tl;dr
Miscellany.
Market Snap
Market Wrap
Oil regaining $100 pb and an increase in rates at the ultra-long end are not the most conducive of environments for BTC strength.
Curious Cryptos’ Commentary – The cost of trust
For TradFi banks, compliance headcount is 10-15% of the total workforce, costing up to 15% of gross revenue. The Competitive Enterprise Institute estimates that the annual compliance costs and wider economic effects of US federal regulation are at least $2.153 trillion per annum, though some banks are less compliant than others (*).
Any change in banks’ costs or taxes feeds directly into the banking system’s ability and capacity to make loans. An increase makes loans i.e. more expensive, raising the cost of capital for all business and making all of us poorer. The converse is true too.
If only there was a recent technological development that relies not on trust but easily verifiable public information that would strip out huge swathes of TradFi’s costs raising productivity across the board, making us all richer.
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(*) JPMorgan has paid more than $40bn in fines and penalties since the turn of the new millennium related to misconduct including the facilitation of money-laundering. The bank seems to have an ingrained habit of carelessness (if one is being generous) when it comes to dealing with fraudsters, drug dealers, and terrorists. I guess the financial rewards for doing so are greater than the fines, otherwise surely internal action would have been taken by now to stamp out these ongoing grievous breaches of financial regulations.
Curious Cryptos’ Commentary – Techie nonsense
If only this were true (*):
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(*) For reasons of disclosure, the CC Treasury has been long XRP since it traded below 40c in 2022, with a stash held off-site in a secure location requiring multi-signatures to access.
Curious Cryptos’ Commentary – LAPTOP
The CCC has been highly and rightly critical of the alleged grift demonstrated by the Trump family’s crypto activities, not least here and here.
Hunter Biden has now joined the game, launching a memecoin called LAPTOP. You may recall that in the 2020 Presidential election, he lost a laptop which it was claimed showed some dodgy business deals involving his father, allied with potential Russian meddling in the election. None of these things have been proved, though the idea that megalomaniacal Putin and his murderous henchmen (along with Xi) wouldn’t mess around as much as they possibly could in all Western nations’ elections is farcical.
Like many memecoins, LAPTOP’s price action has been mostly downhill:
But here is something I just noticed:
On Aster, a perpetual futures DEX, the funding rate – quoted hourly – is currently a whopping negative 0.1366%.
If you are not overly familiar with funding rates, this tells us that there is an imbalance of shorts over longs, and a large one at that. This hourly funding rate equates to an APR of 1,200% and an incredible APY of 15,800%. However little knowledge you may have of perps, I think we can all agree that is unsustainable for any reasonable period.
I suspect that the mother of all short squeezes is going to prove particularly painful for many of the leveraged short children involved in this market.