From Saylor’s $10M BTC buy (a rounding error), to Ripple’s lawsuit win, to Solana’s cringey ad, last week’s crypto headlines were dwarfed by the real forces driving markets: inflation, war, and a global liquidity pivot.
Make Way for Macro and Geopolitics
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Last Week Crypto Took a Back Seat
The biggest stories of the week affecting crypto had nothing to do with crypto. Macroeconomics and geopolitics drove not just the crypto markets, but all markets.
The Federal Reserve kept the federal funds rate steady, citing persistent inflation concerns. More importantly, it adjusted its balance sheet strategy by cutting the monthly Treasury redemption cap from $25 billion to $5 billion, meaning it will hold onto more assets and slow the pace at which liquidity is withdrawn from the financial system. This move signals that the Fed might be nearing the end of quantitative tightening (QT), as many have predicted they would, including Arthur Hayes in my interview with him last week. While the end of QT doesn’t necessitate the beginning of quantitative easing (QE), it does increase the likelihood of QE.
Market uncertainty propelled gold to new all-time highs. The Middle East made up a lot of uncertainty. From intensifying conflicts between Israel, Hezbollah, and Iran, to continued Houthi maritime disruptions, and strained U.S.-Iran relations. Then there is Trump uncertainty in the form of President Trump’s tariff trade tactics with both friend and foe alike. Finally, the Russia-Ukraine situation, while in the beginnings of talks, remains tenuous and volatile.
There were interesting stories within crypto, although compared to the above macro and geopolitics, they seem unserious. On Monday, in an example of bad optics, Michael Saylor’s Strategy bought $10.7 million worth of Bitcoin, increasing its holdings of Bitcoin by a pitiful 0.02%. He was pilloried on Crypto Twitter (CT). The very next day, as if in response to the avalanche of ridicule, Strategy announced a 5 million-share stock offering in order to increase its Bitcoin stockpile.
On Wednesday Ripple CEO Brad Garlinghouse announced that the SEC had finally officially dropped its lawsuit against the blockchain company over XRP sales, presumably paving the way for a spot ETF later this year.
Finally let’s end with a funny, headscratching story. On Monday the Solana X account released what can only be described as a virtue signaling cringe video advertisement. The derision was swift and unanimous. The account deleted the video very quickly. Luckily you can still watch it here. The next day A16z released an ad with the same overall message, but ditched the stilted, anti-woke boomer speak.
