A US recession is likely around the corner, according to a new forecast from Societe Generale economist Kokou Agbo-Bloua. Agbo-Bloua, the global head of economics, cross-asset and quant research at the $1.6 trillion French banking giant says the Federal Reserve is battling the effects of money printing, the war in Ukraine and an excess in […]
The post $1,600,000,000,000 Bank Warns ‘Original Sin’ of Money Printing Will Force US Into Recession appeared first on The Daily Hodl.
Chris Maurice, founder and CEO of crypto exchange Yellow Card said in Africa, crypto isn't the "casino" that it can sometimes feel like in the West.
While many investors in the West may look to crypto to speculate the next biggest trend, blockchain technology is actually solving “real-world problems” in Africa such as hyperinflation and "corruption," executives told Cointelegraph.
Speaking to Cointelegraph, Chris Maurice, founder and CEO of Yellow Card — Africa’s largest cryptocurrency exchange — said crypto in Africa “is growing at the speed of light” because it allows many Africans to escape from the traditional financial system’s failures and transact more freely.
“Crypto solves real-world problems with banking and currencies on the continent, and it isn't the casino that it can feel like sometimes in the West.”
Maurice said the most common use cases in Africa are to make international payments, to send money to friends and family and to “save money against inflation.”
“Crypto in Africa lives closer than any other part of the world to the original mission of the technology,” he added.
Africa has more crypto users than North America or Europe.
— Chris Maurice⚜️ (@chrismaurice) April 24, 2023
6 of the top 20 countries in the world for crypto are in Africa.
Africa is the crypto continent. https://t.co/NzodcOkMYn
Kevin Imani, the founder and CEO of Sankore 2.0 — an affiliate of layer-1 Near Protocol — believes blockchain-based payments can act as a human rights technology:
“It’s important to recognize the human rights protections that it provides to people in underdeveloped nations. In many developing countries, hyperinflationary pressure and corruption have left citizens with few options.”
“Cryptocurrencies offer a lifeline to these individuals, providing greater financial inclusion and control over their money,” he added.
According to Statistica, inflation rates in Sub-Saharan Africa reached an estimated 14.5% in 2022 — which marks the region’s largest annual change since the 2008 recession.
Imani said the “ability to counter weak national currencies and corruption” and increase financial inclusion makes peer-to-peer crypto transactions a no-brainer for many Africans.
From Lagos to Nairobi, Accra to Cape Town, Africa is emerging as a powerhouse of tech innovation.
— NEAR Kenya | NEAR is Now (@NearKenya) June 19, 2023
Watch this space! #BlockchaininAfrica pic.twitter.com/LYGZCQ0u9Z
“I personally see Crypto as Africa's next shot at life, another opportunity to be part of something great, as opposed to the internet revolution of the 2000s, when most Africans weren't as exposed as today,” added Okoye Kevin Chibuoyim, the founder and CEO of crypto education platform GIDA, based in Nigeria.
“Africans are used to bad governments that aren't accountable and transparent, but here, the blockchain flashes its transparent nature here and makes everyone trust the system,” he said.
Related: Africa: The next hub for Bitcoin, crypto adoption and venture capital?
In April, Block — a U.S. digital payments firm led by Jack Dorsey — partnered with Yellow Card to facilitate cross-border payments in Africa based on Block’s infrastructure.
After the number of cryptocurrency users increased by 2,500% in 2021, the region experienced an 11-fold explosion in venture capital funding in 2022.
Maurice said Nigerians have adopted cryptocurrency “like no one else” in the region — with one local publication reporting in May that 47% of Nigerians own or transact with crypto on a daily basis.
While Maurice said Botswana has the “most legal and regulatory clarity,” cryptocurrency is now reportedly illegal in Cameroon, Central African Republic, Gabon, Guyana, Lesotho, Libya and Zimbabwe, according to Investopedia.
Magazine: Bitcoin in Senegal: Why is this African country using BTC?
The US appears headed for a hard landing and a recession, according to the chief economist at one of Europe’s biggest banks. Deutsche Bank’s David Folkerts-Landau says a recession is the highly likely cost of the Federal Reserve’s rapid sequence of interest rate hikes, even if it achieves the desired outcome of lower inflation, reports […]
The post Deutsche Bank Warns US Recession Imminent, Says Avoiding a Hard Landing Is Next to Impossible: Report appeared first on The Daily Hodl.
BTC’s price recovered quickly from this week’s swing low, but derivatives data hints that a challenging road lies ahead.
