The valuations of VC-backed tech companies depend more on the supply of VC capital than on changes in the economics of the companies. The downturn in VC capital has caused a large drop in tech company valuations; as much as 80% for some https://www.ft.com/content/6395df7e-1bab-4ea1-a7ea-afaa71354fa0

FTX MARKET MANIPULATION

One of the clearest cases of the need to regulate cryptocurrencies. The manipulation of markets described in the article is reminiscent of the stock market before regulations were put in place to prohibit these practices.

https://www.nytimes.com/2023/02/15/technology/ftx-modulo-capital.html?login=smartlock&auth=login-smartlock

#cryptocurrencies #digitigalassets #FTX #ezrazask #investments #financialfraud #marketmanipution

FTX: Failure of Due Diligence

 https://www.ft.com/content/6e912f25-f1b7-4b19-b370-007fbc867246 

This close-up look at the breakup of FTX shows so many red flags that we have to ask how Sam Bankman-Fried was able to hoodwink the investment world for so long, especially since many of the red flags were also present in the Madoff Ponzi scheme.  It does seem like investors have to re-learn the lessons of previous fiascos every generation.

UK Proposed Digital Pound is in Sight

 The U.K.'s intent to introduce a digital pound in the coming years is notable for its commitment to giving access to banks, credit cards, and payment systems such as PayPal access to the digital payment system, thus allowing them to compete with the digital pound. The U.K.'s move is a defensive attempt to forestall competition by cryptocurrencies and similar techniques. All major countries face the same threats and are examining the introduction of digital currencies. Paradoxically, cryptocurrencies may yet have a significant impact on the world's payment system, not as a substitute for existing payment systems, but as a spur to the development of national digital currencies. 

https://www.ft.com/content/1247a045-6750-45ee-b3a9-f5144d4efb4d

UK AND EU CRYPTOCURRENCY REGULATIONS PUT PRESSURE ON US REGULATORS

 https://on.ft.com/3X7XHvx

The development of comprehensive regulation of cryptocurrencies by the UK and the European Union has two consequences: First, it adds legitimacy to cryptocurrency by misleading many investors to mistake this regulation for increased safety in crypto investments. Second, it places increased pressure on the U.S. to develop crypto regulation since crypto exchanges and investors will migrate to locations with these regulations.

German Regulator Sees Need for Global Crypto Rules - BNN Bloomberg

German Regulator Sees Need for Global Crypto Rules - BNN Bloomberg: Crypto assets need to be subject to global rules if they’re adopted by mainstream finance and expose banks and a wider swathe of investors to risk, Germany’s top regulator said.

The Fed's Political Decision-Making

 Is the Fed too eager to raise rates?

https://lnkd.in/e5Vz4fS5
As Mr. Sandhi points out, the Fed is in an unenviable position in its choice of decisions. If it allows the economy to surge ahead, inflation may become institutionalized, while slamming on the breaks can tip the world's economy into a recession of unknowable depth and duration. This decision has many unknowns, including the relative importance of various factors in maintaining inflation at high levels and the unknown impact of a labor market undergoing structural changes. A central question is whether a wage-price cycle is inevitable if the Fed resists a dramatic rise in interest rates. And yet, despite the uncertainties, the Fed is hell-bent on pursuing an all-or-nothing approach. Mr. Sandhi convincingly argues that public opinion may be a decisive factor. In the public's perception, economic pain is preferable to high inflation. However, it remains to be seen if opinion remains the same if the coming recession turns out to be deep and prolonged and only has a moderate impact on inflation.