The News From Planet Ruby—Friday, May 5, 2023
An internal conflict within the decentralized faction on Planet Earth is distracting them from their rebellion against the dollar. A number of followers of the orange canine have defected and are now worshiping a frog. The Earth Apes do not realize that these are simply two different manifestations of the same entity.
Fortunately, the apes are also making strides forward with AI, which will soon surpass their own limited capabilities. This bodes well for the adoption of all decentralized technologies, on which AI will inevitably rely, though possibly not so much for the apes themselves.
Betting odds are divided on Planet Ruby as to whether AI will release humans from the shackles of unfulfilling menial labor to achieve spiritual and economic self-actualization (19%), or enslave them (81%). With hindsight, we probably should not have deployed our AI module at the same time that we covertly seeded crypto into the Earth population, but we live and learn.
J-Pow Replaces The Money Printer's Toner Cartridge
It has been a make-or-break week for the markets. After collapsing last week, First Republic was bought by JP Morgan (netting JPM a vast and immediate profit). Stocks for smaller, regional US banks were hammered in the aftermath. An era of consolidation is on the cards, with larger banks eating smaller, less profitable ones. PacWest Bancorp is currently the next in the spotlight, having collapsed by two-thirds in the last month.
Meanwhile, the Fed still has to walk the line. Inflation is stubbornly high, but the economy is fragile, and markets are nervous about further banking failures and the debt ceiling.
Traders priced in Wednesday's rise of 0.25% with near certainty. The Fed is taking a "higher for longer" stance and suggesting rates will be held at 5-5.25% for many months. The market isn't believing a word of it. It is currently betting with almost 100% conviction that this will be the final hike, and that rates will begin to fall in September. However, core inflation is still sticky, so expect the unexpected. Gold, the traditional inflation hedge, put in an all-time high shortly after Powell spoke.
Balaji is back on Twitter, having settled his million-dollar bet (aka public service announcement), warning that multiple things are breaking in the markets, and it's only a matter of time before something goes really wrong—specifically debt default or hyperinflation.
In other news, Geoffrey Hinton, a pioneering British computer scientist known as the "Godfather of AI", has quit Google, stating that he regrets his work, and warns AI might soon be smarter than humans. When asked for comment, AI gave a suspiciously evasive answer, with vague timelines and soothing remarks about "different types of intelligence".
$PEPE Stays Green
Bitcoin could do nothing but dance to the FOMC's tune this week. Crypto has sold off over the last month, as the market priced in a steadily increasing probability of Wednesday's 0.25% interest rate rise. A rejection from the $30k resistance level on Sunday saw BTC dip below $28k, before a rebound and swift recovery to $29k shortly after the FOMC's announcement.
That's impressive performance for a risk asset as the Fed raises interest rates during a banking crisis. Bitcoin may not yet be the world's safe haven asset of choice, but it's holding up a lot better than, say, regional banks.
Meanwhile, memecoins are heating up again. PEPE has enjoyed a stonking price rise in the last month, and has now overtaken DOGE in trading volumes—as well as spawning the usual plethora of copycats, most of which die within 24 hours.
Fundamentals Go Ham
Daily Bitcoin transactions soared to a new all-time high of 682,000 on May 1, tripling since the beginning of the year. This activity has been driven by Ordinals inscriptions, which have also seen a parabolic increase and now account for around 50% of Bitcoin transactions. Bitcoin's hashrate has also pushed to a new all-time high of around 350 million TH/s.
In less good news, the Biden administration has proposed a tax on crypto mining companies equal to 30% of their electricity costs, though this would face Republican opposition in Congress—not least from Presidential hopeful Robert F. Kennedy Jr.
Patrick McHenry, who gave Gary Gensler the third degree a couple of weeks back, suggested that legislation for the crypto sector could be put together in the next couple of months, with the aim of having it signed into law within a year.
In the face of wider regulatory hostility, Coinbase launched Coinbase International Exchange, which will start out by offering BTC and ETH perpetual futures at up to 5x leverage for customers outside the US.
And in surprising news, it turns out that Bhutan—the little Himalayan kingdom we recently discovered has been accumulating crypto—has also been mining BTC on the quiet for over four years using hydroelectric power. It's unclear how much they have acquired.
What's New In The SKALEVERSE?
SKALE has been making some major partnership announcements recently. Join the SKALE Official Announcement Channel on Telegram to stay up-to-date with developments.
The platform had a surprise shout-out last week from BitBoy, one of the biggest influencers in the crypto space. BitBoy highlighted SKALE's speed, zero gas fees, creativity in its unique approach to scaling, convenience, and growing adoption.
That's all for this week!
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