Connect with us

Commodities

Coinbase posts $1.1B loss, Polygon DApps rocket 400% in 2022 and Elon Musk says inflation is on the decline: Hodler’s Digest, Aug 7-13

Coming every Saturday, Hodlers Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption…

Published

on

Coming every Saturday, Hodlers Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more a week on Cointelegraph in one link.

Top Stories This Week

 

Elon Musk: US past peak inflation after Tesla sells 90% of Bitcoin

With Tesla now having sold 90% of its Bitcoinholdings during the bear market, Elon Musk says the U.S. economy is past peak inflation and predicts that only a mild to moderate recession could be incoming. We sort of have some insight into where prices are headed over time, and the interesting thing that were seeing now is that most of our commodities, most of the things that go into a Tesla not all, more than half the prices are trending down in six months from now, Musk said at Teslas 2022 Annual Meeting of Stockholders.

 

Coming sooner: ETH devs move up the date for Merge

The long-awaited Merge looks to be ahead of schedule, with Ethereum core developers Tim Beiko and Terence Tsao agreeing on a developer call Thursday to tentatively set the date of the Merge for Sept. 15. The previously estimated date from Beiko was Sept. 19, and suggested that the final preparation work is going smoothly after the final Goerli testnet merge went off without a hitch this week.

 

 

Coinbase posts $1.1B loss in Q2 on fast and furious crypto downturn

Major crypto exchange Coinbase posted a whopping Q2 loss of $1.1 billion, citing a fast and furious crypto downturn during the quarter. The firm noted that Q2 was a tough quarter as trading volume and transaction revenue fell 30% and 35%, respectively. It marks the second consecutive quarter of loss for the company this year. The current downturn came fast and furious, and we are seeing customer behavior mirror that of past down markets, the firm wrote in a shareholder letter posted on Tuesday.

 

Decentralized apps on Polygon hit 37,000, rocketing 400% this year

The number of DApps on Ethereum scaling platform Polygon topped 37,000 this week, marking a 400% increase since the start of 2022. The project provided a breakdown of DApp projects built on Polygon, which notably showed that 74% of teams integrated exclusively on Polygon, while 26% deployed on both Polygon and Ethereum. Polygon also stated that its ecosystem has now seen more than 142 million unique user addresses and $5 billion in assets secured, with around 1.6 billion transactions processed on the network to date.

 

Anonymous user sends ETH from Tornado Cash to prominent figures following sanctions

One day after the U.S. Treasury sanctioned crypto mixer Tornado Cash over its alleged role in money laundering operations, intervals of 0.1 Ether transactions began being sent from the smart contract to prominent figures such as Coinbase CEO Brian Armstrong and American television host Jimmy Fallon. The move appears to be a critique or satirical commentary on the U.S. governments current policy of also sanctioning addresses that interacted with Tornado Cash.

 

 

 

Winners and Losers

 

At the end of the week, Bitcoin (BTC) is at $23,840.93, Ether (ETH) at $1,882.20 and XRP at $0.37. The total market cap is at $1.13 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Celsius (CEL) at 93.85%, Ankr (ANKR) at 46.99% and Decred (DCR) at 26.34%.

The top three altcoin losers of the week are ApeCoin (APE) at 9.03%, Curve DAO Token (CRV) at 5.01% and Kusama (KSM) at 4.53%.

For more info on crypto prices, make sure to read Cointelegraphs market analysis.

 

 

 

 

Most Memorable Quotations

 

A senior living community has almost no exposure to the crypto ecosystem unless their grandchildren tell them about it.

Owen Robertson, marketing associate at Dominant Strategies

 

The fact that I dont have an alternative to Facebook is the reason why Facebook is a monopoly. But if it was on a blockchain, I could transmit data freely, there could become [different] Facebooks.

Yat Siu, co-founder of Animoca Brands

 

In the past six months or so, weve seen valuations on companies come down to a bit more realistic valuations, and its become a great time to begin allocating capital.

Gerard Berile, venture and investment principal at Wave Financial

 

Going forward, that mentality towards risk management while still being bullish over the long term is very important. […] You can be bullish on crypto, but you can still sell out of the market.

