The Week in Business: Crypto’s ‘Death Spiral’

 The Week in Business: Crypto’s ‘Death Spiral’


In what some call a “death spiral,” the value of many digital currencies has fallen in the past week, shaking the faith of investors in crypto markets. The implosion is particularly devastating for TerraUSD, or UST, which is called stablecoin, meaning it is targeted at a strong asset and does not need to fluctuate in price. But it’s changing: A big sell-off in a sister cryptocurrency sent UST to a low of 11 cents on Friday while Luna, a signal closely tied to UST, climbed to $ 0. Bitcoin fell alongside the Nasdaq, a benchmark weighed by technology stocks, making a cryptocurrency investment as risky as any other technology stock. the crash brings home a bad fact for investors – that an asset they hoped would change didn’t live up to its promise.

Elon Musk said he placed his $ 44 billion bid to buy Twitter “temporarily restrained” as he sought more details about the platform’s spam and fake accounts, which Twitter estimated was nearly 5 percent . Mr. Musk made the announcement in a tweet early Friday morning, followed by another saying he was “still committed” to the deal. Even if trying to identify the mercurial billionaire’s motivations might be futile, Mr. Musk may be deploying a tactic to lower the acquisition price or thinking about backing out of the deal entirely. The latter can be expensive: Mr. deal. Musk on Twitter included a $ 1 billion breakup fee as well as a clause to force Mr. Musk on paying off the deal if he still has financing. His tweets came a day after Twitter’s chief executive fired two top executives, suspended most of the new hires and said he was cutting spending. Earlier in the week, Mr. Musk said he would allow former President Donald J. Trump to rejoin the platform.

Annual inflation slowed in April for the first time in months, but the Consumer Price Index, which measures changes in the prices of consumer goods and services, still rose 8.3 percent. That number is uncomfortably high for households struggling to raise the prices of necessities like food, fuel and housing for months, and it’s bad news for the White House and Federal Reserve, which are trying to economic consolidation. The Fed may be more concerned to see core inflation – which removes costs for groceries and fuel – pick up 0.6 percent. Lawmakers are closely watching this move to figure out the path that inflation can take in the coming months. Its acceleration has allayed concerns that the Fed will take a more aggressive approach to raising interest rates.

From the sixth consecutive week of declines, the S&P 500 is on the edge of a bear market, Wall Street jargon for a drop of 20 percent or more from the index’s last peak. Even if the S&P 500 rebounded on Friday, it was still a small percentage point away from bear market territory. The Nasdaq Composite, which has mostly shown performance in tech stocks, has been doing well in that territory since early March. This steady slide in markets shows how sad investors are about the economy. Concerns about inflation, rising interest rates and the ongoing pandemic are numerous, and investors will find every new data point – as reported by the Consumer Price Index last week – another factor. anxiety and a new reason to sell.

Retail sales are expected to grow again for the fourth consecutive month, as prices continue to rise across the country. In fact, economists are likely to account for most of April’s spending spree on inflation, which is still continuing at the fastest pace in decades. The March retail sales report showed that gas spending rose 8.9 percent, and although prices fell in April, gas is likely to account for a significant share of American spending. Other companies also shifted the increased cost of production to consumers, who they found willing to pay a higher price.

As employers continue to wonder how to attract workers, a new survey provides some helpful – and, some would say, obvious – advice. Sixty-nine percent of women looking for work said child care benefits will determine their decision on where to work, according to a study from McKinsey & Company, the consulting firm, and Marshall Plan for Moms, a campaign focused on the economic participation of mothers. Nearly half of mothers with young children who left work said they did so because of child care problems.

Jerome H. Powell has been confirmed for a second term as chairman of the Federal Reserve. Instacart can be made public. Disney says its streaming platform, Disney +, is increasing subscribers, avoiding the collapse seen by Netflix weeks ago.



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