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A majority of Federal Reserve officials last month believed that economic conditions would likely warrant keeping the Fed’s benchmark interest rate unchanged for the rest of this year.
But several officials said their view could shift in either direction based on new data, according to minutes…
President Trump wants the Federal Reserve to cut interest rates immediately, his top economic advisor said Friday, making it clear that the president is still angry with the central bank.
The U.S. federal funds rate is sitting just shy of 2.5%, the highest in more than a decade although low by…
On March 20, the Federal Reserve’s Open Market Committee (FOMC) unanimously decided to keep federal interest rates unchanged. Critics believe that the central bank’s policy of near-zero interest rates and quantitative easing (QE) has corrupted the U.S. economy for nearly a decade and spawned a generation of socialists.
The U.S. Federal Open Market Committee Too Stubborn to Raise Interest Rates
This week, numerous news outlets described how the Federal Reserve’s FOMC opposed changing interest rates again. The group seems leery toward normalizing the Reserve’s monetary policy. The central bank hasn’t budged on increasing interest rates higher than 3 percent since the financial crisis in 2008. This week’s FOMC shows the Fed is not willing to increase rates anytime soon and the current monetary policy will be sustained for the foreseeable. A number of economists think that the Fed’s stubbornness will impact badly on the economy for a variety of reasons. For one, keeping interest rates low distorts people’s perception of a healthy economy when younger generations grow used to homes and car loans boasting near-zero rates.
Economists believe that the Fed’s low interest rates make savings an unattractive goal and with extremely low rates the idea of savings doesn’t make sense. Low rates hurt smaller banks like credit unions because individuals choose to keep fewer funds in checking and savings accounts. The rates also cause inflation to rise which makes savings even less worthwhile and to a majority of people borrowing makes more sense.
This, in turn, makes debt increase as near-zero rates encourage people to consume more than they can afford. With rates never rising above 3 percent, the last decade has seen growing debt and excess and quantitative easing has fueled the flames even more. In addition to low interest rates since the Federal Reserve and Chairman Ben Bernanke’s administration, the Fed has been a money printing machine.
A Decade of Near-Zero Rates and QE Is Creating a Generation of Socialists
Back in the summer of 2016, it was estimated that the Fed had printed over $ 12.3 trillion of new money and nearly $ 10 trillion in negative-yielding global bonds since the financial crisis in 2008. Even today the Fed hasn’t stopped the printing madness and interest rate cuts continue unchallenged. In 2018, the Fed’s balance sheet exceeded $ 4 trillion and economists believe more QE is on the way. Skeptics think this has caused Generation Z and millennials to embrace socialism and the ideologies behind it. Notorious Zero Hedge columnist Tyler Durden explained on March 11 that a recent Harris-Axios Poll shows the Fed’s QE has likely bolstered the idea of a state fostered by socialism. Durden’s report emphasizes:
With younger generations financially penalized under QE to prevent the economy from a deflationary collapse, the Fed may have inadvertently transformed tens of millions of young Americans into socialist.
The poll shows that American millennials and Gen Z’s are dealing with the low-paying gig economy, renting rather than owning, increasing debt, and rampant cost of living expenses and inflation. Additionally, the poll points out that 50 percent of young Americans today would choose to live under a socialist regime. 37 percent polled desire a socialist-based economy over capitalism. Moreover, the Fed is doing a good job of educating society and even created a mobile app that teaches young children about the ‘benefits’ of promissory notes.
The Fed’s Failure: An Unimpressive Economy and Rising Inequality
A senior editor at the Mises Institute, Ryan McMaken, gives a seething critique of the FOMC decision and the Fed’s continued failure. McMaken denounces the FOMC’s fear of raising rates and believes the central bank’s actions have “coincided with both an unimpressive economy and rising inequality.” “If that’s not evidence of the Fed’s failure, it’s hard to imagine what is,” McMaken’s evaluation notes. Since the crash of 2008, QE, and the bailouts, cryptocurrencies have been a method for some to escape the manipulation created by the state and the Fed’s monetary policy. In fact, over the last decade, as the Fed has pursued this activity, safe haven investments like precious metals and bitcoin have risen in value exponentially.
What do you think about the FOMC’s decision to leave interest rates unchanged? Let us know what you think about this subject in the comments section below.
Image credits: Shutterstock, Pixabay, Bloomberg, Pixabay, and Mises.org.
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The post The Fed’s Low Interest Rates and QE Have Created a Dependent Generation appeared first on Bitcoin News.
On March 4, cryptocurrency-backed USD lending platform Blockfi announced the launch of a new savings program called the Blockfi Interest Account (BIA). Having started as a private beta service, BIAs are now available to the public who can store bitcoin core (BTC) and ethereum (ETH) and receive 6 percent annual interest, paid monthly in cryptocurrency.
