MAJR News 086
BTC & ETH prices drop 5% as US & Russia tensions grow, Fidelity believes Bitcoin is superior money, Google is looking at web3 technology, NFTs could become the next comic hits, Central banks tighten
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Jason Lowery from the US Space Force and joins Robert Breedlove for a multi-episode series exploring the first principles of physics, the ubiquity of organic power projection, and how Bitcoin changes the game. Jason Lowery is studying national strategic implications of Bitcoin at MIT.
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BITCOINBitcoin, Ether Drop as US Deploys Troops to Eastern Europe
Bitcoin & Ethereum prices dropped ~5% to $36,700 on the news that the US will deploy troops to Eastern Europe and the Eurozone’s annual inflation rate rose to 5.1% in January. President Biden approved 3,000 American troops to protect NATO allies from Russian aggression.
U.S. Orders 3,000 Troops to Bolster European Allies in Russia-Ukraine Crisis
Fidelity: Bitcoin is a 'superior form of money'
Fidelity Digital Assets, the crypto subsidiary of the $4.23 trillion asset manager released a paper titled Bitcoin First. The paper claimed that there’s no other digital asset close to bitcoin due to its properties for being “superior money.” The firm sees bitcoin as a monetary good, it’s own asset class that is distinct from the rest of the digital assets and should be the first stop for all investors getting exposure to crypto.
“Bitcoin clearly possesses a lot of good qualities of money, combining the scarcity and durability of gold with the ease of use, storage and transportability of fiat.”
“We won’t be so bold as to predict there will only ever be one money, but we do believe that one monetary good will come to dominate the digital asset ecosystem due to the very powerful effects of networks.”
MicroStrategy will continue to purchase bitcoin this year, says CFO
MicroStrategy, CFO Phong Le says the company will continue to purchase bitcoin despite bearish price action. MicroStrategy holds 124,391 BTC or $4.7B and they have no plans on selling their stack. The firm said that they’re constantly looking for other ways to use bitcoin to add value to shareholders. One example is buying bitcoin backed bonds in the next few years.
More on Bitcoin
CRYPTOGoogle Is Looking to Help Build Web3, Blockchain Products: Alphabet CEO
Alphabet CEO, Sundar Pichai said that the company was actively looking at web3 technology and ways to apply it to their existing businesses.
MAJR Take: There’s an increasing trend of large technology and media companies (Disney) leaning into crypto, starting with NFTs, payments and the metaverse. It could be more of a marketing play since crypto has been so hot with consumers. Keep in mind, crypto business models are about digital ownership and transparency, which is the opposite of publicly traded technology companies. Rather than go full-crypto and launch a token, we see them as large buyers of upcoming projects as a web3 hedge.
He said, that they’re "definitely looking at blockchain and such an interesting and powerful technology with broad applications."
"So as a company, we are looking at how we might contribute to the Web3 ecosystem and add value…Just one example, our Cloud team is looking at how they can support our customers' needs in building, transacting, storing value, and deploying new products on blockchain-based platform…So we'll definitely be watching the space closely and supporting it where we can."
Pixel Vault raises $100M for NFT development platform
Venture capital firms Velvet Sea Ventures and 01 Advisors invested $100 million into Pixel Vault, a large nonfungible token collection of superheroes. The company’s goal is to leverage NFTs and the intellectual property to tell stories about these crypto communities characters across television, movies and videos games. Pixel Vault owns 100% of the IP from PUNKS Comic and MetaHero franchises.
MAJR Take: This is really interesting. The NFT communities are high energy, highly engaged and in many cases NFTs represent the owners identity. If Pixel Vaults executes it would be akin to Marvel’s rise out of the comics and onto the big screen, only all NFT owners own the rights.
The Year Ahead In Crypto: Pantera Capital Letter to Investors
Our last two investor letters forecast a pop in the U.S government and mortgage bond bubble. The next mega-trade has just started.
