Bitcoin was lower after rising nearly $ 600 on Thursday and rising above $ 16,000 for the first time in nearly three years.
“Investors should plan for both volatility and price increases,” wrote the blockchain analysis company Chainalysis in a newsletter.
In traditional markets, European stocks fluctuated and US stock futures indicated a higher opening as investors weighed the prospect of a new stimulus package against record coronavirus cases. Gold gained 0.1% to $ 1,879 an ounce.
Federal Reserve Chairman Jerome Powell has been sticking to his talking points lately. It goes something like this:
These are all key topics that cryptocurrency traders are following as a growing number of investors say widespread money printing could support the use of Bitcoin as a hedge against inflation.
But what was perhaps more interesting and newer among Powell’s comments on Thursday’s virtual forum hosted by the ECB was his realization that life as we know it – and with it the economy – is unlikely to be the same again earlier.
“You will see more teleworking,” Powell said on the virtual forum. “We’re not going back to the same economy. We are recovering from a different economy. ”
It was more than a topic of conversation. It might have provided some glimpse into a key subject that Powell didn’t say much about. The coronavirus will have a permanent and scarring impact on the economy, but remote working could be another massive factor to consider for monetary policy.
The economy is in a state of upheaval, and not just because people don’t eat out, go to the movies or travel for leisure, or because so many businesses and households would be sick without all the emergency aid.
A secular transition to internet commuting could take place, perhaps one of the biggest changes in the workforce since the industrial revolution that drew people to cities.
When employees really enjoy being set up remotely, and many do, and employers really see how productive their employees can be remotely, and commuting takes a lot of time and money, and it’s easier for many working parents to set up a base why should there ever be a return to old bourgeois civilization at home?
What would that mean for the airlines? Commercial real estate? Oil companies? Automaker? Amusement parks? Cities?
Governments and central banks are likely to need a great deal of help and inspiration to ensure that the transition goes smoothly, that society stays together, and that people can make it. And these widespread debt defaults are not overwhelming the banking system. Even many people who believe that bankers are exploiting their anchored role in the economy will recognize that banks play an essential role in the existing financial infrastructure.
Dave Hendler, principal and founder of banking analysts Viola Risk Advisors, says one implication is that the hand of governments and central banks could be heavy in the economy for a long time.
In a telephone interview, he said he recently traveled to Manhattan from the suburbs of New York City for the first time since February to attend a wine tasting. While in town he visited his old barber. The barber, who has “one kid and another on the way,” said Hendler that he had one client a day from a prepandemic of about 20 a day.
Imagine a lot of the office workers never actually coming back. It’s an extreme, but entirely plausible scenario.
“It’s going to be a longer hiring, and it’s going to be harder,” says Hendler. “There will have to be help for the transition to the new world.”
Central bankers like Powell are just beginning to think about it, let alone think about it. Once more investors focus on it, the remote controlled economy is likely to require a lot more attention – and potentially a lot more money.
The European Central Bank Christine Lagarde appears on Thursday with the Chairman of the US Federal Reserve, Jerome Powell, during a virtual forum. (CoinDesk screenshot of the ECB video feed)
Bitcoin price chart showing cryptocurrency’s recent surge above $ 16,000.
Bitcoin appears to be holding above $ 16,000 and cryptocurrency traders are considering the next step.
The big market debate now is whether and when Bitcoin will return to the record price of around $ 20,000 that was hit in December 2017.
George McDonaugh, managing director and co-founder of the listed cryptocurrency investment firm KR1, wrote in e-mail comments on Friday that he does not expect Bitcoin holders to sell until prices hit a new record “given the comparatively small delta between 16,000 and $ 20,000. ”
Bitcoin is known to have surprised in the past with pullbacks that penalize overly bullish bets. Alternative.me’s Crypto Fear & Greed Index has entered the “extreme greed” zone after reading “neutral” just last month.
“I’m assuming we won’t reach $ 20,000 with this current move,” wrote McDonough.
As First Mover noted last week, Bitcoin has spent so little time over $ 16,000 in its 11-year history that analysts scouring price chart patterns for clues have little to do.
Matt Blom, head of sales and trading at digital asset finance firm Diginex, wrote Thursday that the next major level of price resistance is likely to be at $ 17,130 and downside support at $ 15,420.
“New multi-year highs are quickly becoming boring headlines,” wrote Blom. “The market trend is still very bullish.”
Bitcoin is now up a staggering 127% in 2020, up from 9.5% for the Standard & Poor’s 500 index of large US stocks and 24% for gold.
What is hot?
Blockchain data shows that $ 300 billion bitcoin is flowing from Huobi to Binance while the Chinese government is taking action against the exchange of cryptocurrencies (CoinDesk).
PayPal removes waiting list for new crypto service and increases weekly purchase limit to USD 20,000 (CoinDesk)
Ant’s $ 35 billion IPO has its roots in goals for the digital yuan (CoinDesk).
Uniswap farming ends in 4 days, potentially releasing $ 1.1 billion in ether (Cointelegraph).
The ECB’s Lagarde has the impression that the digital euro will be introduced in two to four years (CoinDesk).
Hut 8 Mining Revenues Down 43% Q3 Quarter From Q4 (CoinDesk)
Brent crude oil futures are now tradable on the DeFi exchange Synthetix (CoinDesk)
Chainalysis aims to help government customers sell millions of dollars in decrepit Bitcoin (CoinDesk).
The latest on economics and traditional finance
Former Chinese Finance Minister Lou Jiwei said Friday that US-China trade tensions need not ease under a Biden government (Reuters).
Brazilian President Bolsonaro distributes USD 10 billion a month to the poor as the national debt is heading from 76% in the previous year (WSJ) to 100% of GDP.
Writing off student debt is one way Biden can build black wealth (Bloomberg)
The deadline for divesting US operations for the video sharing app TikTok has passed and the social media giant has remained in limbo (Nikkei Asian Review).
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