Sam Martin

<div id="highlights-block_9395deceadc1e6f2393411af7d750ead" class="highlights">
        <ul>
                <li>Bitcoin’s weekly outflows reached a five-month high with nearly $3 billion worth of BTC leaving centralized exchanges</li>
                <li>The inflation outlook for December remains unclear as shipping and energy costs begin to rollover.</li>
            </ul>
    
</div>



<p>BTC rallied to near $50,000 after the 6.8% CPI print before erasing the gains and trading below $47,500.</p>



<p>Real yields on the US 10-year are at their lowest level since the 1940s.</p>



<p>The inflation outlook for December remains unclear as shipping and energy costs begin to roll over.</p>



<p>Bitcoin’s weekly outflows reached a&nbsp;five-month high&nbsp;with nearly $3 billion worth of BTC leaving centralized exchanges.</p>



<p>Axie Infinity teases future aspects of gameplay and provides an overall update of the largest blockchain-based game.</p>



<h3 class="wp-block-heading"><strong>Latest in Macro:</strong></h3>



<ul class="wp-block-list">
<li>S&amp;P 500: 4,712, +0.95%</li>



<li>NASDAQ: 15,5630, +0.73%</li>



<li>Gold: $1,782, +0.36%</li>



<li>WTI Crude Oil: $71.95, +1.42%</li>



<li>10-Year Treasury: 1.482%, -0.005%</li>
</ul>



<h3 class="wp-block-heading"><strong>Latest in Crypto:</strong></h3>



<ul class="wp-block-list">
<li><a href="https://blockworks.co/price/btc">BTC</a>: $48,348, +0.97%</li>



<li><a href="https://blockworks.co/price/eth">ETH</a>: $4,043, -2.61%</li>



<li>ETH/BTC: 0.0836, -3.31%</li>



<li>BTC.D: 41.19%, +1.54%</li>
</ul>



<h3 class="wp-block-heading">6.8% CPI print</h3>



<p>After a <a href="https://cms.blockworks.co/bonds-sell-off-on-6-2-cpi-print-bitcoin-liquidations-spur-correction-markets-wrap/" target="_blank" rel="noreferrer noopener">6.2% Consumer Price Index (CPI)</a> print for the month of October, November&#8217;s numbers showed a 6.8% year-over-year inflation rate. This is the highest inflation rate since June of 1982, <a href="https://twitter.com/JackFarley96/status/1469300999860989955?s=20" target="_blank" rel="noreferrer noopener">according</a> to Jack Farley.</p>



<p>Moreover, the 10-year real yield is also officially at its lowest level since the 1940s, <a href="https://twitter.com/TaviCosta/status/1469312450445123584?s=20" target="_blank" rel="noreferrer noopener">per</a> Crescat Capital portfolio manager, Otavio Costa. Real yields are calculated by subtracting the prevailing inflation rate from the nominal Treasury yield, thus providing investors with the real rate of return of bond yields.</p>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="791" height="578" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png" alt="" class="wp-image-12432" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=791 791w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=352 352w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=357 357w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=80 80w" sizes="auto, (max-width: 791px) 100vw, 791px" /></figure>



<p>Container shipping rates have begun to roll over, which should help ease CPI prints going forward.</p>



<p>&#8220;If the Fed errs, the bond market and its deflationary signals will say, &#8216;Told you so!&#8217; Long yields are very low considering low jobless rates and inflation, and inflation expectations are falling. Note the 5-yr-5-yr forward TIPS break-even spread and container shipping rates,&#8221; <a href="https://twitter.com/TimmerFidelity/status/1469336106764316685?s=20" target="_blank" rel="noreferrer noopener">wrote</a> Jurrien Timmer, Director of Global Macro at Fidelity.</p>



<p>US President Joe Biden also signaled ahead of today&#8217;s CPI number that, &#8220;the information being released tomorrow on energy in November does not reflect today&#8217;s reality, and it does not reflect the expected price decreases in the weeks and months ahead, such as in the auto market,&#8221; according to a <a href="https://www.reuters.com/business/biden-says-inflation-data-due-friday-will-not-reflect-recent-drop-some-prices-2021-12-09/" target="_blank" rel="noreferrer noopener">Reuters report</a>.</p>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="553" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg" alt="" class="wp-image-12433" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=1193 1193w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: Fidelity</figcaption></figure>



<h3 class="wp-block-heading">BTC fake-out</h3>



<p>Similar to last month when <a href="https://cms.blockworks.co/bonds-sell-off-on-6-2-cpi-print-bitcoin-liquidations-spur-correction-markets-wrap/" target="_blank" rel="noreferrer noopener">BTC rallied to an ATH</a> following the CPI print for the month of October only to quickly erase the gains shortly thereafter, the same thing happened today. BTC rallied close to $50,000 before dropping below $47,500 moments later, according to data from <a href="https://coinmarketcap.com/currencies/bitcoin/" target="_blank" rel="noreferrer noopener">CoinMarketCap</a>.</p>



