The Santa Rally was in full force this week, as the S&P 500 climbed to new YTD highs and is now almost back at its all-time high as investors increasingly price in (correctly or incorrectly) peak restrictive monetary policy.
The Santa Rally was in full force this week, as the S&P 500 climbed to new YTD highs and is now almost back at its all-time high as investors increasingly price in (correctly or incorrectly) peak restrictive monetary policy. As the Fed ostensibly prepares to cut rates during the coming year, the S&P now sits 9% above the level at which the Fed began hiking rates in early 2022, and basically in line with its all-time high in November 2021; at the same time, core PCE and CPI metrics still sit comfortably above 2021 levels (despite recent declines in their acceleration), all unmistakable signs of another job well done by central bankers. US policymakers continued to beclown themselves by sending a tirade to various “crypto” industry participants and advocacy groups scolding them for having the temerity to publicly disagree with new financial surveillance legislation from Senator Elizabeth Warren. Against the backdrop of ongoing regulatory finger-wagging, the bitcoin network reached yet another all-time high in total hashrate and difficulty, with hashrate eclipsing 500 EH/s for the first time (up ~2x from just a year ago).
We at Ten31 wish everyone – from the Ten31 Tribe to cockroach miners and dip-buyers to the petty tyrants in DC – a Merry Christmas, and we’ll close out the year with a reminder that no one is bullish enough.
Hoseki is a platform allowing bitcoiner holders to express proof of ownership to legacy financial and legal institutions without selling or moving their bitcoin. Users can easily and selectively link on-chain addresses or custodial accounts to Hoseki’s interface and create credible ownership proofs similar to brokerage statements commonly requested by lenders and similar counterparties. This capability allows users to unlock bitcoin as a source of capital (e.g. to improve creditworthiness when applying for a loan) without incurring any risk to the underlying asset, addressing a major unmet need for bitcoin users. The platform also allows enterprises to dynamically monitor counterparty balances and to make their own credible public attestations.
Mempool.space released its new “Mempool Goggles” feature, which allows users to filter transactions in mempools by 25 categories:
Unchained launched a new transaction fee estimation algorithm, which will enhance privacy and generally reduce fees on many transactions:
Zaprite added a new integration with WooCommerce:
Coinkite released the latest firmware update for the Coldcard Mk4:
Peach released its latest version update:
Hoseki Founder and CEO Sam Abbassi discussed proof of reserves and the future of bitcoin custody on the Galaxy Brains podcast.
Forbes named Fold’s debit card the best card for maximizing bitcoin rewards.
Fed officials extended their risk-on commentary this week, as San Francisco Fed President Mary Daly suggested she expects several rate cuts next year to avoid “over-tightening.”
Meanwhile, core PCE, the Fed’s favored metric for price inflation, came in a bit below expectations at +3.2% Y/Y, in line with last week’s dovish CPI print.
Markets continued to react positively, with the S&P notching its longest weekly winning streak since 2017 and nearly revisiting its all-time high (while corporate buybacks continued pushing parabolically to new highs). The index is now up 9% relative to where it was when the Fed began hiking rates almost two years ago.
Under the surface, several indicators once again looked less impressive, with new home sales data continuing to crater M/M and coming in 14% short of expectations.
In the same vein, the Wall Street Journal published a feature this week on the increasingly tenuous commercial real estate market, where office occupancy is stuck at ~50% of pre-COVID levels and hasn’t budged in a year. New forecasts point to office vacancy rates rising from 13.6% this year (vs 9.4% in 2019) to nearly 16% next year just as a wave of lease extensions are set to expire.
Use of the Fed’s BTFP facility – an “emergency” facility intended to prop up banks with historic levels of unrealized losses on their bond and mortgage portfolios – ballooned to another all-time high this week. However, recent growth in use of the facility increasingly looks to be a carry trade arbitraging the spread between the facility’s interest rate (<5%) with interest on reserves parked at the Fed (5.4%).
US Senator Elizabeth Warren sent a screed to various cryptocurrency companies and advocacy groups haranguing them for opposing her unconstitutional and unfounded proposed legislation to use the already problematic Bank Secrecy Act to expand financial surveillance of US citizens in the name of fighting terrorism.
In the letter, Warren criticizes industry participants for inappropriately leveraging a “revolving door” of lobbyists, a curious objection given her own bill was crafted by the Bank Policy Institute (a bank lobbying group helmed by scrappy upstarts like JPMorgan Chase, Bank of America, and Citi).
A new set of policy changes enacted by Javier Milei’s administration in Argentina includes a stipulation that debts and contracts can be settled in currencies not designated as legal tender. The country’s Minister of Foreign Affairs confirmed that this measure extends to contracts denominated in bitcoin.
The Wall Street Journal obtained the Federal Reserve’s so-called “Doomsday Book” (its internal set of collected recommendations for the most effective ways to print over a crisis) via a FOIA request. Among the most chilling revelations contained therein is that the introduction to this guide written for the masters of the financial universe was composed in Comic Sans.
The Human Rights Foundation also announced $500,000 in new grants to a diverse set of 18 bitcoin projects.
Asset manager Bitwise – one of the many platforms with an outstanding spot bitcoin ETF filing – released the first in what will surely be an oncoming wave of commercials marketing its ETF to mainstream investors.