Latest news with #tradetariffs
Yahoo
2 days ago
- Business
- Yahoo
Is the Crypto Bubble About to Pop?
The crypto market is facing significant macroeconomic headwinds, amid mounting concerns about trade tariffs and rising government debt. Stablecoins could enable "financial contagion" to spread from traditional financial markets to the crypto market. The new Crypto Treasury Company business model may work for Bitcoin, but not for other cryptocurrencies. 10 stocks we like better than Bitcoin › In the crypto market, all lights appear to be flashing green right now. New crypto market legislation is on the way, companies are embracing the Bitcoin (CRYPTO: BTC) Treasury Company model at a rapid pace, and analysts continue to predict that the price of Bitcoin will double by the end of the year. In fact, some top officials within the Trump administration are now suggesting that the crypto market, currently valued at $3.4 trillion, could be headed to $20 trillion soon. However, there are several key factors that have me thinking the crypto bubble could be ready to pop by the end of this year. Even if you're a diehard optimist when it comes to the financial markets, there's reason to be concerned about the current situation. I'm not convinced that a few tax cuts here and a Fed rate cut there will be enough to keep the U.S. economy roaring at full steam ahead. The U.S. debt load is ballooning into the stratosphere, the full impact of trade tariffs has yet to be felt, and inflationary pressures are continuing to build. I agree with Jamie Dimon, CEO of JPMorgan Chase (NYSE: JPM), who's warning that market participants have become "too complacent." The market just keeps going up, regardless of all the warning signs. Heading into the Fourth of July weekend, both the S&P 500 and Nasdaq hit new all-time highs. Bitcoin, too, is sitting just below its all-time high of $111,970. Another reason for concern is the hype and buzz surrounding stablecoins. They have been growing like gangbusters over the past few years and are now worth over $250 billion. According to Treasury Secretary Scott Bessent, this sector of the crypto market could be worth over $2 trillion in just a few years. But here's the thing: Bessent is primarily focused on stablecoins as a last-ditch effort to shore up the value of the dollar and keep interest rates on U.S. debt from rising. That's because stablecoin issuers have become some of the most enthusiastic buyers of short-term U.S. government debt. They are buying T-bills to back their stablecoins, thereby preserving their 1:1 peg with the U.S. dollar while earning interest in the meantime. However, those T-bill holdings create an entirely new linkage between crypto markets and traditional financial markets. What many people don't realize is that the faster the value of the stablecoin industry grows, the more exposure that mainstream financial institutions have to the crypto market. I've always been fascinated by the way "financial contagion" spreads and how weaknesses in one area of the financial markets can spread into a seemingly unrelated area. And that's what stablecoins could do: They could enable "financial contagion" to spread from traditional markets to crypto markets (or vice versa), with unpredictable consequences. Back in 2021, professors at Yale warned that stablecoins could take down the whole financial system, and that's still true today. Also, consider the rise of the Bitcoin Treasury Company. The original Bitcoin Treasury Company was Strategy (NASDAQ: MSTR), the company formerly known as MicroStrategy. It began accumulating Bitcoin in August 2020. Over the past five years, Strategy has become the largest corporate holder of Bitcoin in the world, and its current holdings are now valued at over $65 billion. Not coincidentally, over those five years, Strategy has been one of the best-performing stocks in the world. It's up 3,332% over the past five years. So, perhaps it was only natural that other companies would eventually attempt to emulate this strategy. And that's led to a remarkable rise of new Bitcoin Treasury Companies, often in industries not even tangentially related to crypto. The logic seems to be remarkably short-sighted: Buy Bitcoin and watch the stock price go up. This Bitcoin Treasury Company model is now spreading to other cryptocurrencies, including XRP (CRYPTO: XRP) and Ethereum (CRYPTO: ETH). Everybody wants to be the next MicroStrategy. But will this strategy really work with cryptocurrencies other than Bitcoin? On top of all this, there's something that can only be referred to as "the Trump factor." In just about every niche of the crypto market, members of the Trump family are taking an active role. It started with meme coins and has spread into altcoins and stablecoins via the family's World Liberty Financial crypto venture. This involvement has also spread into Bitcoin. Trump Media & Technology Group (NASDAQ: DJT), where President Trump is the largest shareholder, recently raised $2.3 billion to become a Bitcoin Treasury Company. This company will also get involved with decentralized finance (DeFi) via its new "Truth Fi" operations. I'm all for the Trump administration supporting pro-Bitcoin policies. For example, I stood up and cheered when the White House announced the Strategic Bitcoin Reserve. But I'm having second thoughts about Trump-backed companies getting so involved with Bitcoin and crypto right now. Maybe I'm wrong. Maybe the crypto bubble will never pop. But just remember: Crypto has historically been a boom-and-bust industry, and it seems too good to be true that it's "up only" from here on out. Before you buy stock in Bitcoin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bitcoin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $694,758!