banking strain. First Republic’s problems are unlikely to trigger the same level of shock as we saw back in March, but they are revealing a unique characteristic of bitcoin’s investment thesis. More on this below.

Consumer confidence. The latest data from the US Conference Board contains some hidden messages. More on this below.

Dedollarization. I am not one of those that believes the dollar will be replaced by the yuan or bitcoin or any other currency any time soon, but here is an interesting data point that confirms there are some changes underway to the leading currency’s role on the global stage: according to Bloomberg Intelligence, the yuan’s share of China’s cross-border payments and receipts has risen to 48% from nearly zero in 2010, while the dollar’s share almost halved from 83% to 47%. And China moves a lot of cross-border payments.

Coinbase turns up the pressure. Last year, the crypto exchange filed an official petition requesting formal rulemaking from the SEC. The SEC ignored it. Now, Coinbase has asked a federal court to force the SEC to respond. It’s unlikely this move will produce a response, but it will make even more public the SEC’s lack of official guidance while regulating via enforcement. Given the escalating political attention to the matter from both sides of the aisle, it’s a smart move that could help Coinbase in its upcoming case against the SEC suit (when it is eventually filed – we’re all still waiting for the details behind the recently issued Wells Notice).

MARKETS

Here we go again? No, not really

So, about that banking stability… Actually, the current unease is happening in different waters than the almost-simultaneous collapse of three US banks just over a month ago. As such, it is sending a different message and is likely to have a different outcome.