ALTCOIN season at ATH
Grayscale dumps $BTC
Here’s 3 factors about the economic boom or slump 👇🧵
Macro Pulse Update 27.01.2024, 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
Banking and Regulatory Updates
Terraform Labs' Chapter 11 and SEC Lawsuits
Changpeng Zhao's Legal Troubles and Binance's Challenges
SEC Delays Grayscale's Ethereum ETF and Ethereum's Resilience
BlackRock Shelves XRP ETF Plans and XRP's Uncertainty
OKX's Flash Crash and Shift Away from PoW Mining
Ondo Finance Expands in APAC and Token Price Dip
Crypto Market Insights
FTX Customers Challenge Bankruptcy Plan and Alameda's Moves
Solana Labs' Token Extensions and NFT Market Growth
Controversy Surrounding SatoshiVM's SAVM Token
NFT News
Cristiano Ronaldo's NFT Involvement and Lawsuit
Florida Governor's Endorsement and Trump's NFT Success
Magic Eden's Changes and Community Incentives
Rari Foundation Launches Rari Chain Mainnet
Altcoins
Frax completed its V3 rollout, introducing bonds.
Debiex faced romance scam allegations, with the CFTC citing $2.3M in losses.
Trezor users received an alert due to a third-party security breach.
Dogecoin reached a 7-day high as ‘XPayments’ gained 100K followers in one day.
An OSL executive mentioned the potential debut of Hong Kong's spot crypto ETF by mid-year.
Injective launched gas compression, promising lower fees than Solana.
Concentric's liquidity manager was exploited for $1.8M in a private key hack.
EigenLayer outlined a 'shared security' model for dapps.
Cosmos Hub rejected a proposal to reduce minimum ATOM inflation to zero.
Socket recovered $2.3 million in ETH following a bridge protocol exploit.
Swiss fintech firm Taurus received approval to offer tokenized securities to retail clients.
Radiant Capital began repaying debt after a $4.5M flash loan exploit.
Rabby Wallet introduced a points program.
0x Labs debuted a ‘gasless’ swap API, used by Robinhood and Coinbase Wallet.
Hackers targeted crypto email lists, netting over $600,000 in phishing attacks.
Edward Snowden supported a legal fund for Tornado Cash Co-Founder Roman Storm.
Nexo sought $3B in damages from Bulgaria over a dropped investigation.
Worldcoin hinted at a new Orb for improved iris-scanning.
SUI's value increased with support from Alibaba and Mysten Labs.
Synthetix deployed the first perpetuals protocol on Base blockchain.
Polygon's AggLayer aims to unify multiple blockchains into a single chain experience.
Former Ozys security chief was accused of sabotaging a firewall before a $81.5 million exploit.
AltLayer opened airdrop claims, with a $2.9 billion fully diluted valuation.
Bitcoin Ordinal inscription tokens, such as ORDI and SATS, underperformed due to decreasing demand, "sell the news" sentiment, and BTC correlation.
3️⃣ Market overview
The US economy showed resilience in 2023 with robust GDP growth of 3.3% in Q4 and 6.3% for the full year, surpassing expectations and outpacing China's growth. This was driven by strong consumer spending and employment.
Inflation has cooled in line with the Fed's targets, raising expectations of a potential Fed rate cut in March. However, forecasts suggest economic growth may slow in H1 2024.
The ECB maintained interest rates at 4% while signaling a gradual shift in tone towards future rate cuts, likely beginning discussions in March and potential cuts in June if inflation declines continue.
Grayscale reduced its Bitcoin holdings by a significant 15,986 BTC worth $641 million, indicating a major divestment or rebalancing strategy.
In contrast, 8 Bitcoin ETFs added a total of 10,690 BTC worth $428.6 million on the same day, led by iShares which accumulated 4,079 BTC worth $163.6 million.
The divergence in behavior between Grayscale decreasing and ETFs increasing BTC holdings signals differing strategic approaches and institutional sentiments towards Bitcoin investments at the start of 2024.
Grayscale's sizable reduction might reflect caution or a response to investor redemptions, while ETFs' collective accumulation points to growing confidence and strategic expansion of Bitcoin exposure.
Especially iShares' substantial BTC purchase could positively influence market perception and outlook among investors. However, Grayscale's major decrease may be interpreted with more caution and impact market sentiment.
4️⃣ Key Economic Metrics
🟡 Expectations for the pace and timing of rate cuts have shifted more hawkish recently as inflation proves difficult to reduce further and central bankers signal a slower, more data-dependent path to monetary policy easing. Still, financial market optimism persists.
Expectations for quicker monetary policy easing have shifted recently as inflation remains sticky at higher levels due to tight labor markets and resilient economies. Central bankers are signaling a slower pace of rate cuts than previously expected.
ECB indicated rates will likely be cut in the summer rather than spring, and the pace will depend on wage growth and labor markets. This led to a market selloff.
IMF and Fed officials also cautioned against cutting rates prematurely before inflation is fully under control, though investors still widely expect significant 2024 rate cuts.
Inflation may be harder to reduce from current levels due to continued job market tightness and potential price pressures. Recent inflation and growth data undermine confidence it will quickly hit the 2% target.
Higher interest rates are already causing distress like rising corporate bond defaults, especially in sectors like business services, healthcare and tech. However, risk spreads remain historically low as many investors expect improvement.
🟢 Japanese inflation peaked and is now decelerating without policy tightening as supply issues ease. But weak wage and spending growth pose challenges for broader economic momentum. The BOJ can keep monetary policy loose with limited inflationary consequences.
Inflation accelerated to multi-decade highs in 2023 but has been decelerating since August without any tightening by the Bank of Japan (BOJ). Headline, core, and core-core inflation all declined in December.
The BOJ held the view that inflation was supply-driven and would ease on its own as disruptions faded, which now appears to be happening.
In contrast to the US and Europe, Japan faces falling real wages meaning the labor market is not stoking inflationary pressures. This enables the BOJ to maintain its ultra-loose monetary policy stance.
However, weak wage growth is hurting consumer spending which, together with soft exports, may be discouraging business investment and slowing economic growth.
The Japanese government aims to boost wages to stimulate spending, but progress has been limited so far.
5️⃣ China Spotlight 🔴
China faces slowing growth, deflationary pressures, weak domestic demand, and a shrinking workforce that together pose challenges for its economic trajectory going forward. Sustaining solid productivity growth through private sector-led innovation is an imperative.
China's economic growth slowed to 5.2% in 2023, the weakest since 1990 outside of pandemic years. Growth was dragged by property market issues, weak private investment, modest consumer spending, and declining exports.
Further slowing growth is expected in 2024 due to ongoing economic headwinds. Meanwhile deflation has emerged, which could hamper lending and growth.
Retail sales and fixed asset investment grew at multi-decade lows in 2023 indicating weak domestic demand. However industrial production accelerated in December.
China's population declined for a second straight year in 2023, with falling birth rates hitting the lowest level since records began in 1949. This shrinking workforce hinders growth.
Offsetting the declining working-age population requires boosting productivity growth, which the government hopes to achieve through investments in automation and robots. However persistent innovation and productivity gains depend on private sector investment.
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