BITCOIN, FED & WAR 
2024-08-06

From Wen lambo to Wen WW3 ! 🚀

If you're wondering why your portfolio feels like it's been caught in the new Twister movie, you're not alone. the entire broader financial market has entered correction territory, and it's a volatile ride out there. Buckle up as we dive into the chaos

1/ Reverse carry unwinding: The Japanese yen 💹

The Bank of Japan pulled a move we haven't seen in 30 years by increasing interest rates. 
This tiny 0.25% hike putt a major kink in the popular reverse carry trade strategy, sending the Yen's value soaring against the USD, For those new to the game, the strategy involved borrowing Yen at a rock-bottom 0% interest rate and reinvesting in USD for a 5% yield.

2/ Jump Crypto 

Ethereum plummeted 20% faster than you can say "overleveraged" (if that takes you 3 minutes) 
Why is  CRYPTOCAP:ETH  feeling the heat the most? Well, Jump Crypto has been liquidating their  CRYPTOCAP:ETH  stack for over 11 days…Jump Trading recently redeemed $410 million worth of 120,000 wstETH into ETH and then transferred it to CEXs such as Binance and OKX.these trades might be part of a liquidation process as the proprietary trading firm prepares to wind down its crypto operations following its former CEO’s resignation amid a probe by the United States Commodity Futures Trading Commission

Jump Crypto shifted hundreds of millions of  CRYPTOCAP:ETH  and  CRYPTOCAP:USDT  into centralized exchanges
Rumor also has it they're exiting the crypto biz amid an investigation! 
The Japanese Yen and Jump had a huge effect on crypto but they weren’t alone. Here are the other reasons we’re seeing fear in the markets.

3/ Geopolitical tensions/ WW3 Fud  🇮🇷 🇺🇲

IRAN vs Israel again:  Ismail Haniyeh is assassinated in Iran by an alleged Israeli strike and things are heating up, with fears of a global conflict bubbling. Russian military planes were sent to Iran for support and US  sends more troops to Middle East to support Israel as well
Keep your eyes on the news this week cuz it can impact markets further 

US Politics: Kamala is closing in on Trump's lead, according to Polymarket odds. The market had already started to price in a Trump win, but now? Not so sure, and the market is feeling that 

4/ Recession fears: All eyes on the FED ✂️

Job numbers came in below expectations, unemployment ticked up, and The Sahm Rule was triggered .wtf is a Sahm Rule?  The Sahm rule is an early recession indicator.Since 1950, the Sahm rule has indicated only one false positive (in 1959), and even then, six months later the US had entered a recession.

A 50 basis point rate cut for September was off the table, but now?
Some are shouting, "We're too late already! Emergency cut now!" 
Rumors are swirling that the FED may have an emergency meeting this week…
We got no cut in July, but the case for it just got a whole lot juicier. 

Bad earnings and political/geopolitical uncertainty have pummeled the stock market back to 2020 levels, $2 T was erased from the stock market 

Meanwhile Warren Buffet sold 56% of his Apple stock and with $235 billion,now holds more US Treasury Bills than the Federal Reserve! Elon just called him a FED too! Cash is not trash after all. 

