First engine: why the Fed cares about remote work and what it means for Bitcoin

Bitcoin was lower after climbing nearly $ 600 on Thursday to surpass $ 16,000 for the first time in nearly three years.

“Investors should plan for volatility and price appreciation,” blockchain analyst firm Chainalysis wrote in a newsletter.

In traditional markets, European equities fluctuated and US stock futures indicated an opening to the upside as investors weighed the prospects for a new stimulus package against record coronavirus cases. Gold strengthened 0.1% to $ 1,879 an ounce.

Federal Reserve Chairman Jerome Powell has been holding up his talking points lately. It works like this:

These are all key themes that cryptocurrency traders are following because a growing number of investors say large-scale money printing could support the use of bitcoin as a hedge against inflation.

But what was perhaps most interesting and new among Powell’s comments in a virtual forum Thursday hosted by the ECB was his acknowledgment that life as we know it – and by extension the economy – will likely never return to anything like it. It was once.

“You’ll see more telecommuting,” Powell told the virtual forum. “We will not return to the same economy. We are recovering in a different economy. ”

It was more than just a talking point. He may have offered a look at a key issue that Powell hasn’t talked much about. The coronavirus will have a lasting and frightening impact on the economy, but remote working could be another important factor for monetary policy to consider.

The economy is in turmoil, and not just because people don’t eat out, go to the movies, or travel for leisure, or because so many businesses and families would be in trouble right now without all the emergency aid.

There may be a centuries-old transition to commuting via the Internet, perhaps one of the biggest transformations of the workforce since the industrial revolution, which has drawn people to cities.

If workers really appreciate remote setup, and many do, and employers are really seeing how productive their employees can be working remotely, and it costs a lot of time and money to get to work, and it’s easier for many parents who work set the home base, why on earth would there be a return to the old office-based civilization?

What would that mean for airlines? Commercial property? Oil companies? Car manufacturers? Theme parks? City?

Governments and central banks are likely to have to provide a lot of help and stimulus to ensure that the transition goes smoothly, that society holds together, that people can manage. And that widespread debt defaults do not overwhelm the banking system. Even many people who think bankers benefit from their established role in the economy will recognize that banks play an essential role in the existing financial infrastructure.

Dave Hendler, director and founder of banking analytics firm Viola Risk Advisors, says one implication is that the hand of governments and central banks could be heavy on the economy for a long time.

She said in a phone interview that she recently walked from the New York suburbs to Manhattan for the first time since February for a wine tasting event. While in town he visited his old barber shop. The barber, who has “a baby and another on the way,” told Hendler he has dropped to one customer a day from a pre-pandemic level of about 20 a day.

Imagine if many of the employees never really returned. This is an extreme but entirely plausible scenario.

“It will be a longer readjustment and it will be harder,” says Hendler. “There will have to be assistance for the transition to the new world.”

Central bankers like Powell are only now thinking about this, much less talking about it. As more investors start focusing on it, the remote working economy will likely require a lot more attention and possibly a lot more money.

Bitcoin appears to be holding above $ 16,000 and cryptocurrency traders are considering the next move.

The big market debate now is if and when bitcoin will return to the record price of around $ 20,000 reached in December 2017.

George McDonaugh, CEO and co-founder of publicly traded cryptocurrency investment firm KR1, wrote in email comments Friday that he doesn’t expect bitcoin holders to sell until prices hit a new record high. “given the relatively small delta between $ 16,000 and $ 20,000.”

Bitcoin has been known to surprise in the past with pullbacks that punish overly bullish bets. Alternative.me’s Crypto Fear & Greed Index entered the “extreme greed” zone from a “neutral” reading just last month.

“I expect we won’t hit $ 20,000 with this current move,” although it’s likely to happen in 2021, McDonough wrote.

As First Mover noted last week, bitcoin has spent so little time above $ 16,000 in its 11-year history that analysts looking at price chart patterns for clues have little to work with.

Matt Blom, head of sales and trading for digital asset financial firm Diginex, wrote Thursday that the next key level of price resistance appears to be at $ 17,130, with bearish support at $ 15,420.

“The new multi-year highs are fast becoming a boring stock,” wrote Blom. “The bias in the market is still very bullish.”

Bitcoin is now up 127% in 2020, versus 9.5% for the Standard & Poor’s 500 index for large US stocks and 24% for gold.

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PayPal Removes Waiting List for New Crypto Service, Increases Weekly Purchase Limit to $ 20K (CoinDesk)

Ant’s $ 35 Billion IPO Has Roots in Digital Yuan Goals (CoinDesk)

Uniswap farming ends in 4 days, potentially releasing $ 1.1 billion in ether (Cointelegraph)

ECB’s Lagarde has a ‘feeling’ that the digital euro will launch in 2-4 years (CoinDesk)

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Brent Crude Oil Futures Now Tradable on DeFi Synthetix Exchange (CoinDesk)

Chainalysis wants to help government clients sell millions of dollars in confiscated bitcoins (CoinDesk)

Former Chinese Finance Minister Lou Jiwei said on Friday that trade tensions between the US and China may not necessarily ease under a Biden administration (Reuters)

Brazilian President Bolsonaro distributes $ 10 billion a month to the poor as public debt approaches 100% of GDP from last year’s 76% (WSJ)

Canceling student debt is one way Biden can build black wealth (Bloomberg)

The deadline to divest US operations for the TikTok video sharing app has come and gone, leaving the social media giant in limbo (Nikkei Asian Review)