Crypto Market Musings
- Bitcoin is down around 0.7% over the past seven days. Ethereum is down about 0.4% over that very same time period. And Monero is up about 1.8%.
- Conflicting macro narratives seem like driving the market. Inflation is proving to be stubborn, and the Fed raised rates again this week. The crypto markets have consistently responded poorly to rate hikes over the past yr. But continuing problems within the U.S. banking system — this time with First Republic Bank — illustrate the necessity for a greater and more decentralized economic system. And that drives prices up. So long as these two forces are in conflict, a serious leg-up for crypto seems unlikely.
- Bitcoin’s answer to NFTs, Ordinals, has been incredibly lively recently. Because of this, bitcoin set a record for transactions earlier this week and saw transaction fees jump greater than $7. That’s the best transaction fee in two years.
What Vin Is Considering About
Earlier this week, Allison Brickell and I talked about Coinbase suing the SEC in our Crypto Insider podcast. The short version is that last summer Coinbase asked the SEC to undergo a proper rulemaking process to find out which digital assets are securities and which of them are usually not. The SEC is required to just accept or reject the request. The agency has done neither. So Coinbase sued the SEC to make the agency do its job. You may watch the podcast here.
Now, a federal court has asked the SEC to clarify itself. It gave the SEC 10 days to reply to Coinbase’s lawsuit.
It’s nice to know that somebody or something can force the SEC to do its job. I’m looking forward to learning why the SEC thinks it may well ignore the principles when it sees fit. And I can’t wait to see what a federal judge thinks of the reason. Things are about to get interesting.
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In March, we told you Balaji Srinivasan bet $1 million that the banking crisis would result in a period of hyperinflation inside 90 days, which — combined with money printing — would send the worth of bitcoin soaring.
Srinivasan made the bet to make some extent about money printing. And this week, he paid off the bet early. Here’s a part of the tweet that explains why he made the bet:
Well, I’m not a trader, I’m not John McAfee, and I’m not within the habit of publicly burning one million bucks. The explanation I did this was because I do imagine in the general public good, but unfortunately we will’t depend on the general public sector anymore to inform us when something’s improper.
In any case, Yellen knew the 2008 crisis was coming, but didn’t sound the alarm. Bernanke told us on April 10 2008 that it might be a “mild recession”, but 158 days later the world economy collapsed. And Powell keeps saying today that we will still have a “soft landing”.
So I spent my very own money to send a provably costly signal that there’s something improper with the economy, and that it’s not going to be a “soft landing” like Powell guarantees — but something much worse.