🕴️ Bitcoin: Waiting for the Central Bank Lightning?

Good Morning!

The yen's making waves. After a brief flirtation with sub-140 levels against the dollar, all eyes are on this week's Fed and BOJ decisions. With a 67% chance of a 50-basis-point Fed hike, the yen's recent 12% gain could be just the beginning. A push through 140 might send it soaring to January's peak of 127.215. Meanwhile, the Nikkei's feeling the heat, down 1.7%. As we await German sentiment and U.S. retail data, BlackRock's throwing cold water on hopes for deep rate cuts. We're in for another week of currency gymnastics!

In today’s email:

• FedWatch: All eyes on tomorrows rate decision and FOMC meeting

• Bitcoin: Hovering around $59k, don’t expect much till rate cut clarity

• Trumps: Launch their crypto project and we have all the juicy details!

• Gold: Just getting started with a new supercycle? 🚀

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THE BIG IDEA

Trump family's crypto venture, World Liberty Financial, unveils token distribution and ambitious goals amid controversy and skepticism

The Trump family's diving headfirst into the crypto pool with their new venture, World Liberty Financial. Despite a jam-packed campaign schedule and a recent security scare, the former president's making time for a grand reveal tonight at 8 PM on X.

So, what's the deal? World Liberty Financial's promising to be a one-stop-shop for all things crypto banking. They're rolling out a token called WLFI, with 20% going to the founding team (including the Trumps), 17% for user rewards, and 63% up for grabs by the public. No VIP pre-sales here – it's a Reg D offering, sidestepping some SEC red tape.

The project's got quite the lineup

Donald Sr. as "Chief Crypto Advocate," Barron as "DeFi Visionary," and Eric and Don Jr. as "Web3 Ambassadors." But the real puppet masters? Seems to be Eric Trump and Steve Witkoff, a longtime Trump pal who brought the family together with crypto entrepreneurs Zak Folkman and Chase Herro.

Now, it's not all smooth sailing. Leaked documents raised eyebrows with an initial 70% token allocation to insiders. There's also chatter about the founders' past ventures, including a hacked DeFi project and some eyebrow-raising marketing tactics.

Trump's crypto journey's been quite the rollercoaster. From dismissing Bitcoin as "thin air" in 2019 to keynoting major crypto events, he's now positioning himself as the industry's champion in the presidential race.

But here's the million-dollar question: Will this crypto plunge pay off, or could it backfire? Some of Trump's crypto-world supporters are biting their nails. As the clock ticks down to tonight's reveal, one thing's for sure – the intersection of politics and crypto just got a whole lot more interesting.

MARKETS AT A GLANCE

TOP NEWS

Dollar weakens as markets anticipate aggressive Fed rate cut, with euro and yen gaining ground

The greenback's on shaky ground. With the Fed's meeting looming, markets are betting big on a potential 50 basis point cut. The euro's flirting with yearly highs, while the yen's eyeing a comeback. Sterling's leading the G10 pack, up 3.9% against the dollar this year. Meanwhile, the Aussie and Kiwi are riding the wave of Fed focus, shrugging off China's economic woes. All eyes are on Wednesday's Fed decision, with U.S. retail sales and Canadian CPI data as appetizers.

Apollo's Kleinman warns of overoptimistic Fed rate cut expectations, citing wage and housing inflation concerns

Apollo's Scott Kleinman's throwing cold water on hopes for 10 Fed cuts in the next year. Despite futures traders' optimism, Kleinman says we'd need a recession to see that many cuts - and the broader market isn't pricing that in. Apollo's view? No recession, but wage and housing inflation will keep the Fed's hands tied. Kleinman quips that markets are addicted to "up-and-to-the-right" thinking, potentially setting us up for disappointment.

Investors anticipate emerging market debt windfall as Fed prepares for rate cuts, with local currency bonds expected to lead the rally

Get ready for a potential emerging market bonanza! As the Fed gears up for rate cuts, big players like JPMorgan Asset Management are betting on a comeback for EM debt. Local currency bonds are the hot ticket, with longer-dated issues expected to shine. Asia's looking particularly juicy for duration plays. But it's not all smooth sailing - currency outlooks are murky, and Latin America's facing some headwinds. Post-US elections, we might see an even bigger EM asset reshuffle.

CRYPTO

Bitcoin faces pivotal week with $60,000 resistance as Fed decision looms, while altcoins struggle

Brace yourselves! Bitcoin's flirting with $60,000 as we gear up for Fed's rate decision tomorrow. Markets are betting on a 0.5% rate cut, but Bitcoin's dominance is soaring to 3.5-year highs, leaving altcoins in the dust. Ether's particularly feeling the pain, hitting lows not seen since April 2021. Technical indicators are on a knife-edge, with key resistance levels in play. As for Bitcoin's price action? It's eerily mimicking past cycles. Only thing for sure is, we're in for a volatile week ahead!

DeltaPrime crypto broker suffers $6M exploit due to private key leak on Arbitrum network

DeltaPrime's wallets on Arbitrum just got drained for over $6 million in a classic case of "oops, where'd I put that private key?" The hacker pulled a sneaky one, hijacking the admin proxy and redirecting it to their own malicious contract. Only the Arbitrum version got hit, but users are locked out of withdrawals. The DeltaPrime team's in full investigation mode, while their PRIME token's taking a 6.5% nosedive. Just another day in the wild west of crypto!

MicroStrategy to Sell $700 Million in Convertible Notes for Bitcoin Purchases and Debt Buybacks

MicroStrategy is selling up to $700 million in convertible senior notes to fund additional bitcoin purchases and buy back debt. The notes, due in 2028, will be unsecured and pay interest semi-annually. MicroStrategy plans to use the proceeds to redeem $500 million of senior secured notes and purchase more bitcoin. The firm currently holds around $14 billion in bitcoin, with a $1 billion purchase made last week.

Tether's USDT Hits 75% Market Share Amid Record Exchange Balances

Tether's USDT stablecoin now controls 75% of the stablecoin market, up from 55% in 2022, driven by a $118 billion circulating supply. Tether’s strong financial performance, generating $400 million in monthly revenue and $5.2 billion in Q1 2024 profits, has reinforced its leadership. USDT balances on exchanges reached a record $20.3 billion in August, reflecting growing demand as a hedge against market volatility and preparation for trading opportunities.

GOLD

Analysts Predict New Commodity Supercycle, Gold Set to Benefit

Analysts predict a decade-long commodity supercycle driven by rising demand, inflation, and supply shortages. Michaël van de Poppe and Bank of America highlight the potential for significant price increases. Factors like electrification and net-zero policies will likely boost metals like copper and lithium. Gold, already up 20% this year, is expected to benefit further, with Rick Mills noting that falling interest rates and a weaker U.S. dollar will strengthen the entire commodities sector, including gold and silver.

DAILY ECONOMIC CALENDAR (ET)

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