The News From Planet Ruby—Friday, June 30, 2023
The Earth has traveled precisely half of the way around its orbit, measured from an arbitrary point half an orbit behind where it is now. This is consequently a significant date in the Apes' calendar, and the traditional time for them to assess the performance of their financial assets.
We don't pretend to understand this, just as we don't understand why they would want financial assets that go down as well as up in value, but still, there it is.
TradFi Continues To Creak
With the government default drama out of the way for the immediate future, the US has wasted no time in getting back to the really important business of accumulating more debt. US National Debt just hit $32 trillion, with no signs of slowing down.
Interestingly, M2 has ticked slightly higher in the last month, following nine months of decreases.
The US Money Supply increased in May for the first time since last July, ending a record streak of 9 consecutive monthly declines. Still down 4% year-over-year but perhaps this marks a change in trend. pic.twitter.com/Jhi1rrXatD
— Charlie Bilello (@charliebilello) June 27, 2023
M2 money supply includes cash, checking deposits, savings deposits, money market securities, and other time deposits, while M1 includes only cash and checking deposits. A growing amount of money in the economy can signal higher inflation is coming. At the moment, it's only a small change, but one to watch in case it's the start of a new trend—which could, of course, have implications for interest rates.
Problems in the Commercial Real Estate (CRE) market could increase the pain coming to regional banks. We'll dive into this in more detail in a separate blog, but suffice to say that commercial landlords are being hit left and right by the work-from-home trend and higher interest rates, and regional banks are going to be hit left and right by distressed loans (government bonds) and landlords defaulting.
In the Eurozone, the manufacturing PMI index has fallen to 43.6, the lowest since May 2020.
Bitcoin Holds The Line
Following its impressive gains last week, Bitcoin has held the $30k level and is in the process of consolidating, allowing some of the key moving averages to catch up and the RSI to reset, at least on shorter time frames. At the time of publication it's changing hands at around $30,700.
Bitcoin Dominance similarly broke above the 50% mark and appears to be consolidating as BTC draws all the attention and liquidity from alts. Barring something seismic, the new narrative and market trend appears to have been established as interest from institutional capital and ongoing enforcement from the SEC turn the spotlight firmly on bitcoin.
As June and Q2 close, bitcoin is the clear winner at half time—and the second half of the year looks promising.
Institutional Money Keeps Flowing
Speaking of institutions, Fidelity is finally getting in on the spot ETF action—a latecomer after BlackRock, WisdomTree, Invesco, Bitwise, and Valkyrie filed last week. Meanwhile, HSBC is now allowing access to BTC ETFs to its clients in Hong Kong. These are futures ETFs that were launched at the end of 2022 and beginning of this year. BITO, the world's largest and most popular bitcoin (futures) ETF, saw its biggest inflows in two years. And Microstrategy, which institutions currently use as a proxy for BTC, has bought another large tranche of coins.
Traders are watching the options market carefully, as billions of dollars of BTC and ETH options will expire later today (Friday). The large build-up of open interest around $30k means a deviation from that price could lead to an exaggerated move, either to the upside or downside. Another narrative working in bitcoin's favour is that July is historically bullish, with BTC averaging 24% growth in that month over the past three years.
In worse news, Binance Australia was debanked with less than 24 hours notice, impacting around a million customers in the country.
Finally, Ruble-USDT trading volumes hit $15 million on June 24 as Wagner leader Evgeny Prigozhin's march on Moscow unfolded. Binance, Cryptonex, HitBTC, and Coinsbit still support RUB transactions.
What's New In The SKALEVERSE?
Ruby's liquidity mining promotion continues. For the next three weeks, Ruby will distribute SKL and USDP as well as RUBY tokens to liquidity miners, pushing up APRs as a "thank you" to our LPs!
That's all for this week!
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