Markets slaughtered, Tether ratio shows we are at the lowest point
Alt season indicator back to levels of Sep 2023
Macro indicators are 4x red 👇🧵
Macro Pulse Update 11.05.2024, 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
Crypto Market Regulation and Compliance
Robinhood Contests SEC's Crypto Securities Allegations
FTX's Post-Bankruptcy Financial Recovery Surpasses Expectations
Binance Faces Allegations and Regulatory Scrutiny
Crypto Exchanges and Trading Platforms
Hong Kong ETFs Show Resilience Amid Bitcoin Fluctuations
BlockFi Partners with Coinbase for Client Withdrawals
Magic Eden Leads NFT Market Amidst Industry Shift
Crypto Asset Performance and Analysis
AI Crypto Tokens Surge Following Tech Developments
Toncoin's Price Soars with Upcoming Game Launch
Memecoins Dominate Altcoin Leverage in 2024
Stablecoins and Regulatory Developments
Stablecoin Stability Questioned by Deutsche Bank
Coinbase's Base Blockchain Gains Traction in SocialFi
NFT News
Salvor Secures Funding for NFT and DeFi Expansion on Avalanche
NFT Trader Victim of Phishing Scam by "PinkDrainer"
Trump Hosts NFT-Themed Fundraiser Amid Trial
Magic Eden Leads NFT Market Amidst Industry Shift
Altcoins
Genius’ AI-crypto project's limited partners lost $1.3M due to a fake token hack, with suspicions of a rug pull.
Crypto venture capital funding reached $1B for the second consecutive month.
Investors filed a lawsuit against Coinbase, claiming the sale of unregistered securities.
Mango Markets DAO's buyback plan sparked accusations of self-dealing.
The community reacted to ZeroLend’s crypto airdrop.
Stacks, Moonriver, Hedera Network, and Iron Fish joined Axelar’s Interchain Amplifier.
Bitfinex’s CTO declared FSociety's database breach allegations as fake.
South Korea updated its donation legislation to exclude cryptocurrencies.
Sui Network explained that SUI coins are locked within third-party custodians and cannot be moved.
Jupiter enabled trading for non-native Solana tokens including DOGE and BNB.
Arbitrum became the first Layer 2 to surpass $150 billion on Uniswap.
Revolut's crypto exchange went live for experienced traders.
Polygon launched the alpha testnet of its zero-knowledge rollup solution ‘Miden’.
Starknet Foundation launched a $5M grants program.
The Australian Tax Office targeted 1.2M crypto exchange users for data collection.
Mode Network initiated a 550 million crypto airdrop on Optimism.
LocalMonero and AgoraDesk shut down, urging users to reclaim funds.
Mastercard partnered with US banking giants for tokenized settlement trials.
Injective now plans to launch a Layer-3 chain on Arbitrum.
A trader lost a seven-figure sum due to the 0L Network hard fork.
Sophon ZKSync raised $60M in a node sale.
Ethernity launched an Ethereum Layer-2 network with AI integration.
Lagrange Labs secured $13.2M to develop ZK proofs based on EigenLayer.
$20M of bridged ETH returned to ZKasino multisig, sparking hopes for a refund.
Bitpanda expanded its Austrian presence through 55 branches of Raiffeisen Bank.
Crypto lending platform Nexo allocated $12M for ecosystem incentives.
Crypto Wallet Provider Exodus' NYSE American stock listing was postponed for SEC review.
Optimism announced new Superchain features for layer-3 devs.
Ledn's first-quarter loans topped a record $690M as the lending market rebounded.
The EU Securities Authority considered adding crypto to a €12 trillion investment market.
Taiwan revised its money laundering act to include digital assets.
The Notcoin token launch was confirmed with rewards from Binance and OKX as the NOT airdrop nears.
Chilliz and Azuro partnered to explore the growing onchain sports prediction market.
Grayscale's parent company, Digital Currency Group, reported $229M in revenue for Q1.
Binance and KuCoin obtained registration with India's Financial Intelligence Unit.
Bugs in an unnamed Gains Network fork allowed traders to profit 900% on each trade.
Notcoin listings on OKX and Binance ignited a market frenzy.
SBI VC set to become a validator on the XRP Ledger starting May 10.
Kraken asked the court to dismiss SEC claims to avoid a significant reordering of the U.S. financial structure.
3️⃣ Market overview
Crypto Overview
FTX Announces Customer Reimbursement: Lawyers for the now-bankrupt cryptocurrency exchange FTX have announced that customers will receive refunds of the funds they lost during the company’s collapse in November 2022, along with accrued interest. The reimbursement process is expected to take several months and requires approval from a bankruptcy judge.
SEC Issues Enforcement Notice to Robinhood: The Securities and Exchange Commission (SEC) has delivered a Wells Notice to Robinhood’s cryptocurrency division, signaling impending enforcement actions. Robinhood argues that the crypto tokens in question are not securities and is prepared to defend against any legal actions.
Grayscale's Bitcoin Trust Sees Rebound: After a four-month period of outflows, Grayscale's Bitcoin Trust (GBTC) has reported significant new inflows, marking a positive turn in the Bitcoin ETF market. Despite these developments, Bitcoin’s price has remained stable, reflecting a period of calm that one analyst has termed “post-halving boredom.”