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $998,376!* Now, it's worth noting Stock Advisor's total average return is 1,058% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. Dominic Basulto has positions in Bitcoin, Ethereum, and XRP. The Motley Fool has positions in and recommends Bitcoin, Ethereum, JPMorgan Chase, and XRP. The Motley Fool has a disclosure policy. Is the Crypto Bubble About to Pop? was originally published by The Motley Fool Sign in to access your portfolio
News.com.au
4 days ago
- Business
- News.com.au
‘Unprecedented': The challenges Australian economists must solve
Australia needs new economic research to tackle the rolling challenges of trade tariffs, productivity slowdowns and climate change or risk living standards. In a speech to mark the 100th anniversary of the Economics Society of Australia as part of the Australian Conference of Economists in Sydney, Reserve Bank deputy governor Andrew Hauser pointed to the challenges facing the economy. Mr Hauser called the current issues 'unprecedented' but pointed to the lessons of the past in helping Australia solve them. 'Indeed Australian macroeconomic research has pulled that trick off twice,' he said. 'First, powering the ideas that lifted the country out of the Great Depression to flourish after the Second World War. 'And, second, helping to design a reform program that rescued the country from the slump of the 1970s, and led to more than a quarter century of recession-free growth. 'Two Golden Ages, marshalling thought into action.' Mr Hauser alluded to US President Donald Trump's tariff policy, which has now seen 14 countries receive letters dictating new tariff rates. These include some of Australia's major trading partners, Japan and South Korea. ' … the tectonic plates of the global economic system are once more in flux, as free trade is rolled back; geopolitical alliances shift; climate change accelerates; and productivity growth slows to a crawl in most developed countries,' he said. Earlier this week, the Productivity Commission said Australia could be a winner from the trade tariffs directly, although it warned the second order impacts of a trade war could hurt Australian living standards. Productivity Commission deputy chair Alex Robson said the ensuing global uncertainty could 'affect living standards in Australia and around the world'. 'Uncertainty is a handbrake on investment – when businesses are uncertain about the future, they are less likely to invest,' Dr Robson said. 'Further retaliatory escalation could spiral into a broader trade war, which would bring serious consequences for Australia and the world.' Mr Hauser also pointed to Australia's falling productivity as a key risk to living standards. 'One of the most profound issues of our time is how to reverse the productivity slowdown,' he said. 'Important work is underway on this topic in the public sector, some of it in conjunction with academia: for example, researchers at the Productivity Commission, Treasury and RBA have analysed the causes of the productivity slowdown, its links to competition, innovation and dynamism, and the implications for the wider economy.' He said economics will need to go for the 'hat trick' with Australian academics helping to drive the next leg of economic growth. Mr Hauser's speech follows a cautious RBA monetary board holding the official cash rate at 3.85 per cent following its July meeting, with the shock move defying expert commentators and predictions from the money markets. The board voted 6-3 in favour of the hold but Ms Bullock, fronting the media after the 2.30pm decision, said the votes were 'unattributed' and declined repeatedly to reveal her position. Prior to Tuesday's announcement, the money market had placed a 92 per cent chance on a rate cut off the back of weaker-than-expected economic data. Mortgage holders will now have to wait until August at the earliest to get further interest rate relief. bRight Agent co-founder Aaron Scott called the surprise hold a 'cruel blow' for millions of Australian homeowners. 'Despite the fact that a July cut would not have been enough to give most mortgage holders a meaningful reprieve, it would have been welcome by the millions of Aussies who are holding out for more cost-of-living relief,' he said.
Bloomberg
27-05-2025
- Business
- Bloomberg
Mitsui OSK Lines CEO on Trade Tariffs Impact
Takeshi Hashimoto, President and CEO at Mitsui OSK Lines, discusses the company's business strategy and the impact from the trade tariffs. He speaks with Haidi Stroud-Watts and Paul Allen on "Bloomberg: The Asia Trade". (Source: Bloomberg)
