Altseason is at the halfway mark
AI Nvidia conference is round the corner
Here are 3 factors about the state of the economy👇🧵
Macro Pulse Update 16.03.2024, 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
Crypto Market and Investment Updates
Bitcoin ETFs Experience Slowdown Amidst Strategic Moves
Ethereum's Landmark Upgrade and Future Cost Dynamics
U.S. Senators Weigh In on Ethereum ETF Prospects
LSE to Introduce Groundbreaking Bitcoin and Ethereum ETNs
Blockchain and Crypto Innovations
Arbitrum's Big Bet on Gaming and Token Strategy
MakerDAO's Strategic Pivot Towards Market Dominance
Binance Navigates Regulatory Hurdles and Strategy Shifts
Court Rules Against Craig Wright's Satoshi Claim
Solana Demonstrates Strength in Market Volatility
Ether.Fi Attracts Major Investment and Eyes Expansion
NFT Ecosystem Developments
NFTs and IP Law: A Comprehensive Study
VeVe and Marvel: Revolutionizing NFT Collectibles
SuperRare Expands with Bitcoin Ordinals Initiative
Christie's Ventures into Generative Art NFTs
Altcoins
Eclipse Labs raised $50M before its Layer-2 mainnet launch.
Paradigm led a $200M funding round for Monad Labs, valuing the company at $3B.
Polyhedra Network secured $20M in funding, reaching a $1B valuation.
Berachain secured $69M in funding before its mainnet launch.
The Uniswap community rejected a proposal to distribute revenue to UNI token holders.
Curve Finance announced plans to increase its AMM fee.
HEX's valuation dropped over $1 billion following Richard Heart's remarks.
Unizen vowed reimbursements after a $2.1M loss due to a platform breach.
Toncoin's price reached a two-year high as Telegram considered going public.
The creator of Bitcoin Fog was found guilty, with plans for an appeal.
Coinbase aimed to raise $1 billion through a bond offering amid a bullish market.
OKX received in-principle approval for a payment institution license in Singapore.
dogwifhat (WIF) saw a 44% jump to a new all-time high as meme coins rose.
BNB Chain unveiled 'Rollup-as-a-Service', encouraging Layer 2s built on BSC.
Polkadot introduced a new SDK for DApp development.
Crypto.com was fined €2.85 million by the Dutch Central Bank for noncompliance.
Elon Musk announced Tesla would accept Dogecoin payments.
Nexo reported $50 million in holiday purchases, winning a FinTech award.
The Graph expanded its subgraph to over 40 blockchains.
Hong Kong's regulator stated MEXC operated without a license.
Chainlink's CCIP revenue surged 180% over two months amid adoption.
The Avalanche Foundation made its first meme coin investment, acquiring KIMBO, COQ, and three others.
Worldcoin addressed privacy concerns with a third-party audit.
A Swiss firm launched a Cardano staking ETP that's fully backed.
PancakeSwap announced v4 featuring custom pools and gas optimization.
Celsius creditors claimed 30% less compensation than promised.
Tether announced the launch of USDT on the EVM-compatible Celo blockchain.
3️⃣ Market overview
Macro Insights
Persistent Inflation: Inflation remains a key concern, with February's CPI data indicating higher-than-expected increases, particularly in energy and shelter costs, challenging the Fed's monetary policy strategy.
Growing Fiscal Deficit: The U.S. faces escalating fiscal pressures, marked by an expanding budget deficit and soaring interest expenses on the national debt, posing long-term challenges to fiscal sustainability.
Stock Market Optimism: Despite macroeconomic uncertainties, the stock market demonstrates resilience, buoyed by corporate successes and strategic partnerships, indicating investor confidence in the face of inflationary and fiscal concerns.
Crypto Insights
Bitcoin's Ascendancy: Bitcoin's new all-time high price and surpassing of silver in market capitalization underscore its growing acceptance and integration into the global financial system. The substantial inflows into BTC ETFs highlight increasing institutional and retail interest.