Pantera Capital, veteran crypto investment firm is forecasting the next big trade and calling out the Federal Reserve and government manipulation in the bond and mortgage market. Financial reality is setting in for monetary and fiscal authorities and it starts in March. Founder and CEO of Pantera, Dan Morehead highlighted the following as big crypto trends in 2022. To say that he’s bullish on the space is an understatement, however in recent interviews he’s mentioned that we could be in a new bearish price cycle and should expect volatility.
Layer 2 solutions will be important for Ethereum to scale as adoption continues
Alternative layer 1 blockchains will compete with Ethereum like Near and Solana
NFTs will continue to be massive and haven’t even scratched the surface of the $1.7 trillion traditional art asset class
DAOs will mature as decentralized collectives for crowdfunding, capital allocation and shared cultural identity
More on Crypto
Hacker Steals $320 Million From Solana, Ethereum Bridge Wormhole
DeFi Technologies Subsidiary Gets Nod to List Solana ETP on Frankfurt Exchange
MACROFed's Hawkish Pivot May Not Last, Bitcoin Analysts Say
While the Fed’s hawkish tones have turned the market sour and the consensus trade is in for bearish price action moving forward, many crypto analysts are calling the Fed’s bluff. There’s already been so much turbulence in traditional markets based on the Fed’s rhetoric alone. Some analysts think the Fed will only be able to handle as much as a 20%-30% pull back in stocks before course correcting. Bank of America is predicting seven 0.25% rate hikes this year, while JPMorgan, Goldman and Deutsche forecast five and Morgan Stanley sees four. Powell tried to increase rates back in 2018, but the market turned on him and he was pressured into pivoting. There’s no doubt that Powell has left room for another pivot if he sets off a recession in stocks as the largest generation goes into retirement and the economy slows down.
MAJR Take: The consensus trade is tight monetary policy all year. We are of the opinion that the Fed will no doubt tighten and raise rates at least once in March and perhaps again in June, but officials want the market to correct first in hopes that the inflation worries will dissipate before ever actually having to seriously reign in policy.
Bank of England Enacts First Back-to-Back Rate Rises Since 2004
The BOE raised its key interest rate for the second consecutive time, lifting policy rate from 0.25% to 0.5%. They expect annual inflation to be above 7% within months due to low unemployment, rising wages and rising energy costs. Some BOE officials wanted to increase to 0.75%. They said they will slow their bond buying program and shrink their balance, no longer reinvesting their proceeds into the economy.
Brazil Central Bank Raises Benchmark Lending Rate to 10.75%
Brazil’s central bank raised its key interest rate to 10.75% from 9.25% on Wednesday, making it the the eight consecutive rate hike starting in March of last year. Their 12-month inflation rate may have peaked in November reaching 10.75%. Brazil’s GDP contracted in the second and third quarters of last year.
Turkish Inflation Climbs to Highest in 20 Years on Lira, Energy
Turkey’s inflation rate reached a new high in January driving by rising energy costs, food prices and a weak lira. Prices rose an annual 48.69% through last month, up from 36.08% in December. Monthly consumer inflation was 11.1%, while producer price inflation was 10.45%, bringing their annual inflation inflation to 93.53%. Energy costs rose 76.38% from 42.93% in December, while electricity prices were up as much as 130% in January. Annual food prices were up 55.61%.
More on Macro
Poor Nations Face $35 Billion Bill as Debt Restructuring Slips
Russia introduces export ban on ammonium nitrate for two months — government
Low Jobless Claims Reflect High Demand For Labor, Economists Say
Eurozone Inflation Rises to Fresh Record, Against Expectations
Facebook Owner Meta Set for $195 Billion Wipeout, Biggest in Market History
MEDIABitcoin and the Power Projection Game | The Jason Lowery Series | Episode 1 (WiM124)
Bitcoin and crypto adoption is here to stay. Don’t let your friends and family miss the opportunity of a lifetime. For more breaking news and updates, follow us on Twitter @majr_daoWe’ve moved some content behind the pay wall. Subscribe to receive all our research and analysis.This is not financial advice. Please do your own research. Investing in bitcoin and cryptocurrency comes with risk. The information presented in this newsletter is for information and entertainment purposes only.