2nd May 2024 > > CBS, vol, & the UK.

tl;dr

Central bankers should find something better to do with their time. Speculators are running away. The UK might be about to make some real progress crypto-wise.

Market Snap

Market Wrap

This monthly repetition of farce surrounding the Fed’s decision on the manipulation of short-term interest rates is getting tiresome.

Look at this inversion:

3mth/10 year                              -78bps

6mth/10 year                              -75bps

2s/10s                                           -33bps

With zero sign in the economic indicators of an impending recession – quite the opposite – perhaps somebody at the Fed should spend a little time contemplating what these numbers mean. I do not know for certain, but I am pretty confident in predicting that we have never had this combination of strong economics, rates at what are elevated levels compared to the last decade or so, and inversion.

If I am wrong about that, I would be delighted to be corrected, and go spend my time worrying about something else instead.

Curious Cryptos’ Commentary – Milk Road

Curious Cryptos’ Commentary – Volatility is back

Peter Schiff is out declaring disaster for BTC. That’s the first sign of an impending recovery. Once we get Cramer, EU, FT, and hopefully the World Bank saying the same thing, it will be time to put on those buying boots if you have not already done so.

In the short-term however, yesterday saw outflows from the ETFs suggesting that at least some of that money is highly speculative. Speculative money panics when sitting on a loss, rather than seeing it as the opportunity that investors do.

Very short-term coins, those transacted in the last 155 days, changed hands at an average price of $59,600. At the current price, the hot money in that cohort is frantically scanning for the exit. It’s hard to know what will force their hands, but a dip to the low 50s would likely be more effective in chasing them away than an immediate return to $60k.

For a more in-depth analysis on this topic:

https://newsletter.checkonchain.com/p/bitcoin-bull-market-blues

Curious Cryptos’ Commentary – UK

The UK government and in particular its approach to cryptos, has often been the subject of sustained criticism from the CCC.

Just for once, I have something positive to say.

Bim Afolami, economic secretary to the Treasury, has announced the impending release (June or July, but remember that several months in our world is the equivalent of a blink of an eye in the bureaucratic world) of proposals for the regulation of cryptos:

“Once it goes live, a whole host of crypto asset activities, including operating in exchange, taking custody of customer assets and other things, will come within the regulator perimeter for the first time.”

That’s not a convincing description of the crypto world (what does “operating in exchange” actually mean?), but let us not jump to conclusions about the depth of understanding of all things crypto that has gone into these proposals until we actually get to read them.