Big players are making waves
Cryptocurrency analyst, Saxo Bank
This week the entire crypto market cap rose 17% to just under $300bn. Similarly, Bitcoin rose by 15% with most of the gains happening on one single day. Ethereum underperformed its larger competitor by rising 13% over the week. The market saw a majority of its returns during a three-hour window on July 17. Although there were no major announcements during that time to cause markets to react so aggressively there has been a recent string of positive news.
Blackrock forms Blockchain taskforce
Earlier this week news broke that Blackrock has formed a working group to evaluate blockchain and cryptocurrencies. The asset management firm has over $6.3tn assets under management. The market reacted positively after the announcements. However, this is not the first time executives at the company mention blockchain. Larry Fink said last year that he was a “big believer” in the potential of cryptocurrencies. It is should only be a matter of time before they announce their first investments in the sector.
IBM partners with insured stable coin project
A stable cryptocurrency is said to be the holy grail of crypto, and this week IBM announced a partnership with a company do just that. The start-up Stronghold is building a USD-backed token on the Stellar blockchain, that is backed 1:1 with an insured USD stored in a chartered trust. This is one of the many attempts to create a stable coin, but this is the first time a large company such as IBM is backing a project. USD-backed stable coins have been wrapped in controversy with many accusing companies of running fractional reserves while advertising full reserves. Bitmex Research released a great post detailing stable coins in all their forms.
Crypto investment funds continue to raise money
Grayscale investments, run by Barry Silbert, raised $250m in the first six months of this year. This is the largest amount raised in a similar period for a company with $2bn AUM. The company offers several products with exposure to various cryptocurrencies. Additionally, the company stated in its report that 56% of the interest was from institutional investors. These numbers could be the canary in the coalmine, alerting the market to the increase wave of institutional investors flocking to the space.
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Outrageous Predictions 2023: The War Economy
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French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.