Higher inflation weighs on Fed policy, starts to have a broader impact on cost of living, wages and social-benefits programs
The Labor Department said last month’s consumer-price index, which measures what consumers pay for goods and services, rose by 5.4% from a year earlier, in unadjusted terms. That is the same rate as in June and July as the economy reopened
, and slightly higher than in August. The so-called core price index, which excludes the often-volatile categories of food and energy, in September climbed 4% from a year earlier, the same rate as in August.
U.S. inflation accelerated last month and remained at its highest rate in over a decade, with price increases from pandemic-related labor and materials shortages rippling through the economy.
WHAT DOES THIS MEAN FOR BITCOIN AND THE INTERNET ECONOMY?
FED monetary policy (devaluation of the dollar via inflation aka dollar dilution) and US government fiscal policy (deficit spending to the tune of $3+ TRILLION per year, not including QE and other unfunded liabilities) will not be stopping or slowing down anytime soon.
Furthermore, unless we want to default on our debt or be forced to dilute the dollar even more aggressively, then interest rates will not increase either.
We are at the point in the monopoly game where we agreed to put $2000 in Free Parking and once someone hit it, we put another $2500, and now if we do not keep loading up free parking then no one will want to play. You no longer buy property by landing on the space, but rather by negotiating/out-bidding with your excess dollars.
As we stated in the intro, prepare for 🚀 🌕
Circle Financial is under investigation by the U.S. Securities and Exchange (SEC), the payments company disclosed Monday.
Circle, a key supporter of the USDC stablecoin, said in a regulatory filing
that it received an “investigative subpoena” from the SEC’s Enforcement Division in July. That subpoena requests “documents and information regarding certain of our holdings, customer programs and operations,” the filing said.
“We are cooperating fully with their investigation,” Circle said in the filing, which was issued as part of Circle’s plan to go public.
The Federal Deposit Insurance Corp. (FDIC), a key U.S. banking regulator, is studying whether certain stablecoins
might be eligible for its coverage, five people familiar with the agency’s thinking said.
The agency is trying to analyze what so-called pass-through FDIC insurance
might look like for the reserves that stablecoin issuers hold at banks, the sources said. Such coverage would insure holders of the tokens against losses up to $250,000 if the bank holding the collateral were to fail.
The FDIC is also looking at what regular, direct deposit insurance might look like for banks that want to issue stablecoins, people familiar with the discussions said.
The race to cater to institutional investors who want to wager on cryptocurrency is heating up.
, the fifth-biggest retail bank in the nation, announced Tuesday that its cryptocurrency custody service is available to fund managers, CNBC was first to report.
The offering will help investment managers store private keys for bitcoin
, bitcoin cash and litecoin with assistance from sub-custodian NYDIG
, according to Gunjan Kedia
, vice chair of the bank’s wealth management and investment services division. Support for other coins like ethereum is expected over time, Kedia said.
The move is the latest sign that established financial players are beginning to accept cryptocurrencies as a legitimate asset class.
Digital-asset platform SEBA Bank has introduced a product that will allow clients to earn yield on their crypto holdings:
The Zug, Switzerland-based firm’s SEBA Earn will let institutions generate income from proof-of-stake
protocols such as Polkadot, Tezos and Cardano, with other networks to be added over time.
The platform will also enable investors to lend bitcoin and ether through SEBA Bank, the company said Wednesday.
Swiss financial regulator FINMA-licensed SEBA says it will be the first fully regulated bank to offer investors access to yields in decentralized finance (DeFi) protocols.
The Swiss regulated firm is tapping into demand from institutions for income from digital assets.
Cryptocurrency Tether and crypto exchange Bitfinex will pay $42.5 million to settle civil charges from the U.S. Commodity Futures Trading Commission (CFTC) over allegedly making misleading statements and making illegal transactions.
The U.S. Securities and Exchange Commission (SEC) has approved an exchange-traded fund (ETF) that aims to provide investors with exposure to publicly traded companies with exposure to bitcoin.
According to a prospectus
filed Oct. 1, the Volt Crypto Industry Revolution and Tech ETF will track the performance of “Bitcoin Industry Revolution Companies”
– publicly listed companies that either hold a majority of their net assets in bitcoin, like MicroStrategy (NASDAQ: MSTR), or that make a majority of their profits through mining or building mining equipment, like Marathon Digital Holdings (NASDAQ: MARA).
