25th April 2023 > > Shanghai and Changsu.

tl;dr

ETH staking grows ever more attractive to all investors, whilst China rushes headlong into financial repression of its population.

Market Snap (at time of writing)

Market Wrap

Reuters reports that a research note put out by Standard Chartered includes this commentary from Geoff Kendrick, head of digital assets research:

“While sources of uncertainty remain, we think the pathway to the USD 100,000 level is becoming clearer.”

Which is nice, but the date has been set for the end of this year, which is far too far away for my liking.

Curious Cryptos’ Commentary – ETH deposits

Following the successful conclusion of the Shanghai upgrade to the Ethereum network – allowing for the withdrawal of staked ETH - the amount of staked ETH has surged. Though most commentators predicted the exact opposite effect, regular readers were already primed to expect this to happen:

Reduced supply – all other things being equal – means higher prices.

But the exciting piece of news is that these inflows are driven by two key factors.

The first is increased institutional staking of ETH as execution risk of Shanghai is removed, and liquidity concerns are reduced. The ability to stake, claim rewards, and unstake at will, is a key pull factor for institutional involvement in ETH.

The second is the re-staking of ETH rewards that had been withdrawn. This is not something I had previously considered but it makes a lot of sense. Stakers have tested the withdrawal process with staking rewards. Satisfied that this process works, early doors stakers (who are clearly diamond hands) are looking to continue compounding their staking returns.

The future looks ever brighter to long-term ETH holders, in my view.

Curious Cryptos’ Commentary – CBDCs (Central Bank Digital Currencies)

The Chinese city of Changsu will start paying all public sector employees in China’s CBDC from next month.

The rest of China, and the totalitarian states around the world – who abhor individuals’ rights to liberty and freedom from coercive government action – are expected to increasingly follow suit.

Even some of the liberal western democracies might be jealously eyeing up this move by Changsu.

Here in the UK, many public sector, or public sector-like jobs, have had huge advantages over private sector employment for decades, with that gap growing ever bigger. Those advantages can include better pay, shorter working hours, earlier retirement, big fat state guaranteed pensions, and little to no chance of being fired for incompetence.

Despite these unfair disparities weighted against wealth creators and in favour of wealth destroyers, I would not wish a loss of financial privacy and freedom upon anyone.

We should all be grateful to the US and Switzerland for leading the fight against the financial and personal repression engendered by CBDCs.