Bitcoin might have displayed strength by quickly recovering from the $25,500 support level on June 6, but that doesn’t mean that breaking above $27,500 will be an easy task.
Investors still expect stricter regulatory scrutiny after FTX’s bankruptcy in November 2022, including the recent suits against Coinbase and Binance.
A total of eight cryptocurrency-related enforcement actions have been undertaken by the United States Securities and Exchange Commission (SEC) over the past six months. Some analysts suggested the SEC is attempting to redeem itself for failing to police FTX by taking action against the two leading exchanges.
Additionally, looking at a wider angle, investors fear that a global recession is imminent, which limits the upside of risk-on assets such as stocks, cryptocurrencies and emerging markets.
The eurozone entered a recession in the first quarter of this year, according to revised estimates from the region’s statistics office, Eurostat, released June 8. Poor economic performance might limit the European Central Bank’s ability to further increase interest rates to tackle inflation.
Billionaire Ray Dalio, founder of Bridgewater Associates, said the U.S. is seeing stubbornly high inflation along with elevated real interest rates. Dalio warned of an excess debt offer amid a shortage of buyers, which is especially concerning since the U.S. government is desperate to raise cash after the debt ceiling was hit.
Recent macroeconomic data has been mostly negative, especially after China announced a 4.5% decline in imports year over year on June 6. Furthermore, Japan posted a 0.3% quarter-over-quarter contraction in gross domestic product on June 7.
Let’s look at Bitcoin (BTC) derivatives metrics to better understand how professional traders are positioned amid the weaker global environment.
Margin markets provide insight into how professional traders are positioned because they allow investors to borrow cryptocurrency to leverage their positions.
OKX, for instance, provides a margin-lending indicator based on the stablecoin/BTC ratio. Traders can increase their exposure by borrowing stablecoins to buy Bitcoin. On the other hand, Bitcoin borrowers can only bet on the decline of a cryptocurrency’s price.
The above chart shows that OKX traders’ margin-lending ratio spiked on June 5 after Bitcoin crashed by 7% to $25,500. Those traders were likely caught by surprise, as the indicator reached an impressive 62 favoring longs, which is highly unusual and unsustainable.
The OKX margin-lending ratio adjusted to 34 on June 6, as leveraged longs were forced to reduce their exposure and additional margin was likely deposited.
Investors should also analyze the Bitcoin futures long-to-short metric, as it excludes externalities that might have solely impacted the margin markets.
There are occasional methodological discrepancies between exchanges, so readers should monitor changes instead of absolute figures.
Both OKX’s and Binance’s top traders reduced their long-to-short ratios between June 7 and June 8, indicating a lack of confidence. More precisely, the ratio for OKX top traders declined to 0.78 on June 8 after peaking at 1.08 on June 7. Meanwhile, at crypto exchange Binance, the long-to-short ratio declined to 1.29 on June 8 from 1.35 on the previous day.
Related: Bitcoin rebound falters amid SEC crackdown on exchanges, raising chance of a BTC price capitulation
Overall, Bitcoin bulls seem to be in a bad place, both from the worsening regulatory crypto environment and the unfolding global economic crisis.
Bitcoin derivatives markets indicate a low probability of the BTC price breaking above $27,500 in the short to medium term. In other words, Bitcoin’s market structure is bearish, so a $25,500 support retest is the most probable outcome.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Billionaire hedge fund manager Stanley Druckenmiller has a dire prediction for the U.S. economy: a recession is looming, and it’s likely set to hit this June. Druckenmiller’s forecast comes as American consumer spending remains low, and is largely driven by credit card usage. Druckenmiller, a seasoned investment mogul, warns that it would be foolish to […]
Bitcoin price giving up ground over the past week to slide below $28,000 has put bears in a better position for Friday's expiry.
The $900 million Bitcoin (BTC) weekly options expiry on May 12 might play a decisive role in determining whether the price will succumb below $27,000.
BTC bears will try to take advantage of macroeconomic headwinds, Silk Road coins' FUD, and uncertainty caused by Bitcoin’s transaction fee spike to pull Bitcoin's price down in the next few days.
The BTC/USD pair broke above $29,800 on May 6, but the tide quickly changed as the resistance proved stronger than anticipated.
The subsequent 8.2% two-day correction tested $27,400 support, favoring the thesis of sideways trading as investors evaluate the economic crisis dynamic and its potential impact on cryptocurrencies.
