Stay ConnectedFed Watch is a weekly podcast with Bitcoin Magazine’s Podcast Editor CK and Historian/Economist Ansel Lindner of Bitcoinand Markets.com.
Ck and Ansel interview the best analysts, traders, and thinks in both Macro economics and Bitcoin as well as give the audience their takes of important news and press conferences in the macro space.
This is the perfect podcast to learn about and stay on top of Bitcoin, Macro Economics, and the world at large.
In this episode of Bitcoin Magazine’s Fed Watch podcast, CK and I continue our monthly series with Dylan LeClair, author of the Deep Dive report. We had the opportunity to go over the metrics in the bitcoin market that he is watching and is an expert in. They have a free version of the report that comes out daily, and an exclusive paid version monthly and yearly. Follow along with his slide deck here.
Fed Watch is a podcast for people interested in central bank current events. Bitcoin will consume central banks one day, understanding and documenting how that is happening is what we are about here at Fed Watch.
The first topic we cover in this episode and the first topic from the January issue of the Deep Dive is bitcoin’s correlation to stocks and the volatility measure, the VIX. Dylan describes why this correlation has appeared over the last year and what it can tell us about the health of the bitcoin market.
One of the bigger topics we talk about with Dylan is Grayscale and the effect this market behemoth has on the bitcoin price.
LeClair walked us through this product and its effect on the market. We talked about major institutions, AKA market makers, that could have been caught on the wrong side of this trade, as the large price premium that was facilitating “risk free” arbitrage suddenly changed to a discount.
Bitcoin On-Chain Analysis of Liquid Circulating Supply
As the name suggests, the Deep Dive is an in-depth report, going into very specific metrics about the bitcoin network. One of those is, what I interpret as, the liquidity of circulating supply and its correlation to price. As you can see in the chart above, the shaped areas represent coins that have moved within a 3-month period. It is related to velocity, but where velocity is concerned with the number of transactions, liquidity of circulating supply is a percent of the total supply that has moved at least once.
The percentage of supply that becomes liquid begins to ramp up as the price approaches peaks, and resets lower as price consolidates. The pattern is emerging of lower top-level circulating supply and lower lows. That makes sense if we think in terms of purchasing power at the tops and bottoms. In other words, each peak is a lower number of satoshis but a higher level of purchasing power, since the price is significantly higher. And vice versa, the lows are a lower number of satoshis but a higher level of purchasing power.
If bitcoin is going to continue appreciating in value, we would expect that exact pattern to continue. As new entrants come into the market they will find fewer satoshis to buy, even in times of FOMO.
The next part of our discussion blew me away. Dylan brought the rise of stablecoins like
In this episode of Bitcoin Magazine’s Fed Watch podcast, CK and I had the opportunity to sit down and have an epic conversation with Log Scale of twitter, and host of The Bitcoin Spot series of Twitter Spaces, and new YouTube channel. This episode is a big white pill for those down about the recent price dip and who think of the US as an evil empire. We get into many aspects of institutional client money coming into bitcoin this year, and why the US is likely to be one of the most friendly bitcoin jurisdictions in the future.
Fed Watch is a podcast for people interested in central bank current events. Bitcoin will consume central banks one day, understanding and documenting how that is happening is what we are about here at Fed Watch.
Log Scale had a very interesting Twitter thread several weeks ago. The first part of this episode is him laying out the arguments he made there. Corporate treasuries diversifying into bitcoin has been a major source of optimism in bitcoin over the last year or two, but Log says they are only 2% of all investable wealth in the world. Signs are starting to shift toward the other $500 trillion are looking at bitcoin, too.
You can find estimates for total investable wealth from several sources. Log cites Credit Suisse in this episode and McKinsey in his tweet thread. Both have a multi-hundred trillion dollar estimate.
Of course, every dollar that is used to buy bitcoin is not going to have a 1:1 effect on the bitcoin market cap. The multiplier is not a steady variable, the Bank of America has estimated it at 107x, but in his conservative valuation model, Log uses 3x. Now, what his model needs is an estimate for the amount of money that will come into bitcoin.
For this he draws from the very well-respected Ric Edelman’s 2022 predictions for bitcoin. He is “Edelman, one of the most prominent thought leaders in the investment advisory field and founder of Edelman Financial Engines.” Nearly all of his 2021 predictions proved correct, and this year he has some big ones. He says that by the end of the year, 1) 1/3rd of Americans will own bitcoin, and 2) financial advisors will be recommending between 3-5% allocation to bitcoin.
