TBW Free #4: Watch out for the Fed

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Since it was founded in 1869, Goldman Sachs has always been a pioneer, and it clearly has no intention of stopping. A few days ago, the American investment bank became the first to grant credit secured by... bitcoin. As of yesterday, we know that it was Coinbase that obtained this loan in dollars against the deposit of a certain amount in bitcoins. And don't imagine you'll be able to go to your bank tomorrow and negotiate a loan by bringing it crypto 😎. Goldman Sachs is not just anyone's bank. It's reserved for the very wealthy. Pending further transactions, the signal is truly significant. Other institutions could in turn try this kind of experiment...

👉 Crypto.com caught up with reality

It's a cold shower for Crypto.com users! The application known for its generous cashbacks when you use your Visa payment card has decided to cut back. From 1 June, Ruby cardholders will no longer receive 2% cashback, but just 0.5%... All cards are affected, and there will also be a cap on monthly rewards and a reduction in staking revenue. The Singapore-based start-up justified this decision by saying that it would "ensure the long-term sustainability of the company". Naturally, the community did not take kindly to this change, pointing out that the company should perhaps have spent less on marketing. In the space of just a few months, Crypto.com has signed sponsorship contracts with the organisers of the World Cup in Qatar, Paris Saint-Germain and Formula 1, and has also taken on the naming of the Staple Center in Los Angeles (worth $700 million over 10 years). The risk for the company is that it will drive away its loyal users at a time when Celsius and Nexo are introducing their own payment cards. In the meantime, the price of CRO, Crypto.com's token, has plummeted: -20% in just a few days.

👉 Bored Apes going from strength to strength

Are you familiar with Bored Apes? In the space of a year, these NFTs of totally bonkers apes 🙉 have become a real phenomenon, and not just because we're talking about the most expensive "collection" in the industry (around $4 billion). Alongside NFT, Yuga Labs, the studio behind 'Apes', is already working on the sequel. A few weeks ago, it launched the Apecoin, the currency of its future metaverse, and on 30 April Yuga Labs sold its first 55,000 plots of land. The deal raised more than $300 million. What's next? Yuga Labs, which is already valued at several billion dollars, wants nothing less than to create an entertainment empire around its monkeys. The first project is already in the pipeline, with US crypto giant Coinbase announcing a film trilogy in April.

👉 Which country will adopt bitcoin next?‍

When El Salvador made bitcoin its legal tender in September 2021, many rightfully wondered about President Nayib Bukele's motives. Was it just a marketing stunt or a genuine political decision? The other question was whether other countries would follow suit. Eight months on, the Central African Republic has just provided the answer: the country has become the second in the world to adopt bitcoin alongside the CFA franc. One of the main reasons for this decision is that the country of 5 million inhabitants is having difficulty managing the influx of money from the diaspora. In the wake of this announcement, Panamanian and Cameroonian politicians have hinted that their countries may also jump ship.

THE BIG ANALYSIS

"The party's over... for now" (By Nicolas Chéron, market strategist for ZoneBourse)

2022 is a bad year for many asset classes including cryptos, and I get the impression that the period of uncertainty we are experiencing is going to last for some time. 2020 and 2021 were exceptional years on all levels: massive monetary injections, stimulus plans, cheques sent to the people, which generated hyper-speculation and stellar performances.

Except that period is over. Inflation caused by multiple factors (powerful economic recovery, supply chain disruptions due to Covid, rising commodity prices due to the war in Ukraine...) has forced central banks to switch from "ultra-accommodating" mode (easing) to its opposite (tightening). In short, the party is over... at least for the time being.

In the coming months, the Fed will gradually withdraw from the market and raise rates. Europe is likely to follow suit later, albeit much more timidly - as usual. In other words, the flows that allow the most risk-sensitive assets to rise will dry up. In fact, the phenomenon has already begun. That's why I wouldn't be surprised to see a fluctuation band of between $30,000 and $50,000 for several months, or even several quarters.