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- ๐ Don't walk... RUN!๐โโ๏ธ
๐ Don't walk... RUN!๐โโ๏ธ
We protect ourselves by keeping savings separate from a dying system, and you can, too.
Bitcoiners,
The Federal Reserve continues to straddle the line between fighting inflation and crippling America's financial markets. As you would expect from a centralized, politicized government agency, it isn't doing a good job.
This week, macroeconomic analysts are focusing on the "credit crunch" ripping through the economy, another knock-on effect of bank runs that impacts car loans, housing, and business loans.
Banks are cutting off loans and credit to car dealerships, leading to a potential collapse of dealers and a decrease in car prices โ a short-term boon for consumers at the expense of businesses.
Mortgage applications have plunged, with debt-to-income ratios higher than the peak before the 2008 subprime meltdown, causing a rise in defaults.
The impact on business loans is particularly concerning, as tighter lending means companies must use up their cash, leading to further credit tightening and potential job losses.
As these events manifest, there is a high chance of hard times ahead. We protect ourselves by keeping savings separate from a dying system, and you can, too.
With that, let's dive into the news.
NEWS
Bank of England: "Accept poverty"
The Bank of England's chief economist, Huw Pill, stated that British households and businesses "need to accept" that they are poorer and to stop seeking pay increases, which he believes push prices higher.
Pill's comments drew fresh ire from many โ but there is more to this story. The idea of wage-driven inflation is a myth, frequently evoked by central bankers to pin the blame on anyone other than themselves. As Milton Freidman said, "Inflation is always and everywhere a monetary phenomenon."
Today, central banks have tighter control of the fiat money supply than ever before. With great power comes great responsibility, and it is they who are responsible for inflation โ not workers who want to raise a family and maintain a middle class lifestyle. Don't let them or anyone else shame you into lowering your expectations.
Capital continues to walk away from banks
After last month's bank crises, many expected consumers to uniformly move deposits from small to large banks, crippling the regional banking sector. So far, that has not happened. Instead, consumers are leaving small and large banks in what commenters call "bank walks" and moving deposits into mobile banking apps that can access money market funds. Why?
Interest rates. Large and regional commercial banks offer interest rates below 1%, while money market funds with access to treasuries offer interest rates close to 5%. If this trend continues, small and large banks will bleed profits, which will decrease their ability to lend and further decelerate the economy.
Coinbase drama intesifies
Coinbase has filed a lawsuit against the SEC in a federal court, seeking a clear response to its petition for crypto regulation, which it claims the SEC has ignored. The lawsuit comes amid a tense standoff between Coinbase and the SEC over the former's plan to launch a lending product that the SEC considers a security.
Coinbase argues that the SEC is trying to regulate crypto through litigation instead of rulemaking. If Coinbase prevails, pressure on the SEC to change its operational strategy will increase.
Either way, now is as good of a time as ever to get your bitcoin off Coinbase and start doing business with a company that aligns with bitcoin's values
BITCOIN ADOPTION CONTINUES
Trammell Venture Partners, a bitcoin venture capital firm, released an ecosystem research report demonstrating how bitcoin-native companies have seen a 52.9% increase in year-over-year deal activity.
Senator Ted Cruz announced that he DCA's weekly into bitcoin at the Bitcoin Policy Institute conference.
CoinFlip, a bitcoin ATM provider, launched a self-custody platform for users called Olliv.
Amboss Technologies, a lightning network data analytics firm, raised $4 million in seed funding led by Stillmark and other venture capital firms.
HOW BITCOIN WORKS
Learn one key idea about bitcoin each week. This week:
Bitcoin is a puzzle piece
Powerful forces, such as technology, politics, climate, and topography, drive significant societal change. Some of these forces are within our control, while others are not.
The periods over which these forces drive change differ significantly. Their effects are sometimes apparent within a lifetime, while others span generations.
One of the most relevant forces of change in the early 21st century is technology, which is compounding rapidly in its advances. It is transforming mobility, communication, and freedom.
However, it is doing so at the expense of legacy power. Trust in institutions is decreasing as people discover new ways to travel, transact, and communicate โ freely.
In response, governments, mainstream media, and corporate power are pushing back, attacking the technological forces that threaten their grip on the status quo.
But they cannot stop the unstoppable. Future generations will look back on today's antiquated institutions the same way we study medieval feudalism.
Bitcoin is playing an important role in this transformation. In our opinion, it is the key. But regardless of how big or small its role, it is undeniable that is is a piece of the puzzle that, once solved, will allow us to live in freedom โ a promise that has all but been forgotten.
Ready to get started with bitcoin? Coinbits is the best option. It's fast, safe, and free to create your account.
COIN CHECK
Who invented Hashcash, the proof-of-work system for spam control later incorporated into bitcoin mining?
Satoshi Nakamoto
Alan Turing
Lyn Alden
Adam Back
Check your answer at the end of the page.
FROM THE MEME POOL
ANSWER
Adam Back
In 1997, Back invented Hashcash, the proof-of-work system used for spam control. It is a mechanism that forces email senders to solve computational puzzles. By adding a cost (time and computational power) to sending an email, Hashcash made spam uneconomical. Bitcoin later repurposed these proof-of-work puzzles to become the basis of bitcoin mining, and Backโs Hashcash is even cited as a reference in the Bitcoin whitepaper.
Thatโs all for this week, folks! When you signed up for this newsletter, we promised to act as your personal guide and help you understand whatโs happening in the world of bitcoin. What did you think of todayโs newsletter? Reply to this email and let us know what youโd like to see more of.
Until next week!
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