A Look Into Historic DeFi Interest Rates
Smart money has been using interest rates to plot market swings for decades. We applied the concept to DeFi using Aave historical data to hunt down potential patterns.
The Yield Curve Is Telling Us Something
Plotting interest rates can offer a snapshot of global economic sentiment.
Interest Rates Matter
The yield curve is known as the market's 'crystal ball'. Let's explore what it is and how it can signal bull/bear momentum.
A Look Into Historic DeFi Interest Rates
Smart money has been using interest rates to plot market swings for decades. We applied the concept to DeFi using Aave historical data to hunt down potential patterns.
The Yield Curve Is Telling Us Something
Plotting interest rates can offer a snapshot of global economic sentiment.
Interest Rates Matter
The yield curve is known as the market's 'crystal ball'. Let's explore what it is and how it can signal bull/bear momentum.

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Crypto has never been through a Tradfi recession. Ignoring the short-lived Covid recession for reasons we’ll outline later, the last meaningful recession for the US economy ended in 2009, not long after the Bitcoin genesis block was created.
Over the last 5 years, the correlation between TradFi and cryptoasset prices has increased. Crypto is no longer the self-contained bubble it may have been a decade ago. TradFi bleeds into crypto prices.
Every time the US Treasuries yield curve inverts, a recession typically follows. This inversion has predicted all 8 prior recessions since the 1960s with no false positives. Stocks typically bottom in the middle of the recession.
Currently the yield curve is undergoing one of the longest-lasting inversions in history.
This leads one to the logical conclusion that there is a decent risk of a Tradfi recession, and if that were to happen, maybe a great crypto bear market will occur followed by the buying opportunity of a lifetime.
Maybe.
Can anyone really predict these things?
So…
We’re starting this newsletter to introduce macro topics in digestible bites to crypto investors and builders.
We aim to explore emerging questions in “crypto macro” as the digital asset space matures and develops its own unique market characteristics.
Macroeconomics focuses on the effects of large-scale economic drivers like interest rates and productivity. Although we call our newsletter “Macro for Crypto”, we’ll focus on a subset of macro: the business cycle.
As a crypto investor, timing cycles correctly means the difference between being a multi-millionaire and being broke.
And as the crypto market matures, it will become more and more intertwined with the broader global markets.
It is our thesis that the next parabolic move, whether to the upside or downside, will be greatly influenced by macro events. So we think it’s worth starting to pay attention.
This newsletter is targeted at the average crypto investor with limited exposure to macro topics. We’ll try to keep things simple but also relevant to crypto builders and investors.
In each piece we’ll introduce a new topic as well as comment on developing trends and new products/protocols.
Here’s a small glimpse of some of the first topics:
What are interest rates and why do they matter?
Significance of the yield curve
Is there a DeFi yield curve? How does it relate to the TradFi yield curve?
A look at historic DeFi interest rates
Interest rate strategies in DeFi
Variable rate models in DeFi & associated risks
Fixed rate models in DeFi
Oracle-free lending in DeFi
… (TBD)
Predicting recessions
The business cycle
Housing and the business cycle
Volatility events
Risk appetite in crypto cycles
Why did DeFi fall first in May ‘21?
Parabolic pumps
… (TBD)
We aren’t macro experts despite many years of indirect exposure to macro topics. So expect some mistakes from us and please let us know when we go wrong!
We aim to publish one piece a week.
Subscribe below and keep a lookout for us in your inbox. You can also follow The Tinkering Society’s blog and X for more DeFi-related content.

Crypto has never been through a Tradfi recession. Ignoring the short-lived Covid recession for reasons we’ll outline later, the last meaningful recession for the US economy ended in 2009, not long after the Bitcoin genesis block was created.
Over the last 5 years, the correlation between TradFi and cryptoasset prices has increased. Crypto is no longer the self-contained bubble it may have been a decade ago. TradFi bleeds into crypto prices.
Every time the US Treasuries yield curve inverts, a recession typically follows. This inversion has predicted all 8 prior recessions since the 1960s with no false positives. Stocks typically bottom in the middle of the recession.
Currently the yield curve is undergoing one of the longest-lasting inversions in history.
This leads one to the logical conclusion that there is a decent risk of a Tradfi recession, and if that were to happen, maybe a great crypto bear market will occur followed by the buying opportunity of a lifetime.
Maybe.
Can anyone really predict these things?
So…
We’re starting this newsletter to introduce macro topics in digestible bites to crypto investors and builders.
We aim to explore emerging questions in “crypto macro” as the digital asset space matures and develops its own unique market characteristics.
Macroeconomics focuses on the effects of large-scale economic drivers like interest rates and productivity. Although we call our newsletter “Macro for Crypto”, we’ll focus on a subset of macro: the business cycle.
As a crypto investor, timing cycles correctly means the difference between being a multi-millionaire and being broke.
And as the crypto market matures, it will become more and more intertwined with the broader global markets.
It is our thesis that the next parabolic move, whether to the upside or downside, will be greatly influenced by macro events. So we think it’s worth starting to pay attention.
This newsletter is targeted at the average crypto investor with limited exposure to macro topics. We’ll try to keep things simple but also relevant to crypto builders and investors.
In each piece we’ll introduce a new topic as well as comment on developing trends and new products/protocols.
Here’s a small glimpse of some of the first topics:
What are interest rates and why do they matter?
Significance of the yield curve
Is there a DeFi yield curve? How does it relate to the TradFi yield curve?
A look at historic DeFi interest rates
Interest rate strategies in DeFi
Variable rate models in DeFi & associated risks
Fixed rate models in DeFi
Oracle-free lending in DeFi
… (TBD)
Predicting recessions
The business cycle
Housing and the business cycle
Volatility events
Risk appetite in crypto cycles
Why did DeFi fall first in May ‘21?
Parabolic pumps
… (TBD)
We aren’t macro experts despite many years of indirect exposure to macro topics. So expect some mistakes from us and please let us know when we go wrong!
We aim to publish one piece a week.
Subscribe below and keep a lookout for us in your inbox. You can also follow The Tinkering Society’s blog and X for more DeFi-related content.
Macro for Crypto
Macro for Crypto
Just launched a newsletter to cover the intersection of Macro and Crypto! Join as we explore interest rates, the yield curve, emerging "crypto macro" phenomenon, and new DeFi primitives. https://paragraph.xyz/@macroforcrypto/introducing-the-macro-for-crypto-newsletter
Just launched a Macro for Crypto newsletter! Learn alongside me as we cover interest rates, macro cycles, emerging "crypto macro" phenomenons, and new DeFi primitives. And just learned about automatic @paragraph frames, cool! https://paragraph.xyz/@macroforcrypto/introducing-the-macro-for-crypto-newsletter
2 comments
Just launched a newsletter to cover the intersection of Macro and Crypto! Join as we explore interest rates, the yield curve, emerging "crypto macro" phenomenon, and new DeFi primitives. https://paragraph.xyz/@macroforcrypto/introducing-the-macro-for-crypto-newsletter
Just launched a Macro for Crypto newsletter! Learn alongside me as we cover interest rates, macro cycles, emerging "crypto macro" phenomenons, and new DeFi primitives. And just learned about automatic @paragraph frames, cool! https://paragraph.xyz/@macroforcrypto/introducing-the-macro-for-crypto-newsletter