Hopes of Vaccine and Bitcoin’s Rivalry With Gold #32
Market Meditations | October 26, 2020
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Positive AstraZeneca Results Raise Hopes of Coronavirus Vaccine
Fincen Proposes Lower Threshold for Transaction Data-Gathering Under Fatf’s ‘Travel Rule’ Including Those Made With Crypto
Harvest Finance Token Plummets 65% After Attack Drains Money Out of Stablecoin and BTC Pools
Bitcoin’s Rivalry With Gold Plus Millennial Interest Gives It ‘Considerable’ Upside Potential: JPMorgan
China’s Ant Group Set to Raise More Than $34bn in Record IPO
Lira Weakens Past 8 per Dollar as Currency Rout Deepens
Microsoft Quietly Prepares to Avoid Spotlight Under Biden
The Art of Subtraction
Oct 26-30. Blockchain Revolution Global 2020
Oct 28-29. Zcoin (XZC): Rebrand + StakedXZC
Oct 29. Komodo (KMD): AtomicDEX v0.3 Beta Launch
Oct 26. AUD Trade Balance (MoM) (Sep) and CHF SNB’s Chairman Jordan Speech
Oct 27. ECB Bank Lending Survey
Oct 28. AUD Consumer Price Index (QoQ) and CAD BoC Rate Statement
Oct 29. JPY BoJ Monetary Policy Statement and USD GDP
Oct 30. EUR Consumer Price Index (YoY) (Oct)
Positive AstraZeneca Results Raise Hopes of Coronavirus Vaccine
Drugmakers and research centers are scrambling to deliver a safe and effective vaccine in an attempt to bring an end to the coronavirus pandemic that has claimed over 1.15 million lives.
Increasingly, it seems as though the vaccine is the only way out of this mess we find ourselves in. That is, we tried a complete lockdown to see if it would ‘go away’. It did not. The majority of people, back in Spring, strictly adhered to the rules and avoided the invisible enemy. However, month after month the virus did not seem to be going anywhere. Nowadays, far less people stick to the rules because they realize the virus is not something that we can wait out.
Other people have been tempted by the idea of herd immunity. The idea that we all go about our lives as normal; if we catch the virus it is a shame but it is inevitable and we might as well get it out the way. Whilst this is all well and good for the younger generations who are likely to make a swift recovery (if they get hit with any symptoms at all) we can understand how this might not appeal to the elderly or those with pre existing medical conditions. Certain groups in society cannot afford herd immunity.
The light at the end of the tunnel therefore is the prospect of a vaccine. In fact, the markets are far more responsive to news around a vaccine than they are to the likes of the U.S. election or Brexit. The vaccine is the ideal solution. Of course, it has to be arrived at and then, it has to be in a state for mass production. Before mass production, it must be monitored for any longer term impacts. Nonetheless, progress on this front is very welcome and it is what we are seeing increasingly. According to the WHO, many candidate vaccines are in clinical evaluation, with some already conducting late-stage tests before seeking formal approval.
The vaccine being developed by the University of Oxford and AstraZeneca is thought to be one of the frontrunners to secure regulatory approval. Just today, AstraZeneca said its potential Covid-19 vaccine has produced a similar immune response in older and younger adults. Shares of the company rose 1% in Monday’s U.S. premarket. The news has raised hopes of a path out of the gloom and economic destruction wrought by the novel coronavirus. If it works, a vaccine would allow the world to return to some measure of normality.
The World Health Organization has said that older people, in addition to people of all ages with pre-existing medical conditions, appear to develop serious illness on contracting the virus more often than others.
“It is encouraging to see immunogenicity responses were similar between older and younger adults and that reactogenicity was lower in older adults, where the Covid 19 disease severity is higher” an AstraZeneca spokesman explains.”The results further build the body of evidence for the safety and immunogenicity of AZD1222,” the spokesman continued, referring to the technical name of the Oxford AstraZeneca vaccine.
AstraZeneca CEO Pascal Soirot has previously said the drugmaker’s vaccine would likely provide protection against contracting the coronavirus for about a year. Reportedly, the company is preparing to deliver the first batch of the vaccine developed with Oxford University to London hospitals as soon as next week. British Health Secretary Matt Hancok said he was preparing logistics for a possible roll out mostly in the first half of 2021.
Fincen Proposes Lower Threshold for Transaction Data-Gathering Under Fatf’s ‘Travel Rule’ Including Those Made With Crypto. The Financial Crimes Enforcement Network (FinCEN) and Federal Reserve proposed new rule changes that, if approved, would drop the threshold for reporting transactions, including those made with cryptocurrencies and digital assets. In a document published on Friday, we see that in the proposed rule, the threshold would be lowered from $3000 to $250 for ‘funds transfers and transmittals of funds that begin or end outside the United States’. The document also includes a clarification of the rules to make sure that change would be applied to transactions involving cryptocurrencies and digital assets as well. Read more.