Meanwhile, Berkshire Hathaway owner and billionaire investor Warren Buffett is no longer optimistic about the U.S. economy’s growth. Such a pessimistic scenario for the global economy might explain why some Bitcoin traders decided to reduce exposure over the past week, greatly reducing the odds of breaking $30,000.
The open interest for the May 12 options expiry is $900 million, but the actual figure will be lower since bears were expecting sub-$28,000 price levels.
These traders got excessively optimistic after Bitcoin’s price rallied 11.2% between April 9 and April 14, testing the $31,000 resistance.
The 1.65 call-to-put ratio reflects the imbalance between the $560 million in call (buy) open interest and the $340 million in put (sell) options.
But if Bitcoin’s price remains near $27,500 at 8:00 am UTC on May 12, only $11 million worth of these call (buy) options will be available. This difference happens because the right to buy Bitcoin at $28,000 or $29,000 is useless if BTC trades below that level on expiry.
Below are the four most likely scenarios based on the current price action. The number of options contracts available on May 12 for call (bull) and put (bear) instruments varies, depending on the expiry price.
The imbalance favoring each side constitutes the theoretical profit:
This crude estimate considers the call options used in bullish bets and the put options exclusively in neutral-to-bearish trades. Even so, this oversimplification disregards more complex investment strategies.
For instance, a trader could have sold a put option, effectively gaining positive exposure to Bitcoin above a specific price. Unfortunately, there’s no easy way to estimate this effect.
Ultimately, after it became clear that the Bitcoin network was working as designed, the selling pressure dissipated, causing Bitcoin’s price to stabilize around $27,500. Nevertheless, traders should be cautious as the bears are still in a better position for Friday’s weekly options expiry, favoring negative price moves.
Related: PayPal’s crypto holdings increased by 56% in Q1 2023 to nearly $1B
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
A widely followed economist says a recession is about to hit the US following a weak first quarter performance. Steve Hanke tells his 628,600 Twitter followers that the country’s economic growth significantly slowed down in Q1 of 2023. According to the Bureau of Economic Analysis (BEA), the economy grew 1.1% per annum in the first […]
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Another top-20 U.S. bank bites the dust, but Ethereum price fails to benefit from the event.
Ether (ETH) price has shown weakness after failing to break above the $1,950 resistance on April 26. The subsequent correction drove ETH to $1,810 on May 1, nearing its lowest level in four weeks. Curiously, the movement happened while the First Republic Bank (FRB) was closed by the California Department of Financial Protection and Innovation.
Curiously, the movement happened while the First Republic Bank (FRB) was closed by the California Department of Financial Protection and Innovation.
The Federal Deposit Insurance Corporation (FDIC) entered into a purchase and assumption agreement with JPMorgan to protect FRB depositors, estimating a $13 billion loss.
Regarding this latest major U.S. bank failure, UBS analyst Erika Najarian stated,
"This deal does not change the rates, recession, and regulatory headwinds that regional banks are facing."
Curiously, the VIX indicator, which measures how traders are pricing the risks of extreme price oscillations for the S&P 500 index, reached its lowest level in 18 months at 15.6% on May 1.
It is worth noting that overconfidence is the main driver for surprise moves and large liquidations in derivatives markets, meaning low volatility does not necessarily precede periods of price stability.
The economic environment has worsened significantly after the U.S. reported its first quarter gross domestic product (GDP) growth of 1.1%, below the 2% market consensus. Meanwhile, inflation in Germany remained exceptionally high at 7.6% year-over-year in April. Investors are now pricing higher odds of a global recession as the U.S. Federal Reserve is expected to raise interest rates above 5% on May 3.
Meanwhile, inflation in Germany remained exceptionally high at 7.6% year-over-year in April. Investors are now pricing higher odds of a global recession as the U.S. Federal Reserve is expected to raise interest rates above 5% on May 3.
According to fundamental macro analyst Lyn Alden, the U.S. Treasury is now targeting $1.4 trillion in new net borrowing between April and September 2023 as tax receipts have been running below expectations.
The U.S. Treasury updated their borrowing estimates.
— Lyn Alden (@LynAldenContact) May 1, 2023
They target over $1.4 trillion in net new borrowing during the two quarters from April through September 2023, with an ending cash balance target of $600 billion.
Tax receipts have been coming in below their expectations. pic.twitter.com/qnA6QFqx4m
If the U.S. debt level continues to increase while interest rates remain high, the government will be forced to increase debt payments, further pressuring its delicate fiscal situation. Such a situation should be positive for scarce assets, but what can Ethereum derivatives metrics tell us about professional traders’ risk appetite? Let's take a look.