<p>&#8220;Bitcoin is below the short-term holder cost basis, which currently sits at $53K. Until this is reclaimed, not bullish. Not saying I am a &#8216;giga bear&#8217;, just cautious until the market shows me otherwise. Happy to flip bullish if reclaimed. Bearish confirmation would be a failed underside retest of the band,&#8221; reads a <a href="https://www.blockwareintelligence.com/p/blockware-intelligence-newsletter-35b?r=fg8t4&amp;utm_campaign=post&amp;utm_medium=web" target="_blank" rel="noreferrer noopener">Blockware Intelligence Newsletter.</a></p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/on-chain-cost-1024x576-1.jpg" alt="" class="wp-image-12434"/><figcaption class="wp-element-caption">Source: Blockware Intelligence</figcaption></figure></div>


<p>Some other bitcoin highlights from an <a href="https://medium.com/intotheblock/macro-conditions-dominating-cryptos-outlook-f323bdec3043" target="_blank" rel="noreferrer noopener">Intotheblock report</a> include:</p>



<ul class="wp-block-list">
<li>Bitcoin recorded a modest increase in the fees generated by its blockchain as network activity picked up during the crash</li>



<li>BTC&#8217;s weekly outflows reached a&nbsp;five-month high&nbsp;with nearly $3 billion worth of BTC leaving centralized exchanges</li>



<li>Bitcoin’s underperformance comes at a time when both the dollar (DXY) and the volatility index (VIX) are at their highest in months</li>



<li>Year-to-date, bitcoin has significantly outperformed traditional markets, potentially leading to profit-taking activity amid uncertain conditions</li>



<li>Bitcoin&nbsp;<a href="https://app.intotheblock.com/coin/BTC/deep-dive?group=derivatives&amp;subgroup=perpetual&amp;chart=all&amp;utm_source=hs_email&amp;utm_medium=email&amp;_hsenc=p2ANqtz--3HthPON7RdkqvpuHQkAo5sKcLDqom_ZNmPoINz_cKzhRZDdo6RhGdAF5Y5S0AsAjgyfRx" target="_blank" rel="noreferrer noopener">perpetual swaps’ funding rate</a>&nbsp;remain near zero, pointing to neutral expectations in the near-term</li>
</ul>



<h3 class="wp-block-heading">Axie Infinity December update</h3>



<p>An <a href="https://axie.substack.com/p/dec2021" target="_blank" rel="noreferrer noopener">Axie Infinity development update</a> that was released last night shows that the popular play-to-earn game is approaching 3 million community members and significant progress in the battles, land and origins game development.</p>



<p>For comparison, there are roughly 4.1 million unique addresses in DeFi, <a href="https://dune.xyz/rchen8/defi-users-over-time" target="_blank" rel="noreferrer noopener">according to data</a> from Dune Analytics.</p>



<p>The report continues by comparing Ronin usage, the Ethereum sidechain that Axie Infinity is built upon, to activity on the Ethereum base layer. &#8220;Today, Ronin’s transaction volume has grown to roughly 4x the number of daily transactions of the Ethereum chain, and that growth has pushed us all to prepare for significant scale in 2022!&#8221; according to the report.</p>



<figure class="wp-block-image size-large"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/ronin-activity-1024x879-1.jpg" alt="" class="wp-image-12436"/><figcaption class="wp-element-caption">Source: Nansen </figcaption></figure>



<p>Land gameplay is <a href="https://axie.substack.com/p/dec2021" target="_blank" rel="noreferrer noopener">still under development</a> and set to roll out in the first half of 2022. The team continues to work on resource production, gathering, and crafting mechanics and even teased what some of the in-game art will look like:</p>



<figure class="wp-block-image size-large"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/axie-art-1024x491-1.jpg" alt="" class="wp-image-12438"/><figcaption class="wp-element-caption">Source: Axie Infinity Development Update </figcaption></figure>



<p>The <a href="https://axie.substack.com/p/dec2021" target="_blank" rel="noreferrer noopener">update continues</a> by adding, &#8220;We also continue to make significant progress with our next generation battles experience, where we provide opportunities for players to experience a full, brand new storyline, non-blockchain “starter” Axies, the ability to attach power-ups to Axies, and much more.&#8221;</p>



<p>Sky Mavis, the <a href="https://cms.blockworks.co/axie-infinity-developer-scores-152m-in-series-b-funding-nearing-3b-valuation/" target="_blank" rel="noreferrer noopener">developers</a> behind Axie Infinity, are also working on graphical special effects for the game and leaked some of what they have been working on:</p>



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="Origin VFX Leek!" width="1024" height="576" src="https://www.youtube.com/embed/wrbEyQZGipc?start=11&#038;feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>
</div></figure>



<h3 class="wp-block-heading">Non-Fungible Tokens (NFTs)</h3>



<p>Trading data from <a href="https://opensea.io/rankings" target="_blank" rel="noreferrer noopener">OpenSea</a> and <a href="https://solanalysis.com" target="_blank" rel="noreferrer noopener">Solanalysis</a> of some of the top Solana and Ethereum projects can be found below:</p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="1024" height="332" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png" alt="" class="wp-image-12450" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=2048 2048w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Top Ethereum Projects</figcaption></figure></div>

<div class="wp-block-image">
<figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="1024" height="283" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png" alt="" class="wp-image-12451" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=80 80w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Top Solana Projects </figcaption></figure></div>


<p>If you made it this far, thanks for reading! I am looking forward to catching up on Monday.</p>



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