Jeffrey Gao, CEO of Cypherpunk Holdings

 

Scalability isnt just like some boring thing where you just need like ‘cost numbers go down’ scalability, I think actually enables and unlocks entirely new classes of applications.

Vitalik Buterin, co-founder of Ethereum

 

So I think institutional adoption is where its going, and the institutions are what is going to enable […] that killer app for consumers to really bring crypto and DeFi to the next level.

Boris Alergant, head of DeFi markets at Ripple Labs

 

Prediction of the Week

 

$29K Bitcoin is closer than you might expect, according to derivatives data

With Bitcoins price continuing to battle $24,000 resistance, facing rejection on Aug. 10 but managing not to be knocked off the 52-day-long ascending channel, Cointelegraph market analyst Marcel Pechman suggested the price could eventually hit $29,000 by October. He pointed to a bullish chart formation with a support level of $22,500 that indicates the price could climb to just under $30,000. Pechman also noted that while BTC derivatives data show a lack of interest from leveraged longs, there is no indication of a surprise crash being priced into the market.

 

 

FUD of the Week

ASIC chair troubled by sheer amount of risk-taking crypto investors

Joe Longo, the chairman of the Australian Securities and Investments Commission (ASIC), has raised alarm bells over the number of Aussies that invested in unregulated, volatile crypto assets during the pandemic. As part of a media release on Thursday, Longo pointed to ASIC research from November 2021 that found that crypto was the second most common investment product, with 44% of those surveyed reporting holding it. Out of those investors, 25% indicated that crypto assets were the only investment class they were involved in.

 

Cross-chain bridge RenBridge laundered $540M in hacking proceeds: Elliptic

According to a Wednesday report from blockchain analytics firm Elliptic, crypto bridge RenBridge has facilitated the laundering of at least $540 million in hacking proceeds since 2020. According to the report, the laundering was conducted via a process known as chain hopping converting one form of cryptocurrency into another and moving it across multiple blockchains.

 

Tornado Cash co-founder reports being kicked off GitHub as industry reacts to sanctions

Tornado Cash co-founder Roman Semenov claimed his account on developer platform GitHub was suspended on Monday. Semenov noted that, despite not being individually named as a Specially Designated National by the U.S. Treasurys Office of Foreign Assets Control, he seemed to be facing repercussions relating to the Treasurys allegations that Tornado Cash laundered more than $7 billion worth of crypto.

 

 

Best Cointelegraph Features

How to bake your own DAO at home With just 5 ingredients!

Decentralized autonomous organizations come in all sizes and flavors. Some can seem sweet, others turn sour. It can be fun and interesting to create one that suits your needs and satisfies your hunger for something new.

Reinventing yourself in the Metaverse through digital identity

Metaverse users can reinvent themselves with a digital identity built upon avatars and digital assets, but there are challenges to consider.

How Bitcoin whales make a splash in markets and move prices

Are the whales selling in this bear market? A deep dive into their on-chain data.

 

The best of blockchain, every Tuesday

Subscribe for thoughtful explorations and leisurely reads from Magazine.


By subscribing you agree to our Terms of Service and Privacy Policy

 

 

Read More

Continue Reading

Economics

Roubini: The Stagflationary Debt Crisis Is Here

Roubini: The Stagflationary Debt Crisis Is Here

Authored by Nouriel Roubini via Project Syndicate,

The Great Moderation has given way to…

Published

on

Roubini: The Stagflationary Debt Crisis Is Here

Authored by Nouriel Roubini via Project Syndicate,

The Great Moderation has given way to the Great Stagflation, which will be characterized by instability and a confluence of slow-motion negative supply shocks. US and global equities are already back in a bear market, and the scale of the crisis that awaits has not even been fully priced in yet.

For a year now, I have argued that the increase in inflation would be persistent, that its causes include not only bad policies but also negative supply shocks, and that central banks’ attempt to fight it would cause a hard economic landing. When the recession comes, I warned, it will be severe and protracted, with widespread financial distress and debt crises. Notwithstanding their hawkish talk, central bankers, caught in a debt trap, may still wimp out and settle for above-target inflation. Any portfolio of risky equities and less risky fixed-income bonds will lose money on the bonds, owing to higher inflation and inflation expectations.

