Connect with us

Will cryptocurrencies be a ‘safe haven’ asset post-pandemic?

Will cryptocurrencies be a ‘safe haven’ asset post-pandemic?

Published

on

Bitcoin a safe haven Bitcoin Circuit

The consequences of COVID-19 are expected to exceed that of the 2008 recession, as well as the Great Depression, and global economies are facing unprecedented and uncertain times. The economic shock reverberating around the world has forced governments to act quickly and implement policies and, with the effects of the pandemic permeating every aspect of society, many businesses are preparing to navigate in a new world, post-health crises. But what will an economic downturn mean for blockchain and cryptocurrencies?  Will Bitcoin ever be considered a safe haven like cash?

Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q1 2020 hedge fund letters, conferences and more

We have gathered commentary from a range of industry experts (below) including the Gibraltar Stock Exchange, Ontology, DeFiner, CRUXPay, and NEM Ventures who shared their insights on what a global recession could mean for digital assets.

The Concept Of Bitcoin As A Safe Haven

Nick Cowan, CEO of the GSX Group, said:

“Cryptocurrencies are not immune to market turbulence, with natural fluctuations illustrating regular asset class behaviour in so far as smart money trading and herd mentality tendencies are clearly visible in the market. The dizzying price high that defined late 2017 was an unrealistic representation of BTC and the subsequent price drop painted a picture of high volatility. However, since then, market patterns have been generally positive, with normal peaks and troughs along the way. 

In terms of a post-pandemic market, I don’t expect cryptocurrencies to suddenly become a fixture in the safe haven category with gold for example. Rather, adoption levels will continue to increase, particularly as major financial institutions and fintech platforms continue to show interest in this asset class. However, the idea that blockchain-powered finance is limited to cryptocurrencies is passé, and there are other significant developments enabled by blockchain that will broaden global liquidity pools, specifically the proliferation of tokenized or digital securities. 

As we emerge from this global pandemic, I would also expect to see a considered reevaluation of the capital markets infrastructure, particularly around the T+2 model, the period in which securities transactions have been historically settled. This delay of two days places unnecessary stresses on the capital markets, particularly around the prevalence of counterparty risk. Harnessing blockchain can help classify this protracted settlement delay and counterparty risks as obsolete.”

Erick Pinos, Ontology Americas Ecosystem Lead, said: 

“Bitcoin was one of a number of technological innovations created in response to the 2008 financial crash, and in March 2020, the UK and US markets suffered their worst day since. 

The concept of Bitcoin as a safe haven during a global recession is one that has long been touted by industry players. However, so far, the current market downturn has not resulted in investors flocking to Bitcoin. At this point in the crisis, this is not surprising. It’s important to remember that it is still very early days for both the crisis, and for Bitcoin. Bitcoin has never lived through a recession, so it’s difficult to predict how things might pan out, and how actors might respond in what is likely to be a long road to economic recovery. 

What we can expect to see as a result of the global pandemic is an even greater spotlight on digital assets, each from governments, central banks, traditional investors, and enterprises. This is due to their ability to offer users increased trust, security, and access, while also providing an opportunity to avoid many of the risks associated with traditional markets and fiat currencies.” 

Jason Wu, CEO of DeFiner.org, a true peer-to-peer network for digital savings, loans, and payments, said: 

“A recession will be the catalyst for the mass adoption of digital assets and decentralized finance (DeFi). DeFi builds trust using code and mathematics, whereas the traditional financial system is based on human trust and company reputation. DeFi allows people to manage and own their assets without any intermediaries. The 2008 financial crisis taught people that financial intermediaries are not always trustworthy. The current financial system is associated with high-costs and lacks transparency. Thus, a future financial crisis could also be a factor in proving the worth of DeFi. Bitcoin was born from the last financial crisis and DeFi will thrive in these economic conditions. While a global recession will be good for digital assets, it will crush the market at the beginning due to the liquidity crisis. The world of cryptocurrency will suffer first, then prosper. There are three phases: Liquidity, Suffering, and Thriving. 

