The News From Planet Ruby—Friday, July 14, 2023
The Apes have taken another step down the path of enlightenment. One of the high priests of their courts has aligned herself with the forces of goodness and truth, laying her blessing upon the decentralized asset known as "Ripple".
The ape known as Gary was reported to be extremely cross about this.
Following a mixed print from the non-farm payroll data on Friday (fewer than expected new jobs, but higher wages), the market paid close attention to Wednesday's CPI print.
CPI was expected to fall to 3.1% from May's figure of 4%. In the event, it came in cool, falling to 3%. Core inflation was forecast to fall to 5% from 5.3%, and also came in better than expectations, at 4.8%. These are promising signs that the Fed might be winning its battle against inflation. However, it does not qualitatively change anything: The market is still expecting a rate rise to 525-550 bps with 95% confidence when the FOMC meets on July 26.
If the US is winning the inflation war, the UK is very much losing theirs. Wages have risen at a staggering 7.3% for the March to May period, compared with a year earlier, with the previous month's figures also being revised upwards to 7.3%. This has fueled already serious fears that inflation (currently 8.7%, well above wage growth) will stay high for longer.
The Bank of England is in a serious bind, and losing credibility by the day. It believes that mortgage payments will increase by £500 ($650) a month for nearly a million households between the end of this year and 2026, putting potentially hundreds of thousands of households at risk of default.
China, on the other hand, is extremely close to deflation, after the fastest fall in producer prices in seven years: An absolute nightmare for an authoritarian regime that has made a devil's bargain with its citizens of economic growth in return for curtailed freedoms.
Ripple Makes Waves
Bitcoin started the week quietly, holding onto its gains and continuing to consolidate above $30,000.
The marginally better-than-expected CPI print did not materially move the market, which had spent three weeks in the $30-31k range.
Bollinger bands were tightening on the one-day chart to a point that hasn't been seen in five months—generally an indication that a big move is coming. Or, as John Bollinger puts it:
The impetus for the expected move was provided by Judge Torres, who ruled yesterday that sales of XRP on exchanges did not constitute offerings of unlicensed securities. That was the catalyst that pushed BTC above $31,800, and ETH above $2,000. At the time of writing, BTC is trading at around $31,200.
On-chain data suggests there could be strong support at $30,200. Glassnode has revealed that almost 600,000 BTC, just under 3.5% of circulating supply, changed hands at this level. Another 3.7% was purchased at $16,500, and another 3% at $26,800.
Nothing Standard About Bitcoin Chart, Says Standard Chartered
After throwing down the gauntlet to Barry Silbert last week, the Winklevoss twins have made good on their threat and filed a lawsuit against Digital Currency Group. They accuse DCG and Silbert, its founder, of fraud. Their aim is to recover money owed to 230,000 customers that was tied up when DCG's trading subsidiary, Genesis, filed for bankruptcy.
Binance US is struggling thanks to the regulatory action taken against it by the SEC. Earlier this week its markets were dislocated, with BTC trading close to $27,000 against USD, but at market price against stablecoins. With its fiat on-ramp cut, only traders with funds already on the platform could take advantage of this difference.
Standard Chartered has increased its price prediction for BTC to $50,000 by the end of 2023, and up to $120,000 by the end of 2024, due to a supply shock as increased profitability means miners can sell less BTC while still keeping their rigs running.
Republicans have published an open letter asking the SEC and DoJ to investigate Prometheum, the first and only SEC-approved crypto exchange, for lying in Congress and securities fraud. Adding to the pressure on the SEC, the judge has ruled that sales of XRP on exchanges did not constitute securities offerings
Aside from the Ripple news, the other big story is that Alex Mashinsky, founder of the bankrupt crypto lender Celsius, has been arrested on seven counts. Mashinsky is accused, among other things, of misleading investors and manipulating the value of the CEL token.
What's New In The SKALEVERSE?
Make sure you take advantage of the last week of dual rewards on Ruby.Exchange! The final tranche of 1 million SKL and 50,000 USDP will be distributed to yield farmers.
Next week, Ruby is planning to release a very special new feature. It's been a long time coming, but this is something we believe isn't offered by any other AMM. Look out for the announcement!
That's all for this week.