Here’s what you’ll find in today’s edition:

• This is no ordinary business cycle. 

• In Gary Gensler’s final days at the SEC, the agency has advanced an appeal. 

• More BTC reserve proposals have surfaced at the state level.

Are we at the start of a new business cycle?

Ever since COVID closed global economies in 2020, gauging where we stand in the business cycle has been a very difficult act. 

The typical business cycle looks as follows, and historically, it’s been fairly easy to have a general idea of where we stood by contrasting it with interest rates and monetary policy:

However, everything has been somewhat upside down in recent years, leaving many economists befuddled. 

For example, in 2022 we saw negative real GDP prints (initially at two but then revised down to one):

However, during that same time we saw one of the hottest labor markets we’ve ever seen, as per JOLTS data. 

It’s hard to believe in a recession with a labor market that strong:

Since 2022, we’ve seen a major rate hiking cycle from the Fed that somehow also didn’t tilt the economy into a recession when looking at it on an aggregate basis. Stocks hit new highs everyday, the labor market cooled but remained resilient, and GDP growth powered ahead.

During that same time, however, if you honed in on the manufacturing and goods sector and set aside the services economy, it almost looks like we’ve just been through a manufacturing recession. 

ISM Manufacturing PMIs have been in contraction territory for a couple years now:

During that time, we saw significant disinflation leading to outright deflation in the goods sector of the economy:

Fast forward to today, and we’ve seen the Fed cut rates to frontrun concerns about the labor market and continue attempting a soft landing of the economy where we move into a new business cycle without a recession.

We’re now seeing leading indicators hinting that the manufacturing sector might be exiting the doldrums and heading toward a new upswing.

We’re starting to see commodities begin to break out after two years of consolidation, hinting at an upswing in economic growth:

ISM new orders look to be breaking out, as well as the Philly Fed manufacturing index:

Per the survey data, it’s looking like much of this is being led by optimism from the business sector ever since the election:

So where does this chart-geeking journey lead us? 

I think it’s safe to say we’re not late in the cycle. It increasingly looks like we are in fact in the early innings of a new business cycle that avoided a recession due to the huge fiscal stimulus and deficits during the last couple of years.

— Felix Jauvin

This March, join leaders from Morgan Stanley to Ledger as DAS NYC 2025 brings together the sharpest minds in investing, institutions and digital assets. Explore the forces shaping the future of global markets — from emerging trends to the integration of onchain innovation into traditional finance.

📅 March 18-20, 2025
📍 NYC | Javits Center North

The transformation of finance is happening now. Be part of it.

This is an estimate for the total value of crypto illicit addresses received in 2024, according to a new report from Chainalysis. Take this number with a grain of salt, though. 

Analysts say the actual figure is probably much higher, but they can only base their calculation on illicit wallets already identified. As the team discovers more bad actors, they will update their reporting.

The SEC has moved forward with an appeal in its case against Ripple. 

The securities regulator is seeking to reverse a 2023 ruling that determined retail sales of Ripple’s XRP token were not unregistered securities offerings. Federal Judge Analisa Torres said that blind/programmatic sales of XRP, which occur on exchanges, were not in violation of US securities laws. 

“The district court erred both factually and legally in concluding that defendants’ offers and sales of XRP to public buyers who purchased on crypto asset trading platforms,” the SEC wrote in its opening brief, filed late last night. 

Even if buyers didn’t know their XRP tokens were coming from third parties or Ripple itself, Ripple still led the public to have “reasonable expectations of profits” from the cryptocurrency, the SEC said. Ripple’s “public marketing campaign…specifically engaged ‘less sophisticated’ investors,” the regulator added. 

Ripple chief legal officer Stuart Alderoty dismissed the SEC’s claims, writing on X that the brief is nothing but “a rehash of already failed arguments.” 

Plus, Alderoty added, new leadership at the SEC is likely to "abandon" the case altogether.  

On this last point, I’m less certain that the SEC will drop this case after Trump takes office and Chair Gary Gensler departs, at least immediately. It’s possible, but any decisions Commissioners Hester Peirce and Mark Uyeda make in the short term (before three additional commissioners are appointed and confirmed) will face harsh legal scrutiny. 

We’re much more likely to see commission votes resume after there are at least three sitting commissioners.

— Casey Wagner

Amid ongoing speculation about an American strategic bitcoin reserve, several US states are looking to take matters into their own hands. 

“It's time for Texas to lead the way in establishing a strategic bitcoin reserve,” Texas Sen. Charles Schwertner wrote in a Wednesday X post. 

The GOP lawmaker’s proposal calls bitcoin a valuable digital asset “with strategic potential for enhancing this state’s financial resilience.” Its decentralized nature and finite supply are “unique qualities that can serve as a hedge against inflation and economic volatility.”

The draft bill seems to echo a Texas House proposal from Rep. Giovanni Capriglione last month. 

The reserve would be a “special fund” outside the state treasury’s general revenue fund. The comptroller would be responsible for establishing secure custody of the BTC (i.e. via cold storage) and may contract a US-based third party for help. 

The Texas legislature — by a two-thirds majority vote in each house — can direct the comptroller to transfer, sell or convert the reserve’s BTC. It would then deposit proceeds to another state treasury fund or account. 

Meanwhile, a lawmaker from Oklahoma (Cody Maynard) introduced a bill to allow the state treasurer to invest public funds in BTC, stablecoins or any other digital asset with an average market cap north of $500 billion over the previous calendar year. 

Money used for such purchases could come from the state’s general, revenue stabilization and/or constitutional reserve funds. The amount it invests in BTC can’t exceed 10% of the public funds in the account. 

These proposals follow similar ones by Pennsylvania, New Hampshire, North Dakota and other states. 

While the fate of Cynthia Lummis’s national BTC reserve plan remains unclear, at the very least Trump has promised to keep the BTC the government already possesses.

— Ben Strack

• Bitcoin was trading around $99,400 at 2 pm ET — down 1% from 24 hours prior. The US spot bitcoin ETFs reported collective net inflows on Wednesday ($755 million) for the first time since Jan. 7.

• Canary Capital Group filed for a litecoin ETF on Wednesday. Some industry watchers said the filing suggests a fund holding LTC could be the next spot crypto ETF that the SEC approves.    

• Speaking of new planned products, asset manager VanEck proposed an Onchain Economy ETF Wednesday. The fund would invest in digital asset companies, ETPs and options contracts.

• Trading platform eToro has filed for a US initial public offering, the Financial Times reported. A launch on the New York Stock Exchange could value eToro at roughly $5 billion.