In phase one, the cryptocurrencies market will face liquidity issues and a price drop, as will all financial assets. This has happened last month as bitcoin price dropped dramatically from approx. $9000 to $4000. In the financial crisis, everyone is looking for liquidity, because their normal cash flow is interrupted. In phase two, cryptocurrencies will suffer, together with other industries. In this phase, a lot of companies will go bankrupt and people will lose their jobs. Financial institutions will go into default and bankruptcy, and balance sheets of depository banks will end up with a deficit. Then the central bank will step in and print out even more money. This will lead to inflation. In phase three, people lose faith in the existing financial system. DeFi is an alternative system for people to manage and grow their savings. It’s cheaper, faster, and gives back people full control of wealth. People will learn from their painful experiences and embrace the world of crypto to enjoy true financial freedom. For the next several decades, more and more assets will be managed through blockchain and the world of digital assets will thrive.”

Ashish Singhal, CEO and Co-founder of CRUXPay and Coinswitch.co, said:

“At first sight, the idea that digital assets and cryptocurrencies, such as bitcoin, are a safe haven seems to have gone out of the window. Cryptocurrencies seem to be taking as much beating as debt, equity, and commodities like Gold. This happens because, at the onset of a recession, when panic strikes, all fundamentals are lost. However, during a crisis, debt and equity lose value because of the decline in asset value and decline in profit, respectively. But the underlying value of cryptocurrencies doesn't lose value during a recession; infact, it gets even stronger.

A global recession is a defining moment for cryptocurrencies. The long-touted "bitcoin is a safe haven" is put to the test during a recession. A recession forces governments worldwide to introduce measures to ease the downturn, which will have adverse economic effects for years to come. Cryptocurrencies are inherently designed to be hedged against such implications. This makes an excellent case in favour of cryptocurrencies.

When the crisis starts, panic hits and irrationality creeps in; the markets will see a massive sell off in all categories. The decline in asset value and profits during a global recession will drive debt and equity prices to even lower levels. And this might further lower the prices of cryptocurrencies. However, it is not an indication of loss in the inherent value of cryptocurrencies. The underlying value of cryptocurrencies defined by decentralisation and mathematical stability will continue to hold even in the worst recessions. Cryptocurrencies will then become the choice of investment during such economic turmoil.”

Nicholas Pelecanos, Head of Trading at NEM Ventures, commented: 

Hidden in the bitcoin genesis block is a quote that perhaps acknowledges Bitcoin’s true purpose: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. The creation of Bitcoin is not incidental to financial crises but a direct response to the 2008 financial crash and failings of the global financial system. As a global recession or even depression looms, I’m more bullish on Bitcoin and cryptocurrencies than ever. Unlimited QE, unserviceable global debt, a failing monetary system and negative interest rates all at a time where society, globally is moving away from cash. This is precisely what Bitcoin was designed to hedge against. 

The crypto sell-off witnessed in March was a result of a global liquidity event and Bitcoin has now climbed 90% from its low—a swift recovery. More importantly than being a safe haven, Cryptocurrencies are an uncorrelated asset class. This alone can attract a lot of capital in times of uncertainty and with a total market capitalization of $200bn it won't take much capital inflow for the price to rapidly climb.”

The post Will cryptocurrencies be a ‘safe haven’ asset post-pandemic? appeared first on ValueWalk.

Read More

Continue Reading

Spread & Containment

The Coming Of The Police State In America

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now…

Published

on

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.

Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.

The message has been sent: Only the police can do this job. Whether they do it or not is another matter.

Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.

In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.

The law-abiding will suffer and the criminals will grow more numerous. It will not end well.

When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.

If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.

We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.

My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.

It goes like this:

1) lockdown,

2) loss of moral compass and spreading of loneliness and nihilism,

3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,

5) a rise in uncontrolled immigration/refugees,

6) an epidemic of ill health from substance abuse and otherwise,

7) businesses flee the city

8) cities fall into decay, and that results in

9) more surveillance and police state.

The 10th stage is the sacking of liberty and civilization itself.

It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.

But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.

It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.

Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.

As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.

The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.

Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.

By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.

The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.

Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.

The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.

The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.

But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.

What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.

As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.

The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.

Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.

Tyler Durden Sat, 03/09/2024 - 16:20

Read More

Continue Reading

Government

Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

Published

on

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

Read More

Continue Reading

Uncategorized

February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

Published

on

By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

Read More

Continue Reading

Trending