Welcome anon to another week of paid content.
Please refer to the Backdrop Post and trade with mindfulness.
If you’re new and have a question, please read the FAQ post first.
Please refer to Definitions page for any terms or abbreviations that I use that you don’t understand. If a term is missing, please let me know.
This post will be too long for the email, please come to the substack website.
Substack has launched an iOS app for those of you using apple devices. I am an android peasant and can’t tell you if its good or not, but check it out if you have an iPhone or some other such trappings of royalty.
I’ve created a twitter account specifically for this substack. Will just be harassing people and quoting my substack in the public sphere. Hope to be joining twitter spaces in time from that account as well.
Please feel free to skip around or ignore certain sections if it does not apply to you. The Table of Contents is made to preserve your time in this manner. You can always simply read the conclusion if you are in a hurry.
All times given in this update are in US Central time (UTC-6 clock).
Song of the Week - Mariah Carey - Hero
Table of Contents
Crypto is the WNBA
Economic Calendar
US Interest Rates
Japanese Interest Rates
Swiss Interest Rates
English Interest Rates
Crypto Macro
Conclusion
1. Crypto is the WNBA
For those of you who have been reading for a long time, the focus of this blog is on the Macro-economic sphere primarily; and this is despite my belief that crypto is the money of the future. Why do I focus so much on the goings on within fiat if I think it is dying? That’s because crypto is the WNBA, and the dollar, Euro, etc. are the NBA. For those of you who aren’t American, the WNBA is the woman’s basketball league.
One of the main gripes that the WNBA and some other women’s pro sports have are centered around pay, sponsorships, and overall attention from general sports fans. What those who complain about this disparity in pay between the WNBA and NBA often fail to recognize is that the NBA, and other mens sports leagues in the US went for many decades with little viewership, no sponsorships, and low pay. In fact, in the 1950’s and 1960’s it was customary for even star athletes to have a second job they worked during the off-season. It was not until the 1980’s and 90’s when athlete salaries really started to take off as American sports leagues began to really drive up audience attendance and viewership. Many don’t realize this, but Michael Jordan’s $30m salary in 96-97 was the most any NBA player was paid per season until 2016. Even despite inflation, his salary was a reflection of how much viewership, merchandise sales and ticket sales he had driven to the Chicago Bulls team.
The main thing that the WNBA is missing is prestige and a player with wow factor. Larry Bird, Michael Jordan, and other stars were what drove viewership to the levels that could justify the player salaries they received. That shift occurred alongside a cultural shift where players were asked to do more and more, but could also focus more of their free time on the little things in their game as their salaries were pushed so high that they no longer needed to have 2nd jobs. Unfortunately for players in the WNBA they are entering a league with low viewership and lower salaries but are still being asked to devote a similar level of their time and attention to watching film, off-season workouts, and other activities.
This is in part why Britney Griner ended up in a Russian Jail cell. Most WNBA players have 2nd jobs, as the max salary was $110,000 in 2017, while the average was much less. The ideal second job for a WNBA player that will keep you competitive is playing basketball overseas. Womens basketball leagues in Asia and Europe are paying more than the WNBA; as foreign oligarchs are willing to take a loss for bragging rights about having the most dominant team.
The problem for the WNBA is growing a legitimate fan base across time in order to drive viewership. As they manage to do that, they will eventually overcome the same problems that the NBA overcame in the 70’s and 80’s which will allow for the kinds of player salaries that can turn a game into lucrative careers.
Crypto is the WNBA. So long as people cannot spend, save, and earn crypto in a reliable and convenient manner, they will always have to cash out to the US dollar or other currencies when they wish to actually use their money. Because crypto is tied to fiat for off-ramps, that means it is subject to the same macro-economic cycles that dominate the fiat sphere. It also means that for the most part, crypto can’t create it’s own macro-economic cycles. That’s why despite significant changes to the tokenomics of ETH, the only natural direction for it’s price to move after the successful ETH 2.0 merge was down.
Yes, I’m telling you that the merge will be a high water mark for price on ETH in the short term/mid-term
And it’s why only a few hours after the merge, price dropped.
The macro always wins. It’s why you need to know and be aware of the macro, it’s cycles will dominate crypto until a lot of the difficult ground work is put in, and that ground work may take this entire decade to complete. How does crypto become it’s own sphere? The same way that the WNBA becomes it’s own league. The WNBA needs to generate fans who are fans of the WNBA first, and basketball second, and not for ideological reasons, but because there are players that they wish to watch who can only be found in the WNBA. Womens tennis is a great example. Athlete pay is fairly even, and despite the men playing two extra sets per game, viewership is what drives player pay, and I’ve spent the better part of the last 2 decades watching Serena Williams play. She doesn’t play in the mens league (of course), and would probably lose against a man, but her games against other women are great entertainment. Similarly, the WNBA needs electric, entertaining athletic performances that can only be found there and no where else.
For crypto, this means that the ability to spend, save, and earn in a more convenient and beneficial way needs to be ubiquitous, and thats not here yet. If I go down to the corner store a few blocks from my apartment, can I spend ETH there? No. I have a crypto.com debit card, and I can kind of spend crypto through that card, but its a half measure. We stop being the WNBA when at my corner store and nearly everywhere else there is a method for me to sign a transaction and pay for goods and services on chain and in crypto. We stop being the WNBA when its easier for the store owner just to keep the ETH he receives rather than selling it for dollars because his suppliers accept ETH and his employees also want their salaries in ETH. We stop being the WNBA when on-chain payment methodology is readily available just about everywhere. It took decades for debit and credit card adoption to occur after their invention. The same is likely true for crypto, we just have the benefits of a macro-economic tailwind as inflation becomes more and more rampant in the western fiat sphere.
Until then that means that the macro-economic cycle of crypto will be dominated by central bank activities and the amount of liquidity available in the lending markets. Which is why we track macro-economic activities in order to maximize how much food, shelter, and status we can buy ourselves in the short-run/mid-term while simultaneously planning for the future within which crypto continues to gain adoption both here, and in other countries. Ultimately, the less holders and users of crypto need to off-ramp back to fiat, the more we separate ourselves from the macro-economics of fiat. Until one day when the thought of off-ramping becomes a distant memory. At that point a completely new macro-economic cycle will emerge within crypto, and I hope I will be competent enough to identify it.
Keep reading with a 7-day free trial
Subscribe to Flirtcheap’s Asymmetric Economics to keep reading this post and get 7 days of free access to the full post archives.