Bitcoin ETFs were finally approved, an extremely important milestone on the path toward the integration of crypto technology/markets into the regulatory mainstream. Just as dotcoms and bricks-and-mortar converged, so too will crypto finance and traditional finance. With this approval, things start to really accelerate.

Dusted off an anecdote from 2012 when the dollar was down near all-time lows. It’s something I reflect on with the world order evolving and the greenback still up near 20yr highs (see below). Enjoy MLK long weekend, back next Sunday with full wknd notes. All the very best, E

Week-in-Review: Mon: US Congress made progress on bipartisan spending deal ahead of 1/19 gov’t shutdown deadline, Israel killed another key Hamas leader in Lebanon, Fed’s Logan suggests lowering QT pace as RRP reaches lower levels, Saudi cuts crude prices due to weak demand, reports that Houthi and shipping companies reach an agreement, Trump asked GA judge to toss out the state’s criminal case arguing he’s immune from prosecution over his actions as President, Germany factory orders -4.4% (-3.4%e), Germany expts 3.7% (0.5%e)/ impts 1.9% (0.4%e), EU ret sales -1.1% (-1.5%e), US NY Fed 1y infl exp 3.01% (3.36%p), US consumer credit 23.751b (8.55b exp), S&P +1.4%; Tue: Brainard says “work is not done” when it comes to lowering prices, ECB’s Villeroy repeats that cuts to come in 2024 / Centeno sees cuts in 1H24, SEC twitter account hacked / falsely announces approval of Bitcoin ETF, Tokyo CPI 2.4% (2.5%e) / Core Cpi 3.5% as exp, Germany IP -4.8% (-4%e), EU unemp rate 6.4% (6.5%e), Mexico CPI 4.66% (4.57%e) / Core 5.09% (5.15%e), US NFIB 91.9 (91e), US Trade Balance -$63.2b (-$64.9b e), S&P -0.1%; Wed: Fed’s Williams says must be confident inflation headed to 2% before easing / don’t seem close to point of slowing asset runoff, SEC approves 11 bitcoin ETFs, Houthis conduct largest attack in the Red Sea, ECB’s de Guindos said EU may have ended 2023 in a recession, Blinken met Palestinian leader Abbas, Japan labor earnings 0.2% (1.5%e) / Real earnings -3% (-2%e), S. Korea unemp 2.9%, Australia CPI 4.3% (4.4%e), (3.3%e), S&P +0.6%; Thu: US CPI 3.4% (3.2%e) / Core CPI 3.9% (3.8%e), Fed’s Mester says March is too early for a rate cut / more work to do, Iran seized tanker near Oman, US strikes down 20 Houthi fired drones/missiles, Xi says China wants to work with the US to improve relations, Meloni meets with Hungary PM Orban to convince him to lift opposition to EU’s support of Ukraine, House republicans blocked GOP bill in protest of spending agreement, Japan leading index 107.7 (107.9e), Brazil IPCA 4.62% (4.55%e), Mexico IP 2.8% (4.9%e), US init claims 202k (210k exp), S&P -0.1%; Fri: US and UK conduct air strikes against Houthi targets in Yemen, Tesla announces prices cuts in China, ECB’s Lagarde says will start cutting when convinced infl is headed back to its 2% goal, Riksbank’s Bunge says further tightening unnecessary but haven’t discussed rate cuts, media reports BOJ is considering lower infl forecast to 2.5% (from 2.8%) and cutting growth estimates, US bank earnings kick off with mixed results, Israel rejects allegations of genocide at the UN court, China CPI -0.3% (-0.4%e) / PPI -2.7% (-2.6%e), China Expts 2.3% (1.5%e) / Impts 0.2% (-0.5%e) / Trade balance $75.34b ($74.95b e), Argentina CPI 211.4% (222%e), UK IP -0.1% (0.7%e) / mfg prod 1.3% (1.7%e), Turkey Current acct balance -2.72b (-1.70b e), France CPI 4.1% as exp, China aggregate financing 1.94T (2.162T exp) / M2 9.7% (10.1%e), India IP 2.4% (3.5%e), India CPI 5.69% (5.88%e), US PPI 1% (1.3%e) / Core 1.8% (2%e), S&P +0.1%.

Weekly Close: S&P 500 +1.8% and VIX -0.65 at +12.70. Nikkei +6.6%, Shanghai -1.6%, Euro Stoxx +0.1%, Bovespa -0.8%, MSCI World +1.2%, and MSCI Emerging -0.7%. USD rose +2.1% vs Chile, +1.0% vs Turkey, +0.4% vs Australia, +0.4% vs Canada, +0.3% vs China, +0.3% vs Sweden, +0.2% vs Indonesia, and +0.2% vs Yen. USD fell -16.5% vs Ethereum, -2.5% vs Bitcoin, -2.4% vs Russia, -0.4% vs Brazil, -0.3% vs India, -0.3% vs Sterling, -0.2% vs South Africa, -0.1% vs Euro, and -0.1% vs Mexico. Gold +0.1%, Silver +0.1%, Oil -1.5%, Copper -1.7%, Iron Ore -1.3%, Corn -3.0%. 10yr Inflation Breakevens (EU -1bp at 1.99%, US +5bps at 2.28%, JP +2bps at 1.19%, and UK -5bps at 3.48%). 2yr Notes -24bps at 4.15% and 10yr Notes -11bps at 3.94%.

