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📖 Book of the Month 📖
This month (or maybe two), I am reading Debt: The First 5,000 Years. If you follow me on Twitter or my prior books you will notice that the Debt topic is top of mind. This is because I think we are nearing some sort of major reset and I want to gain as much knowledge as possible on the history around this topic because no humans alive today have lived through what I think is coming which is a major global debt reset and/or hyperinflation to reduce debt levels. If you are reading along or listening drop me a note on Twitter or email!
Listen to Debt: The First 5,000 Years For Free with Audible. Link
💭✍🏼 Food For Thought 💭 ✍🏼
The return of inflation, by Agustin Carstens read in full and download the PDF - Link
The Bank of International Settlements is the Central Banks Central Bank. They are telling you that global central banks will raise decades low interest rate to fight inflation most of us have never seen in our lifetimes. My personal opinion ( you can draw your own conclusions) is that there is no way to do this "smoothly" all markets will have to correct downward as the "price of money" becomes more expensive. The real question is how long before these changes take hold do policy makers "say uncle" at the pain caused and reverse course--yet again to take he easy money printing route. No one knows, buckle up.
Also, Federal Reserve is saying that same thing as the BIS. Coincidence? Not likely. I personally think we could get a surprise rate hike in April but I have zero basis for this other than my deduction that the Fed could really lose control of interest rates and this is a much scarier prospect than a tanking of the stock market. Full FT article here Link
For those of you that have been reading this newsletter for a long time you know what I have been saying. If you are new, welcome!! Go back and see the December 6, 2021 edition where I noted and continue to pound the table that the biggest change to impact everything including Crypto was the Fed's pivot. I know we all thought we were geniuses the last two years but we were not---it was "liquidity". If you have kids or remember when you were a kid and you took a bath with the rubber ducks in the tub? Recall that when the water level rose so did the rubber duck. Now remember what happened when your mom or dad drained the water out of the tub. We are at that point right now. Good protocols, good tech stacks, great stocks---I do not think it will matter as the "liquidity" gets sucked out of the financial system as I noted in my video on Inflation in Q4 2021.
This is another call out article that policy makers are telegraphing to anyone that will listen that they are getting ready to sink markets by hiking interest rates and removing cash from the system. These news stories are designed to jaw bone the market. Maybe I am totally wrong; however, if I am right it makes sense to take chips off the table and watch and wait if you are not comfortable with what may be ahead over the next few months. 👇 Link
I will end this section with this article on Shanghai. I do not think people really appreciate the cultural differences between East and West. In the East "fresh" food is the cultural norm, this means you go to the grocery store every day or multiple times a week. In the West you have some canned foods, preserved foods...this is not a cultural reality in most of Asia / EM generally. Thus, during locks of one of China's largest cities were people effectively have "just in time food" things can go very wrong quickly. I flag this article because this might be the spark to start a forest fire in China. I know the "West" is done with Covid but Covid is not done with the world. Link 👇
💸 Companies and Deals I am Watching Closely 💸
1. UK Treasury outlines plan to regulate stablecoins and issue an NFT - Link
2. SEC’s Gensler Calls for Watchdogs to Collaborate on Crypto Oversight - Link
3. Lightning Labs Announces $70 Million Series B Raise - Link
📖 Quote of the Week 📖:
“There are only nine meals between mankind and anarchy.”
-Alfred Henry Lewis
📰 This Weeks Most Interesting Digital Asset News 📰:
- Indonesia to Introduce 0.1% Crypto VAT, Income Tax Next Month - Link
2. (SEC) aims to redefine definition of securities dealer – a move industry experts say could cripple the DeFi industry - Link
3. Polygon unveils identity service leveraging zero-knowledge proofs - Link
4. Visa launches program to help creators navigate NFTs - Link
5. Circle, the issuer of the USDC stablecoin, has selected BNY Mellon as its primary custodian for USDC's reserve assets - Link
📈 Top 10 Market Movements by Market Cap over the last 7 days 📉:
Bitcoin: Price OHLC
We are all seeing continued chop in Bitcoin's on-chain data. See this same chart for last week where I noted that it was approaching the highs from early January--it did not last. I continue to remain bearish short term but as I have previously stated that I am planning to take a hard look during the May / June time frame. My reasoning for the Summer time frame is that I think we may get a break down in markets due to all the Central Bank Policy changes and once that happens I think they will with policy again and go back to printing money and supporting assets--in this case all hell may break lose given a loss in market credibility. If there is anything dramatic that changes I may send out a flash update.
Bitcoin: HODL Wave
The chart shows the bundle of all active supply age bands for Bitcoin, aka HODL waves. Each colored band shows the percentage of Bitcoin in existence that was last moved within the time period denoted in the legend. I do not think we are at the trough point but as I have said before--the world has never had Bitcoin during a "great power war" nor during Stagflation 1940s and/or 1970s style. If you have not--make sure to checkout my video on "Inflation" from Q4 21--it remains more relevant than ever.
Bitcoin: Realized Profit/Loss Ratio
Realized Profit/Loss Ratio is the ratio between all coins moved at a profit and at a loss. I added this metric back to provide some context from the realized profit in November 2021 until today. You can see here where the holders of Bitcoin sit now relative to November 2021 and from my perspective---people cheering "crypto is back" are potentially premature.
Ethereum: Price OHLC
OHLC is the Open, High, Low and Close price. ETH is still chopping around just like Bitcoin above and you can see here it is off the highs of the prior week which was already a lower high. As I said above, I remain bearish from a price perspective but I am paying closer attention to the on-chain data in preparation for a Summer buying opportunity.
Total Value Locked (USD) in DeFI
As a reminder TVL means "Total Value Locked". This refers to people taking ETH based tokens or other tokens and "locking" them in DeFI protocols to lend, generate yields and otherwise earn excess returns.
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Disclaimer:
This Newsletter does not provide, and no portion of this content purports to be, individualized or specific investment advice and I do not provide investment advice. All information provided herein is general in nature and is made without regard to individual levels of sophistication or investment experience, investment preferences, objectives or risk parameters and without regard to the suitability of the content for individuals or entities who may access it.
No information provided herein, should be construed as an offer to sell, or a solicitation of an offer to buy any security or investment vehicle, nor should it be construed as tailored or specific to you, or any reader or consumer thereof. You understand and agree that the content does not constitute specific recommendations of any particular investment, security, portfolio, transaction or strategy, nor does it recommend any specific course of action is suitable for any specific person or entity or group of persons or entities.
The content herein is based upon information from sources believed to be reliable and I am not responsible for errors, inaccuracies or omissions of information; nor is it responsible for the accuracy or authenticity of the information upon which I rely. For informational purposes only. Do your own research.
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