Welcome to BRC’s Breakdown.

The Indian equities market continues to hold strong, and but the same is not the case for others. While most of the classes took small hits, it was a particularly bad week for crypto.

First, let’s see how the markets fared this week:

Here’s a preview of what we’ll cover:

• Macro: Equity Trends Higher, Bond Yields Decline

• Around The World: BoJ and RBI’s Policy Decision

• Crypto: Bitcoin Fees Surge to 20-Month Highs

• AI: Tesla wows with next-gen humanoid robot!

Macro: Global Equity Markets Trend Higher, Bond Yields Decline Further, Crypto Down

Markets continued to take the US Federal Reserve's pivot in their stride. As a result, global equity markets trended higher with many hitting their highest levels for the year.

In the US, the S&P 500 rose 2.5% for the week bringing the YTD tally to 22.91%. Financials and industrials led the rally showing the breadth of the positive sentiment.

Bond yields declined further:

• US 10-year yield down 0.30%

• India 10-year yield down 0.10%

• Germany 10-year yield down 0.25%

Amidst all this, the US dollar continued to weaken sharply. The Dollar index was down 1.37%. Gold and the broader commodity segment benefitted from the dollar’s weakness.

Crypto was a sore spot amidst this positive sentiment. Both Bitcoin and Ethereum dropped about 5% for the week.

The biggest development last week was the US Federal Reserve meeting where the committee decided to keep rates unchanged. More importantly, the Fed downgraded inflation expectations.

The rate-setting panel cut the median projection for interest rates at the end of next year to the midpoint between 4.50 and 4.75. This signaled that the Fed now expects a – 0.75 percentage points or 75 basis points cut from the current levels next year. At 25 basis points per cut, it would translate to three rate cuts in 2024.

Around The World: BoJ and RBI’s Policy Decision

This week, the Bank of Japan’s policy decision (Dec 19) will be closely watched for signs of whether/when the BoJ will start tightening its ultra-loose monetary policy.

In India, the RBI monetary policy committee meeting minutes will be a key development.

In India, the Nifty rose 2.3% for the week, and a year-to-date increase of 17.9%.

Bitcoin Fees Surge to 20-Month Highs: Miners Thrive as Community Debates Solutions

Bitcoin fees have reached a 20-month high, with on-chain transaction costs soaring to almost $40. The surge in fees is a result of increased on-chain transactions, causing a backlog of almost 300k transactions waiting to be confirmed.

Some argue that high fees are here to stay, emphasizing the need for solutions like the Lightning Network for mass adoption.

Critics believe demanding low fees for "Level 1" transactions is counterproductive and can undermine Bitcoin's competition-based network. Despite critique, experts suggest that high fees drive innovation and adoption of layer-2 solutions.

Miners are benefiting from the increased fees, enjoying the best USD revenues in two years. Miner revenue has reached levels last seen during Bitcoin's all-time high of $69,000 in November 2021.

Tesla wows with next-gen humanoid robot!

Tesla has just revealed a super-upgraded version of its humanoid robot, Optimus Gen-2. The new model is lighter, faster, and way better at dancing!

Optimus Gen-2 is now more agile, shedding over 20 pounds for improved mobility and walking 30% faster with cool new feet. Finger sensors allow it to delicately handle things, as demonstrated by gently holding an egg in a demo.

Upgrades like that will make it more human-like are:

• a bendy neck

• smart electronics, and

• faster hands with touchy-feely feedback make it more human-like.

Tesla's Optimus upgrade is a giant leap toward the cool robots we only used to see in movies.

Interesting Reads

The Emperor is Naked - How the future will happen.

The article talks about our world today, saying it's kind of like a hidden problem. It explains how some ideas we believe are only half true, and we need to look at things in a new way. It also talks about how we can use the internet to make positive changes, but we need to be kind to each other and not cancel anyone.

It's like the story where a little girl speaks up and tells everyone the emperor isn't wearing anything. Discover how this has happened before and might happen again. Learn about a time when people in Romania spoke out, and their leader lost power because everyone realized he was doing wrong things.

Read it here.

Top Headlines Of The Week

• ARK expects open-source AI to outperform private models like ChatGPT

• Palau advances CBDC with Ripple in phase 2 of the PSC program launch

• Tens of millions to enter Web3 through gaming in 2024 - GameFi execs