Macro Catalysts Looming over BTC
There are several macro catalysts looming that are expected to play out in the next days and next couple of weeks.
- DEBT Ceiling
- FEDNOW launch
- SEC vs Ripple
FED and US TREASURY - DEBT Ceiling
The United States Treasury is going broke, the FED is broke and banks are crumbling.
The market crash actually started back in September 2019 when the yield curve inverted (investopedia.com/terms/i/invertedyieldcurve.asp).
The "Debt ceiling" cannot be raised indefinetly and at some point US will most likely have to default unless they reach a deal like they did in 2011.
Image 1:
https://fred.stlouisfed.org/series/RESPPLLOPNWW
The FED is basically a bank that has assets and liabilities. Their profits are funnelled into the US government. Since August 2022 they have recorded over $60 billion in losses.
Image 2:
Image 2
The balance sheet of the Treasury shows how much money the US government has. After the COVID printer went crazy the balance sheet reached $1.8 trillion and has now plummeted to $100 billion.
The US government is the ultimate PONZI, in order to pay their debts they need to keep borrowing.
To make it worse the borrow estimates for Q1 2023 where about $500 billion but ended up being double that at about $1 trillion. This goes to show how the US is no longer in control and cannot predict what is to come.
Image 3:
https://www.bloomberg.com/news/articles/2023-05-15/debt-ceiling-negotiations-have-investors-eyeing-gold-if-us-defaults?leadSource=uverify%20wall
Bloomberg did a piece on Gold and assets that according to their survey will do well if US defaults. Data is based on 670 participants.
Interesting to see that Bitcoin is considered to be a good BUY in that event.
During a financial crisis, commodities such as Gold, Silver and Platinum have been the "go to" assets along with the YEN and Swiss Franc. It seems like Bitcoin is moving from a Risk-On asset to more of a commodity.
FEDNOW Launching
https://www.federalreserve.gov/newsevents/pressreleases/other20230315a.htm
Another important upcoming catalyst is the FEDNOW banking system which goes live July 1st. This is kind of a precursor to CBDC. The question here is, how well will this function and is there any risk of bugs? All software is vulnerable, and a small bug can lead to huge implications because banks will not be able to move money if a bug happens. It is important that the system runs smoothly because on the same date another major catalyst is at play.
- LIBOR to SOFR transition.
LIBOR (London Inter Bank. Overnight Rate) is a group of banks that determines the interest rate on loans, this has been done in London as per the LIBOR
The US wants to move to SOFR (Secured Overnight Financing Rate) , they want to have more control. We are talking about approximately $650 trillion worth of assets that will have to migrate.
The rate on the SOFR is set by the Overnight Rates.
Taking the FEDNOW and SOFR together, if a bug happens with the FEDNOW software, banks will not be able to move money. This would mean that the Rates will skyrocket.
SEC vs RIPPLE - Hinman documents
https://cointelegraph.com/news/ripple-and-sec-seek-extension-for-unsealing-hinman-documents
Another potential catalyst is the 2.5 year long case between SEC and Ripple.
Recently Ripple convinced the court to force the SEC to reveal the Hinman documents.
Hinman is a former SEC director who reportedly stated that ETH is not a security because "it is sufficiently decentralized."
But since the documents are sealed it is uncertain what is exactly ment by this statement. Ripple believes revealing this document can help them win their case.
Ripple winning this case could potentially be one of the most bullish catalysts to have impacted the crypto market. The public release was supposed to be June 6 but is now set for June 13.
Important Dates:
JUNE 1
Yellen states that it is likely that the treasury will not be able to satisfy all obligations as early as June 1
JUNE 13
- Hinman Documents made public
- Inflation figures for May released
JUNE 14
- FED announcement on interest rates decision
JULY 1
- LIDOR to SOFR migration
- FEDNOW launches
- DEBT Ceiling
- FEDNOW launch
- SEC vs Ripple
FED and US TREASURY - DEBT Ceiling
The United States Treasury is going broke, the FED is broke and banks are crumbling.
The market crash actually started back in September 2019 when the yield curve inverted (investopedia.com/terms/i/invertedyieldcurve.asp).
The "Debt ceiling" cannot be raised indefinetly and at some point US will most likely have to default unless they reach a deal like they did in 2011.
Image 1:
https://fred.stlouisfed.org/series/RESPPLLOPNWW
The FED is basically a bank that has assets and liabilities. Their profits are funnelled into the US government. Since August 2022 they have recorded over $60 billion in losses.
Image 2:
Image 2
The balance sheet of the Treasury shows how much money the US government has. After the COVID printer went crazy the balance sheet reached $1.8 trillion and has now plummeted to $100 billion.
The US government is the ultimate PONZI, in order to pay their debts they need to keep borrowing.
To make it worse the borrow estimates for Q1 2023 where about $500 billion but ended up being double that at about $1 trillion. This goes to show how the US is no longer in control and cannot predict what is to come.
Image 3:
https://www.bloomberg.com/news/articles/2023-05-15/debt-ceiling-negotiations-have-investors-eyeing-gold-if-us-defaults?leadSource=uverify%20wall
Bloomberg did a piece on Gold and assets that according to their survey will do well if US defaults. Data is based on 670 participants.
Interesting to see that Bitcoin is considered to be a good BUY in that event.
During a financial crisis, commodities such as Gold, Silver and Platinum have been the "go to" assets along with the YEN and Swiss Franc. It seems like Bitcoin is moving from a Risk-On asset to more of a commodity.
FEDNOW Launching
https://www.federalreserve.gov/newsevents/pressreleases/other20230315a.htm
Another important upcoming catalyst is the FEDNOW banking system which goes live July 1st. This is kind of a precursor to CBDC. The question here is, how well will this function and is there any risk of bugs? All software is vulnerable, and a small bug can lead to huge implications because banks will not be able to move money if a bug happens. It is important that the system runs smoothly because on the same date another major catalyst is at play.
- LIBOR to SOFR transition.
LIBOR (London Inter Bank. Overnight Rate) is a group of banks that determines the interest rate on loans, this has been done in London as per the LIBOR
The US wants to move to SOFR (Secured Overnight Financing Rate) , they want to have more control. We are talking about approximately $650 trillion worth of assets that will have to migrate.
The rate on the SOFR is set by the Overnight Rates.
Taking the FEDNOW and SOFR together, if a bug happens with the FEDNOW software, banks will not be able to move money. This would mean that the Rates will skyrocket.
SEC vs RIPPLE - Hinman documents
https://cointelegraph.com/news/ripple-and-sec-seek-extension-for-unsealing-hinman-documents
Another potential catalyst is the 2.5 year long case between SEC and Ripple.
Recently Ripple convinced the court to force the SEC to reveal the Hinman documents.
Hinman is a former SEC director who reportedly stated that ETH is not a security because "it is sufficiently decentralized."
But since the documents are sealed it is uncertain what is exactly ment by this statement. Ripple believes revealing this document can help them win their case.
Ripple winning this case could potentially be one of the most bullish catalysts to have impacted the crypto market. The public release was supposed to be June 6 but is now set for June 13.
Important Dates:
JUNE 1
Yellen states that it is likely that the treasury will not be able to satisfy all obligations as early as June 1
JUNE 13
- Hinman Documents made public
- Inflation figures for May released
JUNE 14
- FED announcement on interest rates decision
JULY 1
- LIDOR to SOFR migration
- FEDNOW launches
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