# Decoupling 10/26/23

**Published by:** [Kintsugi Research](https://paragraph.com/@research.kintsugi/)
**Published on:** 2023-10-26
**URL:** https://paragraph.com/@research.kintsugi/decoupling-10-26-23

## Content

Bitcoin pumped to $35k this week, a level last seen over a year ago (May 2022). The move pushed past the upper bollinger band and sent the BTC x SPY correlation coefficient negative for only the fourth time in three years.ETF approvals are the loudest narrative on crypto twitter and for good reason. The first Gold ETF in November 2004 corresponded with a nice run (>4x) in the spot price of the fancy yellow metal.Galaxy predicts over $14B could flow into Bitcoin from broker-dealers, banks, and retirement accounts in the first year after an ETF is approved. Big, if true.Meanwhile, the market is increasingly concerned about inflation. In Where is the Bottom? back in June 2022, we acknowledged how inflation regimes affect asset class correlations. Since the Sept 20th meeting long term term treasuries (TLT) dumped and equity x bond correlation flipped positive for the first time in 20 years.While inflation is trending in the right direction, the siren calls of insolvent banks, wars, and fiscal deficits could prove to be too much for Powell to keep his hands off the printer much longer.The structural hedging needs of banks and the borrowing needs of the US war machine reflexively feed on one another in the US Treasury market. (Arthur Hayes)It’s notable that the recent rise in bond yields came as Fitch Ratings downgraded its U.S. credit rating, Treasury upped the size of its bond auctions, analysts began revising upward this year’s federal deficit, and Congress nearly shut down parts of the government over a failure to pass spending bills. The federal deficit was over 7% of gross domestic product in fiscal 2023, after adjusting for accounting distortions related to student debt. That’s larger than any deficit since 1930 outside of wars and recessions. And this is occurring at a time of low unemployment and strong economic growth. (wsj)TLDR; It’s looking like a pretty good setup for hard assets such as Bitcoin in what BlackRock CEO Larry Fink describes as a flight to quality.References10/26/23WSJ: 60-40 portfolio just had worst year in generationsWSJ: Economy was supposed to slow down by nowWSJ: Recession no longer consensusBloomberg: Car Owners fall behind on paymentsTBL: BTC touches 30k as stocks dumpPitchbook: Cloud gaming startupsTrust Machines: BitVMMessari: Filecoin Q3 2023Messari: Solana Q2 2023Filecoin featured clientsMacro Compass: New inflation paradigmInformationist: Twin deficitsFidenza: Big chart levels getting testedTBL: Bitcoin up 100% in 2023Spectra: What part of yield curve does dollar listen to?Arthur Hayes: PeripheryVariant: Doubling down on BottoWSJ: Interest rates up = financial drama?10/19/23WSJ: Netflix deepens gaming pushLyn Alden: Oct newslettera16z: Techno Optimist ManifestoMessari: Consumer Sector Brief, Oct 2023TBL: Fake Bitcoin ETF Fire DrillBloomberg: BlackRock tweaks treasuries viewTBL: Consumers cruising for a bruisingGlassnode: The cycle of BTC changing handsSam Lessin: The State of VCA24: The Rise of a Cultural Conglomerate21.co: The state of tokenizationBofA report on tokenizationCreator finance is going mainstreamFortune: CreatorDAO raises $20mWSJ: Term premiumWSJ: American consumer keeps splurgingMorgan Stanley: Will Crypto Spring Ever Come?BMPro: Bitcoin positioned for rally10/12/23WSJ: Rising Rates and Bank Balance SheetsMessari: Infrastructure Sector BriefMessari: Intro to Optimism’s Security CouncilWSJ: Wall Street thinks America’s homes are overvaluedEater: Web3 x RestaurantsWSJ: Rising Rates mean Deficits MatterArthur Hayes: Double Happiness WSJ: Iron Ore and China Real EstateWSJ: Can Wall Street Handle Washington’s BondsTBL: Economic Woes AheadTBL: Part-Time Jobs SoarForbes: US Dollar Collapse, Crypto to $8TForbes: Flashing Red Warning, $33T US Debt Death SpiralBMPro: Volcano Energy Builds Road to Geothermal BTC MiningHoward Marks: Further Thoughts on Sea ChangeWSJ: Profits are making a comebackGlassnode: Capital flows, exchanges, and alt season2023 Multicoin SummitMacro Compass: What Hedge Funds are ThinkingDecrypto: Sage Labs on Solana does more tx than PolygonCoinshares: Digital asset fund flowsAcumen Metaverse Research ReportDecrypt: Amazon and Immutable Make it Easier to Launch Crypto GamesOn the Brink: Crypto backed stablesJake Pahor: Maker DAO thread

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