How do these predictions stack up? First, Team Transitory clearly lost to Team Persistent in the inflation debate. On top of excessively loose monetary, fiscal, and credit policies, negative supply shocks caused price growth to surge. COVID-19 lockdowns led to supply bottlenecks, including for labor. China’s “zero-COVID” policy created even more problems for global supply chains. Russia’s invasion of Ukraine sent shockwaves through energy and other commodity markets. And the broader sanctions regime – not least the weaponization of the US dollar and other currencies – has further balkanized the global economy, with “friend-shoring” and trade and immigration restrictions accelerating the trend toward deglobalization.

Everyone now recognizes that these persistent negative supply shocks have contributed to inflation, and the European Central Bank, the Bank of England, and the US Federal Reserve have begun to acknowledge that a soft landing will be exceedingly difficult to pull off. Fed Chair Jerome Powell now speaks of a “softish landing” with at least “some pain.” Meanwhile, a hard-landing scenario is becoming the consensus among market analysts, economists, and investors.

It is much harder to achieve a soft landing under conditions of stagflationary negative supply shocks than it is when the economy is overheating because of excessive demand. Since World War II, there has never been a case where the Fed achieved a soft landing with inflation above 5% (it is currently above 8%) and unemployment below 5% (it is currently 3.7%). And if a hard landing is the baseline for the United States, it is even more likely in Europe, owing to the Russian energy shock, China’s slowdown, and the ECB falling even further behind the curve relative to the Fed.

Are we already in a recession? Not yet, but the US did report negative growth in the first half of the year, and most forward-looking indicators of economic activity in advanced economies point to a sharp slowdown that will grow even worse with monetary-policy tightening. A hard landing by year’s end should be regarded as the baseline scenario.

While many other analysts now agree, they seem to think that the coming recession will be short and shallow, whereas I have cautioned against such relative optimism, stressing the risk of a severe and protracted stagflationary debt crisis. And now, the latest distress in financial markets – including bond and credit markets – has reinforced my view that central banks’ efforts to bring inflation back down to target will cause both an economic and a financial crash.

I have also long argued that central banks, regardless of their tough talk, will feel immense pressure to reverse their tightening once the scenario of a hard economic landing and a financial crash materializes. Early signs of wimping out are already discernible in the United Kingdom. Faced with the market reaction to the new government’s reckless fiscal stimulus, the BOE has launched an emergency quantitative-easing (QE) program to buy up government bonds (the yields on which have spiked).

Monetary policy is increasingly subject to fiscal capture. Recall that a similar turnaround occurred in the first quarter of 2019, when the Fed stopped its quantitative-tightening (QT) program and started pursuing a mix of backdoor QE and policy-rate cuts – after previously signaling continued rate hikes and QT – at the first sign of mild financial pressures and a growth slowdown. Central banks will talk tough; but there is good reason to doubt their willingness to do “whatever it takes” to return inflation to its target rate in a world of excessive debt with risks of an economic and financial crash.

Moreover, there are early signs that the Great Moderation has given way to the Great Stagflation, which will be characterized by instability and a confluence of slow-motion negative supply shocks. In addition to the disruptions mentioned above, these shocks could include societal aging in many key economies (a problem made worse by immigration restrictions); Sino-American decoupling; a “geopolitical depression” and breakdown of multilateralism; new variants of COVID-19 and new outbreaks, such as monkeypox; the increasingly damaging consequences of climate change; cyberwarfare; and fiscal policies to boost wages and workers’ power.

Where does that leave the traditional 60/40 portfolio? I previously argued that the negative correlation between bond and equity prices would break down as inflation rises, and indeed it has. Between January and June of this year, US (and global) equity indices fell by over 20% while long-term bond yields rose from 1.5% to 3.5%, leading to massive losses on both equities and bonds (positive price correlation).

Moreover, bond yields fell during the market rally between July and mid-August (which I correctly predicted would be a dead-cat bounce), thus maintaining the positive price correlation; and since mid-August, equities have continued their sharp fall while bond yields have gone much higher. As higher inflation has led to tighter monetary policy, a balanced bear market for both equities and bonds has emerged.

