The price of bitcoin today is $10,355.20. Bitcoin is holding steady around the $10,000 level. With that, let’s take a look at what’s been happening within the world over the past week and how it have am impact on bitcoin.
Bitcoin and BlakckRock’s Larry Fink on Economy
Fink called bitcoin and crypto “an index of money laundering” in the past but he’s also doesn’t think that Libra is a cryptocurrency. He thinks that there is a need to “democratize the exchange of foreign currency” minimizing the cost of transferring and converting foreign currencies.
He then talked about the general economy, policies, and other aspects that help to prove why bitcoiners bitcoin.
Larry Fink appeared on CNBC to talk about second quarter earnings and mentioned a few key points of potential interest to investors.
Emerging markets were down 7% in the second quarter while the S&P rallied 7%. He continues to see that a substantial portion of investors are in a de-risking mode and store value in cash.
In addition to that, Larry Fink, the CEO of Blackrock stated that corporate earnings still look healthy for the second quarter.
Fink pointed toward the appointment of Christine Lagarde to the ECB as a potential positive if she is able to form more consensus around effective fiscal policy in that region. Fink is of the thought that fiscal policy has more impact on an economy than monetary policy. When pressed by Joe of Squawk Box, Fink noted that monetary policy monetizes bonds and stocks but mentioned that there’s just one problem “the general population doesn’t hold bonds and stocks in Europe and Asia”.
Fink further stated that more than sixty percent of savings is held within a bank account in European nations and even more so in China.
Finally, interest rates in Europe are negative meaning that savings in bank accounts are eroded even further. As such, it wouldn’t make sense to save cash in such a negative environment, one would have to spend it or allocate it to investments that would provide positive yields.
Safer investments such as bonds may not seem as safe in Europe where “55% of all European debt is negative yielding” according to Fink on CNBC.
Facebook Libra Coin Project and Results
The Facebook Congressional hearings was entertaining as much as it was informative. It set precedents and showed that there are members of Congress that understand the difference between sh**coins and bitcoin, it also demonstrated the conviction that others have on bitcoin.
Patrick Timothy McHenry of North Carolina stated “the reality is whether Facebook is involved or not, change is here. Digital currencies exist. Blockchain technology is real. And Facebook’s entry in this world is just confirmation, albeit at scale.“
He also went on to state that “the world that Satoshi Nakamoto, author of the Bitcoin whitepaper, envisioned—and others are building—is an unstoppable force.”
While Donald Trump, the President of the United States, may not be a fan of cryptocurrencies and may want to impose further regulations on Facebook and its Libra Project, it looks like senators and other members of government have a more nuanced approach.
Ray Dalio and the Paradigm Shift
Dalio, a hedge fund titan, published a Linkedin article called Paradigm Shifts which talks about the past, the present and what the future looks like in terms of assets, returns, the haves and the have nots and assets that may be a good buy. It is a compelling read as it dives into how things have changed in the economy, in currency, and how one may prepare for a potential decline.