Friday's Markets Update (Feb 10, 2023)

11 Feb 2023 by rate3

On Friday, Mr. Waller, a member of the Federal Open Market Committee (FOMC), presented his views on the cryptocurrency ecosystem at the "Puzzle of Crypto" Conference in La Jolla, CA. As previously discussed in my posts, I have commented on the level of "understanding" among aging bureaucrats regarding cryptocurrencies since 2015. If Mr. Waller, who's "supportive of prudent innovation in the financial system", serves as an example, it appears that little progress has been made in this regard :)

Please find below two quotes from the speaker, which provide insight into the perspective of those who aim to manage our finances in the 21st century: "The blockchain technology is simply a protocol for managing a database, with varying permissions for who can write to and read from it." and "In my view, a cryptocurrency is merely a speculative asset, similar to a baseball card." No further commentary is necessary.

In regards to Mr. Weller's proposal, it states: "... certain personal information is required to safeguard against anonymous trading, which has the potential to facilitate money laundering." Of course.

However, Mr. Waller also highlights some positive aspects: "... surveys have shown that between 12% and 20% of adults in the US have owned, traded, or utilized cryptocurrency assets." This indicates that if restrictive regulations are implemented sooner rather than later, there could potentially be up to 52 million individuals who will be pissed off with the outcome.

The University of Michigan released the February Consumer Sentiment Index on Friday. Despite a rise to 66.4, up from 64.9 in January, it remains at a decade low and over 22% below its average since 1978. This suggests that consumers are likely to be more cautious with their spending in the future.

However, traders once again disregarded macroeconomic conditions in their positioning. As a result, the NASDAQ remained above 11,700 (opening at 11,714, closing at 11,718) while Bitcoin followed suit (opening at 21,767, closing at 21,724).