A Canadian pension fund, the nation's second-largest, Caisse de dépôt et placement du Québec (CDPQ), is writing off its investment in cryptocurrency lending platform, Celsius Network. The write-off will be $150 million. Explaining the disaster, the fund's chief executive, Charles Emond, explained that "we went in too soon into a sector that was in transition." Scott Chipolina and Josephine Cumbo report in the Financial Times: Canada’s second largest pension fund manager has written off its $150mn investment in crypto lending platform Celsius Network and conceded it went into crypto “too … [Read more...]
Gold, Silver, and Currencies
Young Research & Publishing has been providing research and insights on precious metals and currency markets to institutional investors, corporate financial officers, business owners, and individual investors for over four decades. Richard C. Young started Young Research & Publishing in the 70s to publish the authoritative Young's World Money Forecast, a 50-page monthly investment report on the precious metals and currency markets. Today, our research on gold, silver, and currencies is geared toward investors in or nearing retirement who are looking to preserve and protect wealth.
Despite All the Money Involved, Crypto Is Still a Wild Market
Cryptocurrency markets are still in the "wild" stage of their development, despite all the money involved. In the Financial Times, Lex analyzes the state of the crypto market today, writing: In percentage terms, the cryptocurrency crash of 2018 was worse than the winter that is currently gripping crypto markets. The difference this time round is the amount of money involved. In 2018, about $700bn was wiped from the market’s high point, according to price-tracking site CoinGecko. So far this year, the crypto market’s value has fallen by more than $1.2tn. To that total can be added millions … [Read more...]
How to Stabilize Stablecoins
In an extensive article in the Financial Times, Willem Buiter and Anne Sibert explain the benefits and problems with stablecoins, and how to maximize and solve them respectively. They write: As the world of decentralised finance continues to grow, there is much demand for a digital currency fit for use in blockchain-based applications with near-real-time, peer-to-peer global settlement that can be used as a medium of exchange. However, most cryptocurrencies are too volatile for this and there are also issues with central bank digital currencies. CBDCs may not be based on the distributed … [Read more...]
Swiss National Bank Surprises World with Rate Hike
The Swiss National Bank hasn't raised the country's interest rates since 2007, but today the bank surprised the world with a rate increase. Sam Jones and Tommy Stubbington report for the Financial Times: Switzerland’s central bank on Thursday raised interest rates for the first time in 15 years, as it became the latest rate-setter to shift away from ultra-loose monetary policy. The Swiss National Bank said its benchmark rate would rise by 50 basis points from minus 0.75 per cent to minus 0.25 per cent, catching markets off guard. The Swiss franc surged following the surprise decision, … [Read more...]
BLOOMBERG: Big Business’s Bitcoin Bet Backfires
MicroStrategy, a company founded to sell data mining services and software, has watched its stock price stumble as bitcoin prices collapse. The problem for MicroStrategy is that its management essentially turned the company into a bitcoin fund with shareholder money. The latest drop in bitcoin prices has cost the company nearly $1 billion. Matt Turner reports for Bloomberg: MicroStrategy Inc. founder and Chief Executive Officer Michael Saylor’s big bet on Bitcoin has backfired in a major way as the paper loss for his firm’s holdings of the largest digital asset has reached roughly $1 … [Read more...]
Japan Restricts Who Can Issue Stablecoins
In a long-prepared set of new regulations, Japan has set stricter rules on stablecoins and their issuance in order to protect consumers and the Japanese economy from potential volatility. Leo Lewis and Kana Inagaki report for the Financial Times: Japan has passed a landmark law clarifying the legal status of stablecoins, surging ahead in an international race to construct safety nets around the tokens whose peg to mainstream currencies underpins the broader cryptocurrency market. The move by Japan, part of a five-year effort to protect consumers investing in cryptocurrencies, followed last … [Read more...]
Big Banks Adopting Blockchain for Short-Term Trading
Big banks BNP Paribas and JPMorgan are using digital tokens in their short-term trading operations. Eva Szalay reports for the Financial Times: JPMorgan’s blockchain allow banks to lend out US government bonds for a few hours as collateral, without the bonds leaving their balance sheets. Post-crisis regulatory requirements demand that banks hold large amounts of liquid assets — which can be bought and sold easily even during times of market stress — such as Treasuries as a safety buffer. By tokenising these assets banks can temporarily turn them into collateral for a few hours, but without … [Read more...]
CRYPTO: Has the Fire Gone Out?
In The Wall Street Journal, Peter Santilli and Corrie Driebusch write that "Last year cryptocurrencies were on fire and appeared to gain more legitimacy after years of being considered a fringe, speculative product." In the last six months, crypto has lost $1 trillion in market value. It's fair to ask, has the fire gone out? Santilli and Driebusch write: In November, bitcoin and ethereum, two of the most popular cryptocurrencies, reached all-time highs. Bitcoin’s value at 5 p.m. on Nov. 9 was $67,802.30; ethereum was worth $4,800. They are now down 58% and 60%, respectively, from those … [Read more...]
STABLECOIN DEATH SPIRAL? TerraUSD Becomes Terra0.5USD Overnight
A selloff is currently hitting cryptocurrencies, and one, in particular, is beginning to look like an emperor with no clothes. TerraUSD, a so-called "stablecoin," because of its purported peg to the dollar at 1 to 1, has lost around half its value overnight. The loss was so great, according to industry analysts, that it could even enter what's known as a "death spiral." According to The Wall Street Journal, TerraUSD uses " financial engineering to maintain its link to the dollar." Does that sound very "stable," to you? Caitlin Ostroff and Elaine Yu explain the breakdown, writing: The … [Read more...]
What’s Pushing Down the Yen?
In the Financial Times, Zach Pandl examines recent yen depreciation, writing: The yen has been the worst performing major currency this year, sliding around 12 per cent against the dollar and underperforming even the Turkish lira and Argentine peso. Relative to a basket of trading partner currencies and adjusted for inflation, the yen has fallen to levels last seen in the early years of the Reagan administration, before the 1985 Plaza Accord. But this state of enyasu (weak yen) will probably be shortlived. The yen is an undervalued haven asset at a time of rising recession risks around … [Read more...]
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