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!
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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
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
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
FinTech Collective Newsletter
Curated News with Context
Delivered every Saturday, the weekly newsletter, produced by our team, provides a tightly edited rundown of global fintech news, along with a bit of our original analysis.