With those numbers, Log’s valuation model is just a matter of plugging in the numbers, yielding a result that the bitcoin market cap could increase by $11 trillion this year.
The next part of the podcast might be controversial. We spend some time discussing Gary Gensler and possible reasons behind his appointment as Chairman of th
In this episode of Bitcoin Magazine’s Fed Watch, CK and I catch up on the Freedom Convoy donation situation, dissect Jon Stewart’s wake up call with James Hoenig, former Fed President, Fed signaling around CPI and the emergency FOMC meeting, and lastly the scandal that is brewing around Sarah Bloom Raskin’s nomination being delayed. This is a longer episode where we just let the conversation go where it wants to.
Fed Watch is a podcast for people interested in central bank current events. Bitcoin will consume central banks one day, understanding and documenting how that is happening, is what we are about here at Fed Watch.
The donation drama around GoFundMe and GiveSendGo has now spilled over to the Bitcoin fundraiser on Tallycoin. As a quick update, GiveSendGo refused to comply with the Canadian court order to freeze the Freedom Convoy funds, however, when they distributed some of the funds to Canadian bank accounts, the funds to the peaceful protestors were frozen on the bank's side. This highlights the multiple layers of censorship that the legacy financial system has, and the need for bitcoin.
The honkhonkhodl fundraiser is also running into a few hiccups due to the illegal invocation of the Emergency Act in Canada. The fundraiser had to be stopped because the public faces of the campaign could become targets of the out of control Gestapo government up there.
Overall, the Tallycoin fundraiser was a great success and the community learned some very important lessons. The keys to the bitcoin have now been distributed and sending of the funds to the protestors has started.
There was also a hack of the GiveSendGo campaign which doxxed 90,000 donors, the amounts they donated, and other personal information. It showed that roughly 45% of the funds came from Americans, not Canadians. This opened the door for dishonest rhetoric from the government calling it “foreign funding” of an insurrection, instead of just Americans and Canadians coming together for freedom. This rhetoric fits into the mold of the “Russia hoax” and is a sign of a government that has totally abandoned its duty to serve the people.
On the show, we watch a clip of former Kansas City Fed President, James Hoenig, trying to explain money printing to Jon Stewart. It’s absolutely hilarious to watch Stewart being red pilled on the financial system in real time.
I believe that Hoenig is attempting to explain it all in good faith, but makes a couple mistakes. 1) he says the Fed is the only source of money printing. That is empirically false and misleading, because commercial banks are the source of money printing when they make loans. The Fed only prints reserves, an illiquid asset. 2) Hoenig says that bitcoin is faith-based like the dollar. Instead, bitcoin is not faith-based debt like the dollar, it is a real form of commodity-backed money.
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In this episode of Bitcoin Magazine’s Fed Watch, we get an update on the European Central Bank (ECB), use a candy to make the Bank of Japan interesting, and we talk about recent troubles with BlockFi and bitcoin lending.
Fed Watch is a podcast for people interested in central bank current events. Bitcoin will consume central banks one day, understanding and documenting how that is happening, that’s where this show lives.
European inflation numbers for January 2022 came out this week, and set another Euro-era record at 5.1%, up from 5.0% in December. This consumer price increase of 5.1% must be in context of the worst energy and supply chain crisis in two generations.
The price of natural gas and electricity have exploded in Europe, which has a trickle down effect on most prices in the economy. These price increases are not a direct side-effect of money printing, they are a direct effect of the pandemic response of nearly shutting down the global economy for two years.
We attempted to play the below 2 minute clip of President Lagarde speaking about inflation, but the audio on the livestream wasn’t set up properly. You can also find the full length press conference here.
> https://youtu.be/f8MQ_Cn2Uck
I spent some time on the podcast comparing the highly produced press conference style of the ECB to that of the Federal Reserve. LaGarde appears to have a checklist of special interest groups that she must mention and placate. It strikes me as a political process, where Jerome Powell strikes me as much more concerned about the economics.
It is a central part of the Federal Reserve to stay fiercely independent from politics, as seen in the Raskin interview in front of the Senate Banking Committee. Her progressive views were on trial, and they wanted to make sure she wouldn’t be bringing her politics to a job at the Fed. The European Central Bank, on the other hand, conflates politics as part of their mandate.
