Posted In:

Cryptocurrency


#193
Currency Wars

Published:

Aug 11, 2018


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Posted In:

Cryptocurrency

Published:

Aug 11, 2018


Author:


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One of the most common criticisms of bitcoin is its volatility. How can you practically use a currency whose value is so unstable?

However, traditional currencies are taking the cake this week. Turkey's currency, the Lira, was in freefall Friday – losing up to 20% of its value against the dollar after President Trump threatened to increase tariffs. The Lira has experienced more than 40% inflation so far in 2018.

Moreover, the U.S. Treasury Department is closely monitoring China for signs of manipulation. By devaluing their currency, China can make its exports cheaper to buy - and thereby counteract Trump’s tariffs. Some currency analysts believe Trump could retaliate by devaluing the U.S. dollar.

The risk with such devaluation is that it can lead to uncontrollable inflation – with everyday people holding the bag as their personal wealth diminishes.

And those who believe that developed countries like the U.S. are immune to inflation are not students of history. In the 1970s, the US, UK, and other industrialized nations experienced a period of “stagflation” – whereby inflation was rampant while economic growth was stagnant.

Though bitcoin has its flaws, geopolitical warfare is not one of them as of yet. Ultimately, whether traditional currency or cryptocurrency, a wild ride is not what you want!

Portfolio News


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Offering a white-labeled lending service in emerging markets, Mines raises $13 million - Congratulations to portfolio company Mines and CEO Ekechi Nwokah on raising a $13m Series A led by TPG's Rise Fund, with participation from Velocity Capital and other investors. Mines will bring consumer lending to emerging markets, finding customers where they already are – their mobile phones. Read more

Let's restart the hidden economic engine - Following Neighborly's "Future of Public Finance" conference this month, an extremely insightful blog post by Jase Wilson (Neighborly CEO) on how we must rewire public finance, especially given the critical inflection point our planet is at from an environmental and socioeconomic standpoint. Read more

Currency Wars


Turkey emerges as Economic Flash Point as Tensions With U.S. Soar - Turkey's currency, the Lira, was in freefall Friday - losing 20% of its value against the dollar at one point and hitting record lows after President Trump threatened to increase tariffs on the country. Read more

How Trump's trade war with China will hit VC, PE and M&A - Trump is prepared to raise tariffs on all imports from China to more than $500b. As a result, Chinese foreign direct investment into the US was only $1.8b in the first half of 2018, down 90% from the comparable period last year and the lowest in 7 years. Read more

U.S.- China trade war is now becoming a currency war, too - The U.S. Treasury Department is closely monitoring China's currency markets for signs of manipulation. By devaluing their currency, China can make its exports cheaper to buy and counteract the Trump administration's new tariffs. Read more

Industry News


Fintech frenzy: hype or reality? A closer look at 6 key sectors - With fintech funding momentum not slowing down and surpassing more than $5.4b in the first quarter, Bain’s Matt Harris covers for Fortune the trends and maturity across the sub-sectors of payments, lending, wealth management, insurance, real estate, and crypto. Read more

Goldman Sachs is considering a custody offering for crypto funds - If executed, the plan could enable more crypto funds and traditional asset managers to enter the emerging asset class. Deliberations are ongoing and no timeline has been made available. Read more

Something’s brewing at Facebook’s cryptocurrency division - David Marcus, Facebook vice president and the former head of its Messenger division, has stepped down from Coinbase's Board. Combined with the stealth meetings between Facebook and Stellar, many are speculating that the social network has a Kin-like offering in the works. Read more

Zillow stock plunges after it announces its buying an online mortgage lender - The popular real estate listing service has announced its buying Mortgage Lenders of America, a move that will expose Zillow to a new revenue stream but also has been a historically risky industry. Read more

Public firm becomes first to launch an ICO in Singapore - Y Ventures Group has launched an initial coin offering (ICO) through its subsidiary, Luminore 8, making it the first Singapore-listed company to do so, with the new AORA Coin cryptocurrency envisioned for use in e-commerce transactions. Read more

Crypto mining giant Bitmain on target for $10b revenue this year - The world's dominant producer of cryptocurrency mining chips (ASICs) has rung up a $2bn revenue quarter ($1bn of profit) as it explores a IPO in a valuation range of $40 - $50mb. The company is also looking to launch their own AI chips by the end of the year as well. Read more

Blend launches insurance agency - The mortgage technology company is expanding into home insurance, which is often required to be in place when a new home sale is effected. To support the new offering, Blend is opening up an office in LA that will be staffed with insurance professionals. Read more

Select Financings


Even Financial - New York City based fintech product comparison and recommendation engine has raised $18.8m in Series A funding led by GreatPoint Ventures, with participation from GS, Canaan, F-Prime, and Lerer Hippeau. Read more

Libra - New York based crypto fund administrator services provider has raised $15m Series B funding from a large anonymous family office and Liberty City Ventures. Read more

Spruce - New York based national title insurance and escrow company raised $15.6m in Series B funding led by Bessemer, Omidyar, and Collaborative Fund. Read more

Taxfix - Berlin based tax filing mobile assistance has closed $13m in Series A led by Thiel's Valar Ventures. Read more


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