But US and global equities have not yet fully priced in even a mild and short hard landing. Equities will fall by about 30% in a mild recession, and by 40% or more in the severe stagflationary debt crisis that I have predicted for the global economy. Signs of strain in debt markets are mounting: sovereign spreads and long-term bond rates are rising, and high-yield spreads are increasing sharply; leveraged-loan and collateralized-loan-obligation markets are shutting down; highly indebted firms, shadow banks, households, governments, and countries are entering debt distress.

The crisis is here.

Tyler Durden Tue, 10/04/2022 - 17:25

Read More

Continue Reading

Economics

Oil Spikes After OPEC+ Hints At 2 Million B/D Production Cut

Oil Spikes After OPEC+ Hints At 2 Million B/D Production Cut

Oil prices are extending their recent gains following headlines from Vienna that…

Published

on

Oil Spikes After OPEC+ Hints At 2 Million B/D Production Cut

Oil prices are extending their recent gains following headlines from Vienna that OPEC+ is considering a reduction in its production limit of as much as 2 million barrels a day.

However, the impact on actual production could be smaller since several members are already pumping far below their officials quotas, meaning they could automatically be in compliance with their new limit without having to curb production.

Nevertheless, it could still result in the cartel's largest reduction since the deep cuts agreed at the outset of the Covid-19 pandemic in 2020 and WTI surged up to $87 on the news...

Notably, Saudi Aramco CEO Amin Nasser told the Energy Intelligence Forum in London this morning that the world is misinterpreting the oil market by worrying too much about a potential recession in the near future.

Current oil prices indicate a focus on "short-term economics rather than supply fundamentals."

"If China opens up, [the] economy starts improving or the aviation industry starts asking for more jet fuel, you will erode this spare capacity," he said.

"And when you erode that spare capacity the world should be worried. There will be no space for any hiccup — any interruption, any unforeseen events anywhere around the world."

The timing could not be more interesting as it comes just weeks after Biden begged the Saudis to hike production and just weeks before the Midterms... with gas prices at the pump beginning to rise again (to record highs in California)...

Finally, Biden's political emptying of the SPR has left it with a record low of just 22 days supply...

Source: Bloomberg

Let's hope we don't have a real emergency - other than collapsing poll numbers we mean of course...

And given the resurgence in crude and wholesale gasoline prices, regular pump prices are set to soar again...

By the way, whatever happened to that Ridiculous Buyers' Cartel idea? 

Tyler Durden Tue, 10/04/2022 - 11:00

Read More

Continue Reading

Economics

Consumer Savings Shrink to 2008 Lows

Americans are saving less money than ever as inflation and higher interest rates have impacted their budgets.

Published

on

Americans are saving less money than ever as inflation and higher interest rates have impacted their budgets.

The American consumer is accumulating less money each month and tapping into their savings to pay for basic necessities and bills such as utilties, adding to fears of a recession

The personal savings rate in the U.S. for August was down to 3.5%, which is flat compared to July's rate, according to the Bureau of Economic Analysis that was released on Sept. 30. 

"It’s a natural consequence of high inflation that has been forcing individuals and households to raid their own savings accounts where they have them," Mark Hamrick, Bankrate’s senior economic analyst, told TheStreet. "Not everyone has been so fortunate. Others have had to cut back severely or rely more on credit."

Wage growth in many industries has fallen short as inflation has risen exponentially this year.

"The fact is that wage growth has not been keeping pace with inflation and has had a negative impact on savings," he said.

The savings rate is calculated by the income that is remaining aftter consumers pay for food, rent and energy as well as taxes.

The decline in the savings rate matches the low rate in August 2008. 

"As the economy reopened, consumers rushed to spend more of their past savings and current income," Anthony Chan, former chief economist for JPMorgan Chase, told TheStreet. "The yearly rise in the CPI has been outpacing the growth in average hourly earnings for all workers since April 2021. That has created another incentive for consumers to lower their savings rate to maintain their standard of living as inflation continues to outpace the growth in wages for all workers."

The percentage of disposable personal income was 3.6% in May, but fell to 3% in June as many Americans went on summer vacations. 

