OSL Trader View | Weekend Digest
Friday May 8, 2020
April non-farm payroll print is slated to be released tonight, wiping out two decades of jobs and pushing the unemployment rate to 14%, territory not seen since 1938. Sometimes it’s hard to fathom how extreme these moves and the repercussions are when it’s just a macro print. But in arguably one of the worst backdrops ever, there are some pretty heart wrenching anecdotes circulation - from dairy farmers dumping millions worth of milk since logistics lockdowns prevent the supply from reaching the demands of starving populations, to the Lebanese losing their shirts as its government desperately tries to salvage what they can in what looks like a complete write-off of the country’s coffers. A move that is forcing the country to tighten her belt as the dollar crunch kicks in. There have been over $400B taken down through the extended swap lines and the party is just getting started.
On the bright side, for our American readers who opted to take their US$1200 in stimulus and invest it in $BTC, here’s some encouraging figures: Your $1200 Stimulus is now Worth…
- An important "red line" was crossed today...Euro-Dollar futures markets are now pricing in negative US interest rates before year-end 2020:
- In the face of severe inflation, Iran’s new ‘Reforming Monetary and Banking Law’ has passed in parliament. The new law dictates the transition from rial to the superunit toman — valued at 10,000 rials — within the next two years.
- US mulls cancelling debt to China of US$1.1T
- With some recent data out of Hong Kong showing the flatlining visits to the city (whether for business or tourism) the impact this will have is already baring its teeth and the continued compounding impact on ancillary spending in retail, hospitality, amusement, etc will likely be a trend that plays out in most major centers around the world - and this considering Hong Kong is one of the markets faring “well” with the pandemic:
Digital assets market:
Former People’s Bank of China President, Li Lihui, has revealed the launch of the digital yuan is imminent, and that the currency can replace cash - improving efficiency, lowering transaction costs, creating economies of scale with commercial value, whilst growing acceptance.
- Paul Tudor Jones has become one of the first big hedge funds and certainly one of the first voices of authority in traditional finance to preach the benefits of bitcoin in portfolios given the rapid inflationary environment that the financial crisis (and COVID-19) has encouraged. He said he considered various bets on gold, Treasuries, certain types of stocks, currencies and commodities before recognizing a “growing role for Bitcoin.”
- The growth of the digital asset market can also be evidenced by the growth of the sector’s leading banking partner, Silvergate Exchange Network (SEN) which has 850 digital currency customers (+38% YoY), including 61 exchanges, 541 institutional investors and 248 other customers. The largest customer segment increase was in institutional investors, which increased by 32. The bank also claims to have more than 200 prospective clients in its pipeline. $1.1bn cash and cash equivalent; SEN transfer volumes of $17.4 billion and over 31,000 SEN transactions; 1Q net income of $4.4 million + 22% QoQ; deposits increased $188.3 million, or 10.4%, NIM 2.86%, fed fund rate contraction -11bps QoQ , but cost of funds flat at 94bps.
- Bitcoin Manipulation Abatement LLC filed a lawsuit in a U.S. federal district court: Ripple misled investors, sold $XRP as an unregistered security. Seeks to “recover damages” and “obtain other relief” related to the alleged violations. The same firm also filed a $150 million lawsuit against crypto derivatives exchange FTX in November 2019 which was subsequently dismissed one month later.
As we near the halving, most active addresses since June 19, 2019:
Liu Fei, who manages self-mining facilities at Chinese bitcoin startup Bixin, has said “It would be normal to see bitcoin network’s hashrate drop to 60 to 70 million TH/s after halving.”
With significant energy glut in the Ukraine, various government bodies are looking at mining practices to use the excess power and tapping into their nuclear power network.
We are only a few days away from the halvening, so you still have time to enter our Halvening Pricing Competition on Twitter for your chance to win an amazing prize pack. And be sure to have a safe and wonderful weekend!
May the trend be your friend!
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