Funding Stress, Sticky Wages, & an Unwavering Fed: TBL Weekly #15
Our free weekly markets analysis, recapping the action in bitcoin and macro.
Welcome to TBL Weekly #15—here are the week’s highlights!
Markets Analysis
Our monitor for the week ending Saturday, October 8th, 2022:
Bitcoin had what could definitely be considered another few days of resilient price action as the stock market suffered a pair or large consecutive red daily candles on Thursday and Friday. Bitcoin has now spent 83 days below one on our TBL Fair Value Ratio, a combination of valuation metrics including average price, on-chain derived cost basis, and mining input costs. While the macro backdrop should continue to remain challenging for risk assets, it’s hard to ignore just how buoyant bitcoin’s price has been since the leveraged wipeout of June.
The debate rages on about the Fed and whether a pivot is in the cards for this year. We believe we have presented a balance of views, both why and why not a pause would occur, as well as our bias that headline inflation and unemployment statistics should eventually take a backseat to more fixed-income driven cracks in the system, such as a severely slowing corporate new issue market:
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Now, here are your quick links to all of the TBL content for the week:
Tuesday
Nik discusses the troubles beginning to appear in the domestic US economy, some global central banks starting to shift their tune, and the impact these marginal shifts are having on stocks and bitcoin. Ride with Nik around sunny LA as he gives you a timely macro update:
Wednesday
Joe takes you through the current turmoil at Credit Suisse. Are they on the brink of imminent default? What are credit default swaps (CDS), and what can they tell us about Credit Suisse’s default risk? Ultimately, Joe concludes that default risk is not the most pressing issue for Credit Suisse.
Market-implied default risk is soaring for Credit Suisse, along with a dramatic selloff in its bonds, which has sent its short-term yields higher. Having to issue short-term paper at a 650-point-wide spread over government debt is a tall order:
Joe discusses why the embattled European investment bank is in for a slow demise, followed by a bailout, or a buyout.
Thursday
We’ve also recorded our Credit Suisse analysis in video format! Nik walks through the default risk of Credit Suisse and its potential outcomes, including our thesis that we will not see another 2008-style financial crisis. Here’s everything you need to know:
Friday
Nik and Joe were in Miami on Friday filming episodes for What Bitcoin Did with Peter McCormack. TBL did not put out a research note due to travel. Is that a breakfast beer for Nik?
Be on the lookout for our episodes dropping in the next few weeks!
A special thank you to our now-over 10,000 subscribers here at The Bitcoin Layer! We couldn’t be more thankful for your continued patronage. Your readership and viewership only helps us strengthen our quality and frequency of analysis.
Have a great weekend everybody!
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