$100,000 Bitcoin, Stocks Ripping, and Meta's $10B Investment

One Hundred Thousand Dollars for One Orange Coin

December 06, 2024

Each week feels like a month.

This Week in Crypto

Well, we finally broke 6 figures. I’ll try not to harp on about it given it’s literally all everyone’s been talking about. Demand for coins remains high… ETF flows are mid 9 figures daily!

  • Mt.Gox chose the perfect time to move $2.4B of coins around, and the US government obviously felt left out, so decided to move $1.9B.

  • Price tapped $105,000 in a convincing breakout, but a flash crash sent us to $91,000 (-13%), causing >$1B in liquidations (none of which were Arch clients, they know how to manage their risk). A recovery has since ensued.

    • Is this volatility for ants? The class of ‘17 or ‘21 remains unfazed.

Farside Investors

And, I don’t want to jinx it, but even the ETF flows have shown signs of life with 9 consecutive days of inflows, and volumes picking up drastically in recent days.

Farside Investors

Narrative, follows price, as they say. And ETHUSD has just taken $4,000, still below ATHs, while ETHBTC has made a somewhat convincing move off the bottom (+27%).

  • Aggregate DEX volumes are on ETH and are up significantly (still below SOL).

  • Stablecoin borrow rates have rocketed on all chains (but not at Arch!!) with demand for leverage and this is causing stablecoin supply to hit new ATHs ($196B, up from $189B on Nov 28).

  • ETH NFT volume is up (+258M in 30 day volume) ahead of the announced Pudgy Penguins $PENGU airdrop

  • Generally, you can see the early formations of a narrative for a “catchup trade” forming with ETH still 15% below its ATH, driven by increasing institutional flows.

    • I think we’re still a way away from pension funds/asset managers and the like from taking Ethereum allocations seriously, but ETH has a quarter of the market cap of Bitcoin, so it takes much less to move price, and crypto is the hottest asset class in the market right now so hedge funds and retail can push flow.

In other news…

This Week in TradFi

Coming out of the Thanksgiving holiday, the U.S. economic outlook remains optimistic. 

  • 197 million Americans shopped over the five day period from Thanksgiving to Cyber Monday, higher than the estimated $183.4 million but lower than last year’s 200 million. Consumers spent an average of $235, $8 more than 2023. 

  • The Federal Reserve reported on Wednesday that U.S. economic activity has expanded slightly in most regions since October, with subdued employment growth and a slight increase in inflation.

  • Fed Chair Jerome Powell said that the economy is stronger now than the bank had initially expected in September, and the Fed can begin to slow-down upcoming interest rate cuts. 

  • As a result, the stock market closed at record-highs, with technology shares rallying. This was also helped by Salesforce stock increasing 11% after Q3 revenue reports came in higher than expected. 

On the international front:

  • The Reserve Bank of India kept its interest rate unchanged but cut the cash reserve ratio that banks are expected to hold, supporting the country’s growth with more liquidity. This comes after India’s GDP growth rate unexpectedly fell to 5.4% last quarter, its slowest pace in seven quarters.

  • Asian stocks continue to see heavy outflows for a second consecutive month, with investors worried about President-elect Trump’s upcoming tariff hikes. Foreigners net withdrew $15.9B out of equity markets in November. 

  • Germany’s labor market continues to weaken, with 1.28M reported job vacancies in Q3, falling for the seventh consecutive quarter and down from 1.98M two years ago. 

  • The OECD reports that Greece’s economy is expected to grow by more than 2% annually in the next two years. Recommendations to continue to stimulate growth included broadening the country’s tax base and adopting more growth-friendly taxes to support fiscal sustainability. 

This Week in Tech

Readers know we love writing about AI, and the AI news continues to come:

  • OpenAI announced ChatGPT Pro, a $200/month subscription that gives unlimited access to all of OpenAI’s models, including the full version of o1. O1 is currently available to all paid ChatGPT users, but new subscription users will get a better version of the o1 model that’s able to use more compute and can answer harder questions.

  • Google’s DeepMind has unveiled a new model, Genie 2, that can generate endless playable 3D worlds, including worlds in which users can take actions like jumping and swimming using their mouse or keyboard. 

  • Amazon’s AWS launched a suite of new generative AI models called Nova, which has four text-generating models, alongside photo- and video-generating models.

As if we’re not addicted to social media enough, Meta is building a $10B subsea cable that will span the world.

  • The cable will be 40,000+ kilometers, extending around the world. 

  • The plan is still in early stages, with people expecting Meta to more publicly announce the plan in early 2025. 

  • It’ll take years before the cable is actually operational, but once it is, Meta will have its own pipe for data traffic anywhere in the world. 

As usual, below are some fundraising announcements, M&A, and tech personnel changes that caught our eye:

Arch is building next-gen wealth management platform for individuals holding Alternative Assets. Our flagship product is the crypto-backed loan, which allows you to securely and affordably borrow against your crypto. We also offer access to bank-grade custody, trading and staking services, powered by BitGo.

Disclaimer: None of the above is financial advice, seriously.