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CCM Blockchain Newsletter (June 17, 2024)

The Federal Reserve is signaling at least one rate cut in 2024.

17 Jun 2024 — 2 min read

Please see this week’s BTC mining market data attached at the bottom of this post.

Macro Market Update

Last week, the June FOMC meeting and U.S. inflation data took center stage, bringing some encouraging news for market bulls
The inflation data was lower than anticipated, with the headline CPI inflation for May at 3.3% year-over-year, below both forecasts and April’s 3.4%
This was a welcome relief after a series of higher-than-expected inflation readings in the first three months of the year
As predicted, the Federal Reserve maintained interest rates at 5.25% - 5.5% during its June meeting
The Fed’s revised projections now suggest one rate cut in 2024, a decrease from the three rate cuts forecasted in March
However, the Fed still expects the fed funds rate to reach 3.1% by 2026, consistent with its March projections
Overall, despite the adjusted pace of rate cuts, the Fed’s long-term outlook remains unchanged: interest rates are likely to moderate over the next two to three years.

The US Dollar share of the world’s central banks reserves fell to 58.4% in Q4 2023 from 59.2% in Q3 2023, according to the IMF
To put into perspective, the US Dollar accounted to 71% of reserves in the year 2000
Still, the US Dollar remains the dominant currency (source: The Kobeissi Letter)

Earnings Transcripts Hint at Job Cots

Research from Morgan Stanley shows that mentions of “operational efficiency” (i.e., job cuts) are at the highest level since 2005
This further supports the ISM data from last week’s note suggesting weakness in the labor market

Over the last few weeks a lot of people have been raising an eyebrow to the fact that BTC ETF inflows have been material yet the price of BTC has remained steady
There is nothing nefarious going on - traders have been taking advantage of the basis trade in BTC spot ETF and futures
Traders are currently going long ETF (proxy for spot BTC) and selling futures while enjoying the positive basis between BTC and its futures

Deutsche Telekom’s plans and Web3 expansion follow its recently established position as a validator on Fetch.ai’s decentralized blockchain
The firm has been operating a Bitcoin node since 2023 and is currently running Bitcoin Lightning Network nodes
They have been actively involved in Web3 as a Polygon validator since June 2023, establishing its position to leverage its extensive infrastructure and secure new revenue streams