1/ Mr #Zoltan speaks..

And now I have the urge to prove his Bretton Woods III theory is right in the most crypto degen way possible.

Shall we?

(insert obligatory thread of yarn and point down emoji here)

(and coffee cup for espresso branding purposes)

let's go 2/ So, this Zoltan guy. He's pretty smart.

Ran interest rate strategy at Credit Suisse. Spent time at NY Fed Reserve. And was made famous for his deep dive into shadow banking and predicting QE.

He's Wall Street's Bono. He writes or speaks, finance nerds get weak in the knees

1/ With all the talk about the FED, debt, and money...

Do you know the story of how government paper fiat money began?

It was 1690, and America looked like this.. 2/ At the time, the Providence of Massachusetts Bay acted like pirates.

They would frequently sail to the French colony in Quebec and steal.

To pay for their services, the "pirates" were paid from the pile of stolen loot. Think of it like organized crime.

To diagnose a problem, you first need to label it.

In August 2022, the Federal Reserve did just that.

They called it, Liquidity Dependence.

Our financial system is an addict.. And it's creating what can be described as a double-bounce effect for asset prices.

Let me explain.. 2/ The double bounce. You know it.

As a child it helped you defy gravity while jumping on a trampoline with your friend.

For financial markets, its happening thanks to money supply and U.S. dollar strength.

1/ The VDay CPI print is tomorrow.

In the six days leading up to this day of romance, the market has been anything but loving. BTC, ETH down 7, 11%.

Is this a new trend forming? Are new lows coming? And what does CPI mean here?

Let's dive into the metrics to find out.. 2/ $BTC is hitting overbought levels when it comes to its 30-day returns.

When this figure hits 40-50%, bullish rallies tend to pause for this to 'reset'.

Market shifting past few days. Note the analysts saying inflation seems to be hotter than expected.

Recent downtrend last week on this chart hints at the market starting to believe JPow now

https://twitter.com/MrBenLilly/status/1620884770963222528

2/ Here is another way to visualize this market shift of late

https://twitter.com/M_McDonough/status/1625126649153961987?s=20&t=-8-WFVsFtr3M0BdBxsL8IA

1/ JPow won.

Inflation is cooling, based on the latest CPI reading.

But we're not convinced the problem's been solved.🤨

The chart below is the main reason.

We'll unpack it some more in the 🧵 below. 2/ It’s no secret that inflation got out of control the past few years.

In June 2022:

-Gas was up 60% YoY.

-Eggs were up 33%.

-Chicken was up 18.6%.

This was wrecking havoc on the ordinary American’s wallet. So JPow and the Fed decided they had to act.

1/ In 2023 we will have a first row seat to Jerome Powell's master class..

On normalizing a yield curve.

He's almost done with the first stage, and in 2023 will begin the second stage.

But first, what is the first stage? 2/ If you look at the curve today, (pause for dramatic effect)

... it is not normal.

Treasuries are loans to the gov't.

You give the U.S. govt money for 30 years, they give you 3.9% each year on your money.

Lend for 6-months, you get 4.7%. Which do you pick?

1/ Welcome to the biggest ponzi game of 2021.

A game that let SBF build an empire on what can be described as FDV - Faulty Designed Valuations.

He used it to borrow billions of capital in order to gain political and media influence.

Let's take a look into this methods.. 2/ Sam issued tokens under the guise of decentralization.

What we see is that his game was maximum control. There was an effort to muddle up the allocations to give FTX and Alameda as many tokens as possible.

Let's start with his prized FTT token.

1/ Ponzis just revealed something the cryptocurrency market is overlooking.

And it is likely to create a massive supply shock for a major token economy.

Here's a thread on what that something is.. (h/t to @senyor_kodama on the insight) 2/ Last week the team at Jarvis Labs noticed the # of TXs on Ethereum were skewed.

Amount of ERC20 transfers were becoming an outlier. You can see that on the right-hand side here as TX count more than doubled.

1/ While Gensler throws a temper tantrum and the White House is publishing 'kicking the can down the road' commentary, there is a bill (below) flying below the radar that might be a regarded as...

Crypto's 0 to 1 moment.

Why?
congress.gov/bill/117th-con… 2/ Five cosponsors (3 Republican, 2 Democrat) gives the bill bipartisan agreement.

The House of Reps have the same bill moving through its process. This typically gets done when a popular bill has legs and looks to find common language.
congress.gov/bill/117th-con…

1/ Which trading session is leading the charge..

