Inflation, memecoins, the SEC, and more — Week in Review

The Fed's easing cycle suggests Powell & co are confident inflation's under control. Fittingly, we had Truflation co-founder Cameron Lee on Token Narratives, where the BLS's bizarre inflation adjustment metrics came up. It reminded me of pseudonymous X account Rudy Havenstein's many posts ridiculing the BLS, including this one showing used car prices were flat for 25 years. Now that's some financial trickery.

It begs the question, has Powell tamed inflation, or is he the second coming of Arthur Burn s? Bob Elliot, CIO of Unlimited Funds, thinks conditions are right for reinflation.

Two stories took up a lot of oxygen on CT this week. HBO released their highly anticipated Satoshi Nakamoto documentary in which they suggested Peter Todd is the crypto industry's progenitor. By all accounts, this suggestion garnered nothing short of derision from everyone including Todd himself.

Then there was ZachXBT, a blockchain sleuth lauded for exposing countless scammers and nerdowells connected to the crypto space, who revealed a slew of wallets alleged to belong to current crypto darling and memecoin cheerleader Murad Mahmudov. Zach defended his actions, claiming this was to hold Murad publicly accountable for his memecoin shills, since memecoins are highly volatile and it can be easy to dump on followers. Many online accounts bemoaned Zach's actions, equating this somewhat hyperbolically to "doxing." I think if you are shilling memecoins, it should be acceptable for people to expose your heavy bags.

Two high-profile news stories this week showcased the SEC's renewed attack on crypto. First, Crypto.com revealed it received a Well's Notice in August and has preemptively sued the SEC for overreach. Second, the SEC has charged Cumberland DRW, a Chicago-based firm, for operating as an unregistered dealer of crypto assets deemed securities.

Meanwhile, there was further evidence that crypto's bad actors get jailed, an outcome I support, while traditional finance gets slaps on the wrist. TD Bank will pay $3 billion to settle charges that it failed to properly monitor money laundering by drug cartels. Seriously?

Let's end on a positive note. The graph in this X post from me indicates that every year mainstream or non-crypto interest in Bitcoin bottoms around the end of September and rises through the fourth quarter into the new year. Is this cope, or do the normies not yet know Uptober is here?

-David Sencil

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In the news

Cryptoquant: stablecoin liquidity surges to record highs

Stablecoin liquidity reached unprecedented levels in September 2024, boosting overall cryptocurrency market activity. Meanwhile, Ripple made a notable entrance into the stablecoin space with its newly launched RLUSD, expanding its influence in the financial landscape.

Editors comment: Not to sound like a broken record, but stablecoins are one of the best indicators to measure the health of the market.

JPMorgan analysts predict Bitcoin gains in Q4

JPMorgan analysts are showing optimism as bitcoin exhibits strong upward trends moving into the fourth quarter. They highlighted October's historically positive returns for the cryptocurrency and suggested this trend could persist.

Editors comment: Does it start to become bearish if everyone (including myself) is bullish for Q4?

FBI creates crypto token to expose fraud

Eighteen individuals and entities have been charged with fraud and market manipulation in the cryptocurrency industry. The charges involve deceptive practices such as wash trading and pump-and-dump schemes that inflated token prices, resulting in the seizure of $25 million in cryptocurrency. As part of "Operation Token Mirrors," the Federal Bureau of Investigation (FBI) created a fake cryptocurrency company and token to uncover fraud in the market.

Editors Comment: A fascinating story that, on the face of it, helped to remove crypto malefactors. Although, it does bring to mind the phrase, "spitting in the wind."

Peter Schiff: Phony economy must die or US risks financial ruin

Economist Peter Schiff has warned that restoring a real economy requires letting the "phony economy" collapse, which would result in significant financial losses for many. However, he emphasized that the alternative is worse, as it would lead to the devaluation of money itself.

Editors comment: I am sympathetic to criticisms presented by Schiff and others, but be cautious of the time horizons for these deep issues to play out.

USDT faces downward pressure as investors pivot to stocks in China

USDT, the largest stablecoin in the crypto market, has marginally lost its peg to the U.S. dollar, trading at less than $1 since September 30. Analysts believe this is a byproduct of large outflows from China as crypto investors turn to the national stock market to participate in the bull run following the announcement of stimulus measures.

Editors comment: This is an interesting take that may or may not be true, however it is something to keep in mind if and when China stimulates further.

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