In the press conference, LaGarde said they’d let their QE programs run their course and finish up in late-March to early-April. That was not surprising. However, what did surprise the market was the fact that LaGarde would not repeat her statement from December’s press conference where she said the ECB would not raise rates in 2022.
The reason the market didn’t like this seemingly small detail is because it makes the ECB appear capricious. Compared to Powell, where he made his pivot and doubled down on it later, LaGarde does not give the sense of being confident in her opinions or evaluation of the economy. I attribute this to the overly politicized ECB, by the way. They are unable to focus on a clear mandate, becaus
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In this episode of Bitcoin Magazine’s Fed Watch, we have a Twitter Spaces recording of an event that took place in January of this year. The topic is inflation vs deflation, but turns into an introduction to the debate, instead of the debate itself. It is great for anyone to get started trying to understand the deflationary side of the credit bubble.
In the second half of the call we do get more into the details. The how and why of CPI, US Treasuries, interest rates, yield curves, it’s all in there.
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Written by Ansel Lindner
Economist, bitcoin specialist, and author of the Bitcoin Dictionary and the free weekly Bitcoin Fundamentals Report. Find more from Ansel at the bitcoinandmarkets.com
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In this episode of Bitcoin Magazine’s “Fed Watch'', I fly solo without Christian, but get to interact with the livestream fellas at Bitcoin Magazine, Q and Alex, and answer some questions from the live audience.
Topics for this episode were the new nominees for the Federal Reserve Board, the Arizona bill to make bitcoin legal tender, Evergrande and China, and finally the IMF forecast for GDP in 2022.
This month Biden announced his nominees to replace Rosengren, Kaplan and Quarles at the Federal Reserve, three board members who stepped down in 2021. Of most note was the nomination of Sarah Bloom Raskin to fill Quarles’ Vice Chair seat, and his role as Head of Supervision.
This is a controversial nomination, because Raskin is a radical progressive. She served at the Fed previously during the Obama administration, so is no stranger to the Fed. She is a big supporter of using Fed policies and powers over banking regulations to promote a progressive political agenda, like climate initiatives.
Raskin also draws a hard line on bitcoin and private sector digital alternatives to the USD. She favors the unrestrained use of Fed regulatory powers to control bitcoin and other innovation in the currency space. As for Central Bank Digital Currencies, it is safe to say that she’d agree with those other progressive central bankers like Christine LaGarde, who want to pursue a CBDC.
In our coverage of the Arizona bill to make bitcoin legal tender, I recap the situation and put it in context of GDP size. The Arizona GDP is $375 billion where the El Salvador GDP is $25 billion.
As for the legal issues, it is plainly unconstitutional, because the States are not allowed to make anything other than gold and silver legal tender. In an interesting turn, would the federal government actually pursue Arizona in this case since the current USD does not fit the definition either?
We’ll have to wait and see how this turns out. What we can say now is that it is a big win already for bitcoin in shifting the Overton Window to include this debate.
Long time listeners of Fed Watch will know we talk about China a lot. In this episode, I give a quick update on things happening right now in regards to the communists, Evergrande, and real estate in general.
This month, State Owned Enterprises (SOE) were exempted from the 3-red lines in a de facto, slow motion nationalization of the real estate market in China. This is a big change in how the real estate industry in China is structured, and marks the end of growth in my opinion.
Another development we cover is the gigantic secondary market o
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In this episode of Bitcoin Magazine’s “Fed Watch'' podcast, Christian Keroles and I sit down with Jeff Snider, Head of Global Investment Research at Alhambra Investments and premier Eurodollar expert, for a conversation about the current and changing state of the global financial system.
We cover LIBOR and SOFR, the Federal Reserve hawkish pivot, what we can learn from yield curves, and of course, bitcoin.
Deep in the heart of the Eurodollar system was the London Interbank Offer Rate, known as LIBOR. It was the rate that banks charged each other to borrow money. Since it acted as a Fed Funds rate of sorts for the international Eurodollar system, it was the rate at which informed all the other rates above it.
For years, the Federal Reserve and other central banks had been trying to get rid of LIBOR and it seems they might have done it this time. In 2022, “financial firms using LIBOR face legal, operational, credit, regulatory, and reputational risk,” according to a Congressional Research Service (CRS) document published on Dec 15, 2021.