Ether quarterly futures are popular among whales and arbitrage desks, and they typically trade at a slight premium to spot markets, indicating that sellers are asking for more money to delay settlement for a longer period.
As a result, futures contracts on healthy markets should trade at a 5% to 10% annualized premium — a situation known as contango, which is not unique to crypto markets.
Since April 19, the Ether futures premium has been stuck near 2%, indicating that professional traders are unwilling to flip neutral despite ETH price testing $1,950 resistance on April 26.
The absence of demand for leverage longs does not always imply a price decline. As a result, traders should investigate Ether's options markets to learn how whales and market makers value the likelihood of future price movements.
Related: Venmo will enable fiat-to-crypto payments in May
The 25% delta skew indicates when market makers and arbitrage desks overcharge for upside or downside protection.
In bear markets, options traders increase their odds of a price drop, causing the skew indicator to rise above 8%. Bullish markets, on the other hand, tend to drive the skew metric below -8%, indicating that bearish put options are in less demand.
The 25% skew ratio is currently at 1 as protective put options are trading in line with the neutral-to-bullish calls. That's a bullish indicator given the six-day 7.8% correction since ETH price failed to break the $1,950 resistance.
So far, Ethereum's price has failed to display strength while the baking sector created a giant opportunity for decentralized financial systems to showcase its transparency and resilience versus traditional markets. On the other hand, derivatives metrics show no sign of extreme fear or leveraged bearish bets, indicating low odds of retesting the $1,600 support in the near term.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
A political deadlock over the U.S. debt ceiling and its potential impact on the price of Bitcoin, which is already up 75% in 2023.
On April 26, House Republicans scarcely passed their bill to increase the U.S. debt ceiling. This led to analysts already weighing its potential impact on the price of Bitcoin (BTC), ranging from extremely bearish to overly bullish.
Ultimately, U.S. dollar liquidity is the key to both of these opposing viewpoint.
Some analysts, including Jesse Meyers, the COO of investment firm Onramp, believe raising the debt ceiling would prompt the Federal Reserve to print more money, thus boosting capital inflows into "risky" assets like Bitcoin.
The debt ceiling represents the maximum amount of money the U.S. government can borrow to pay its bills.
Related: Fed balance sheet adds $393B in two weeks — Will this send Bitcoin price to $40K?
Raising it means they can issue more debt to generate more capital. But since the Fed is not buying bonds anymore thanks to its "quantitative tightening," and the flow of available M2 money supply crashing, the U.S. government debt may find it hard to attract buyers.
In other words, a deflationary recession that Meyers believes will force the Fed to return to its quantitive easing policy.
"When the debt ceiling is lifted and credit-contraction leads to economic crisis... They will have to print money on a massive scale," he noted, reminding:
"Bitcoin was the winner during the last round of stimulus."
The government has already hit its $31.4 trillion debt ceiling in January 2023. So, it theoretically cannot generate more capital until the Senate passes the House-passed bill.
However, it's unlikely to pass the Senate and Biden has also vowed to veto the bill.
The standoff could result in the U.S. government defaulting on its debt in June, which poses negative consequences for the U.S. dollar, according to Jeff John Roberts, crypto editor at Fortune.
"If [Republicans] decide to go the kamikaze route during the current debt ceiling standoff, it will deliver another major hit to the dollar's credibility—and a further boost to Bitcoin," he noted.
Former U.S. Treasury Secretary Lawrence Summers meanwhile downplays the fears associated with a potential debt default, noting that the odds of it happening stands under 2%.
Summers:
"I think the odds that we will default in the sense of insolvency, and over some interval people who hold bonds will not be able to get paid, are - assuming the absence of a major war - certainly under 2% over the next decade."
Presenting a similar outlook, analyst TedTalksMacro says extending the debt ceiling would ensure that the Fed continues contracting its balance sheet through the ongoing QT.
That points to lower liquidity and, in turn, more downside pressure for Bitcoin.
"One caveat to the liquidity down/sideways for the rest of 2023 would be the Fed winding up or slowing the current pace QT," TedTalksMacro adds.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Macroeconomist Henrik Zeberg says that Bitcoin (BTC) should skyrocket into the summer as fears of a recession ultimately subside. The economist tells his 109,000 Twitter followers that risk assets will soar into the summer with the king crypto leading the way. According to Zeberg, a “blow-off top” is developing for stocks and crypto, mostly driven […]
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