Lots of chatter from the US but little actions
The potential new head of the Fed confirmation hearing start today. Ahead of the Senate hearing on Tuesday Jerome Powell provided a clear statements indicted that his views were incline with current FOMC strategy. The statement indicated that Yellen’s policy path will be continue under Powell. He went on to stress that the Fed current institutional structured was positive and preserved its “independent and nonpartisan status”. Finally, he provided support for core banking rules such as minimum levels of liquid and capital, living will and stress testing.
Elsewhere, Fed speak was rampant on Monday. New York Fed President William Dudley indicated that he felt that inflation was below target. On the ultra-dovish side, Minneapolis Federal Reserve Bank President Neel Kashkari indicated that he was not comfortable hiking interest rate until inflation trend was on a clear path towards 2%. The USD was weaker on news that the Senate vote on the tax reform, which was scheduled to take place on Thursday, is falling short of support. Republicans occupies 52 seat however, two senators have indicated they will vote against the bill. In order to win support from the deficit hawks there is speculation that an automatic mechanism for higher taxes should revenue come up short. Passage of tax reforms should be marginally USD bullish as higher growth should pressure inflation.
Bitcoin: Ready for new highs.
Bitcoin despite being declared dead hundreds of times since its creation in 2009 has now almost reached 10’000 dollars. It represents definitely a lot of money but there are only going to 21 million bitcoins after all the Bitcoin will have been mined after 2020.
We believe the Bitcoin will continue to go up. There are less than a few hundred thousand millionaires in the world. This means that not everyone will own a Bitcoin.
On top of that Bitcoin is the entry door for accessing a lot of other crypto projects. Investing in ICO for example always requests to own Bitcoin and many exchanges do not allow fiat currencies but Bitcoin.
Last but not least it is true that Bitcoin allow people to store and transfer value. Almost anyone now can create its own blockchain but what really matters is the acceptance rate and Bitcoin acceptance rate is very strong and will keep growing.
Bitcoin will remain and we believe the price may reach very high levels in 2018. For example the Bitcoin market capitalization has recently exceeded the McDonald’s market capitalization with $165 billion versus $134 billion.
