23rd September 2023 > > Cryptos & criminals.

tl;dr

A visual representation of crypto’s place in the pantheon of financial assets. Criminals are involved in cryptos, but in two surprising ways.

Market Snap

Market Wrap

BTC looks resilient despite increasing long-term rates with 2s/10s now inverted at 68bps, down from recent peaks but still a very troubling signal. If we can maintain the $26k-$28k range despite macro issues that does bode well for future price increases, as hot money leaves in droves.

Occasional Series – Economics Editors

The nonsensical platitudes expressed in The Times the day before yesterday after the BoE made the momentous decision to not make a decision (M2 is collapsing – you need to cut rates NOW!) tells us all we need to know about the technocratic elite, and those that cosy up to them. If The Times is to be believed, the decision to raise or not raise rates hinged on the apparently critical piece of data that air fares have dropped over the summer.

Really?

That commentary was simply a cut and paste of Andrew Bailey’s preferred press release. Bailey is a Mark Carney copy without the good looks, but with the same enthusiasm for virtue signalling, at the expense of doing his actual day job. This does not qualify him to ruin peoples’ lives by bringing on a recession.

Is there no more room at the inn for independent thinking and independent opinions?

Curious Cryptos’ Commentary – It’s a little out of date

The graphic in the link below was made in 2020. The points it makes are not only still valid but have become even more so in the intervening years. h/t CoinTelegraph Markets Pro but ignore the section about derivatives. As leveraged instruments, derivative notional means nothing, though not many people understand that.

https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2020/

Curious Cryptos’ Commentary – Crypto-naysayers

Senator Robert Menendez has long been a vocal critic of cryptos, and now we know why.

In 2017, Menendez repeated the tired old trope that “Because of the anonymous nature of bitcoin transactions, the digital currency is an ideal choice for criminals.”

He was a key player to overthrow the democratic mandate in El Salvador by co-sponsoring the “Accountability for Cryptocurrency in El Salvador (ACES) Act” in response to the country’s inspired move to make BTC legal tender.

He was a prime mover in persuading Facebook to abandon its stablecoin project Libra in 2019.

Menendez has been arrested and charged with accepting bribes to use his influence. Police have confiscated $500,000 in cash and $100,000 in gold bars stored at his house.

(Alleged) old-school criminals will never be accepting of the crypto revolution with its key advantage that transactions are documented for all to see, dramatically reducing criminals’ ability to use cryptos for money laundering, drug-dealing, and plain old corruption.

Curious Cryptos’ Commentary – Crypto-criminals

But not in the way you might initially imagine.

Venezuela has long been a centre for crypto adoption with its hyperinflation and wholesale corruption of the political class. That latter point is probably attractive to Menendez.

This week, a notorious prison was raided by 11,000 police and soldiers. With a nod to Escobar, the gang running this prison from the inside had installed a restaurant, a pool, a sports field, a zoo (presumably with hippos), a disco, and a casino, natch. A large stash of weapons and ammunition were removed, along with a collection of motor bikes. Some inmates’ partners and wives were escorted off the premises.

But here’s the crypto angle.

The gang were mining BTC:

https://www.youtube.com/watch?v=9KmCsWK2L4w