It seems that the market has forgotten a bit about the banking crisis to return to concerns about the economy in general. Economic indicators are signaling that the US economy is cooling off. The labor market, however, is not without concern.
In many ways, investors are between a rock and a hard place. For one thing, a strong economy reduces the chance of having a recession. So, on many occasions, investors celebrate such strength as a victory of the so-called “soft landing”.
What is the “soft landing”? In Spanish, “soft landing”. It is the opposite of “hard landing”. In Spanish, “hard landing”. It refers to the scenario that poses a decrease in inflation, but without major damage to the economy and the labor market. In this case, the fear is runaway inflation. Victory without pain? Is it possible?
On the other hand, a weaker economy is an advance in the fight against inflation. Because, when demand goes down, prices go down. With inflation under control, the US Federal Reserve could, sooner rather than later, return to stimuli. And well we know that liquidity injections by the Federal Reserve are the fuel that accelerates bullish periods. But, before getting there, suddenly, it is necessary to go through a recession. During a recession, incomes fall and unemployment rises. Which is not particularly positive for investors, because this scenario hits valuations.
The market has difficulties establishing a position in such a complex and contradictory environment. The bulls are supported by the most optimistic expectations. However, the situation is quite mixed and uncertain. In many cases, the good news is bad news. And vice versa. Therefore, total optimism is as delusional as total pessimism. For example, if we celebrate the cooling of the labor market, we must remember that a recession lowers income. On the other hand, if we celebrate the opposite, we must remember that a very tight labor market exerts inflationary pressures. All scenarios require a sacrifice. In many respects, however, the market is in denial.
The crypto market, right now, is spellbound by optimism. During this first quarter of the year, buyers have returned. The great question: Will we continue to rise in the coming months?
Now, let’s talk about the top crypto news of the week according to Cointelegraph in Spanish. This is not a news summary. This is an opinion article. The intention is to reflect on the following headlines in a skeptical and critical way. This is an article for free thinkers.
From Bat-Signal to Bitcoin: Projecting the BTC Logo on Banks as the EU Pushes for Crypto Regulation
Batman is my favorite character in the DC universe. As a fictional character, he is very entertaining. However, we cannot forget that, deep down, he is a vigilante operating outside the law. In the real world, Batman is not a substitute for the police.
Similarly, I love Bitcoin in many ways. I find it extremely useful. And it has proven to be very profitable as an investment. However, Bitcoin is not a panacea. What is Bitcoin? Bitcoin is code in a decentralized database. What is a bank? A bank is a meeting place between borrowers and lenders.
Now, if person A lends a BTC to person B and person B defaults on the loan, it is quite possible that person A has no choice but to declare bankruptcy due to non-payment. That is to say, credit-related risks do not end with Bitcoin adoption. Idealization is not always positive. Sooner or later, it backfires.
Russia talks about the possibility of the BRICS countries developing a new currency
Russia has been able to survive thanks to China and India buying its oil. The block can afford to have its own currency, because there is already a lot of commercial relationship between its members. The dream of breaking with the hegemony of the dollar is an old one. Now it is possible, partially, thanks to China. Could Russia survive without China?
Binance announces the launch of a fiat ramp in Argentina
In countries with many exchange restrictionsthe population usually buys dollars through unofficial channels. The rise of P2P markets and services such as the one announced by Binance in countries like Venezuela and Argentina, is due to pragmatic reasons. Due to the instability of the local currency, buying and selling dollars is our daily bread. In these cases, heCryptocurrencies work as an ally of the parallel currency market.
Brazilian bank BTG Pactual to issue USD-pegged stablecoin
Due to the immaturity of the market, Latin America still offers many opportunities for people with capital. That is, it is still possible to make large profit margins in some businesses. That is not necessarily true in the case of the United States and Europe. The problem of the Latin American businessman is not to grow per se. The problem is stability. That is the importance of the dollar. AND the most important thing about the dollar is the unit of account.
Stablecoins are not dollars as such. But that, in most cases, doesn’t matter much. Because the most useful thing is the rate. For practical purposes, a stablecoin is the dollar, but without being it.
Peru studies a CBDC to improve the payment system
“The objective of a CBDC within the framework of the payment system in Peru is to give the unbanked population access to digital payments, so it is important to know its characteristics to prepare an implementation strategy.”
The problem of the unbanked population is not always the inability to make digital payments. Why aren’t they banked in the first place? In developing countries, there are still many people without electricity and there are many people without internet service. Besides, the informal economy is largely based on cash.
Is the possibility of making digital payments beneficial? Of course. But it’s not enough. We forget the true role of a bank. That is to say, what people need is greater access to credit.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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