The news from Planet Ruby—Friday, February 16, 2024

• Signal: BTC
• Noise: DXY

Higher For Longer

US CPI data came in hot on Tuesday. Headline inflation remained at 3.1%, while a fall to 2.9% had been expected. In the UK, inflation stayed at 4% (a slight rise had been expected).

With inflation looking like it's going to stay higher for longer, interest rate cuts are unlikely until at least May. The dollar strengthened, with the DXY heading back to 105. There's a silver lining, at least for the government, in that this extra 1.1% above the 2% inflation target is helping to erode the real-terms value of the country's enormous debt. (It won't be enough, of course.)

Inflation Stays Reassuringly High (For Government)

Governments like inflation when it’s high enough to erode the public debt without causing a revolt.

REX WireBender Smort

Risk assets fell across the board as CPI data was released. The S&P 500, which blew past 5,000 last week, briefly dropped back as low as 4,920 but has since recovered somewhat.

Hello $50k My Old Friend

Bitcoin passed $50,000 for the first time since December 2021 on Monday. The CPI print caused BTC to drop $1,500, but it had hit a new local high within 20 hours of that, touching $52,000 on Wednesday. It has since been consolidating around this level.

Bitcoin has put in a strong bull move since it bottomed post-ETF launch. It has broken the 0.618 Fibonacci retracement level from the last peak to the bear market low before the halving, for the first time ever, indicating that this cycle is progressing faster than previous ones.

The reason might have something to do with BlackRock et al. Inflows have been increasing over the last week. BlackRock's IBIT did half a billion dollars in volume on Tuesday, and saw the largest inflows since day 1.

Meanwhile, exchanges have their lowest bitcoin balances since 2017.

And well might Boomers congratulate themselves. BlackRock ALONE now holds over 100,000 BTC: Over 0.5% of all bitcoins in existence, and they've done it in less than five weeks. Fidelity isn't far behind.

All of this FOMO brings into focus the possbility of a left-translated cycle, and a potential early top, although it's still too soon to know anything for certain.

Making Toast, COPA Style

Craig has systematically been burning himself in court this week, as COPA (to mix metaphors) hand him enough rope. The list of gaffes is too long to repeat here, but one of the best was forgetting himself and referring to Satoshi in the third person.

Another was not knowing what an unsigned integer is (programming 101). New heroes are being minted in this trial. A chap called Norbert has tirelessly live-tweeted the trial, alongside two or three other regulars in the court room. The judge has been getting more and more impatient with Wright. And, of course, there's COPA's lawyer, who will dine out on this experience for many years.

What's New In The SKALEVERSE?

SKALE continues to sign up major new games and other projects, driving ever-increasing transaction volumes. The network processed 31.7 million transactions in January, and is close to 20 million already this month.

That's all for this week!

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