26th February 2025 > > Jittery markets, Citadel, & the SEC.

tl;dr

Crypto markets are taking a battering, though relatively minor in the scheme of things. Citadel Securities increases its crypto footprint. The SEC about-turns on its action against Uniswap. Is Ripple next?

Market Snap

Market Wrap

With BTC 20% down from its ATH, it is worth reminding ourselves that such moves are not without a ton of past precedent. It is also a timely reminder that trading with leverage is a mug’s game, for almost everyone.

This pull-back from $100k is being driven by the liquidation of leveraged longs, and outflows of speculative money that buys on green days, and sells on red days, which is the precisely the opposite of sensible investor behaviour. Unfortunately, we will never rid ourselves of either of these two types of hot money, but a shake-out is always welcome.

Occasional Series – A Central Banker, until he decided to do something far more useful instead (*)

“Inflation is transitory”. Jerome Powell, Chair of the Fed, 2018 to … (checks notes) … What? He is still in charge? Has the world gone mad?

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The printing of money in closed societies has always resulted in inflation, sometimes to extreme levels. The Weimar Republic in the 20s, Zimbabwe in the 2000s, Venezuela in the 2010s, there are plenty of text-book examples to learn from.

The money-printing that flowed from the illiberal and illegal over-reaction to Covid was not on that scale. But we all knew that printing money whilst also restricting supply chains would bring inflationary problems upon us, and so it has proved.

If Powell could not make that blindingly obvious prediction, his incompetence is made plain.

If on the other hand he wouldn’t look blank at the mention of Zimbabwe, Venezuela et al, then he was lying for political purposes, which once again destroys the myth of central bank independence. I guess that means he has done us a small favour in that respect.

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(*) He hasn’t retired, to the detriment of us all.

Curious Cryptos’ Commentary – Citadel Securities

Citadel outed itself as a crypto supporter in 2023 by setting up EDX Markets with Charles Schwab and Fidelity Investments. EDX is a centralised crypto-currency exchange for institutional investors.

Bloomberg reports that Citadel is now setting up a team to provide liquidity in spot crypto markets for retail investors. It isn’t clear whether they are setting up an in-house platform, or will provide liquidity to existing platforms (both I suspect) but with $64bn of AUM, yet another significant TradFi player is developing its crypto offerings, to the benefit of us all.

Curious Cryptos’ Commentary – Uniswap

The SEC’s pro-crypto pivot grows by the day.

Uniswap has announced that the SEC’s legal action has been dropped:

The US is fast becoming a very appealing place for crypto entrepreneurs, and all those attendant tax dollars these businesses will create.

Next up – we hope to see the Ripple case dropped. That would be very good for both XRP and the broader market.which should never have been levied in the first place.