Monday, November 29, 2021

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    Digital assets: bear market would be bitcoin’s acid test

    Bitcoin hasn’t been so strongly validated by enthusiastic fans that Jamie Dimon calls it “worthless.” JP Morgan, which he runs, aims to disrupt the cryptocurrencies of just the dominant and regulated institutions.

    “He continues to comment on crypto,” says London crypto entrepreneur Oleg Giverstein, “but the market proves he’s wrong.” Bitcoin made a long-awaited forecast last week, jumping to about $ 60,000, close to its historic high. Launch of Exchange Traded Fund..

    The total cryptocurrency monitored on the CoinGecko website has risen to $ 2.5 trillion, which is about five times the market value of JP Morgan. Despite Dimon’s Broadside, his bank provided wealth management clients with access to crypto funds this summer.

    Lex will look at digital assets in daily notes this week as digital assets are becoming mainstream in finance. However, Giberstein’s comments are only half correct. The popularity of crypto is encouraging some regulated institutions to provide trading services. However, actual market testing only involves a long recession.

    The view of this column about Bitcoin is that its usefulness is limited to secrets (some are illegal), objections (some justified), and speculation (always in us). In the latter guise, Bitcoin is a vibrant barometer just because it is a clumsy transaction medium.

    The price of this seemingly uncorrelated asset has halved last year, when the S & P 500 fell by a third. When bailout and vaccine flowed, it bounced off quickly. It is polluted and very unstable. It is about 5 times more volatile than the S & P500 index.

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    Our premonition is that Bitcoin will remain glued to linoleum throughout the long-term bear market. If the government and central banks put together a switch from freehand stimulus to rate hikes and tax increases, a sharp setback in equities is possible.

    It is arguable how well Bitcoin, a legacy asset that lacks essential yields, will recover. Other more convenient ciphers are emerging. But even if it became a historic footnote, this flagship crypto would have shown that digital assets could be widely retained. Therefore, central banks gathering to defend fiat money are experimenting with electronic versions using the same blockchain technology.

    Ultimately, financial authorities could impose regulated digital assets on Dimon and his successors. This reduces transaction costs and margins for banks. It’s far from the decentralized turmoil that Bitcoin evangelists envision. But the impact will still be widespread.

    The Lex team is interested in hearing more from our readers. In the comments section below, please tell us what you are doing about rising crypto and the broader asset bubble.

    Digital assets: bear market would be bitcoin’s acid test Source link Digital assets: bear market would be bitcoin’s acid test

    The post Digital assets: bear market would be bitcoin’s acid test appeared first on California News Times.

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