Macro Pulse Update 02.03.2024

$BTC breached $64,000

Market is in a frenzy and according to Plan B’s analysis we just started the bull run

However, metrics still show economic weakness 👇🧵

Macro Pulse Update 02.03.2024, covering the following topics:

1️⃣ Macro events for the week
2️⃣ Bitcoin Buzz Indicator
3️⃣ Market overview
4️⃣ Key Economic Metrics
5️⃣ China Spotlight

1️⃣ Macro events for the week

Last Week

Next Week

2️⃣ Bitcoin Buzz Indicator

Exchange Challenges and Solutions

• Coinbase Battles Outages Amid Bitcoin Price Rally

• Gemini's Regulatory Settlement Promises User Compensation

• BitForex Scandal Shakes Trust in Crypto Exchanges

• Binance Contends with Legal Challenges and User Losses

Innovations in Trading and Leverage

• Telegram's TON Gains as Binance Futures Introduces Leverage

Blockchain and Layer-2 Developments

• Blast Chain's Hype Meets Reality with Value Plunge

• Robinhood and Arbitrum Collaborate for Wallet Swap Efficiency

Token Economics and Market Dynamics

• Crypto Market Braces for Massive Token Unlocks in March

NFT Ecosystem and Creator Rights

• Yuga Labs and De Labs Enforce NFT Royalties

• Bitcoin Ordinal Trade Error Highlights Community's Honesty

• ZachXBT's Investigative Work Recovers Stolen NFT Funds

• VanEck Introduces SegMint, A New NFT Marketplace

Atlcoins

• Memecoins saw an impressive performance this week.

• An Australian man disappeared after mistakenly receiving $500,000 in cryptocurrency.

• Frax Finance considered a Uniswap-inspired reward system for its token stakers.

• PancakeSwap launched an affiliate program to support forks across blockchains.

• After finding malicious code, Tornado Cash's website and Discord went offline.

• Arweave introduced a testnet with high scalability, inviting the community to participate.

• OKX opened a cryptocurrency exchange in Turkey, broadening its DeFi footprint.

• The Solana Foundation unveiled the Renaissance hackathon, offering over $1 million in prizes.

• Lawyers stated Do Kwon's extradition likely wouldn't occur before the end of March.

• Theta Network's price jumped, driven by anticipation for its Theta EdgeCloud launch and AI token enthusiasm.

• Gala Games introduced GalaSwap, an exchange platform with token rewards.

• Sam Bankman-Fried's defense team proposed a sentencing cap for the $8 billion FTX fraud case.

• Uniswap released a browser extension and tools to enhance transactions.

• Senator Warren criticized the crypto industry, demanding it adhere to traditional finance rules.

• EtherFi secured a $23M Series A funding as Eigenlayer's TVL surpassed $9B.

• Following a $6.4M exploit, the Seneca stablecoin hacker returned the stolen funds.

• The IOTA Foundation committed $10M to support tokenization and trade startups.

• The SEC accused Terraform Labs of diverting $166 million to its legal team.

• In 2024, hacked funds increased by 15.4% compared to the same period in 2023, according to Immunefi.

• The Shiba Inu team unveiled a new data security encryption method.

• StarkWare released an open-source ZK prover at ETH Denver.

• Portal debuted with a $2.5B valuation.

• Grayscale considered legal action against the SEC.

• State attorneys general argued the SEC overreached in the Kraken lawsuit.

3️⃣ Market overview

US inflation shows signs of moderation but remains elevated, leading the Fed to maintain current high interest rates despite a strong economy and job market. Bank of Japan Governor signals no imminent rate hikes as inflation is still distant from the 2% target; wage negotiations crucial for future policy direction.

• US inflation declines slightly but core inflation rises, underscoring the complexity of adjusting monetary policy amidst an expanding economy and persistent inflation.

• Japan unlikely to hike rates soon given still-low inflation, though wage deals could initiate a virtuous inflationary cycle and impact future Bank of Japan decisions.

• Nasdaq hits first record close since 2021 as AI/tech stocks surge; salesforce up on dividend and buyback news.

• Investor attention turns to upcoming China PMI data for insights on global growth and markets.

• Interconnectedness of Japan's monetary policy with global economy highlighted at G20 discussions signaling international policy coordination.

4️⃣ Key Economic Metrics

🟡 The Fed faces a tough balancing act between controlling inflation and ensuring financial stability as the office property market comes under strain. Remote work trends mean companies plan to downgrade office space, leading to revenue declines for owners and mortgage stresses. Smaller banks with disproportionate exposure to commercial real estate loans are most at risk if property market troubles escalate.

• With $929 billion in commercial property loans maturing in 2023, the Fed may have to intervene if small/mid-sized bank failures risk seizing up credit markets.

• Cuts to interest rates could ease property market crisis but compromises Fed inflation fight.

• Preventing wider systemic crisis from property market may take priority over inflation goals if market troubles proliferate.

• Excess office supply and central business district revivals key issues if crisis avoided.

• Property market risks sparking next US economic downturn if financial troubles spread.

🟢 Eurozone inflation has declined from peak levels but remains sticky and above the ECB's 2% target due largely to high services inflation stemming from tight labor markets and large wage increases. Goods inflation has receded significantly while food inflation persists as a challenge. Despite progress, elevated services inflation likely keeps ECB interest rates higher for months until labor productivity accelerates or labor supply rises.

• Core Eurozone inflation down to 3.3% on reversing supply issues, but services inflation stuck at 4% on labor-intensive wage passthrough.

• ECB faces dilemma keeping rates high with weak growth or cutting rates and risking inflation rebound.

• Labor productivity gains or increased labor supply via participation/immigration could ease wage pressures and prompt ECB rate cuts.

• Food inflation remains problematic at 5.6% as goods inflation moderates.

• High services inflation the main lingering challenge preventing overall inflation descending to 2% target.

5️⃣ China Spotlight🔴

China has a massive excess supply of around 50 million vacant housing units after years of overinvestment in residential property.

This oversupply combined with a declining population and demand is causing prolonged weakness in China's property market.

This is negatively impacting global commodity prices and leading to increased Chinese exports in steel and other sectors like tech and clean energy.

• With limited prospects for housing market equilibrium given demographic headwinds, property prices likely remain depressed, weighing on Chinese consumer wealth.

• Reduced Chinese property construction lowers demand for commodities like iron ore, putting downward pressure on global commodity prices.

• In response to excess capacity from lower domestic property investment, China is exporting more steel and other products, concerning trade partners and increasing economic tensions.

• Though China has cut mortgage rates to boost household finances, revive housing market, the impact may be limited given low confidence, and fiscal stimulus may be needed.

• Lower Chinese growth prospects and worsening foreign relations may explain plunging foreign direct investment in China.