Let’s update some noteworthy news about the market.
Market Update
Bitcoin Market Situation
In the past day, Bitcoin hovered around $62,000, with occasional spikes above $64,000. Altcoins also saw a mild recovery from previous declines. The total cryptocurrency market capitalization stands at $2.343 trillion.
This Week’s Economic Events
In the U.S., there are no significant economic events this week, with the focus being on speeches by regional FED presidents. Notable speakers include FED Governor Christopher Waller and Governor Adriana Kugler. Other key events include the Empire State manufacturing survey results, unemployment claims, and the ECB’s interest rate decision.
Meanwhile, China is accelerating its efforts to inject capital into the economy. The country recently announced a $325 billion stimulus package over the next three months to support banks, revive the real estate market, and boost consumer spending.
Additionally, China’s leading banks have declared they will reduce interest rates on existing mortgages starting October 25. Eligible regions will see rates lowered by at least 0.3% compared to the central bank’s benchmark lending rate.
Market Paradox
The financial market is a unique place where one can be both right and wrong at the same time. For example, Tom Lee of Fundstrat has been bullish on the U.S. stock market for the past two years, predicting its continued rise even as the FED started raising interest rates.
On the other hand, Michael Burry, famous for his pessimistic predictions, accurately called the 2008 financial crisis, making huge profits from the market collapse. However, Burry remained pessimistic even as the market recovered, leading to new all-time highs. As recently as August 2023, he once again predicted a downturn, but the stock market continued its upward trajectory.
This raises the question: Do you want to be right, or do you want to make money?
The market has shown that both bulls (optimists) and bears (pessimists) can be right, but it all depends on the time frame. Asset prices may drop in the short term, but eventually, they can reach new highs. The key isn’t how often you’re right, but how much you gain when you’re right and how much you lose when you’re wrong, all within a certain time frame.
Ultimately, the saying holds true: Bulls make money, Bears make money, but Pigs (the greedy) get slaughtered.
Bitcoin Banks: A Long-Standing Idea
Many people now talk about MicroStrategy’s strategy of becoming a Bitcoin bank, but in reality, this idea was proposed by Hal Finney back in 2010.
On December 30, 2010, Hal Finney wrote on the Bitcointalk forum:
“There is a very good reason for Bitcoin-backed banks to exist, issuing their own digital cash redeemable for bitcoin. Bitcoin itself cannot scale to handle all the financial transactions of the world in its base layer… Bitcoin-backed banks could operate as banks did before the nationalization of money…”
Finney’s vision suggests that in the future, banks could hold Bitcoin and issue their own currency backed by their BTC reserves. This currency could be traded quickly and efficiently for everyday transactions. Today, MicroStrategy, led by Michael Saylor, is pursuing a similar strategy, accumulating BTC and promoting its long-term value.
Other Notable News
- Former President Trump announced the WorldLibertyFi token sale, set to begin Tuesday morning, October 15 (U.S. time).
- South Africa’s tax authority (SARS) is bringing crypto assets under tax compliance, collaborating with financial regulators and crypto service providers. SARS encourages individuals to join the Voluntary Disclosure Program (VDP) if not already compliant but warns those selected for audits will not qualify.
- In 2024, crypto companies have paid over $19 billion to settle lawsuits with U.S. regulators, making up nearly two-thirds of total fines to date.
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