Crypto Saved By the CPI?

The Consumer Price Index was released this morning at 830a ET. This report shows how inflation hits the consumer, which is the engine of most economies. For the past 15 years this report has been ignored, because with near 0% interest rates we also had low inflation. 

That was, until this year. Each report release has been breathlessly met with optimism showing that inflation is easing, and each report has caused disappointment followed by crushing selling of risk assets, especially in Tech. 

Until today’s CPI report. The report came in light, and it felt as if ten months of pent-up buying hit markets of all types. The NASDAQ 100 gained 7.37%, which was peanuts compared to many crypto assets. As I write this, BTC is up 12%, Solana is up 30%, Polygon is up 38%, etc. 

In last night’s ReadySetCrypto LiveStream, I discussed the “Brexit” scenario from 2016 where prices dropped for 3 days after the unexpected result of the vote, before springboarding to new highs. 

Is Crypto out of the woods yet? I’m not sure what the resolution from the FTX debacle is just yet, however sometimes the worst possible news can be a catalyst into unrestrained buying since the news “cannot possibly get worse.” It’s always darkest before the dawn. 

Ledger Under Fire

As you might imagine, there was a huge outflow of crypto from centralized exchanges into private hardware wallets over the last couple of days. Unfortunately, not all of the infrastructure was able to process the demand! Talk about a perfect storm! 

In this case, Ledger’s hardware wallet interface application Ledger Live was experiencing downgraded server performance, which did not allow many withdrawals to take place. Ledger Live had an “unusual load on the device manager service,” which is likely to be attributed to users updating their device for the first time in a while or using a brand new device for the first time. “It was quickly resolved and the team is already working on improving automatic detection and restoration,” a Ledger spokeman commented. 

After a few years of stable centralized exchange operation in which crypto exchanges were rivaling TradFi, the “no keys, no cheese” mandate is back. Self-custody is going to be a necessity once again. .