The News From Planet Ruby—Friday, September 1, 2023
We believe the apes may finally be mounting a decisive counterattack against the Priesthood of the Almighty Dollar, the cabal that has oppressed their world for over 200 years. The first cracks in the priesthood's defense are appearing, as a shadowy group known as the "SEC" was defeated in a ritual game with complex rules known as "litigation". We're looking forward to the second half of this nail-biter.
Jackson Hole Hangover Lingers
Following the Jackson Hole Symposium last weekend, the markets are finally adjusting to the new reality of "higher for longer".
US Q2 GDP data on Wednesday was revised downwards to +2.1% rather than the initial +2.4%. In other words, growth is slower than first thought, which the Fed wants to see.
However, July Core PCE Inflation data on Thursday increased slightly from 4.1% in June to 4.2%, having fallen from 4.6% in May. The slight bump to 4.2% had been expected, and will underscore the Fed's narrative that the job of taming inflation has not yet been done. Later today, we'll also have the July Jobs Report, plus ISM Manufacturing PMI data.
Something else that's larger than last quarter? UBS's Q2 profits, which came in at $29 billion: The largest ever quarterly profit for a bank.
Crypto Not Out Of The Woods
The crypto markets have put in a decidedly mixed performance this week. On the one hand, it was great to see a $2,000 daily candle after the SEC was handed its ass by Judge Rao (see further below). On the other hand, this impressive price action didn't change anything on a technical level, and has now retraced in full. BTC was rejected at both the 200-day and 200-week moving averages, and is trading well below them now. Many analysts are fully expecting further falls to $25k and below.
Volatility is still historically low on the weekly timeframe. Analyst Raoul Pal notes that in prior cycles this has preceded a massive move to the upside. Others aren't so optimistic, like Ben Cowen, who looks at historical support and resistance levels and concludes that a 10-15% drop isn't out of the question.
"Arbitrary And Capricious" SEC Slammed
The big news this week was, of course, Grayscale's victory over the SEC in court. The judge described the SEC's rejection of Grayscale's application to convert GBTC into a Bitcoin spot ETF as "arbitrary and capricious", adding to the pressure on the agency, and on its Chair, Gary Gensler.
The SEC then delayed making a decision on all six of the current spot Bitcoin ETFs, including BlackRock's. The announcement coincided with a crash that wiped out all of bitcoin's gains from the GBTC news. The SEC must understand the precariousness of its position, but there's every chance it will continue to run the clock out, delaying the process for the maximum possible time (March 2024 being the ultimate deadline). After that? If they continue to deny the ETF, it's very likely to end in court.
Coins continue to fly off exchanges, prompting on-chain analysts to ask what's going on. Data from CoinGlass shows over 80,000 BTC has been yanked from the biggest exchanges in the last month. The only reasonable suggestion, surely, is the big guys loading up ahead of launching their ETFs. Right?
What's New In The SKALEVERSE?
July was SKALE's biggest ever month for transactions, with the network supporting a total of 22.2 million txs. August came in ahead of that with 22.8 million txs, an average of an incredible 8 tps every single second of the month. Big contributors to network throughput include Exorde, CryptoBlades, and especially Gamifly.
What's more, we have a major new member of the SKALEVERSE! Please give a big hand to surfing brand Hurley!
That's all for this week!