Connecting the Dots
Episode 134 - The End of the Summer Lull
Welcome to the new subscribers that have joined us over the last week. The aim of this newsletter is to help you navigate the world of crypto. There’s an incredible amount of information out there so we try to distil it into the things you MUST know each week, covering both macro and crypto.
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Onto the newsletter. Here’s what you’re getting this week:
Macro Update: Our latest view on the macro and its impact on crypto markets.
Crypto Native News: Standard Chartered say ETH treasuries a better investment than ETF’s, Ripple buys Rail, Satsuma Technologies raises $163m from a secured convertible note.
Institutional Corner: Marex becomes the “first clearing firm” to use JPMorgan's Kinexys blockchain, Standard Chartered and Animoca form a new joint venture.
Charts of the Week: Hyperliquid with record volume in July, Crypto realised vol falling.
Top Jobs in Crypto: Featuring Citi, Grant Thornton, Ledger, Fireblocks, Binance, Crypto.com, Block Scholes and Gemini.
Macro Update
This is where we connect the dots between macro and crypto.
The End of the Summer Lull
US equities fully reversed last week’s sell off, with the Nasdaq leading the way and closing the week at yet another record high 💪
We outlined last week the powerful macro drivers that we expect will keep this bull market pushing to ever new highs and despite many of the large Wall Street banks calling for a major market pull back, we see nothing to materially interrupt the trend higher. As a reminder, those drivers are: 👇
Rising global liquidity ✅
Global rate cutting cycle ✅
Lagged pass through from a weak dollar ✅
US fiscal dominance and rising deficits ✅
“Treasury QE” and artificially suppressed yields ✅
Tariff and geopolitical fears fading into the background ✅
Contrary to the suits on Wall Street, we think these trends can accelerate, particularly in crypto as the positive lagged impact of a weaker dollar continues to flow through over the next few months. Indeed, after recovering through much of July, the dollar looks once again to be back in the down trend, continuing to provide a nice tailwind to risk.
Global rate cuts…
Maintaining the “global rate cutting” trend, the Bank of England this week cut rates 25bps to 4% on concerns of a weakening labour market, despite inflation expected to hit a 2 year high of 4% in September and warning of stronger price increases to come. Governor Bailey further reiterated that “interest rates are still on a downward path, but any future rate cuts will need to be made gradually and carefully.”
Central banks we feel have quietly accepted higher levels of inflation, even if officially the target remains at 2%. Indeed, with debt levels spiralling exponentially (in the UK, Labour’s so called inherited “black hole” in the finances of £22bn has now, quite predictably following Labour's disaster budget, grown to £51bn over the past year) higher inflation to inflate away the debt is likely welcomed. They just can’t say that out loud.
To that point, the toxic risk mix of “stagflation” reared its head in the US this week, with the Services ISM coming in below consensus, barely in expansion territory at 50.1 with new orders and employment declining in July. Meanwhile, prices rose to 69.9% in the index, the highest level since October 2022. Whilst that threatened to dent risk (as a reminder, stagflation fears are the most toxic risk scenario as markets fear the Fed and other central banks will be unable to respond to a slowing economy with rate cuts due to the inflation constraint) comments from several Fed members in the week suggesting rate cuts will be required in the coming months “if the labour market slows any further and inflation remains relatively subdued” has seen markets price a 90% chance of a Fed rate cut at its next meeting in September.
Trump’s appointment of Stephen Miran, the current chair of the White House’s Council of Economic Advisors, to temporarily fill a vacancy on the Fed’s Board of Governors, reinforced expectations of looser monetary policy as Trump Fed picks support the administration's desire for lower rates.
Consequently, with central banks caught somewhat between a rock and a hard place as they trade off higher inflation with slowing growth and employment, difficult choices have to be made and ultimately, they will always choose growth and employment, accepting (wanting?) higher inflation. Fiat currency is the escape valve and will continue to debase against hard assets such as gold and Bitcoin.
All that glitters…
Speaking of gold, Trump this week announced new tariffs of 39% on 1kg and 100oz gold bars from Switzerland, sending gold futures to intra-day record highs. Some are speculating that this move could be part of a plan to revalue the country’s gold reserves and use that to fund a Bitcoin reserve in a “budget neutral” fashion. It could also be used as a way to pay down some of America’s spiralling debt. QE with American characteristics!
Whilst we are a little sceptical on these ulterior motives, Trump tariffs on gold are a reminder of why Bitcoin as “digital gold” is a better store of capital given its borderless, non sovereign qualities which means it can’t be tariffed. Gold needs to move via third parties and borders which means it can be subject to tariffs. Whilst this will have a positive impact on gold price short term, it will also help accelerate the rotation out of gold towards Bitcoin.