The New York trading session (green) has dictated larger trends of late. But over the last week..

It's going sideways as Europe trading hours (red) have shown gains. This divergence is on the right-hand side of the chart. 2/ We saw this divergence play out earlier this month as the market made its last run up to the highest price in two months. That's the two lines in the middle of the chart.

1/10 The Fear and Greed index is not just for CNBC and retail.

It has some of the best risk-adjusted returns in crypto. Making it one of the easiest trade strategies to add to your arsenal.

Below we dive into the alpha... 2/ Fear and Greed (F&G) Index is measured between 1 and 100. 1 is extreme fear while 100 is greed.

We arrive at this single value by distilling volatility, market momentum, social media, surveys, dominance, and trends into one data point.

1/ The FED did a 50bps hike and markets rallied as Powell gave the market forward guidance on hikes.

But the question here is...

Can this rally for crypto continue? Here's what we see at @Jarvis_Labs_LLC 2/ Over the last month the probability of 50bps hike rose from 69% to nearly 100% as of the morning of the announcement. Market progressed to a more hawkish/bearish stance over this stretch. Indexes and bitcoin traded lower over this period.

Bar graph below is from a month ago.

Things are not a coincidence.. Infura and MM a part of JPMorgan. If true, most native cryptos now use wall street banking infrastructure.

coindesk.com/business/2022/…

https://twitter.com/MrBenLilly/status/1499450288373121029

2/ JP Morgan owns ethereum infrastructure. Has an ethereum compatible JPM Coin that can act as a settlement currency for sovereign currency swaps. It has a 400+ member bank settlement network. They also have one of the largest blockchain teams in the world.

1/ Interesting setup into the holidays - a time associated w/ lower volume/liquidity.

SP500 looks to be making a break out of its range to the upside.

Meanwhile… 2/ Bitcoin dominance is retesting its support.

If the support breaks we should see some hot activity in alts.

tradingview.com/x/1Hera3W2

0/17 Quick thread on HODL Waves.

What are they? And why you should and should not care about them.
🧵👇 1/17 HODL waves help you visualize when new cohorts or a new wave of investors enter bitcoin. New cohorts tend to happen when euphoria sets in.

These red dots resemble when the bands are at their widest point, which reflects the new cohort.

0/9 🧵 The history of Ethereum upgrades in terms of ETH's price.

Significant given the upcoming London upgrade.

Read 👇 to see what this might mean in the coming weeks. 1/9 Tangerine Whistle.

It happened on October 18, 2016. ETH’s price at the time was $12.5.

The result for price was a net negative in the 30, 60, and 90 days that followed. It broke even after 120 days.

0/JPM Coin

This thread is to track progress of JP Morgan’s JPM Coin, which is being pushed by their 100+ in-house blockchain unit called Onyx. They are developing their Liink Network which has 400+ member banks and several CBDCs using it at various capacities. 1/JPM Coin

This coin has been mentioned in the World Economic Forum toolkit next to SWIFT for cross border settlements.

Liink network is built using Quorum blockchain, which is a permissioned version of Ethereum.

1/4
Give us (me and the @Jarvis_Labs_LLC team) your best conspiracy theory with this as the title...

"How BlockFi killed the market"

Go ✍️ 2/4
SEC filings:

Oct: sec.gov/Archives/edgar…
Dec: sec.gov/Archives/edgar…
June: sec.gov/Archives/edgar…

0/SoA: Decided to finally take a moment and break down a few stories to follow over the coming months as they are likely to shape the industry.

This 🧵is to help keep the stories from this essay organized for subscribers and myself:
jarvislabs.substack.com/p/state-of-aff… 1/SoA: Note I'll use an indexing system - that probably makes zero sense - based on the article's themes to keep it organized. Let's see if it works.

x/SoA - General comments on State of Affairs 🧵
x/Global
x/Nations - I'll mention country
x/CBDC - eYuan, US
x/Tether
x/Binance

0/14 Pareidolia - the tendency for one's perception to impose a meaningful interpretation on a stimulus to see a pattern where in fact there is none. In trading we call it bias.

Many crypto traders are forming one right now. Here's what I mean. 🧵👇

(charts🙏 @cryptoquant_com) 1/14
Many might remember the chart below from our last issue, When to Strike: jarvislabs.substack.com/p/when-to-stri…

It shows onchain support/resistances near $50k and $35k.

We are now in the green band.