Powell’s Jackson Hole Speech to Outline Fed’s Future Path

The Breakdown First Five - Friday, August 23, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Babylon Clogs Mempool

The launch of Bitcoin staking protocol Babylon saw huge levels of network congestion. Priority fees spiked above $60 as Bitcoin holders rushed to stake their assets. Only 10,000 Bitcoin were accepted on the platform, which accepted deposits to a multi-sig. All of the slots were filled within six blocks. The platform itself is still untested, but has credible venture backing from Polychain Capital, Paradigm, Galaxy Digital and Hashkey Capital. 

4. CZ Close to Release

Former Binance CEO CZ has been moved to a Long Beach halfway house ahead of his September 29 release date. CZ was sentenced to four months in prison after pleading guilty to BSA violations. CZ has previously said he has plans to move on from crypto and work on an education company. Meanwhile, Binance ramps up with the goal of 1000 new hires and a renewed focus on compliance.

3. USDD Bitcoin Withdrawn 

Justin Sun claims there’s nothing to worry about after Tron DAO removed almost $750M worth of Bitcoin reserves backing algorithmic stablecoin USDD. The $744M market cap stablecoin is now primarily backed Tron tokens, although the reserve is over $1.7B in value. The move comes at a strange time for the Sun empire, with Tron seeing memecoin attention at the same time as concerns are raised over Sun’s involvement in wBTC. 

2. Painfully Rangebound

Bitcoin continues to trade at $60,000 as the summer doldrums drag on. Price action has been extremely stagnant over the past week, with no ability to break resistance or support. On the positive side, Bitcoin is no longer responding to negative headlines, shrugging off another round of Mt Gox selling and a downgrade of the US labor market. On the negative side, zero momentum compared to a bullish stock market could lead us all to die of boredom. 

1. Jackson Hole Speech

Fed Chair Jerome Powell will deliver his annual speech from Jackson Hole this morning, setting the tone for monetary policy over the coming year. With a September rate cut almost assured, Powell is expected to be dovish but cautious. Markets are currently pricing in rates falling to 3% by the end of next year, but Fed officials have argued for a gradual approach. With Fed credibility on the line Powell will be under pressure to chart a course forward.