At least 80% of the fund’s net assets will be invested in crypto stocks. The remaining 20% will be invested in more traditional stocks to offset the risk of the fund’s focused portfolio. The ETF will not hold any cryptocurrencies directly.
Paradigm, the cryptocurrency venture capital firm led by Coinbase co-founder Fred Ehrsam, is looking to raise a $1.5 billion fund for startup investments, according to documents seen by CoinDesk.
An investor deck said the firm’s fundraising push will close on Nov. 12.
The revamped war chest could place Paradigm near the top of the pack as venture capital flows into the crypto sector with unprecedented velocity. VCs have placed $17 billion in crypto investments in the first half of 2021, “dwarfing” the $5.5 billion from the same period last year
, according to a recent report from Bank of America
In addition to the funds raised from Paradigm’s limited partners, the deck mentioned a minimum general partner commitment of 1%. The fund could come in between $1.25 billion and $1.5 billion, according to the deck.
A person familiar with Paradigm’s efforts said the firm had recently been doing the rounds among family offices
in Silicon Valley.
On October 5, Patrick McHenry, the ranking member of the House Financial Services Committee, introduced the Clarity for Digital Tokens Act of 2021.
The bill would adapt the Securities Act of 1933 to establish a three-year safe harbor for token development teams to offer those tokens for sale without full registration as a securities offering on the condition that the network decentralizes over the course of those three years.
Development teams looking to use the safe harbor would also have to file exit reports demonstrating sufficient decentralization.
Corporates are inquiring how to add bitcoin to their balance sheets on a regular basis, according to Darren Jordan, managing director of EMEA at BitGo.
Speaking at the Token 2049 conference in London on Thursday, Jordan said, “The dramatic change — and I have this conversation many times per week — is with corporates. And they are looking to allocate a small percentage of their balance sheet.”
“That has been the most significant change we’ve seen over the last 12 months,” he added.
Jordan said that this involves a lot of education, with corporates having to wrap their heads around liquidity, regulatory frameworks and whether they’re allowed to do so.
Bitcoin has been on a tear, but it doesn’t look like retail traders are driving the action, according to data from market making firm B2C2.
The firm, which has begun circulating a new weekly note to clients with analysis of the market, said overall the market has recently been “moderately biased to the buy-side.” At the time of writing, bitcoin was trading at $57,257, up more than 40% from its lows at the end of September. Ether, meanwhile, is up more than 28% from its lows in September.
Still, not everyone is buying the ongoing rally in crypto, B2C2 shows.
“More interesting, however, is the fact that crypto exchanges continue to be the notable outlier, as the only category net selling overall, implying that this move may be driven primarily by institutional money, with retail on the sidelines,” the firm said.
WHAT DOES ALL THIS MEAN FOR BITCOIN AND THE INTERNET ECONOMY?
It means the institutions are chomping at the bit to get exposure to Bitcoin and other crypto assets within the internet economy.
This comes as no surprise since institutions are starting to understand the dollar is worth more in the DeFi ecosystem than it is in the traditional banking system!
After all, savers can earn 0.1% APY in a traditional bank savings account, or they can open a savings account with a digital financial service provider and earn at least 8% APY.
Economic incentives win because money talks, and bullshit FED policies walk us down the path of dollar destruction via massive inflation (dilution).
Institutions are not dumb, they understand if they cannot yield above real inflation, then they are losing purchasing power on their cash. In current market conditions the opportunity costs of holding cash are just too high.
Institutions are positioning themselves accordingly and making the regulators pay attention…
That is why we see the SEC sending out subpoenas to stablecoin custodians, financial regulators publishing opinions, and the news starting to shed light on the internet economy.
This is all the result of institutions lighting a fire under their butts so that they can legally (with fiduciary responsibility) gain exposure to Bitcoin, stablecoin, and the internet economy.
Whether it is a subpoena, a fine, etc. from a regulator or elsewhere, all crypto institutions will have to pass through the lime light. However, like Tether, once they pass through the lime light with a slap on the wrist, the light is green and the sky is the limit!
By the way this was always the plan…