The WEF Has A Vision For The Economy

It’s becoming hard to avoid election fever these days with so many countries going to the polls in 2024. However, as the debates and campaigns grind on, it’s worth remembering that some of the people who have the most influence on our lives have never been elected by anyone.

The folks at the World Economic Forum (WEF) are among the most striking examples of this and they’ve recently been hard at work on their latest bit of economic forecasting. Like it or not, their conclusions will have consequences for all of us.

In today’s video, we break down what the WEF’s chief economists have to say in their most recent report. Although they seem cautiously optimistic about the global economy’s prospects, they also foresee plenty of bumps in the road ahead. And there’s also the fact that they fail to see how the policies they’re advocating for are in many cases only making things worse for ordinary people. As ever, the WEF and its allies have failed to see the most important detail of the overall picture: they are a big part of the problem.

You can watch that video here.

📈Crypto Market Forecast📈

It looks like the crypto market could be in for another explosive week. That’s because there is one big macro factor and one big crypto factor that could result in major moves to the upside or downside. Let’s start with the crypto factor: the spot Ethereum ETFs, which are expected to be approved by this Thursday, July 4th. Obviously, ETH will probably rally after the final approval.

The question is how ETH will behave once the spot ETFs are actually listed. As with the spot Bitcoin ETFs, there have been lots of predictions about the flows the spot Ethereum ETFs will see in their first days. These have ranged from billions of dollars of inflows taking ETH to 10k, to enormous outflows resulting in a 30% collapse in ETH’s price.

As with most things, it’s safe to assume that the truth will lie somewhere in the middle. History suggests that the bulk of the outflows will come from Grayscale’s spot Ethereum ETFs as Ethereum Trust arbitrageurs finally capitalise on their trades. Similarly, we could see the bulk of the inflows coming from retail investors, who have been relatively absent lately.

More importantly, though, history also suggests that ETH’s strength is inversely correlated to the yield on 10-year US treasuries. This ties into the main macro factor to watch out for this week, and that’s the unemployment rate for June, which will be published this Friday, July 5th. Spot Ethereum ETF approvals by the 4th and listing on the 5th could turn out to be the perfect combination in the context of this unemployment data.

That’s because the unemployment rate has been rising steadily, and sits at 4% as of the May jobs report. For those unaware, 4% unemployment is the Fed’s target. If unemployment starts to rise significantly above this target, the Fed could start to signal that interest rate cuts are coming. Many macro analysts argue that this is guaranteed if unemployment goes above 4%.

This is because of something called the Sahm rule, which we covered in our recent video about a potential recession. The Sahm rule basically measures the rate of change of unemployment. When the Sahm rule indicator goes above 0.5 then the US is likely in a recession. The Sahm rule is currently hovering just under 0.4, and could break 0.5 on the next print.

It’s not just the Sahm rule that’s flashing warning signals either. As some of you may have heard, the value of the Japanese yen recently plummeted to a 38-year low against the US dollar. This weakness is in large part due to the fact that the Fed is keeping interest rates high while other central banks have started reducing them. This has made the USD very strong.

As we saw in October 2022, a strong US dollar can have devastating effects. To refresh your memory, the UK bond market (or rather gilt market) imploded. Although a strong US dollar wasn’t the direct cause of the implosion, it effectively created the conditions required for it to occur. A record number of developing countries also came crawling to the IMF for USD loans.

This fact is why most macro analysts believe that the Fed will have to cut, but this assumes that putting pressure on foreign countries isn’t the desired outcome. As macro analysts like Michael Howell have pointed out, central banks wouldn’t allow the yen to devalue so much unless it was intentionally planned. Consider that a weak yen puts pressure on the Chinese yuan to fall.

As such, it’s possible that the Fed could keep interest rates high, not because of inflation or the economy, but because of geopolitics. A strong dollar puts the squeeze on the likes of Russia and especially China, which has arguably been funding Russia’s war in Ukraine. In other words, it’s a way of forcing the global south to fall into line - which is why they’re trying to ditch the USD.

That’s an upcoming video you won’t want to miss…

☀️Solana Summer☀️

Could Solana be the main character of this bull market?

Given all the recent developments around the project, there seems to be a strong possibility this will be the case. It has been a busy, if not bullish, few months for the industry’s fifth-largest crypto asset by market cap.

