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DeFiGaming & MetaverseInfrastructureMarketsNFTs
Aurelie Barthere
Key Takeaways
9 min read
  • We re-run some scenario analysis following evidence of disinflation in the US: Slowing but resilient real growth + disinflation can persist longer, but watch out for our “scenario c: Growth slows sharply while rates stay high”.
  • Hard to fight the positive price momentum in equity, credit and crypto, but a risk management approach has to allocate a non-negligible probability to scenario c, especially as it is not being priced by markets any more.
  • On the crypto regulatory front, ongoing clarity is a sustained tailwind, especially for institutional adoption. We distill the three implications of the XRP verdict on other crypto assets.

A month ago, we wrote about the two conditions or tailwinds for the resumption of a crypto bull market: 1) Regulatory clarity in the US, 2) Proofs that core inflation is moving lower. Last week and the conclusion of the legal action of the SEC (Securities and Exchanges Commission) against Ripple, plus the disclosure of a US core CPI below economists’ consensus delivered data points in the direction of these two conditions.

In this newsletter, we review the evidence on US disinflation, what markets are pricing, and the potential macro and market scenarios from here. We also summarize the implications of the Ripple case on other crypto assets.