What’s going on in the world? A recap of the top Bitcoin news stories this past week.
1. Macro watch
The Bitcoin price is pretty boring right now, so let’s look at one of the biggest macro indicators again – the Fed.
Obviously Ukraine has had a big effect on the markets, but the data is unclear in the first days of the fog of war. I’ll probably talk a bit more about Ukraine next week, once there is more trustworthy data.
But, nonetheless, here are some interesting charts to show what happens in markets at the onset of an invasion.
The US Fed
The US Federal Reserve is still buying bonds at a fairly alarming rate, even though they have said they intend to taper, over and over again.
As the US inflation rate has risen to its highest rate since 1982, the Fed balance sheet has increased by another $33 Billion. Their overall balance has reached an all time high of $8.91 Trillion.
Taking this into consideration, the market is now pricing less than 6 rate hikes in 2022, whereas a week ago – it was 7.
Feeling topsy turvy yet?
The Fed balance sheet is now equal to 37% of the US’s GDP where the ECB stands at 82% and the Bank of Japan; 134%.
Inflation is still an issue for every country in the world right now. And in the words of Preston Pysh, ‘… the inflationary periods will be accompanied with violent deflationary fits. This is simply the fiat currency [system] failing. It should be expected. Right now, it appears the fixed income market and equity markets are starting their big sell-off due to the unprecedented spread between “investments”… & sustained inflation prints (CPI)’.
In other words, the next few months is going to be pretty tough for most risk-on assets until the market realises the impotency of central banks and Universal Basic Income becomes a bipartisan tool to ‘appease’ the mob.
In Hong Kong, they have just notified all residents that they will receive HK$10,000 (~R20,000) each.
This is nothing but more QE and yet another tool to bring imbalance and inflation to the market. It’s an easy tool to keep citizens ‘happy’.
Expect this to become the norm over the next few months/years as politicians see the short-term merits in it – without too much work. And expect inflation to be this tool’s best friend.
As soon as the reality of this hits the markets, that is when the Overton window for Bitcoin as the ultimate hedge, will be reached.
2. The CEO of one of the biggest exchanges in the world tells everyone to get their Bitcoin off of exchanges
Regulators in Canada have come out in full force to request Crypto Asset providers to provide info or lock accounts for individuals linked to the protests and those who have donated to the movement.
Jesse Powell, the founder of one of the biggest exchanges in the world, Kraken, has publicly advised people to move their crypto assets off of exchanges and into self-custody.
We were always expecting this to happen. It’s the first step of many towards governments realising their lack of efficacy in controlling an asset that people can hold themselves.
The first point of attack was always going to be exchanges. Maybe the fact that a G7 nation is enforcing this will set a lot of peoples’ paradigms in check.
3. A Bitcoin company tells the authorities to jog on
And finally, one of the most interesting (and hilarious) events of this week was when Nunchuk.io (a Bitcoin software provider), told the regulators to kindly jog on.
The Canadian government sent a Mareva injunction to the company and ordered them to freeze their clients’ Bitcoin wallets. They also requested them to disclose all of their clients’ information and records.
This is how the company responded:
You just gotta love it.
Self-custody your Bitcoin and HODL on.