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Digital Currencies — The market for cryptocurrencies is wildly speculative and unpredictable. That being said, let's wildly speculate on what’s powering the newfound bull market. Since mid-September, treasury yields have actually been rising for the first time since ever. The reason, not surprisingly, is likely due to inflationary pressures incentivizing the movement of assets higher on the Efficient Frontier, a representation of risk/return for various asset classes. Although VC is at the top of the curve and digital currencies aren’t near it, they still present the highest risk/return asset class for everyday investors. Further, BTC and its pals are often hailed as protection from inflation, although no one knows if this is true or not IRL. Higher inflation = risk on, so investors may have been driven to increase their tolerance for pure gambling (has anyone checked casino revenues lately?). Anyway, this dynamic could function as an explanation for why BTC has shot up past $55k once again and rose 36% in the last 7 days. Not far behind, ETH has boosted 28.8% while BSC is up 32%, DOGE is up 28%, and SOL is up 18%. Hopefully the last “bear market” didn’t shake you out, because as the saying goes, diamond hands turn into diamond rings.
A Mild $2.2tn — Obviously, the government spending $3.5tn is crazy, but just as obviously, $2.2tn is totally and completely reasonable. The Biden administration has gone in front of fellow Democrats to present an updated “Human Infrastructure Bill”, aka the $3.5tn budget proposal, that now carries a price tag of only “$1.9-$2.2tn.” The reduction has been cut via limiting aspects to some of the bill's most attractive elements, such as imposing limits on community college for all and universal pre-k. Other Democrats have proposed similar changes, like Rep. Jayapal’s bill that wields a price tag of $2.5-$2.9tn. At the end of the day, a lot of money is going to be spent on what are some of the most popular spending proposals in recent memory to the general public. The balance attempting to be struck is seemingly between providing essential services while not creating dependency on the Federal government, because like Reagan said, “the nine worst words in the English language are ‘I’m from the government and I’m here to help.’”
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