Alpha Zone
My Reading List
Log in
DeFiGaming & MetaverseInfrastructureMarketsNFTs
Of Geopolitics and Crypto
Aurelie Barthere
Key Takeaways
11 min read
  • This newsletter reviews the impact of the continuous escalation in economic warfare between the US and China on the global economy and markets.
  • We consider how semi-permissioned wholesale CBDCs could provide valuable cross-border solutions in a geopolitically fragmented world.
  • We analyze how the Hong Kong crypto “renaissance” has not yet impacted exchange trading volumes nor on-chain activity.
  • This week has two major potential crypto price catalysts, as BTC is testing the key 30k-31k resistance zone: the US June CPI is disclosed on Wednesday and the SEC responds to Coinbase's first legal defense on Thursday.

China’s stimulus not working, yet

The People's Bank of China (PBOC) took its most decisive step towards monetary easing on June 19, 2023, by shaving its main policy rate, the one-year loan prime rate, by 10bps to 3.55% for the first time in one year. Since then, the Shanghai Shenzhen CSI 300 and the Hang Seng are down respectively by 2.2% and 6.6% and copper, the barometer for the health of global manufacturing, has lost 3.2%.

What is the reason behind this negative reaction by equity and commodity markets? This time, the monetary and fiscal stimulus architected by the Chinese authorities is a bit different from prior exercises, the first major one having occurred post global financial crisis with significant positive effects on...