Did you know…?

  • Crypto has never been through a Tradfi recession. Ignoring the short-lived Covid recession for reasons we’ll outline later, the last meaningful recession for the US economy ended in 2009, not long after the Bitcoin genesis block was created.
    • Over the last 5 years, the correlation between TradFi and cryptoasset prices has increased. Crypto is no longer the self-contained bubble it may have been a decade ago. TradFi bleeds into crypto prices.
      • Every time the US Treasuries yield curve inverts, a recession typically follows. This inversion has predicted all 8 prior recessions since the 1960s with no false positives. Stocks typically bottom in the middle of the recession.
        • Currently the yield curve is undergoing one of the longest-lasting inversions in history.

          This leads one to the logical conclusion that there is a decent risk of a Tradfi recession, and if that were to happen, maybe a great crypto bear market will occur followed by the buying opportunity of a lifetime.

          Maybe.

          Can anyone really predict these things?

          So…

          We’re starting this newsletter to introduce macro topics in digestible bites to crypto investors and builders.

          We aim to explore emerging questions in “crypto macro” as the digital asset space matures and develops its own unique market characteristics.

          What is “Macro”?

          Macroeconomics focuses on the effects of large-scale economic drivers like interest rates and productivity. Although we call our newsletter “Macro for Crypto”, we’ll focus on a subset of macro: the business cycle.

          As a crypto investor, timing cycles correctly means the difference between being a multi-millionaire and being broke.

          And as the crypto market matures, it will become more and more intertwined with the broader global markets.

          It is our thesis that the next parabolic move, whether to the upside or downside, will be greatly influenced by macro events. So we think it’s worth starting to pay attention.

          Who is this Newsletter for?

          This newsletter is targeted at the average crypto investor with limited exposure to macro topics. We’ll try to keep things simple but also relevant to crypto builders and investors.

          What Specific Topics will be Covered?

          In each piece we’ll introduce a new topic as well as comment on developing trends and new products/protocols.

          Here’s a small glimpse of some of the first topics:

          Interest Rates

          1. What are interest rates and why do they matter?
            1. Significance of the yield curve
              1. Is there a DeFi yield curve? How does it relate to the TradFi yield curve?
                1. A look at historic DeFi interest rates
                  1. Interest rate strategies in DeFi
                    1. Variable rate models in DeFi & associated risks
                      1. Fixed rate models in DeFi
                        1. Oracle-free lending in DeFi
                          1. … (TBD)

                            Macro Indicators

                            1. Predicting recessions
                              1. The business cycle
                                1. Housing and the business cycle
                                  1. Volatility events
                                    1. Risk appetite in crypto cycles
                                      1. Why did DeFi fall first in May ‘21?
                                        1. Parabolic pumps
                                          1. … (TBD)

                                            We’re Learning Too, so Expect Some Mistakes!

                                            We aren’t macro experts despite many years of indirect exposure to macro topics. So expect some mistakes from us and please let us know when we go wrong!

                                            What’s the Frequency, Kenneth?

                                            We aim to publish one piece a week.

                                            Where Do I Sign Up?

                                            Subscribe over at Substack and keep a lookout for us in your inbox. You can also follow The Tinkering Society’s blog and X for more DeFi-related content.