CPI Comes in Cooler Than Expected, USG BTC Moves to Coinbase Prime Wallet
Crypto Market Update
CPI came in slightly cooler than expected, with core CPI at 0.17% month-over-month, compared to the consensus estimate of 0.19%. In our view, this is the best-case scenario, as it temporarily removes the “Fed policy error” trade from the market. This is evidenced by Fed funds futures, which have priced out cuts for this calendar year following the CPI release. Initially, crypto rallied alongside other risk assets, with BTC -1.55% nearly reaching $62k. However, it has since retreated, with BTC -1.55% currently trading just over $59k, ETH -2.19% around $2,650, and SOL -2.96% just under $145. Despite this pullback, there are a couple of bright spots in the crypto market today: TON 2.73% is back above $7 following the announcement of a new TON 2.73% ecosystem venture fund to support projects on the network, and AAVE 6.62% continues to demonstrate strength as momentum builds behind proposed changes that would return fees to token holders. Equities are mixed, with the ^SPX -0.17% moving slightly higher, with all but a few sectors in the green, while QQQ -0.21% is lower on the day. As expected, rates are moving lower, with the 10Y nearly back to 3.8%, and the DXY is slightly down. The next key macro data release is retail sales, scheduled for tomorrow.
![CPI Comes in Cooler Than Expected, USG BTC Moves to Coinbase Prime Wallet](https://cdn.fsinsight.com/wp-content/uploads/2024/08/image-46.png)
EigenLayer to Allow All ERC-20 Tokens to be Restaked
EigenLayer is s[et to introduce Permissionless Token Support](https://www.blog.eigenlayer.xyz/permissionless-token-support/), a significant update that will allow any ERC-20 token to be added as a restakable asset within its protocol. This feature enables Autonomous Validator Services (AVSs) to choose from a broad range of ERC-20 tokens to secure their networks, enhancing the cryptoeconomic security landscape by incorporating a diverse array of assets, including native AVS tokens, stablecoins, and BTC-denominated tokens. AVSs can now fully customize their security profiles, utilizing these tokens to distribute work and rewards, fostering cross-ecosystem partnerships and increasing alignment within the decentralized ecosystem. At the protocol level, new strategies can be created to define which tokens can be restaked, with these tokens used in AVS quorums for security and operator task distribution. The feature is currently in a permissioned testing phase on the testnet, with EigenDA being the first AVS to implement this support. This development is particularly interesting because EigenLayer was initially pitched as a way to enable applications to bootstrap network security by leveraging a time-tested asset like ETH -2.19% . However, it now seems that EigenLayer is looking to expand the range of assets that applications can leverage to provide security to the network. EigenLayer TVL peaked in June at around $20 billion but has since retreated to just under $13 billion due to both token price declines and outflows.
![CPI Comes in Cooler Than Expected, USG BTC Moves to Coinbase Prime Wallet](https://cdn.fsinsight.com/wp-content/uploads/2024/08/image-47.png)
USG Bitcoin Moved to Coinbase Prime Wallets
10,000 Bitcoin, valued at nearly $600 million, have been transferred to a Coinbase Prime wallet, capturing the attention of traders once again. This transaction, reported by [Arkham Intelligence](https://platform.arkhamintelligence.com/explorer/address/bc1qlap8hkt9genaljz5nt2zlehhudx63zlahr2zek), is believed to be part of the $2 billion worth of Bitcoin that the U.S. Department of Justice (DOJ) seized in connection with the Silk Road case. The DOJ had previously moved these funds to an unidentified wallet two weeks ago, and this recent transfer to Coinbase Prime suggests that Coinbase may be moving the coins into longer-term custody, or potentially liquidating the confiscated assets.
![CPI Comes in Cooler Than Expected, USG BTC Moves to Coinbase Prime Wallet](https://cdn.fsinsight.com/wp-content/uploads/2024/08/image-48-1024x646.png)
As Mark Newton is on break, there will be no Technical Strategy section for this week. Mark will be returning on Tuesday, August 20th.
Daily Important MetricsAll metrics as of 2024-08-14 18:23:10 All Funding rates are in bps Crypto Prices
All prices as of 2024-08-14 18:22:50 Exchange Traded Products (ETPs)
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