Going against the grain
With confirmed COVID-19 cases topping 2.1mn, cities belatedly hit by the pandemic in the western States are scurrying to shutter their borders. What or who sticks out most like a sore thumb in this saga? Well, he just never fails to disappoint.
While the World has endeavored to speed up the phasing out high carbon-emitting and unsustainable energy sources, our eager beaver has more than doubled down on his willingness to compromise the environment paving the way for oil and coal fired power plants to spit out mercury and other toxic byproducts into the soil, rivers and streams uninhibited. All the while distracting the public with free money in a classic bait and switch.
Sure, desperate times require desperate measures and considering we are in the midst of the biggest recession since WW2, they have responded with the largest fiscal support measures ever. But at what cost? It certainly looks as though the future has been mortgaged heavily:
With a couple billion here, a few trillion there, and before you know it, the Fed’s balance sheet has grown 50% over the past month — equivalent to 10% of the American economy to more than six trillion.
And this doesn’t only impact Americans. You can’t expect the many sovereign holders of US debt to sit idly, let alone be thrilled, as the POTUS debases the $13 trillion in US government debt they hold. Some of those same sovereigns are actually taking a shine to the whole monetary and fiscal stimulus tactics, turbo charging their own printing presses.
Trump inflated false hopes of resuming to regular day-to-day as he tried to force cities and states resume business as usual and inject some life into the economy. But things are far from normal, alongside the slowest housing start (March s.a. -22.3%) in thirty six years, initial jobless claims filed over the past three weeks has topped 22mn. Before the March 28th print, the biggest claim on record was 671K (1982)
Digital asset players have not been immune to the pullback. Galaxy Digital reported $32.7mn net losses for 4Q19 with a warning for darker times ahead while Canaan has seen their bottom line lurch further into the abyss racking up $107.8mn losses, a 32x increase YoY.
Virtual assets are having a good run at the time of writing — with Ether ($ETH) +12.6% spearheading the charge as the market speculates the EVM will be Libra’s choice to deploy their revamped version of a supranational currency. After quickly taking the mantle of governments’ most hated with their attempt to usurp them of their seigniorage, they’ve conceded and have come back with plans to issue a stable coin per currency and then move on to create a global currency composed of these respective stable coins.
Even without this turn of events, ether has been kicking ass. As a matter of fact, on-chain value transfers have reached parity with Bitcoin.
The value of USDT on the EVM ($4,853mn) eclipses that on the Bitcoin blockchain ($1,223) almost by a factor of four as stable coin issuances 1Q20 top tick $8bn. Maybe why Reddit decided to launch their community points token as an ERC-20.
And that aside, with even Main Street being bailed out, more are starting to realize just how weak a store of value the greenback has become and are slowly starting to dip their toes. Grayscale witnessed $503.7mn uptick in their tracker ETPs 1Q20 and this is a product that has a history of double digit tracking error. Non-coiners using it as a hedge? Definitely more from where that came from.
Lawmakers in Wyoming have successfully passed House Bill 0021 (effective July 1st) that permits virtual asset investments by insurance companies. Whether the insurance co’s actually play ball is another story but could this just be the epiphany triggering FOMO en masse and a stampede to the gates? Recall less than two years ago, the $400mn check Yale Endowment wrote for Paradigm was the tipping point for their peers to get involved and now, nearly all endowments have some exposure to the space. Just as ivy league endowments compare themselves with other endowments, the same applies for pension funds, hedge funds, long only asset managers and yes, insurers too.
BTC balances on exchanges have slipped 10% from highs and futures have flipped out of backwardation forcing the basis-arb traders to revisit positions, subsequently triggering a short squeeze of sorts. Halvening not so bad after all?
After pledging nearly 30% of his net wealth in fighting COVID-19, Jack Dorsey’s Square Capital was accepted by US Treasury & Small Business Administration to become a lender under the federal Paycheck Protection Program (PPP) as China shortlists 71 entities to join the “National Blockchain and Distributed Accounting Technology Standardization Technical Committee” where the group will discuss and set industry standards for distributed ledger technology as the Agricultural Bank of China debuts an interface for whitelisted users to test the country’s CBDC (a.k.a. DCEP)
Roche Cyrulink Freedman LLP has come out of leftfield in their filing of 11 class-action lawsuits against seven token issuers: Block.One ($EOS +9.5%), Tron Foundation ($TRX +6.5%), Bprotocol Foundation ($BNT +5.4%), Civic ($CVC +7.4%), Kaydex Pte ($KNC+4%), Quantstamp ($QSP) +7.3% and exchanges: Binance, Bibox, Bitmex & KuCoin. Their crime being selling securities without saying they would. Creative response from KuCoin as they take the bunny hopping business model to the next level.
The BCH halvening caused a -28% move from which it has since been clawing back the losses but with the network hashrate of 1.7EH just 1.4% the size of BTCs and a price tag of less than $10K for a 51% hack makes you wonder if they’ll still be around.
The Bitcoin halvening is a month away and what a striking contrast this will depict vs. the trillions that your governments are pissing away. #BuyBitcoin.
May the trend be your friend