Hibernation Time, Bears?

The News From Planet Ruby—Friday, September 29, 2023

• Signal: Bond yields, inflation, US national debt, hashrate
• Noise: SEC, BitBoy, shutdown, $26k

Dollar Stronk

A surging dollar is becoming an increasing problem, threatening to undermine US multinationals' foreign-currency profits and give the stock market another headwind. The DXY recently topped 106 and is still trending upwards.

Yields on 10-year bonds have moved over 4.5%. This matters because the US has to pay more on its fast-growing debt (which currently totals over $33 trillion). It also means the price of existing bonds is being driven down, and that has all kinds of impacts—like banks with huge bond portfolios being pushed even further underwater, putting them in imminent danger of collapse if they need to sell for any reason (like funding customer withdrawals). Meanwhile, US 30-year fixed mortgage rates have hit a 22-year high, above 7.5%.

In other news, we're now less than two days out from a government shutdown. The federal government will run out of cash at midnight on Saturday if an agreement isn't reached. A prolonged shutdown would have implications for the world's largest economy, and would probably affect its credit rating. Probably not what you want at a time of extreme economic uncertainty.

Crypto Confounds

Bitcoin kicked off the week at $26,200, meaning it has, essentially, been dead flat for the past month. On the weekly chart, that mid-September spike to $27,500 is no more than a blip, and certainly nothing to get excited (or worried) about.

Tomorrow is the last day of September, and the last day of Q3. Historically, we can expect better times for BTC. Ben Cowen reminds us that in pre-election/pre-halving years (like this one), the S&P 500 tends to have an August-September correction, which pulls BTC down with it.

Wednesday saw the beginnings of a move off support that has lifted BTC by $1,000 to $27,200, at the time of writing, perhaps front-running October's expected gains. There's still a chance BTC might end September—a notoriously bearish month—in the green for the first time since 2016.

The Regulatory Dance Continues

There's no shortage of news from the crypto sphere this week. MicroStrategy announced it had acquired another 5,445 Bitcoin for $147.3 million, at an average price of $27,053 per BTC.

Bitwise have filed an update for their ETF application, preempting the SEC's next objection by providing extensive information on the correlation between the futures and spot markets. Meanwhile, the SEC's latest objection to Coinbase handling the distribution of assets from bankrupt lender Celsius might hint at their next move in this regulatory chess game. A ETH futures ETF has been approved.

Four members of Congress, two Republicans and two Democrats, have sent an open letter to the SEC, demanding that the agency approve a spot BTC ETF.

The same day, the SEC stated it was delaying Cathie Wood's Ark Invest ETF application, six weeks earlier than the next decision was due. Coincidence? Petulance? We may never know. Gensler's testimony before Congress on Wednesday gave no hint of any intention to give the green light.

Finally, the saga of crypto influencer BitBoy, aka Ben Armstrong, continues. This week, Ben appears to have got himself arrested while live-streaming an armed mission to his former business partner's house to "reclaim" a "stolen" Lambo.

What's New In The SKALEVERSE?

Make sure you check out some of the recent SKALE videos, including ones about the intersection of blockchain and AI—something set to emerge as a major use case in the coming months and years.

That's all for this week!

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