Binance CEO Advocates for Detained Compliance Officer: Richard Teng, CEO of Binance, has called for the release of Tigran Gambaryan, the exchange’s compliance officer currently detained by Nigerian authorities over alleged illicit transactions.
Movement of Stolen Crypto Funds: A hacker responsible for the theft of $125 million from Poloniex in November has recently transferred $35.3 million in Ether and Bitcoin. Some of these funds were funneled through the sanctioned mixer Tornado Cash, likely in an effort to conceal their origin.
Signs of labor market cooling boosted hopes for forthcoming Fed rate cuts, while Biden targeted Chinese tech sectors with new tariffs amid the economic rivalry between the two nations.
Economic/Labor Market:
U.S. jobless claims rose to 231,000, the highest in over 8 months, signaling a cooling labor market. This could prompt the Fed to consider rate cuts later this year to support the economy.
Other signs of labor market slowdown include a drop in job openings and increase in layoffs, moving towards a more balanced job market that could help ease inflation.
Trade/Geopolitics:
President Biden is set to impose tariffs on Chinese electric vehicles, batteries, and solar cells, maintaining existing tariffs implemented by Trump in 2018.
This targets strategic sectors and represents a key move by Biden in the ongoing U.S.-China economic competition over technology leadership.
Markets:
U.S. stocks rose broadly on Thursday, with the S&P 500 up 0.51%, on optimism about potential Fed rate cuts spurred by the jobless claims data.
Apple gained 1% on news its AI features will use in-house processors, while Airbnb fell 6.87% on weak guidance despite robust international demand.
Investors are awaiting the U.S. CPI inflation data next week for clues on the Fed's rate path.
Fed's Daly noted current rates are restraining the economy, but more time may be needed to meet the inflation target.
4️⃣ Key Economic Metrics
🔴 While GDP growth slowed and jobs/wage growth moderated slightly, stubbornly high services inflation driven by the tight labor market has made the Fed more cautious about loosening monetary policy too quickly.
U.S. real GDP grew at a slower than expected 1.6% annualized rate in Q1 2024, the slowest pace since Q2 2022.
The core PCE price index, the Fed's preferred inflation gauge, was up 2.8% year-over-year in March, holding stubbornly steady. This led investors to scale back expectations for Fed rate cuts, now seeing only around a 60% chance of a first cut in September.
Job growth slowed sharply in April to 175,000, the lowest since October 2023, hinting at an easing in labor market tightness.
The slowdown in productivity growth coupled with still-high wage growth does not bode well for cooling services inflation.
🔴 Fed maintained a firmly hawkish stance, preparing markets for interest rates to remain restrictive for an extended period until inflation shows sustained downward progress, even as it plans some marginal adjustments to its tightening tools. The impacts on markets and the real economy bear close watching.
The Fed left interest rates unchanged as expected, but signaled that rates will need to remain high for longer than previously anticipated due to persistent inflation.
Fed Chair Powell said it will likely "take longer" to get inflation sustainably down to the 2% target, indicating greater patience before cutting rates.
However, the Fed plans to soon start slowing the pace of its quantitative tightening program of asset sales, which could put some downward pressure on bond yields.
Powell stated that a rate increase is "unlikely" at this point.
Markets seemed to have already priced in these hawkish comments, with limited reaction in bond yields and equity prices after the announcement.
The projection of higher rates for longer raises concerns about impacts on M&A activity and debt rollover costs for businesses, especially if bond yields remain elevated.
While the job openings rate has been declining, suggesting some easing of the tight labor market, Powell indicated the Fed still sees labor conditions as too tight to bring inflation down quickly.
🔴 Eurozone saw an economic growth revival in Q1, providing cause for optimism. But persistent underlying inflation, especially in services, complicates the ECB's policy path and could delay anticipated rate cuts if price pressures prove stickier than hoped. The balance between growth and inflation dynamics will be closely watched.
Economic Growth:
The Eurozone economy accelerated in Q1 2024, with real GDP growth of 0.3% quarter-on-quarter, the strongest pace since Q3 2022.
Prospects look modestly positive going forward, supported by rising real wages, expected ECB easing, and strength in the US and China.
Inflation:
Headline Eurozone inflation was unchanged at 2.4% year-on-year in March, but core inflation continued decelerating to 2.7%.
The improving but still-elevated core inflation has led investors to push back timing expectations for an ECB rate cut.
5️⃣ China Mexico Tensions 🔴
Mexico is caught between taking advantage of economic opportunities with China while balancing pressures from its key trade partner, the United States, amidst the broader U.S.-China strategic tensions playing out globally.
Some Chinese companies are increasing investment and trade flows with Mexico as a way to access the U.S. market amidst tensions with the U.S. and supply chain diversification efforts by global firms.
Mexico offers relatively low labor costs, proximity to the U.S., and trade agreement benefits like the USMCA that make it an attractive manufacturing base.
However, the U.S. has pressured Mexico over the surge in Chinese exports to Mexico, which were up 34.8% in 2023.
In response, Mexico has imposed new tariffs ranging from 5-50% on 544 product categories imported from countries without free trade agreements, aimed largely at China.
This mirrors efforts in other countries to restrict Chinese imports amidst concerns over excess capacity, dumping, and boosting domestic demand.
For China, the tariffs could hamper its ability to use exports as an economic growth engine.
While the U.S. has expressed concerns, Chinese FDI into Mexico remains relatively small at just 6% of total inflows in Q1 2024, compared to 57% from the U.S.
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