Federal Reserve Economist On Bitcoin: 'Small Phenomenon ...
François Velde - Federal Reserve Bank of Chicago
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Bitcoin Plunge from $20K Due to Futures, Says Fed
End of day summary - 02/28
The Dow fell 380.83, or 1.5%, to 25,029.20, the Nasdaq lost 57.35, or 0.78%, to 7,273.01, and the S&P 500 declined 30.45, or 1.11%, to 2,713.83. Stocks began the session in positive territory as the market attempted to reverse following yesterday's selloff on the heels of the testimony from new Fed chair Jerome Powell. The early economic data, including the annualized Q4 GDP report and the Chicago Purchasing Manager's report, helped lift the market, but by midday the averages had given up their gains and the final hours of the trading day saw the market swing lower. February broke the market's record string of winning months, as today's slide capped a losing month for all of the major averages. The S&P 500 dropped 1.1%, moving below its 50-day SMA (2736) for the first time this week. The Nasdaq Composite (-0.8%) held up slightly better, while the Dow Jones Industrial Average (-1.5%) did slightly worse. Losses were broad on Wednesday, with 11 of 11 S&P 500 sectors finishing in negative territory. The energy sector was the weakest group (-2.3%), moving in tandem with the price of crude oil after the Department of Energy's weekly crude oil inventory report showed that U.S. inventories rose by 3.0 million barrels last week; WTI crude futures dropped 2.1% to $61.66 per barrel. Meanwhile, the heavily-weighted health care sector (-1.6%) also finished behind the broader market, with CELG leading the retreat. Among the noteworthy gainers was TIVO, which jumped 11% after it reported quarterly results and announced a plan to explore alternatives to "maximize shareholder value." Also higher after reporting quarterly results were AAXN and ETSY, which gained a respective 28% and 20%. Among the notable losers was CELG, which slid 9% after it received a Refusal to File letter from the FDA regarding its New Drug Application for ozanimod. Also lower was FTR, which plunged 24% after suspending its dividend, and ODP, which fell 9% following its earnings report. LOW fell about 7% after the home improvement retailer's Q4 sales beat consensus estimates but its weak margins caused earnings to miss consensus. VRX dropped 11% after reporting a fourth-quarter revenue miss and downbeat guidance. Stocks in Asia closed sharply lower, catching up with the selloff in the U.S. after the Powell comments. In Europe, stocks fell, with the Stoxx Europe 600 index SXXP, -0.71% down 0.4%.
The U.S. Dollar Index is up 0.3% at 90.61 after marking a session high just a tick above its 50-day moving average (90.69). The dollar rose to five-week highs on Wednesday, bolstered by an upbeat assessment of the U.S. economy from the Federal Reserve's new chairman, which raised expectations the central bank could aggressively increase interest rates over the next two years.
EUUSD: -0.17% to 1.2211
GBP/USD: -0.86% to 1.3786
USD/CAD: +0.32% to 1.2816
U.S. Treasuries ended the midweek session on a higher note with the long bond pacing the advance after showing relative strength on Tuesday. The yield on the benchmark 10-year Treasury note was lower at around 2.87 percent at 3:15 p.m. ET, while the yield on the 30-year Treasury bond was lower at 3.13 percent.
2-yr: UNCH at 2.26%
5-yr: -2 bps to 2.65%
10-yr: -4 bps to 2.87%
30-yr: -5 bps to 3.13%
Oil prices fell more than 2 percent on Wednesday and gasoline futures tumbled, after the U.S. government said crude inventories rose more than expected while gasoline stocks posted a big build instead of the draw that was forecast. U.S. crude inventories rose by 3 million barrels for the week ending Feb. 23, compared with analyst expectations for a build of 2.1 million barrels.
Mar WTI crude settled -$1.35 at $61.66/barrel on the day. In other energy, Mar natural gas settled -$0.01 at $2.67/MMBtu
On Metals, Apr gold rose $0.40 to $1319.00/oz, while Mar silver lost $0.03 to $16.40/oz. Mar copper dropped $0.06 to $3.13/lb
Finally, agriculture: Mar corn rose $0.02 at $3.81/bu.