Blockfi Introduces Savings Account That Earns a Return on BTC and ETH Holdings
Cryptocurrency lending company Blockfi has initiated a new service that provides investors with annual interest on stored cryptocurrencies. The Blockfi Interest Account (BIA) enables customers to earn 6.2 percent a year compounded monthly by simply storing BTC or ETH in an account. Last July, Blockfi raised $ 52.5 million to get the company rolling with a funding round led by Michael Novogratz’ company Galaxy Digital. In August, the lending firm was approved to operate its services in California. According to Blockfi, the newly created BIA savings program was initially launched in private beta and managed to attract $ 10 million worth of ETH and BTC from retail, corporate, and institutional investors.
“The launch of BIA is another significant step in Blockfi’s goal of becoming the go-to provider of financial services for crypto investors,” said Blockfi CEO Zac Prince on March 4. “Lending and borrowing are readily available at the institutional level, and we’re excited to leverage our relationships and capital markets expertise to provide utility and yield on digital assets for all crypto investors.”
Blockfi details that the BIA service is available to customers worldwide and the digital assets are held by the Gemini Trust Company in New York. Gemini recently announced its custodial services and completed a SOC 2 Type 1 security compliance review. Blockfi says customers accrue the 6.2 percent on a monthly basis and are able to initiate withdrawals at any time.
“As crypto markets mature, greater liquidity will be constantly required to keep markets orderly,” Rene van Kesteren, Blockfi’s chief risk officer stated. “By providing a transparent yield on BTC and ETH, Blockfi will be a key part of the trading and market making ecosystem.”
Blockfi Joins a Few Other Startups Offering Compounded Crypto Yields
Blockfi is not the only firm offering cryptocurrency investors a yield on BTC and ETH. Last August, the U.S. Commodity Futures Trading Commission (CFTC) regulated exchange Ledgerx launched an interest-bearing BTC savings platform. According to Ledgerx, the program allows clients to gain an annualized return of roughly 16 percent, even when crypto markets are not appreciating. Unlike Blockfi, Ledgerx holds the digital assets and a U.S. bank holds the accrued USD interest.
Another company headquartered in San Francisco called Compound has developed a platform that creates a decentralized interest rate market for cryptocurrencies. The Compound application uses BAT, ETH, and REP within its protocol that runs on the Ethereum network. The startup received $ 8.2 million in seed funding from venture capital firms like Andreessen Horowitz, Polychain Capital, and Bain Capital Ventures.
Flori Marquez, cofounder and VP of Blockfi operations, believes the startup’s compliance programs set it apart from the competition. The yield earned by BIA customers is generated by Blockfi’s institutional borrowers and from participants from the company’s last fundraiser. Since Blockfi launched, it has also added litecoin and GUSD for crypto-backed loans. “Blockfi’s proprietary risk management system, which automatically initiates margin calls and liquidations to protect our customers’ assets, has a perfect zero-loss performance record since launching in 2017,” concluded the company’s announcement.
What do you think about Blockfi’s BTC and ETH savings program with its 6.2 percent annual interest? Let us know your thoughts on this subject in the comments section below.
Image credits: Shutterstock, Blockfi, and Ledgerx
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Wilsons Auctions on Feb. 28 successfully sold off 315 bitcoin seized by the Belgian police from dark web drug dealers. The 24-hour online auction attracted interest from buyers from 110 countries.
Wilsons Sells Off $ 420k of Confiscated Crypto
Irish auctioneer Wilsons won the contract to dispose of the criminal assets on behalf of the Belgian Government. The 315 coins consisted of 104.99 each of bitcoin core, bitcoin cash and bitcoin gold. The total haul was valued at around £300,000 (~$ 420,000).
The Belfast Telegraph reported that the loot, with no reserve, was put under the hammer in lots ranging from 0.5 BTC to 4 BTC each. The lots for BCH and BTG contained a larger number of coins. Mallusk-based Wilsons also sold a small amount of BTC physically, during its unreserved government auction in Belfast on Thursday.
A large amount of the cryptocurrency being auctioned was seized by police from two drug-dealing brothers in the Belgian city of Antwerp, who were selling substances over the dark net and shipping it worldwide, the article said.
But in 2017 Belgian police also reported they had confiscated about 1,050 BTC from several dark web drug dealers. Liquidation of the seized crypto assets required that the country first implement laws governing these, as is the case with the traditional financial industry. That now appears to have happened, giving effect to the Wilsons BTC auction.
The Allure of Bitcoin’s Anonymity
Aidan Larkin, head of asset recovery at Wilsons, has previously said: “Following huge investment into our systems and infrastructure, we are able to offer government and law enforcement agencies worldwide a secure solution to the ever-increasing problem of seized cryptocurrencies.” He added that the Belgian government contract allowed the auctioneer to expand its cryptocurrency offering and “remove the risks that can be associated with trading with unregulated virtual currency exchanges.”
As cryptocurrencies develop, they have attracted a small group of criminal elements bent on exploiting the anonymity and decentralized nature of virtual currencies like bitcoin. While cryptocurrency offers certain advantages to criminals, fiat money remains their preferred currency. For example, some of the world’s largest banks have been fined billions of dollars for helping criminals to launder money.
