Wednesday, August 30, 2023

the SEC's rebuke, another coup, cooling economic data, and blue moons

“There is nothing like returning to a place that remains unchanged to find the ways in which you yourself have altered.” – Nelson Mandela ||

Hello everyone, and happy Blue Moon! Scroll down to find out more about what I’m talking about. 🌕

You’re reading the premium daily version of Crypto is Macro Now. In this newsletter, I give some depth on factors I’m keeping an eye on that highlight the growing overlap between the crypto and macro landscapes – my focus is on how crypto is affecting the global economy, and vice versa. There is often a market discussion as well, because that is an important piece, not just for the structural changes but also for investor sentiment, which impacts attention and funding. Nothing I say is investment advice!

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Programming note: This newsletter will not publish on Monday, Sept 4, for the Labor Day holiday. Back in your inboxes on Tuesday!

IN THIS NEWSLETTER

• The SEC was “arbitrary and capricious”

• Another coup in central Africa

• Economic cooling in the US

• China’s half-hearted liquidity measures

WHAT I’M WATCHING

The SEC was “arbitrary and capricious”

Yesterday was a VERY big day for the crypto market. The US Court of Appeals finally released its decision on the Grayscale vs SEC case, ruling 100% in favour of Grayscale.

Why it matters:

Some background for those catching up: in 2021, Grayscale (the largest asset manager in the crypto ecosystem) filed a proposal to convert its bitcoin trust into an ETF. This would be better for investors, since their trust charges high commissions and has traded over the past two years at a significant discount to the BTC price – in other words, it’s not a good product for investors, given that holders can only sell at significantly less than the underlying BTC price while paying a hefty fee for the “privilege” of being locked in. In June 2022, the SEC denied the proposal, and the very same day, Grayscale filed a suit against the regulator.

Arguments were heard in March, and the decision was handed down yesterday, with all three judges unanimously finding in favour of Grayscale.

Some choice quotes from the ruling document (my emphasis):