Good Morning, PokPok fam! 🐔 

Ready for another week of madness? We are 😉 

WHAT’S HAPPENING? ⌛️

• 👀 Celcius sues Tether for $3.4B 🚨 💰️ 

• Middle-East War Tensions Continue as US Carriers move closer 🪖 

• (13 August) US Economy: PPI MoM 🏦 

• (14 August) US Economy: Core Inflation YoY 🏦🚨 

• (15 August) US Economy: Retail Sales MoM 🏦 

Coming up this week ⭐️ 

Celcius sues Tether for $3.4B 💼 💰️ 

Our conversation on Friday regarding the risks of stablecoins, particularly USDT (Tether), has come around quite fast.

• Celcius alleges Tether liquidated 57,000 BTC without proper notice to add further collateral

• Claiming that Tether violated their agreement by selling the BTC Collateral prematurely without their 10-hour notice period given within the agreement

• Tether’s Take: Confirms the lawsuit but believes it is just another “shameless litigation money grab”

Will Celcius win this legal battle? Perhaps? Perhaps not?

Celcius isn’t the most law-abiding crypto company either, given its history of pretty much converting its business into a Ponzi scheme.

However, a $3.4B lawsuit is 3% of USDT’s market cap; this is pretty huge.

Middle-East War Tensions Continue 🪖 

We passed with our black swan event last Monday, but our share of uncertainty hasn’t faded just yet. 👀 

Keep in mind that regardless of the rebounds that happen in the markets, any war in the Middle East will disrupt any analysis we may make.

This doesn’t mean that if there is an escalation to war, crypto would dump significantly. At the start of the Israel/Palestine war in October 2023, we only had a ~5% dip in BTC before trending towards ATHs.

US Economic Events this week 📊 

As the US heads for a rate cut in September, we continue to seek reports which show further bias towards rate cuts to increase the probability of faster cuts. 👀 

Due to the Japanese Carry Trade Unwinding, the increased volatility in the US could lead to:

• Uncertainty in pricing for producers, potentially affecting PPI

• Reduced consumer confidence, possibly impacting Retail Sales

(13 August) PPI MoM & (15 August) Retail Sales MoM

• What PPI MoM means: Producer Price Index (Month-over-Month) is a key economic indicator measuring the change in selling prices received by domestic producers for their output. It provides insight into inflation trends at the wholesale level and is often considered a leading indicator for consumer price changes and potential shifts in monetary policy.

• What Retail Sales MoM means: A key economic indicator measuring the total sales value at the retail level in a country from one month to the next (% change). Provides insight into consumer spending trends; Indicator of economic health and potential shifts in monetary policy.

• Prior/Forecast:

  • PPI MoM: 0.2% Prior / 0.1% Forecast

  • Retail Sales MoM: 0% Prior / 0.3% Forecast

• Bullish Thesis: Under-expected PPI and Under-expected Retail Sales indicate lower inflation and a slower economy, leading to potential crypto pumps. Confirmed = Higher % of larger cut 🚀

• Bearish Thesis: The converse would lead to a stronger economy, which goes against our bias. It may not change anything about the September rate cut but does not signal that a faster cut needs to be made. 🐻 

(August 14) Core Inflation Rate YoY

The father of economic indicators which we seek. 🔥

• Prior/Forecast: 3.3% Prior / 3.2% Forecast

• Bullish Thesis: We’re looking for an under-expected Core Inflation Rate further approaching the Fed’s 2% target to give Powell and his friends more confidence in cutting rates. We’re expecting the Carry Trade Unwinding to have had an impact on inflation, potentially more unexpectedly, to see this better we may look at the Core Inflation MoM at the same time. 🔥 

As we approach closer to the target inflation level of 2%, there becomes less resistance to considering a rate cut.

Despite not reaching our target yet — the US economy seems weak, which leaves a rate cut entirely justified. Over the weekend, JPMorgan reveals new probabilities for a recession at 35%.

Polymarket’s Prediction Markets have been tracking this too, however, the probabilities aren’t quite as high (yet). It’s something interesting to consider though.

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