Founded in 1936, Wilsons Auctions claims to be the largest auction company in the U.K. and Ireland. Larkin told the Belfast Telegraph that the criminal assets auctioned by the company had yielded more than £100 million for HM Revenue and Customs in the past five years. The company has also previously auctioned off monero (XMR) virtual currency.
“Five years ago we had a handful of contracts, we now represent 90% of law enforcement agencies in the UK and Ireland, in addition to contracts in Belgium, Malta and now the Balkan countries and soon to be in Nigeria and in Malaysia,” Larkin said.
What do you think about the Wilsons bitcoin auction? Let us know in the comments section below.
Images courtesy of Shutterstock and Belfast Telegraph.
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The post Auction of Seized Bitcoin Draws Interest From 110 Countries appeared first on Bitcoin News.
The Chicago Mercantile Exchange (CME Group) has seen a big spike in bitcoin futures volumes according to an internal investors email sent to clients on Feb. 19. CME Group’s note explains that last Tuesday’s BTC-based futures volumes touched a new record with 18,338 contracts traded and the firm says increased volumes may be due to gradually rising institutional interest.
Bitcoin Futures Volumes Spike in 2019
Cryptocurrency derivatives kicked into high gear in 2017 when two of the largest FX exchanges in the world, Cboe and CME Group, launched their bitcoin futures products. Initially, interest in these markets was high, but a few months later crypto derivatives volumes on these exchanges started to wane. Then in the summer of 2018, futures contracts from the two regulated exchanges began to rise again and interest in these products started to increase significantly. Last December, futures volumes were lower and spectators saw some signs of backwardation which means the derivatives predictions on the price of BTC are significantly lower than the prices on global spot exchanges. However, there was a shift in 2019 as prices returned to normalcy between both futures and spot values and volumes increased in January.
“Futures products from traditionally regulated exchanges (CME and CBOE) represented 11.7% of the Bitcoin to USD futures market in January, up from 6.36% in December,” explains Cryptocompare’s January exchange research.
Cryptocompare’s data shows that CME Group has seen more volume than Cboe in January but non-traditional futures trading platforms stole the show last month. Research reveals that Bitflyer FX traded the most BTC derivatives products in January with a daily average transactional value of $ 1.13 billion. The analysis also highlights the perpetual futures volume last month offered by Bitmex which was roughly $ 665 million. Now, as February comes to an end, CME Group’s recent internal email to investors indicates this month has seen an appreciable jump in interest.
“Yesterday [Feb 19] set a new record with 18,338 contracts traded,” the executive’s note explained. “This is equivalent to 91,690 bitcoin or $ 360 million.”
The note continued:
Q1 2019 is off to a strong start, average daily volume (ADV) has improved to 4,630 contracts (23,150 equivalent bitcoin), up ~13% from Q4 2018 while open interest rose to 4,076 contracts, an improvement of 21.5% over Q4 2018.
Large Open Interest Holders Seek Bitcoin Futures
CME Group’s volume statistics show a gradual rise in the last two months compared to the slight slump in Q4 2018. Moreover, last Tuesday’s futures spike also took place on Cboe’s exchange as the XBT futures daily market statistics show a higher than usual 4,945 contracts. The spike is a big jump from the typical daily average of 700-1500 Cboe-based XBT contract volumes. CME Group’s investors note details that the February rise in volume stems from large open interest holders (LOIHs).
“Institutional interest has gradually risen and the number of LOIHs has been holding steady around 43 holders since November,” the CME Group representative detailed. “A LOIH is an entity that holds at least 25 BTC contracts.”
Over the last year, derivatives and perpetual bitcoin swaps have continued to show growth and spontaneous surges in trading activity. Traditional bitcoin futures products seem to be gaining interest from institutional buyers while leveraged bets with no specific expiration dates continue to see swathes of retail investors playing the market. Even though CME Group, Cboe, and Ledger X products are doing well, they are a long way from matching the volumes executed through perpetual bitcoin swap markets managed by Bitmex, Bitflyer, Bitfinex, Deribit, Crypto Facilities, and Okex.
What do you think about the rise in CME Group’s Bitcoin futures volumes? Let us know what you think about this subject in the comments section below.
Image credits: Shutterstock, CME Group, Pixabay, and Crypto Compare.
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Chicago police say they have no information to suggest the reported attack on Empire ‘s Jussie Smollett was staged, as ABC7 reported Thursday. “We have no evidence to support their reporting and their supposed CPD sources are uninformed and inaccurate,” spokesman Anthony Guglielmi says in a tweet . Already circulating , the…
U.S. stocks jumped Wednesday after the Federal Reserve signaled it could hold off on interest rate increases in the coming months, citing muted inflation.
The central bank’s announcement allays one of the biggest concerns for investors: that the economy, and corporate profits, could be hurt if…
The flood of money rushing into Chinese internet startups has slowed, dashing hopes of quick windfalls for many investors.
WSJ.com: What’s News Asia
Ronnie Ortiz-Magro has been named a “person of interest” in an alleged burglary at the home of his baby mama, Jen Harley, hours after the couple broke up following a nasty fight at a Vegas club … TMZ has confirmed. Law…