Mar soy is up $0.05 at $10.55/bu.
Mar wheat rose $0.16 at $4.93/bu.
Bitcoin: $10,718.10 (24hr: -0.38%)
Ethereum: $875.08 (24hr: -0.83%)
Ripple: $0.92 (24hr: -3.17%)
Nasdaq +5.4% YTD
Dow +1.3% YTD
S&P 500 +1.5% YTD
Russell -1.5% YTD
On Thursday, investors will receive a slew of economic reports, including Personal Income and Spending for January at 8:30 AM ET, the PCE Price Index and the core PCE Price Index for January at 8:30 AM ET, weekly Initial Claims at 8:30 AM ET, the ISM Index for February at 10:00 AM ET, and Construction Spending for January at 10:00 AM ET. In addition, Fed Chairman Jerome Powell will appear before the Senate Banking Committee at 10:00 AM ET, wrapping up his semiannual monetary policy testimony.
About "the belief that they may be accepted by someone else"
I keep seeing this statement in various forms over years: bitcoins (only) have value because of the belief that they may be accepted by others. One recent example is hidden in the analysis by the FRB of Chicago. I find this statement misleading in a dangerously subtle way: it is not a belief, it is a fact that bitcoins are accepted in exchange for goods and services. They have been accepted for years, and have never failed at the fundamental, technological level as a payment. You could argue that we don't know if anyone will be accepting them tommorow, but this is the case with anything. When we say "accepting", we need to consider the actual value it is being accepted at. Have you ever tried redeeming the value invested in gold during an ugly armed conflict? How much value did you get out? Have you ever tried paying with government fiat at times of hyperinflation? Next time anyone mentions the belief in the context of value of bitcoins, insist on hard facts, not beliefs.
December 2013 (document actually created same day Ben Bernanke’s letter went out) Chicago Fed: Bitcoin A primer: ... You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it… ” December 16, 2013. Richmond Fed: New Private Currencies Like Bitcoin Offer Potential — and Puzzles: “…unlike gold and silver, bitcoins have ... value - Bitcoin’s problems: volatility, arbitrage, market incompleteness - Measures of Bitcoin’s adoption in the mainstream economy - Other views of Bitcoin: an investment security, a transfer service. a commodity - Which regulators should be watching over Bitcoin? - Proposed extensions of the Bitcoin algorithm to other financial and legal services Class Eight: Using Bitcoin as a consumer ... Bitcoin reached near $20,000 in mid-December after remaining under $4,000 for about the first half of 2017. But when the Chicago Mercantile Exchange (CME) launched futures trading on bitcoin on ... The value of a bitcoin (or BTC) has grown and fluctuated greatly, from pennies in its early days to more than $1,200 at its peak in November 2013. The current market capital-ization of the bitcoin economy is estimated to be more than $10 billion.1 Businesses big and small have shown interest in integrat-ing the Bitcoin platform into their operations and providing new services within the ... (The best simple explanation of all this is in the Chicago Fed Letter.) ... have pointed out that there is a contradiction between the rapidly rising price of Bitcoin, as a store of value, and its ...
The Founding of the Federal Reserve Murray N. Rothbard ... Austrian Economics is impossible without Bitcoin Aleksandar Svetski - Duration: 27:34. Value of Bitcoin 971 views. 27:34. Murray ... Chicago Mayor's Office 187 ... 1:00:08. Ron Paul Hits Ben Bernanke at Hearing, Says Fed Has Destroyed 'Value of Real Money' - Duration: 4:50. ABC News 43,294 views. 4:50. 2008 Financial Crisis: A ... We discuss bitcoin, it's value, the impact of halving and more with Mark Yusko of Morgan Creek Capital Management. 1:13 What made you move to crypto? 6:27 You have compared Bitcoin to gold, and a ... MY ALL-ENCOMPASSING GUIDE TO GETTING STARTED WITH BITCOIN: https://www.btcsessions.ca/post/how-to-buy-sell-and-use-bitcoin-in-canada Today I check out anothe... Peter Schiff, Financial commentator and economist has a virtual sit-down with Patrick Bet-David. Visit Europac site https://bit.ly/2LiN9ap Visit Schiff Gold ...