Inflation has eroded the amount of income workers have as the core personal consumption expenditures (PCE) Price Index increased by 4.9% in August from last year and by 0.6% on the month, the Bureau of Economic Analysis reported.

This reduced hopes that the Federal Reserve would halt its plans for at least another rate hike since the PCE is the Federal Reserve's preferred measure of inflation.

The headline PCE index rose 0.3% on the month, but fell to 6.3% on the year following the first month-on-month decline which was recorded last month -- since April 2020.

Personal income rose by 0.3%, while personal spending rose by 0.4%, the BEA noted.

Consumers received a slight reprieve when gasoline prices fell for 14 consecutive weeks.

Shutterstock

Gasoline Prices Rising Again

The streak of cheaper gasoline prices ended last week as a string of refinery issues pushed prices up higher slightly

For the second straight week, gas prices moved higher with the average gas price posting a rise of 11 cents from a week ago to $3.78 per gallon today, according to GasBuddy data compiled from over 150,000 stations nationwide. 

The national average is up 4 cents from a month ago and 59 cents higher than a year ago. The national average price of diesel has declined by 29 cents in the last week and stands at $4.86 per gallon.

“With gas prices continuing to surge on the West Coast and Great Lakes, the national average saw its second straight weekly rise," said Patrick De Haan, head of petroleum analysis, GasBuddy, a Boston-based provider of retail fuel pricing information and data. "But at the same time, areas of the Northeast and Gulf Coast have continued to see declines as the nation experiences sharp differences in trends between regions.

Along the West Coast, some states reported prices rose 35 cents to 55 cents a gallon as gasoline supply declined to its lowest level in a decade in the region, resulting in skyrocketing prices. 

Another price spike is possible, he said.

"While I’m hopeful there will eventually be relief, prices could go a bit higher before cooling off," De Haan said. "In addition, OPEC could decide to cut oil production by a million barrels as the global economy slows down, potentially creating a catalyst that could push gas prices up further.”

Consumer Confidence Increases 

The Consumer Confidence Index rebounded and rose to its highest level since April - it has increased by 12 points compared to just two months ago. 

"Falling gasoline prices and a still-tight labor market are the main reasons we have seen a recent rebound in confidence," wrote Tim Quinlan, senior economist at Wells Fargo Securities, and Shannon Seery, an economist at Wells Fargo Securities. "But as inflation persists and the Fed lifts rates to combat it, we are unlikely to see confidence approach pre-pandemic levels."

Optimism from consumers rose with both the Conference Boards Consumer Confidence Index or Consumer Sentiment from the University of Michigan despite higher inflation rates and uncertainty about the outlook on the economy.  

Consumers started cutting back on spending on both discretionary items and and staples earlier this year as retailers have reported a lower demand.

Target  (TGT) - Get Target Corporation Report and Walmart  (WMT) - Get Walmart Inc. Report were among retailers that reported weaker profits while the travel and leisure industries benefitted from pent up demand.

The Fed has raised rates five times this year, starting with a 0.25% hike in March. Its most recent hike was the third consecutive 0.75%.

Consumer confidence levels are not likely to remain at these levels, Quinlan and Seery wrote.

"Still-elevated inflation and the aggressive tightening path from the Federal Reserve to combat it will likely weigh on consumers financial prospects," he said. "The recent gain in confidence may be supportive of spending in the near-term, but as long as inflation persists and risks of recession remain confidence is unlikely to return to pre-pandemic levels."

A United Nations agency is now asking for central banks such as the Federal Reserve to stop its interest rate increases.

Additional tightening would only increase the odds of a global recession, the United Nations Conference on Trade and Development said in its annual report on the global economy. 

The agency estimates that a percentage point increase in the Fed’s key interest rate will decrease the amount of economic output by 0.5% in richer countries while the impact is greater in poor countries by a decline of 0.8% over the next three years.

Action Alerts Plus

The Best Ideas For You To Build Wealth

A members-only investing club that helps you grow your portfolio with real-time trade alerts, analysis of major market events, and key opportunities.

  • Real-Time Trade Alerts
  • 24/7 Access To The Portfolio
  • Portfolio Price Targets

Read More

Continue Reading

Trending