For instance, in just the last week, we saw two major asset managers apply to launch Solana investment products.

Specifically, we first saw the digital asset manager 3iQ file for a Solana exchange-traded product listing on Canada’s Toronto Stock Exchange. Then we saw the New York City-based asset manager VanEck apply to launch a spot Solana exchange-traded fund in the US.

VanEck’s application in particular garnered much reaction from the community. This is to be expected, since the idea of a Solana spot ETF being approved paves the way for every other spot crypto ETF. However, many believe the possibility of VanEck’s application being approved is slim. In fact, experts believe VanEck’s application is not one rooted in absolute confidence, but rather a gamble on the outcome of this year’s US presidential election.

For context, the Biden administration has openly shown that it is ‘anti-crypto.’ On top of that, the SEC’s Enforcement Division has previously stated in a lawsuit against crypto exchange Binance that Solana’s SOL is an unregistered security. Not to mention that, unlike Bitcoin and Ethereum, Solana does not have a regulated US-based futures market.

Notably, the SEC has previously argued that no spot crypto ETFs can be listed on US exchanges unless they satisfy the agency’s market surveillance standards. A highly correlated, regulated futures market for the corresponding asset is the ideal way to do so.

That said, this doesn’t mean the potential rejection of VanEck’s spot Solana ETF is bearish for SOL. If anything, the recent approval of spot BTC ETFs and the incoming approval for spot ETH products just shows that it’s a question of when not if for other spot crypto ETFs.

Besides, other developments within the Solana ecosystem seem to indicate that it's “up only” for Solana from here.

Notably, on-chain data reveals that activity within the Solana ecosystem is at an all-time high. The 7-day average of non-vote transactions on Solana is at 38.37 million, the highest in two years. Data shared via Dune Analytics also shows that the weekly number of traders on Solana-based DEXs hit a record high of three million earlier in June. Data on Artemis also indicates that the number of returning addresses reached a record high of 1.2m on June 17th.

The likely catalyst for this rise of on-chain activity on Solana is the ongoing mania for meme coins launched via Solana-based pump.fun. Notably, over the past month, we’ve seen a swarm of mainstream celebrities attempt to jump on the pump.fun bandwagon. While the morality of their intentions is questionable, there is no doubt about the effect their involvement has had on retail investors and gamblers.

That said, speculative memecoin trading isn’t the only thing the network has got going for it. Notably, the Solana Foundation recently introduced ‘Actions’ and ‘Blinks.’ To put it simply, Solana Actions are APIs that return Solana transactions, while Solana Blinks are a new primitive that transforms on-chain actions into shareable links (aka ‘blockchain links’).

Functionally, they are similar to Farcaster’s Frames – something we covered in a previous issue of this newsletter. Like Frames, Solana Actions and Blinks allow users to create interactable embeds within existing web pages. This means that users can now trade and interact with any dapp on Solana anywhere on the web without being redirected to an external site. Imagine buying an NFT directly while browsing on X.

There are already quite a few projects attempting to adopt Actions and Blinks. These include the likes of Drift Protocol, Sphere, Access Protocol and Sanctum.

With all this in the background, it’s pretty evident why it looks like Solana, not Ethereum, could be the main character of this cycle. It appears that even institutional investors are beginning to catch on to this narrative too.

It would take a brave soul indeed to fade SOL this cycle.

 🔥Hot Deal of The Week 🔥

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🔮Video Pipeline🔮

* Ethereum Update: What’s next for ETH’s price?
* Central Banks Buying Crypto: What are their plans?
* Kucoin Report: Intriguing insights on the market!
* Bond Vigilante: How is government debt being weaponised?

🏆What's New at CoinBureau.com This Week?🏆

* Solana Use Cases: How It Powers Web3 Innovation!
* Top DeSci Projects: Best Decentralized Science Projects of 2024
* BloFin Review 2024: In-Depth Analysis of Features and Services
* Bumper Review 2024: The Next-Gen Trading Platform

📖Quote of the Week📖

Risk management and stop-losses are essential. It doesn’t matter if you have ten profitable trades if the one bad trade that you make wipes out those profits.

“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” - George Soros

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.