Ethereum's Upgrade and Regulatory Hurdles: Ethereum's 'Dencun' upgrade promises enhanced scalability and reduced costs, potentially catalyzing growth in layer-2 networks. However, regulatory uncertainties, particularly from the SEC, pose challenges to the immediate prospects of an ETH spot ETF.
Inflation Concerns: The rise in consumer prices in the U.S., particularly for shelter and gas, indicates persistent inflationary pressures. This scenario affects monetary policy expectations, with markets anticipating the Federal Reserve to maintain or adjust interest rates accordingly.
Altcoins and Memecoins Rally: The performance of memecoins and altcoins, especially those related to artificial intelligence and layer one technologies, reflects the market's appetite for innovation and speculation. Solana's record in new daily addresses signals expanding user engagement and adoption.
4️⃣ Key Economic Metrics
🟡 The latest US jobs report presents a nuanced view of the labor market, indicating both strength and emerging softness. The mixed signals from the job market align with the Federal Reserve's preference for a balancing act between controlling inflation and supporting employment. Fed is close to adjusting its policy stance, potentially dialing back restrictions to avoid a recession. The futures market anticipates a possible rate cut by June, reflecting expectations for a shift in Fed policy based on current economic indicators.
Robust Job Growth: February saw the creation of 275,000 new jobs, surpassing expectations. Despite downward revisions for December and January, the past three months have shown strong job growth, highlighting a tight labor market. Sectors like healthcare, social assistance, leisure and hospitality, local government, and construction experienced significant growth.
Wage Dynamics: Average hourly earnings in February were up 4.3% year-over-year, a slight decrease from January's 4.5% increase. However, the monthly increase from January to February was just 0.1%, the slowest in two years, suggesting potential easing of wage pressures.
Unemployment and Labor Force Participation: The unemployment rate edged up to 3.9%, the highest in two years. Meanwhile, labor force participation among prime working-age individuals continued to rise, potentially contributing to the increased unemployment rate and moderating wage growth.
🟢 The ECB's cautious stance on interest rates reflects a delicate balance between supporting economic growth and achieving inflation targets, with a close watch on labor market developments and service price inflation.
Rate Stance: The ECB maintains its benchmark interest rate at 4.0% but hints at potential future cuts due to a more optimistic inflation outlook.
Inflation and Labor Market Watch: The central bank's focus remains on service price inflation and labor market conditions, indicating that wage inflation moderation could prompt rate reductions.
5️⃣ China Spotlight🟡
China's economic outlook presents a blend of cautious optimism and recognized challenges, as outlined by Premier Li Qiang at the National People's Congress (NPC).
Despite global headwinds and internal economic pressures, the government targets a 5% growth for the year, maintaining the same fiscal stance as the previous year without planning for additional stimulus measures. This target is ambitious, given the economy's recent performance and ongoing challenges, including demand shortfalls, industry overcapacity, and societal apprehensions.
Growth Expectations vs. Reality: The forecast of 5% growth, amidst current economic deflation and without significant changes in fiscal policy, suggests the government's belief in an economic rebound. This optimism seems grounded in the assumption that the economy has reached its lowest point and will soon recover.
Fiscal Policy and Special Bonds: The issuance of one trillion renminbi in special government bonds, mirroring last year's effort, indicates a continuation of the government's approach to addressing key economic issues without altering its overall fiscal stance. The modest increase in special purpose bonds for local governments aims to mitigate debt challenges exacerbated by the property market downturn.
Economic Headwinds: Significant obstacles to achieving the 5% growth target include high household savings, a decrease in foreign direct investment (FDI), potential global economic downturns, trade restrictions, and excess industrial capacity. These factors collectively dampen consumer spending, investment, and export growth prospects.
Strategic Sectors and Investment: The government's focus on new technologies and key industries, such as electric vehicles and information technology, underscores its strategy to drive economic growth through innovation and self-reliance. However, international trade tensions and technology access restrictions pose considerable risks to these sectors' development and global competitiveness.
Consumer Spending and Investment Outlook: Despite efforts to stimulate the economy, high savings rates and lost wealth from property devaluations are likely to limit household spending increases. Furthermore, the decline in FDI and the ongoing shift of global supply chains away from China may constrain private sector investment.
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