tl;dr
A summary of how we entertained you this week.
Market Snap
Market Wrap
BTC opened at $86.5k on Monday morning prompting some of us to get excited about a push into the 90s before the inevitable reclaim of six figures. Sadly, renewed hostilities in the Middle East and the misreporting of the US government’s intentions when it moved BTC to custody at Coinbase Prime put the kibosh on any prospect of a serious rally. With BTC now just shy of $83k, these external events dramatically reversed the inflows to spot BTC ETFs. Wednesday and Thursday saw outflows of $485mm and $244mm respectively. Much more of that and we will see a seven-handle again.
Curious Cryptos’ Commentary – The week in review
On Tuesday we learnt the very surprising news that the ECB might not actually progress its project to create a euro CBDC. This potential change of heart has come about not because the bureaucrats at the ECB have suddenly converted to the causes of freedom, liberty, and privacy. Oh no, certainly not. What they have realised is that the legitimisation of regulated dollar stablecoins enabled by the GENIUS Act in the US will likely lead to lower yields right across the curve for US government debt. The masters of fiscal incontinence (France) have taken note that it is possible to lower borrowing costs by harnessing the private sector. There is literally zero chance that either Mélenchon or Le Pen, one of whom will move into the Élysée Palace next May, will reduce spending. Indeed, the opposite will happen with a mooted cut in the already ridiculously low retirement age of sixty-two years and nine months. The ECB pen-pushers are beginning to realise that a euro CBDC is not going to solve their problems. More on this topic next week.
The Governor of the Bank of England, Andrew Bailey, opened the very conference during which the ECB made its surprising move. It went completely over his head, of course. We are still on track for a so-called Britcoin, putting us firmly in the company of countries such as Russia and China, which to the best of my knowledge are rarely described as shining lights of democracy except by those who would otherwise face a lifetime of hard labour for daring to criticise their own governments.
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Various agencies of the US government have been hard at work since the failure of the CLARITY Act to issue proposals for enhanced regulation of crypto activities. This week it was the turn of FinCEN, which withdrew two regulatory initiatives whose sole purpose was to derail the crypto revolution, and again the CFTC. There is a race against time here, for the midterms will not be conducive to the crypto industry. We don’t even know the runners and riders yet for the next presidential election, but I have little optimism that the winner will be a strong supporter of cryptos.
The supposed threat to cryptos from the emerging technology of quantum computing has potentially been superseded by AI. The risk may have been blown out of all proportion, but the steps to bomb-proof your personal stash of cryptos are relatively simple to take. The CCC will soon issue a detailed guide to what you should do with the individual coins in your portfolio. We will also be offering an audit and bespoke plan of action for anyone who is interested. Details to follow in the coming weeks.
We are also pleased to have presented to you the first in a series of “Explainers”. This resource takes a much deeper dive into issues and topics that we care about and think that you should care about too. Note that these are factually orientated and are therefore distinct from the near-daily commentary, which reflects the CCC’s research team’s sometimes (deliberately?) contentious take on current events. For that reason, the Explainers have a lot of AI input for both the creation of the Explainers and the ongoing process of updates. The near-daily commentary will for ever remain the work of humans.
This week we investigated the mechanics of tokenisation and the various forms it currently takes. We would be delighted to hear your feedback on what we can do to improve this new offering.