Weekly Alpha Leak ?? New Narratives Stirring Despite the Shitty Macro
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Week of September 3-9, 2022
The macro is still shitty and likely won’t be improving for a hot minute - but that’s not deterring people from participating in our favorite 24/7 online internet casino. New narratives are emerging it seems - will it be different this time??
TL;DR:??
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? Crypto Highlights of the Week ?
What Should We Look for to Kickstart the Next Bull Run?
Everyone wants to know when the market will finally start to turn around. Wen bottom!? People are hungry to catch the next narrative and to know when we can go back to being risk on. For clues we look to the actions and verbiage of those in control of the ship. Several Federal Reserve officials recently signaled that the U.S. central bank will continue to raise interest rates until there are clear signs that inflation is coming down for multiple months. Long story short - we’ve still got pain ahead of us.?
Fed Chairman Jerome Powell has stressed that upcoming decisions would be data-dependent, which means that all eyes will be on the CPI set to be released next week for the latest reading on inflation. Last week, the Labor Department’s jobs report for August showed that the labor market has started to cool slightly. The Bank of Canada raised its main interest rate by 75 basis points to 3.25%, the highest in 14 years. The?European Central Bank?(ECB) also raised interest rates by 75 basis points, the biggest single hike since it began setting monetary policy in 1999. The CME FedWatch Tool, which shows how traders of financial futures contracts are betting on the Fed’s next move, now suggests a 78% chance that the central bank will hike by 75 basis points -?which would bring the federal-funds rate to a range of 3% to 3.25%
As for clues to what we want to see: easing monetary policies, the decline of inflation, a change in Bitcoin's mining difficulty, and renewed confidence in DeFi and inflow of liquidity are good clues to watch out for - with a strong focus on easing monetary policies. We’ll be keeping an eye on these metrics so make sure to follow along with us as we stay the difficult course.?
Binance Pushes Native BUSD over UCSD - Who’s Really Winning Here?
Binance?controversially announced this week that it will be ending support for USDC, USDP and TUSD in favor of its own native BUSD stablecoin and will auto-convert USDC, USDP, TUSD to BUSD on September 29 “in order to enhance liquidity and capital-efficiency for users.” This originally seemed to scare people as the headline came off a bit misleading so it’s important to note that users will still be able to deposit and withdraw USDC, USDP or TUSD at a ratio of 1:1. In fact, The?CEO of Circle?actually came out saying that this move was a net positive for USDC. Binance is not “ending support or delisting USDC'' but the move signals a push by Binance to expand the market share for BUSD and may even raise antitrust law concerns. Is Binance strong-arming the market using its position as the world’s largest crypto exchange??
USDC is currently the second-most popular stablecoin in the world, accounting for 33.5% of transactions in the category and has been gaining in market share recently. USDT is currently the most widely-used stablecoin, with a market share of 50.3%. Meanwhile, BUSD sits in third place with 15.1%.?Bank of America?research concluded that the move may increase the supply of BUSD by as much as $908M.?
Positive:
It will now be possible to deposit and withdraw USDC seamlessly in Binance due to the fact that before it was required to first convert USDC to BUSD or USDT and then use it to trade leveraged products. The idea here is that the overall liquidity of USDC should increase from the move.?
Negative:
The automatic conversion could potentially result in greater redemption of USDC to mint more BUSD and anti-trust concerns regarding Binance. USDT, which was excluded, may end up taking a hit as exchange users may be more likely to convert BUSD into USDC than into USDT when withdrawing funds due to the added step of converting USDT causing friction.??
Cosmos - Liftoff???
Cosmos has been getting quite a bit of attention and shilling lately on CT and recently?Delphi, who got obliterated on their Luna investments, returned to the drawing board and decided that the Cosmos ecosystem was their best bet going forward. One way or another, there’s been a lot of buzz around the coin.?
It’s super important to recall that pricewise, ATOM has a history of being a cursed coin! However, in the recent short term, we can clearly see that since mid-June, people have been selling their US american dollarinos, Bitcoin and ETH to buy ATOM. Will it be the next narrative rotation or has it run its course already??
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Gamestop and FTX Partnership - Appealing to the Normies - The Road to Adoption
GameStop, which has earned its place in the popular culture lexicon and who has been busy entering the crypto space in the past year, will begin to carry FTX gift cards in its 2,970 stores as part of a new partnership to introduce more retail customers to FTX’s community and its marketplaces for digital assets. Basically the point is to get retail back and interested in NFTs and crypto gaming. GameStop has been interesting to pay attention to since back in 2021 when Reddit led a short squeeze against Wall St. hedge funds, costing them billions. It was a meme revolution and attracted many new speculators to financial markets.???
GameStop was on the verge of being a forgotten about, dead brick and mortar store and then used the rejuvenated meme publicity from this catalyst to attempt to become a mainstream pillar of gaming and entertainment once again - just like they were in the 2000s. They’ve significantly ramped up their Web3 efforts this year after unveiling an NFT and Web3 gaming division in January, and launching an NFT marketplace in July in partnership with Layer 2 scaling solution Immutable X.?
So why care about GameStop? The goal is to look for opportunities that have the best shot at actual adoption and mainstream usage. What’s more likely to attract and retain users? A brand that people recognize or some obscure DeFi protocol? GameStop was a part of many childhoods and?if executed properly,?could stand a real shot at helping to usher in the next generation of users - by leveraging its brand and name recognition. Could it once again be people’s first stop for games?
This Week’s Top Daily Bullets???
Why this matters: Interesting to see the change in tone but important to emphasize that this doesn’t mean legalization of cryptocurrency as a means of payment domestically in the country. Sanctions have hit them tough.
Why this matters: If you’re a long term person this will probably pass you by without too much noise but if you’re more active in markets, it’s important to pay attention to dates. We’ll be paying close attention to what the price of ETH and BTC are doing during the final Merge event. Exciting tmes!??
Why this matters: This is a continuation in the 3AC insolvency saga and all the fallout. Interestingly enough, VGX token has been performing well lately.???
Why this matters: Slowly but surely, the U.S. government, with proper help and tools, is learning to navigate the on-chain realm. What more can we expect to see from their abilities in tracking individuals??
Why this matters: This has been delayed for a while and Cardano is a polarizing topic in the crypto world. Some love it, some hate it. Waiting to see see if Cardano ever does anything interesting?
Why this matters: Binance is leveraging their name to enter the zk race. We’ve got several other participants such as Polygon zkEVM, zkSync 2.0 and Scroll. Who will win?
Why this matters: we’re starting to see some real world applications of soul bound tokens. Interdasting
Why this matters: Algorand recently launched a $20M incentive program to boost Ethereum compatibility and has been popping up quite often in the news over the past year. Worth keeping an eye on projects that stay busy with developments?
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