2024 Year-to-Date Close: Argentina +10.1% priced in US dollars (+11.1% priced in pesos), Colombia +6.4% price d in US dollars (+8% priced in pesos), Turkey +5% priced in dollars (+6.9% in lira), Hungary +4.8% in dollars (+5% in forint), Russia +4.1% (+2.8%), Greece +3.5% (+4.6%), Japan +3.3% (+6.3%), Denmark +2.4% (+3.5%), UAE +2.2% (+2.2%), Philippines +2.2% (+3%), Czech Republic +2.1% (+3.1%), Saudi Arabia +1.2% (+1.2%), India +1.2% (+0.8%), Malaysia +1% (+2.2%), S&P 500 +0.3% in dollars, Finland +0.1% (+1.1%), NASDAQ -0.3% in dollars, MSCI World -0.4% in dollars, Italy -0.6% (+0.4%), New Zealand -0.8% (+0.7%), Switzerland -0.9% (+0.8%), Spain -1.1% (-0.1%), Germany -1.3% (-0.3%), Canada -1.3% (+0.2%), Indonesia -1.5% (-0.4%), UK -1.6% (-1.4%), Netherlands -1.7% (-0.6%), Belgium -1.7% (-0.6%), Euro Stoxx 50 -1.9% (-0.9%), France -2.1% (-1%), Austria -2.1% (-1.1%), Portugal -2.3% (-1.3%), Thailand -2.4% (-0.2%), Brazil -2.5% (-2.4%), Singapore -2.5% (-1.5%), Norway -2.6% (-0.9%), Mexico -2.7% (-3.1%), Australia -3.4% (-1.2%), Venezuela -3.7% (-3.3%), Russell -3.8% in dollars, China -4% (-3.1%), Taiwan -4% (-2.3%), Sweden -4.1% (-1.7%), Israel -4.2% (-0.1%), Poland -4.3% (-3%), HK -4.8% (-4.7%), Ireland -4.9% (-3.9%), South Africa -5.8% (-3.8%), Korea -6.7% (-4.9%), Chile -6.9% (-3.7%).

Anecdote (July 2012): Took a long walk, to shake a long flight, Seoul to NY is a drag. Strolled through the World Financial Center, where a crazy mensch gave me a shot, back in 1991. High above floated two ghosts - Twin Towers - on which I held my little brother upon my shoulders, whispering the truth, “Pete, you’re on top of the world.” That was 1993. In the distance stood our Lady. Liberty. I spun, headed uptown. Meat Packing District, passed my brother’s nightclubs, filled with centerfolds, sprinkled with oligarchs, spraying Russian crude, and Cristal. Crossed Spring Street, the Shark Bar, where Mara and I marveled at our paper net worth, when I was dumb enough to believe you can get rich quick; but wise enough to not spend a dime, in 1999. Strolled through George Washington’s Park, teeming with Americans; Jews, black hats, Muslims, white caps, Atheists, Africans, Indians, Argentinians. Who come to earn Benjamin Franklins, leaving petty feuds behind. Hit Times Square, lit like a solar flare, where I sealed my biggest deal with a handshake, midnight 2008. Glimpsed Bloomberg’s shining tower, our media mogul, he’s no Berlusconi, no Murdoch. Passed Russia’s Tea Room, where Martha Stewart and Sam Waksall, fittingly toasted themselves, committed a crime, did time - in 2004. Approached the Plaza, where Saudi Princes sleep, with their 300-strong entourages, when in need of a real doctor. Glanced up, at dark, empty, $10mm apartments, Chinese kleptocrats buy, sight-unseen, by the six-pack. And at midnight, I hit Central Park. Alone. Passed The Met, guarding relics from fallen empires. Circled the Reservoir. It’s safe now. Headed East. Where it started for me. In 1973. And sat on my elementary school steps, PS 158. Yellow cabs whizzed by. NYC aglow. Filled with potential. Energy. Opportunity. And wondered why the Dollar remains just 15% above all-time lows.

Good luck out there,

Eric Peters

Chief Investment Officer

One River Asset Management

Disclaimer: All characters and events contained herein are entirely fictional. Even those things that appear based on real people and actual events are products of the author’s imagination. Any similarity is merely coincidental. The numbers are unreliable. The statistics too. Consequently, this message does not contain any investment recommendation, advice, or solicitation of any sort for any product, fund or service. The views expressed are strictly those of the author, even if often times they are not actually views held by the author, or directly contradict those views genuinely held by the author. And the views may certainly differ from those of any firm or person that the author may advise, converse with, or otherwise be associated with. Lastly, any inappropriate language, innuendo or dark humor contained herein is not specifically intended to offend the reader. And besides, nothing could possibly be more offensive than the real-life actions of the inept policy makers, corrupt elected leaders and short, paranoid dictators who infest our little planet. Yet we suffer their indignities every day. Oh yeah, past performance is not indicative of future returns.