Jeff's comments were insightful around why it had taken so long to move away from LIBOR and that the transition will take until at least June 2023 when the last futures contracts using LIBOR expire.
The replacement offered by the Federal Reserve is the Secured Overnight Financing Rate (SOFR), while private firms like Bloomberg are also offering alternatives. There is no clear winner at this time, and it might be that there isn’t one for a prolonged period of time.
LIBOR was an emergent market phenomenon that allowed Eurodollars contracts to eat the financial world. From the above document, in 2020, LIBOR was referenced in $223 trillion worth of contracts. That’s a lot of unwinding, and Jeff mentioned that in stopping the market from using LIBOR, regulators opened up much more systemic risk and uncertainty.
For my part, I think this a fantastic opportunity to observe how the system adapts to a fundamental change. One day, it will have to happen when they adopt bitcoin, so this experiment is one where we can get some data.
I couldn’t let Jeff come on the show and not ask him what his thoughts are on the recent Jerome Powell flip-flopping. His response centered around the Fed being worried that the confusion and discontent over the world “transitory” was going to filter through to longer run consumer and business inflation expectations. That’s what the Fed has wanted since the Great Financial Crisis (GFC), but now they are worried inflation expectations will become too high.
Jeff points out that inflation and growth expectations have actually been falling as the Fed has been pivoting hawkish (not after!). The 5y 5y forward is falling below 2% and the IMF has released their January updated GDP estimates for 2022, three months after their previous estimate, cutting US growth by 1.2% to
This episode is dedicated to the Tongan recovery. Follow @LordFusitua on twitter for updates. You can find a donation link here.
In this episode of Bitcoin Magazine’s “Fed Watch'' podcast, Christian Keroles and I sat down with Dylan LeClair to talk about all Federal Reserve news, rate hikes, balance sheet normalization (QT), US government austerity, and world news. Dylan is the Head of Market Research for Bitcoin Magazine and produces the Deep Dive, a series of daily, monthly, and yearly newsletter updates on the bitcoin market. We loved getting his take on many of the central bank topics we talk about on the show.
Follow CK_snarks or myself on Twitter at our links above to get notified on Tuesday before we go live, or mark your calendars for 2pm Eastern on Tuesdays.
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We jump right into the FOMC minutes from December, which we wanted to cover on last week’s show, but YouTube had other plans. Analysts expected to read about the accelerated taper and even the beginning of rate hikes in 2022. What they got was a big hawkish surprise.
Not only did the Federal Reserve Board talk about those things, they said it might be necessary to accelerate rate hikes and begin balance sheet normalization. That’s central-bank-speak for Quantitative Tightening (QT), the opposite of QE. That took the market by surprise sparking a mild sell-off in risk assets and even a slight jump in Treasury bond rates.
From the FOMC minutes:
“Participants generally noted that, given their individual outlooks for the economy, the labor market, and inflation, it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated.
“Some participants also noted that it could be appropriate to begin to reduce the size of the Federal Reserve’s balance sheet relatively soon after beginning to raise the federal funds rate.”
In 2018 - 2019, Jerome Powell also presided over a major pivot in monetary policy, at that time from tightening to easing. Now, in Powell Pivot #2, he is rapidly moving from easy monetary policy to tightening, even faster than in 2019.
In a speech, President Biden was speaking about the solution to the rising price of cars. “Either you increase supply by making more of them, or you decrease demand by making Americans poorer.” The administration has set itself up as trying to do the former, with thei
In this episode of Bitcoin Magazine’s “Fed Watch'' podcast, Christian Keroles and Ansel Lindner record LIVE on their YouTube channel as part of their nearly daily livestream. During these shows, Alex McShane hosts a multi-hour collection of content producers live recording and community events like contests and raffles. Follow CK or myself on Twitter or Gettr to get notified on Tuesday before we go live, or mark your calendars for 2pm Eastern on Tuesdays.
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This week we review 2021 as major trends and news items and then dive into predictions for 2022 trends.
In this episode of Bitcoin Magazine’s “Fed Watch'' podcast, I go over European energy charts and talk about the broader macro landscape in Europe. Once again, this was recorded LIVE on the Bitcoin Magazine YouTube channel. If you’d like to watch live, subscribe there and follow us on Twitter to get updates of times we will be on. As we get a hang of Livestreaming the show, we will be able to answer live questions from the chat for audience interaction.
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