The positive narrative for Bitcoin and crypto also continues under this new administration and this week, Trump signed an executive order to clear the way for 401k’s to be invested in crypto. That’s over $12trn of potential capital to be tapped and flow into crypto 🤯
With the month-end rebalancing seemingly done, reflected in renewed inflows back into the Bitcoin and Ethereum ETF’s over the past few days and with broad risk markets set to defy calls for seasonal weakness, this consolidation for Bitcoin looks to be over.
Ethereum in particular, is set to lead the next leg higher given its relative underpositioning at a time when demand is ramping up with the introduction of ETH treasuries. That will bode well for the broader crypto space. It's quite amazing to think that ETH is yet to reclaim its 2021 all time highs, despite the 180 shift in the US regulatory environment towards crypto. With the break above $4,000 it feels the move towards those record highs has begun.
The summer lull for crypto is over 🚀
Native News
Key news from the crypto native space this week.
An interesting report from Standard Chartered this week suggested that Buying shares in Ethereum treasuries is a better investment than buying ETH exchange-traded funds. Head of Digital Assets Research Geoffrey Kendrick said that treasuries are offering shareholders better value for money as the net asset value—the per share valuation of the asset in an ETF—is increasing compared to ETFs. Kendrick wrote “This normalisation of the net asset value multiple makes the treasury companies now very investable for investors seeking access to ETH price appreciation, increasing ETH per share (SBET uses an ETH concentration measure which is increasing) and access to staking rewards. Given NAV multiples are currently just above 1 I see the ETH treasury companies as a better asset to buy than the US spot ETH ETFs."
Ripple announced on Thursday that it will buy stablecoin payments platform Rail for $200m. The acquisition - which will close in the fourth quarter of this year pending regulatory approvals - will enable Ripple and Rail to "deliver the most comprehensive stablecoin payments solution available in the market,” the company said. Toronto-based Rail, backed by Galaxy Ventures and Accomplice, uses stablecoins to deploy cross-border payments. It says its transactions are cheaper and can clear in just hours, compared to longer settlement times for fiat payments. Rail says on its website that the company is responsible for 10% of all global stablecoin-based payment activity.
UK-listed bitcoin treasury company and decentralised AI firm Satsuma Technology announced Wednesday it has raised gross proceeds of £163.6 million ($217.6 million) from a secured convertible note round led by ParaFi Capital. According to a statement Pantera Capital, DCG, Kraken, Arrington Capital, Opportunity Fund, and Borderless Capital also participated, among others, including several institutional equity investment funds based in London. The loan notes will convert into ordinary shares at £0.01 each, once shareholders approve the required resolutions and a prospectus is published. Satsuma said it will use the funds to expand operations, retain at least three months' working capital in cash, and allocate the rest to its bitcoin treasury held by its Singapore subsidiary, Satsuma Pte. Read the full statement HERE.
Institutional Corner
Top stories from the big institutions
This week, Marex become the “first clearing firm” to use JPMorgan's Kinexys blockchain platform for client settlements, settling payments with hedge fund Brevan Howard Digital. The statement noted that Kinexys allows Marex and Brevan Howard Digital to "settle payments instantly, reducing settlement risk, time and cost, while maintaining the same security levels as traditional payment settlement rails. The platform enables counterparties to facilitate instant, programmable settlements in near real-time using blockchain deposit accounts. Unlike public blockchains, Kinexys operates on a permissioned ledger, allowing only approved participants to validate transactions and access network data. Read the full statement from Marex HERE.
Standard Chartered and Animoca Brands have formed a new joint venture, Anchorpoint, to pursue a license for issuing stablecoins under Hong Kong's newly minted digital asset regime. The venture has informed the Hong Kong Monetary Authority (HKMA) of its intent to apply for a license under the city's fiat-referenced stablecoin framework, which officially came into effect on 1 August. Mary Huen, Chief Executive Officer for Hong Kong and Greater China and North Asia at Standard Chartered said "We believe stablecoins will play an important role in building a sustainable digital asset ecosystem in Hong Kong and are dedicated to playing a role in supporting Hong Kong as an international financial centre and digital assets hub."
Charts of the Week
Because charts are just as important as macro.
Hyperliquid recorded its highest ever volume in July.
Realised volatility in crypto majors has been falling in recent months.
Top Jobs in Crypto
Well, we all want to work in Crypto don’t we. Here’s a bit of help on your job search!
Digital Assets Product Manager at Citi
Digital Asset Recovery Team Manager at Grant Thornton
Engineering Manager Wallet XP at Ledger
Partnerships Operations Manager at Fireblocks
Partnerships Associate (Global Travel Rule) at Binance
Blockchain Defi Developer - Quant Trading Team at Crypto.com
Head of Business Development at Block Scholes
Senior Associate, Institutional Sales at Gemini
DISCLAIMER: The content in this newsletter is not financial advice. This newsletter is strictly educational and is not investment advice or a recommendation to buy or sell any assets or to make any financial decisions. Crypto markets are volatile, please be careful and do your own research.




Great post - really like it!
Was waiting for this - great one again. Thanks!