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2nd April 2024 > > Ranting and L3 DEGEN.


A couple of Occasional Series rants (and no, not about racist policemen who support the normalisation of parading around London glorifying Swastikas) that shed light on why the crypto revolution is so important for us as individuals. A new L3 is attracting a lot of attention, for now at least.

Market Snap

Market Wrap

Boom, the perpetual futures funding rate turns neutral as this morning’s sell-off was exacerbated by a long squeeze. They will never learn.

The trigger for the leveraged pain was twofold. Strong economic data out of the US lifted DXY to its highest level since mid-November (BTC is negatively correlated to DXY). This was accompanied by another day of outflows from Grayscale overwhelming the inflows to the other ETFs.

Despite all the evidence of a strong economy in the US, the yield curve remains inverted. That can only mean one thing – rates are coming down, and coming down fast. If you want to know why, read on.

Occasional Series – The IMF

The IMF is not famed for getting its forecasts right.

In a recent blog (what happened to good old-fashioned reports?) it has warned that excessive government debts (they got that bit right) will keep long-term interest rates high for years to come.

That’s the bit they have got badly wrong.

Take the US as an example. Government figures show an extraordinary $37 TRILLION of debt owed by the government:

But this figure does not include – according to the government’s own analysis – another $78.4 TRILLON categorised as “Sustainability Measures”, apparently meaning social security and Medicare, all of which are off-balance items. To prevent the debt rising further, there needs to be a 4.5% reduction in government spending per annum (that ain’t gonna happen) or an equivalent increase in taxation, which also is not going to happen.

When the government mandarins add in future promises with regard to social security and Medicare, on a PV basis the gross total is … wait for it … $175.3 TRILLION. This is such a ridiculously large number one cannot comprehend what it actually means. That is half a million dollars per person. I mean, wtf?

The US can never pay this debt back. But neither do they wish to add to it with interest rates at more than 4% in ten years.

The horror story of QE will soon relaunch with QE Part II - The Return of all our Nightmares, and this is going to be so ramped up and so destructive to anyone who does not own hard assets. It will not be pretty.

Occasional Series – Government theft

No, I don’t mean tax, though I am not surprised that was the first thought in your head.

Bruno Le Maire, France’s Ministry of the Economy, is proposing to raid your EU domiciled saving’s account:

“35,000 billion (sic - that is not a true figure) euros lying dormant today in European bank accounts instead of fostering Europe's prosperity tomorrow, instead of financing artificial intelligence, instead of financing the climate transition, is no longer acceptable.”

I wonder if you will find his state-sponsored theft of your rainy-day Euros to be “acceptable”.

Curious Cryptos’ Commentary – DEGEN

Launched a week ago as an L3 chain (I know – it is built upon L2 solution Base), the native coin has a market cap of $600mm. Bybit, HTX, and moved quickly to list DEGEN which clearly helps.

Much of the activity has been memes (no surprise there) and many have been rugged. The self-description on the tokenomics page of the website is instructive:

“The Degen L3 chain is live now! EVM compatible, low transaction fees, built for Degens!”

I suspect we will hear a lot about DEGEN in the near future. I will let you know if any of it is interesting.

Remarkably, Vitalik Buterin foresaw the rise of L3s back in November 2022. The man is a genius.

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