The Breakdown First Five - Tuesday May 9, 2023

5. Inflation Day

April’s CPI print is due this morning and forecasts suggest headline inflation will come in at 5%, same as last month. JPoww said he wanted to see more data before committing to pause the hiking cycle, so uhh…zero progress on inflation seems to fall short of that mark.

4. Genesis Talks Dead

The hanging chad from last year’s chaos remains DCG. Mediation between DCG, Genesis and creditors are rumored to have hit the wall. Talks began last week after creditors sought to renegotiate a February deal in light of new information. DCG says they’re seeking growth capital to refinance the $630M debt owed to Genesis this week, but for months so far that fundraising has been unsuccessful.

3. Market Makers leave Markets

Jane St and Jump Trading are pulling out of US Crypto markets to escape the fury of the CFTC. After taking big hits last year, the additional regulatory scrutiny just isn’t worth it, it seems. The market makers will leave a big liquidity gap in their wake, which already showed up on Binance US over the weekend, with Bitcoin trading at a 3% spread.

2. Stuck on the Debt Ceiling

The first round of talks in the Debt Ceiling negotiations have gone poorly. The Whitehouse insists on a no-strings-attached resolution, while Republicans are sticking firmly to demands of spending cuts to social programs. Secretary Yellen asks Congress to show the world that “we’re not a deadbeat country”. More negotiations Friday.

5. $18B for the Big Guy

Joe Biden is coming for your tax loopholes, you wealthy Crypto trader. In the latest escalation of anti-Crypto sentiment among the Ds, the President tweeted that closing Crypto tax loopholes could raise $18B. It’s unclear which loopholes would be closed, and also unclear how $18B would be raised from that. What is clear is that one party is pretty convinced it’s winning politics to target the crypto set.