Inflation print: What it means for our portfolios
Dear Banter Fam,
It’s a big day for worldwide markets, with the Consumer Price Index (CPI), representing the rate of Inflation Rate YoY, set to be released at 08:30 am EST.
A print lower than the expected 8.3% could help crypto break out of its recent tight-knit price range. On the other hand, a higher figure could give the Federal Reserve the green light to ramp up an already hawkish stance. The markets will re-price accordingly.
Unfortunately, early indicators point towards the latter, after the White House primed investors by mentioning the possibility of ‘elevated’ inflation. It’s likely the reason the stock market sold off yesterday.
But Bitcoin and wider crypto markets failed to react strongly to the White House announcement. Whether it’s already priced in, or whether the sector is becoming uncorrelated to traditional markets, today will reveal all. Regardless of the print, a pump could represent quite the bullish indicator and support some evidence that the two markets are slowly decoupling. An event we’d all love to witness, I’m sure.
Additionally, Senator Lummis is set to speak regarding “The Responsible Innovation Act”, the proposed bill we covered in Tuesday’s newsletter.
One thing is for sure, the events of today will likely determine the short-term direction of digital assets.
Putting aside the macro events incoming, the charts alone suggest the time has come for Bitcoin (BTC) to make a decisive move. The incoming inflation data could be the spark to light the fuse. If inflation has fallen, expect markets to react positively. If not, there’s only one question. Can BTC hold the 30k support? BTC completed the US session down -0.31% to $US29,802.
|US markets close||Gain|
|Protocol (Coin)||Price ($)||Gain (%)|
|Theta Network (THETA)||1.44||+5|
|Pocket Network (POKT)||0.18||+20|
|Bitcoin Fear and Greed Index||13 Extreme Fear|
|“Crypto” Google Trends 90d||18|
|“Bitcoin” Google Trends 90d||29|
Jamaica adopts CBDC. The Jamaican Senate passed a bill allowing the national Bank of Jamaica to issue a CBDC after a year-long pilot program. Officials believe the measure will reduce the challenge for unbanked citizens of the country. The CBDC will not require a bank account but instead will issue digital wallets that allow the transfer of the digital currency among holders. Jamaica joins ten other countries with CBDC programs.
Jay-Z and Jack Dorsey fund a Bitcoin education program. The pair teamed up to fund a project dubbed “The Bitcoin Academy“, which will allow Marcy House residents in Brooklyn to receive free educational Bitcoin classes.
SEC to investigate Terra after the UST debacle. Second Circuit Court rejected Terraform Lab’s appeal against the Security and Exchange Commission (SEC) concerning Mirror Protocol, opening the doors for the SEC to investigate UST. Mirror Protocol allowed permissionless synthetic stock trading on the Terra blockchain with the stablecoin UST, whose collapse wiped out the $40b Terra ecosystem, and sent shockwaves around the wider industry. The ruling enables further investigations and lawsuits concerning incidents surrounding Terraform Labs, Terra, and UST.
Aztec Layer-2 update to focus on privacy. The Aztec Network update named Connect aims to position the Layer-2 as a privacy-based solution in the L2 landscape. Major protocols such as Lido, Aave, Compound, and Uniswap are set to launch on the network.
Institutional-grade DEX. The market-making firm Wintermute released details on a decentralized exchange project named Bebop that focuses on institutional quality for DeFi users.
Protocol level tidbits:
ApeCoin stays on Ethereum. Despite high fees and Land sale gas fee problems, the ApeCoin (APE) community has voted to keep the project on Ethereum (ETH). They will now consider Layer 2s as leading candidates to receive the token ecosystem.
OpenSea to fight fraud. NFT trading platform Opensea vows to increase efforts to curb fraud and plagiarism on the exchange via an announcement written by CEO Devin Finzer.
Plan for the worst, hope for the best. In investing terms, that generally means to manage your risk! Well, the US stock market’s sell-off yesterday suggests investors are doing just that.
Despite the inflation battle waged by the Fed, the crypto markets have strangely remained steady this past week. If luck’s on our side, we’ll soon witness the decoupling of stocks and crypto. Could we be witnessing an early indicator with Chainlink’s (LINK) substantial 30% rise this week? Historically, the oracle project tends to perform well before the crypto market is about to move. In either direction…
We’ll be back on Monday with a full debrief! And don’t forget to tune in to the Friday Banter this afternoon for a full analysis with top macro experts.
Have a great weekend fam. See you on Monday.
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Good Morning crypto (issued by Crypto Banter) is a newsletter for entertainment purposes only.
All opinions expressed by the publisher, writers, and chartists should not be construed as financial advice and do not necessarily reflect the views of Crypto Banter. The publisher, writers, and chartists may hold positions in the tokens and assets discussed. Readers are encouraged to do their own research.