Good Morning. The DX is up 30. Bonds are flat. Stocks are down between 30 and 60 bps. Gold is up $1.00. Silver is down 3c. Oil is down 35c. Grains are weak down between 1.3 and 2.3%. Crypto is weak after yesterday’s selloff: down 40bps
Tomorrow is CPI
2-CryptoNow?
The last 5 days have seen a marked uptick in Crypto analysis. We don’t know what the motivation is yet, and do not think the reports themselves moved BTC lower, but their existence is not a coincidence. Something is definitely up.
Compared to Gold, which has a lot of this type behavior, BTC and ETH can be much fuzzier. Less regulation, new product, nations positioning themselves as lovers or haters…..and markets reacting to reports in ways seemingly contradictory.
Morgan Stanley Likes CBDC
Morgan Stanley panned Crypto in general in favor of CBDC for Payments last week.
From Crypto is Out, CBDCs are In
Consumers aren't widely using crypto for payments as fees are high and merchant acceptance low.
The prospect of crypto being a competitor payment network caused central banks to start work on digital currencies (CBDCs), cross border transactions and faster settlement (e.g. FedNow).
And yet CBDC uses various crypto backbones…..
Goldman Likes ETH.. But Also BTC?
Goldman’s Trading desk came out *this morning today* saying they like BTC’s transactional growth. (That report below)
Meanwhile 4 days before Goldman said they like ETH’s deflationary bias now. Here’s ZH on the ETH report:
One potential driver of ETH's regained popularity is its appeal as a deflationary asset, a topic Goldman's Crypto desk recently explained:
Ether, as an asset, is the fuel powering and securing the Ethereum protocol.
To use the Ethereum network, users pay fees in ETH to execute transactions and use applications built on Ethereum.
In return, this fee and staking rewards (denominated in ETH) incentivize validators to secure the network. ETH’s value is a function of multiple factors, depending on one’s view of ETH as an asset – a store of value, means of exchange or a financial asset.
Here’s our March and April pieces related to FED Now’s launch…
