Wake Me Up When September Ends

The News From Planet Ruby—Friday, September 22, 2023

Another Friday, another Ruby Roundup. Cutting through the noise to get at the signal, the big picture is that macro factors may be approaching a turning point, if they haven't already; the regulatory situation in the US is getting worse but also slowly grinding towards some kind of denouement; Bitcoin fundamentals are strong; and there are reasons to hope that things might start picking up in the final quarter of 2023 or early 2024, even if they could get messy first.

Interest Topping Out?

It was a big week for not raising interest rates. In the US, the FOMC kept rates on hold, as expected, though another rise in early November is possible. In the UK, a small drop in the stubbornly-high inflation rate gave the Bank of England cause for pause. The committee's surprise decision to hold mean rates in the UK remain at 5.25%. In Japan, the BoJ also held firm at -0.1%, with the ten-year target of 0%.

BitMEX founder Arthur Hayes has been drawing attention to the amount of capital fleeing China, which is struggling with deflation. CNY has depreciated almost 15% year-to-date, raising questions about where that money (over half a trillion USD) is going, and going to go, to maintain its value. Gold? BTC? Certainly not US treasuries.

Global liquidity may have hit its lows, which wouldn't be too surprising if we really are at the top of this tightening cycle. And that might have implications...

In other news, Hester Peirce—an SEC commissioner who has vocally disagreed with some of the regulator's recent enforcement actions in the crypto sector—has also dissented on the agency's recent Lyft ruling. The pattern of abuse and incompetence at the SEC stretches well beyond its treatment of the crypto sector.

Bitcoin Holds, Sort Of

Bitcoin closed last week green for the first time in five weeks, starting Monday at $26,500. This week has seen a push higher, taking it above $27,000 and at one point almost to $27,500.

In the medium-term, the line to watch is $28,000, for several reasons. Firstly, this is just above where both the 200 daily moving average and 200 weekly MA currently sit: Both key support/resistance levels. It's also where the short-lived boost from Grayscale's victory over the SEC topped, before its full retrace. Lastly, it's the beginning of the long-term support/resistance band from $28-30k, stretching back almost three years now.

Powell's speech on Wednesday took a while to filter through to the market, as is often the case. The realization that rates might stay high for a few more months yet knocked BTC down a few hundred dollars. It's currently trading just above where it started the week.

At present, the path of least resistance is still to the downside. However, September is traditionally a bearish month for bitcoin, but October is just around the corner, with an average return of over 20%.

Bitcoin Flips (Ecologically) Green(er)

Bitcoin's mempool is once again filling up thanks to high volumes of Ordinals transactions. There's a good chance that it will hit an all-time high again soon, causing fees and delays to increase further.

Mt Gox payments have been delayed for several more months, meaning that source of selling pressure is off the table. Another cause for concern, though, is the large stash of crypto now held by North Korea's Lazarus Group. It's estimated the shadowy organization holds almost a billion dollars worth of crypto. The good news? They're unlikely to dump it, and probably have better OpSec than most users, including institutions.

Speaking of nation states that use crypto as a tool of oppression and abuse, Hester "Crypto Mom" Peirce has urged US crypto businesses not to give up on the country. Meanwhile, Coinbase has decided it's had enough and is launching a campaign to mobilize the 50 million Americans who hold crypto to lobby their congresspeople for clear laws.

Sam Bankman-Fried's parents are being sued by FTX's administrators, who claim the couple siphoned off tens of millions of dollars for charitable donations and luxury real estate, which they deny.

And Bitcoin mining has finally broken through the 50% clean energy threshold, raising the prospect of Tesla restarting BTC payments.

What's New In The SKALEVERSE?

Ruby has included a link to the Meson bridge from the bridge page, enabling fast and direct cross-chain transfers between supported networks. The latest update also features a fix which should address previous errors in the operation of Metaport.

SKALE has been pushing forward its gaming partnerships, and is now one of the leading gaming blockchain platforms.

SKALE's fast, gas-free transactions have proved transformational for the industry, making life easier for users and gaming studios alike.

That's all for this week!

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