Wednesday, Sept 11, 2024

the debate impact, what's going on in CBDCs

“What separates us from the animals, what separates us from the chaos, is our ability to mourn people we’ve never met.” – David Levithan ||

Hello everyone, I hope you’re doing well!

You’re reading the premium daily Crypto is Macro Now newsletter, in which I look at the growing overlap between the crypto and macro landscapes. If you’re not a full subscriber, I do hope you’ll consider becoming one. It’s $12/month, for which you get ~daily commentary on narratives, rates, economic data, crypto adoption, tokenization, geopolitics, privacy, regulation and the likely impact of both resilient and coopted decentralization. This is not a “news” project – it’s about what I think matters for broader crypto impact, and why.

Today I look at the impact of last night’s US presidential debate – it’s material, and the message from crypto markets is surprising.

Also, I offer the regular update on CBDC development (news this week from the EU, Hong Kong and China).

IN THIS NEWSLETTER:

• The debate impact

• CBDC roundup: the EU, Hong Kong and China

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WHAT I’M WATCHING:

So, the debate

After last night’s presidential debate between candidates Donald Trump and Kamala Harris, there seems to have been movement in the polls, but not as much as you would expect in crypto prices.

I confess I did not stay up to see the whole thing (3am my time!), but the overall commentary seems to be that Harris won that round. And Taylor Swift’s endorsement is significant.

Polymarket still has the outcome of the US presidential election at a tie, although Harris has 73% odds of winning the popular vote.

(chart via Polymarket)

Predictit, on the other hand, has a sharp post-debate jump in favour of a Harris win, with a surge in betting volume.

(chart via Predictit)

Traditional polls won’t have had time yet to update after the debate ended late last night – but even heading into the event, The Hill had Harris in the lead with a 51.2% likely win vs Trump’s 48,8%. FiveThirtyEight has the odds at 47.1% Democrats, 44.4% Republicans.

Given the solid tilt here, it’s surprising that crypto hasn’t been doing worse. The topic didn’t come up last night, which means that Harris’ stance on crypto regulation is still uncertain, as is the future of the ecosystem in the US should the Democrats win.

(chart via TradingView)

The positive spin on this is that it seems the possibility of continued regulatory hostility is now priced in. Bleak, perhaps, but it suggests the floor is not much lower than current levels. Personally, I’m optimistic that, should the Democrats remain in the White House come January, there would be some movement towards a more supportive regime. This could be largely achieved with a leadership change at the SEC, as simple as that, and there is no evidence that Harris and Senator Warren are close.

There’s also the non-zero chance that Senator Warren loses her seat in November – I haven’t seen any recent polling out of Massachusetts, but John Deaton is a strong and well-spoken character with what appears to be a more wide-spread appeal.

The negative spin is that the uncertainty and the bouncing around these levels could continue until November. That may sound depressing for market watchers – but it also sets the scene for fast moves when interest does start to return.

CBDCs: what’s been happening?