Harvest Finance Token Plummets 65% After Attack Drains Money Out of Stablecoin and BTC Pools. A possible exploit in a new decentralized finance (DeFi) protocol Harvest Finance resulted in a 65% crash of the platform’s native token FARM. Sunday night, tweets started appearing on Twitter that large amounts of money were being moved out of some pools and being swapped to ETH. The project’s official Twitter account responded that they were ‘actively working on mitigating the economic attack’ and would update ‘in realtime’ in this thread as soon as additional details are available. According to Coindesk, upwards of $25 million in value has been drained from Harvest.Finance pools and swapped for renBTC (rBTC). Following the attack, investors appear to have pulled roughly $350 million from the site. Read more
Bitcoin’s Rivalry With Gold Plus Millennial Interest Gives It ‘Considerable’ Upside Potential: JPMorgan. Over the past few years, JPMorgan has made a 180-degree turn in terms of their public opinion about Bitcoin. After CEO Jamie Dimon called bitcoin a scam in 2017, JPMorgan’s Global Quantitative and Derivatives Strategy team now sees Bitcoin as a risk asset with ‘considerable’ potential upside. In their “Flows & Liquidity” publication to clients, the authors wrote Bitcoin is more of a risk asset instead of a safe (haven) asset, based on the positive correlation with the Standard & Poor’s 500 (S&P500) index since March. In the report, the authors wrote that “Bitcoin could compete more intensely with gold as an “alternative” currency over the coming years given that millennials will become over time a more important component of investors’ universe. Read more
China’s Ant Group Set to Raise More Than $34bn in Record IPO. Ant Group is set to raise more than $34bn after setting the price of shares in its initial public offering, putting the Chinese payments group on track to top Saudi Aramco as the biggest ever market listing. The financial technology company, controlled by Alibaba’s billionaire founder Jack Ma, will sell shares in a dual listing across Shanghai and Hong Kong. It is expected to make its market debut on November 5. Ant said it would sell shares for the Shanghai portion, which will trade on the technology-focused Star market, at Rmb68.80 ($10.26) each, according to documents published by the city’s stock exchange on Monday evening. Ant also said it had set the price for its Hong Kong shares at HK$80 (US$10.32). Together the sale of the roughly 3.34bn shares, which account for 11 per cent of Ant’s total outstanding stock, will fetch $34.4bn. The Shanghai segment alone will bring in Rmb114.9bn ($17.2bn) or more than double the Rmb53bn raised by chipmaker SMIC in July. Read more.
Lira Weakens Past 8 per Dollar as Currency Rout Deepens. Turkey’s lira fell as much as 1.7% to 8.0984 per U.S. dollar, moving lower after Turkey’s President Recep Tayyip Erdogan urged a boycott of French goods. It was the biggest decline among emerging market currencies today and extended a 9 week streak of depreciation, its longest rout since 1999. The benchmark Borsa Istanbul 100 Index sank 3.8%. Foreign investor interest in Turkish assets is being additionally sapped by a string of geopolitical risks. Erdogan’s government faces possible U.S. sanctions over the purchase of a missile system from Russia and is engaged in territorial disputes in the eastern Mediterranean and the Caucasus. The lira has lost more than 25% this year, the world performing currency in emerging markets after the Brazilian real. Read more.
Microsoft Quietly Prepares to Avoid Spotlight Under Biden. Microsoft Corp, which has largely evaded Washington’s scrutiny of Big Tech companies and scored a lucrative $10 billion government contract under the Trump administration, has emerged as a significant backer of the Biden campaign. According to data from OpenSecrets, a website which tracks money in politics and campaign finance. Microsoft Chief Technology Officer Kevin Scott and his wife have contributed over $50,000 supporting committees helping Biden win, according to campaign finance records. And Microsoft board member and co-founder of LinkedIn, Reid Hoffman, and his wife have also donated generously to the Biden campaign. Hoffman’s wife has contributed over half a million dollars to the Biden victory fund. records, Microsoft is the fourth largest contributor to Joe Biden’s campaign. The Trump campaign’s top contributors include government employees from the U.S. Postal Service and Department of Defense, followed by companies such as American Airlines Group and banks such as Wells Fargo, according to OpenSecrets. In recent weeks, Joe Biden’s campaign has continued to out-raise President Trump’s. Biden raised about $130 million between October 1-14, about 3 times the roughly $44 million raised by Trump’s campaign. Read more.
The Art of Subtraction
Are you already thinking about this year’s New Year resolutions? To improve our lives, whether financially, mentally or physically, we almost always think about adding something to it. We promise ourselves to start exercising again, adding healthy foods to our diets, develop a side-hustle so we can earn extra money. This approach certainly works but it has its downside as well. At some point, adding more stuff can be counterproductive. The via-negativa model, popularized by author Nassim Taleb in his book Antifragile, is a helpful way to think about ways to improve our life by subtracting things from it. We improve the quality of our lives by removing things that stand in our way.
Via negativa is a Latin phrase which literally translates to ‘negative way’. It was used religiously to describe what God is not, instead of what he is. That said, the phrase can also be used outside of a religious context. It lets you describe a negative way of improving your life. If you’re a smoker, adding exercise to your life won’t suddenly make you healthy. You have to actually remove the smoking habit from your life.
Think about how a ‘less is more’ attitude could improve your life. Instead of buying things that you think will make you happier, think about the things that upset you and remove them from your life if possible. Instead of adding a few extra vegetables to your diet, think about the unhealthy foods that destroy your health in the first place. Search for ways where you can cut out the unnecessary stuff out of your life and you will have time and energy to implement the things that actually benefit you. For this year’s resolution, take a piece of paper and think deeply about the things that no longer serve you in a positive way. As Antoine de Saint-Exupéry once said: “Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.”
Disclaimer: The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. I am not a financial advisor. Every investment and trading move involves risk. Do your own research when making a decision.