Bitcoin Gets A Big TradFi Hug
The News From Planet Ruby — Friday, July 7, 2023
Early experiments in human-Ruby hybrids are proving more complicated than we had anticipated.
The “Elon” model initially performed well, catalyzing strides forward for the Apes in clean energy generation, space exploration, and the adoption of decentralized technologies.
Unfortunately, it has now become obsessed with social media (a hazard of its human programming), has sunk its fortune into the leading software platform, and promptly broken it with constant tinkering. We now have no reliable way to influence the Ape population.
Banks Stack Half-Trillion In Bad Debts
The FOMC’s latest minutes didn’t hold too many surprises. The Fed expects further rate hikes, and intends to hold rates high for a long time.
Previous interest rate rises mean that America’s banking sector is already quietly struggling. The FT reports that just four US banking giants now have a total of $205 billion in unrealized losses on their balance sheets. Bank of America alone has $100 billion in losses.
In total, unrealized losses in the US banking sector stand at over half a trillion dollars. BoA says it plans not to sell its distressed bonds, to avoid crystallizing losses. Should customers start withdrawing funds, to avoid bankruptcy BoA will need to tap the Fed’s BTFP, which is already running at over $103 billion.
Despite analysts’ gloomy predictions, the S&P put in a yearly high above 4,450, just 300 points below its all-time December 2021 high.
The Russian ruble dropped below $0.011, its lowest ever aside from the short-lived crash to $0.0075 in the early days of the invasion.
Bitcoin Breaks Key Resistance
Bitcoin has put in a new 13-month high at $31,500, having spent most of the last week between $30,000 and $31,000. The last time we saw $31k BTC was back in early June 2022, just before the Terra-induced crash. At the time of publication, BTC is trading at $30,100, following a brief dip below $30k. The weekend will be critical.
$30,000 is a key level to maintain, and a full weekly candle body open and close above this area would be positive. The monthly MACD has flipped green, something that happens rarely enough that it tends to be a fairly reliable confirmation of a bull market. Moreover, there are encouraging on-chain indications that a prolonged period of accumulation has been under way. However, the wider liquidity environment is still a headwind, with the Fed continuing to signal tighter conditions.
Bitcoin dominance has ticked very slightly lower, dropping back below 50% from the highs of last week — indicating that alts have clawed back a little market share as BTC stabilizes.
Institutions Get Into Position
Gary Gensler has not resigned, despite a viral article spread by unscrupulous engagement farmers on Twitter, who quoted an unnamed “source”. Nonetheless, the #FireGaryGensler movement is gaining steam, backed not only by the Crypto Faithful at the grassroots, but by members of Congress who want change.
The house cleaning continues, as crypto struggles to move on from the sins of its past. Binance saw $3.8 billion outflows in June, and was hit with multiple legal challenges. Meanwhile, Gemini has decided it has had enough of Barry Silbert’s heel-dragging, and has laid down an ultimatum: Settle that $1.2 billion now, or see you in court. A lawsuit is expected as early as today.
At the same time, TradFi is drawing inexorably closer to take market share from these early adopters, with existing financial giants seeking to offer innovative products in a familiar wrapper and regulatory format. On-chain analytics platform CryptoQuant notes the “significant upward trend” in bitcoin purchases by institutional entities, who are seeking long-term exposure.
BITO, the first bitcoin futures ETF, has had its best week in over a year. New inflows mean the fund now has over $1 billion under management.
BlackRock, Fidelity, and all of the other asset managers looking to launch Bitcoin spot ETFs have refiled their applications following the SEC’s pushback last week.
As if to confirm the New Order, BlackRock CEO Larry Fink has gone on record singing bitcoin’s praises as an international asset that “digitalizes gold” — a far cry from his words in 2017, when he described it as nothing more than a tool for money laundering.
What’s New In The SKALEVERSE?
Ruby’s DappRadar liquidity mining promotion continues, with 50,000 USDP and 1 million SKL being distributed to yield farmers.
Very soon, we’ll be announcing new features and partnerships, so stay tuned!
That’s all for this week!
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