THE WEEK IN REVIEW
with Jason Deane
It’s been a very noisy week in the press, but if you power through it all, you’ll find not a lot of actual substance has really happened.
Economically, however, there are a couple of things to note.
There was a surprise drop in reported UK inflation to 6.7% against the previous month of 6.8%. It’s a small drop, but most economists had actually been expecting a slight rise to around 7% due to underlying fuel prices. That significantly reduced the chances of yet another rate hike at the Thursday Bank Of England meeting, and, in fact, most of the committee did, in the end, vote to keep rates held at 5.25%
Personally, I think this was a wise move despite the concerns about rising wages and other factors. Interest rate rises are a very blunt instrument and take a very, very long time to feed through to all sectors, often a year or more. We’re probably at the point where the effects are just starting to be felt in earnest, so most of the pain, I suspect, is yet to come.
Meanwhile, while the world was distracted with Russel Brand’s alleged shenanigans, Rishi Sunak tried to put a positive spin on the green policy U-turn that may well have serious ramifications for us achieving certain climate change targets, in some cases by many years. This will almost certainly reduce the urgency of investment into the sector over time.
What I find interesting is the justification. Sunak is blaming the cost of living crisis – the one caused by excessive money printing and dubious policy by the government – as a reason to extend targets. It seems to me it may be more to do with the local election results in Uxbridge where his party managed to cling to power over one central issue – the ULEZ charge. Put simply, it’s a labour policy that wasn’t popular and what better way to grab a few votes than to extrapolate the same concept into a bigger approach?
Meanwhile, while we’re all arguing over traditional economics, the next generation of monetary power has been quietly making some inroads in terms of price and metrics. Price wise, Bitcoin visited $27,000 in a strong move, which then slowly deflated over the following days, leaving the period only very slightly up overall.
Yet, we’re still seeing hash rate reach new highs and this week’s difficulty adjustment was yet another new high with a 5.4842% increase. That number, by the way, can be a little deceiving. As the total network power increases to higher numbers, you need larger and larger additions to the network to get the same change in difficulty. 5% of hundred, for example, is only 5, 5% of 500 is 25. Deployment by miners on that basis isn’t just continuing, it’s accelerating.
Not only that, but the narrative around Bitcoin mining in the mainstream media is definitely starting to change. Even Bloomberg posted this article confirming that the industry now uses more than 50% renewable energy, with far more to come.
Surely, it’s only a matter of time before the divergence in these two lines begins to take effect?
We’ll see, but in the meantime, have a great weekend!
Yesterday’s Crypto AM Daily
In the Markets
The Bitcoin Economy
*Data can be found at https://terminal.bytetree.com/
🌅Total crypto market cap
🔵 $1.05 trillion
What Bitcoin did yesterday
🔺 Daily high $27,155
🔻 Daily low $26,382
Bitcoin market capitalisation
🟠 BTC $520.392 billion
🟡 Gold $12.854 trillion
💳 Visa $492.1 billion
🪣 Total spot trading volume $14.048 billion
FTSE/JSE Top 40
Fear and Greed Index
Bitcoin’s market dominance
Relative Strength Index (RSI)
Values of 70 or above indicate that an asset is becoming overbought and may be primed for a trend reversal or experience a correction in price, while 30 or below indicates an oversold or undervalued condition.
📣 What they said yesterday
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All feedback on Crypto AM Daily in association with Luno is welcome via email to James.Bowater@cityam.com 🙏🏻
Crypto AM: Editor’s picks
FCA’s new crypto advertising rules met with mixed industry response
ChatGPT urges crypto conference panel not to become over-reliant on AI
Mt. Gox customers will have to wait until November to recover lost Bitcoin funds
Sam Bankman-Fried: A tissue of lies soaked with fake tears?
Three-in-four wealth managers are gearing up for more cryptocurrency exposure
Crypto.com granted FCA licence to operate in UK
Q&A with Duncan Coutts, Principal Technical Architect at IO Global
Jamie Bartlett – on the trail of the missing ‘Cryptoqueen’
MPs are falling silent over potential of cryptocurrency
Erica’s ‘Crypto Wars’ handed honours in Business Book Awards
Crypto AM: Features
Crypto AM: Founders Series
Crypto AM: Industry Voices
Crypto AM: Contributors
Crypto AM: In Conversation with James Bowater
Crypto AM: Tomorrow’s Money with Gavin S Brown
Crypto AM: Mixing in the Metaverse with Dr Chris Kacher
Crypto AM: Visions of the Future, Past & Present with Alex Lightman
Crypto AM: Tiptoe through the Crypto with Monty Munford
Crypto AM: Taking a Byte out of Digital Assets with Jonny Fry
Crypto on the catwalk
Crypto AM: Events
It’s definitely tempting to get swept up in the excitement, but please heed these words of caution: Do your own research, only invest what you can afford, and make good decisions. The indicators contained in this article will hopefully help in this. Remember though, the content of this article is for information purposes only and is not investment advice or any form of recommendation or invitation. City AM, Crypto AM and Luno always advise you to obtain your own independent financial advice before investing or trading in cryptocurrency.