Not quite, but who knows? Maybe bitcoin can save the day. |
Insights, news and analysis for the professional investor |
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Bitcoin (BTC) - $20,686.17 |
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Prices as of 8/26/22 @ 7:10 p.m. UTC |
Welcome to Crypto Long & Short! For the first week in a while, the non-crypto world was louder than the crypto world. Everyone is talking about: Meanwhile, no one is talking about if bitcoin (BTC) is or isn't an inflation hedge. Thankfully (unthankfully?) each of the things everyone is talking about is (at least loosely) tied to inflation in some way. So I'll do it. I'll write about if bitcoin is or isn't an inflation hedge. Because everything is about inflation and everything is about bitcoin (even things that aren't about bitcoin). Stochastic means "random," by the way. – George Kaloudis |
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Is canceling student debt inflationary? First off, the U.S. government isn't paying off everyone's student loans. What the Biden administration announced was that people who both hold federal government student loans and earn less than $125,000 a year will have either $10,000 or $20,000 of their student loan balance forgiven. There are nitty-gritty details (which you can get by listening to this NASFAA podcast), but the main question we want to answer is if this is inflationary or not. Here's an argument that it will be: Canceling student loan debt will put money in the pockets of Americans and those Americans will use that money to buy more immediately. The immediate consumption bump will meaningfully contribute to more inflation. Here's an argument that it will not be: Canceling student loan debt will leave money in the pockets of Americans and those Americans will use that money to consume more gradually over the course of their lives. The gradual consumption bump won't meaningfully contribute to more inflation. I very much like the argument that canceling student debt won't be immediately inflationary. Yes, the coronavirus pandemic stimulus checks were, but there is an important psychological difference between handing someone a $3,200 check and handing them an official letter saying they owe $10,000 less on an outstanding loan. Read the full article here. |
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The Ethereum Merge has an official kick-off date. - TAKEAWAY: The Ethereum Merge is set to launch after the Bellatrix upgrade on Sept. 6, which begins the final countdown for setting the rest of the Merge process in motion. The Merge will then be triggered when the Terminal Total Difficulty value hits 58,750,000,000,000,000,000,000, which is expected to happen sometime between Sept. 10 and Sept. 20. Read more here.
Tether won't freeze Tornado Cash addresses. - TAKEAWAY: Tether Holdings Limited, the issuer of the world's largest stablecoin, USDT, reaffirmed its decision to not bar Tornado Cash addresses, and instead will await further specific instructions from U.S. authorities. Tether said in a blog post, "Unilaterally freezing secondary market addresses could be a highly disruptive and reckless move by Tether." Read more here.
Alexey Pertsev, the alleged Tornado Cash developer, must remain in jail for at least another 90 days. - TAKEAWAY: Pertsev's lawyers sought bail for their client, but a judge in the Netherlands rejected the request and set a 90-day time limit for an initial public hearing. Even though Pertsev has not been formally charged with any crimes, he was arrested on Aug. 10 on the orders of the Dutch authorities, two days after the U.S. Treasury Department sanctioned Tornado Cash. The arrest has generated consternation from the Web3 community and could create a chilling effect on those developing open-source software. Read more here.
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