The recent events affecting U. S. monetary policy, comments from prominent figures, the state of Bitcoin and cryptocurrency markets, and the unfolding financial crises in Iran.
1. Federal Reserve Under Scrutiny:
• Former Federal Reserve Chairs Bernanke, Greenspan, and Yellen, along with previous Treasury Secretaries, criticized the current monetary policy in the U. S., comparing it to that of emerging markets with weak institutions.
• Tensions escalated when the U. S. Justice Department served grand jury subpoenas to Fed Chair Jerome Powell, primarily concerning alleged misleading statements to Congress about the Fed's headquarters renovation.
• Powell accused the administration of threatening criminal charges over the Fed's independence in setting interest rates.
2. Administration Responses:
• President Trump denied involvement in the investigations while criticizing Powell’s performance.
• Communication between the prosecutor's office and the Fed’s leadership offered conflicting accounts regarding the nature of the investigation, with official claims that the situation was routine.
3. Bitcoin Market Developments:
• BitGo, a Bitcoin custody company, filed for an IPO, aiming for a valuation of around $2 billion, which highlights institutional interest in Bitcoin infrastructure.
• The company is focusing on custody services, which are crucial for secure management of digital assets, especially amid regulatory scrutiny.
4. Crisis in Iran:
• The Iranian rial has experienced severe hyperinflation, plummeting from 817,500 rials to 1.65 million rials per U. S. dollar within a year.
• As a result, widespread protests erupted, leading to harsh government crackdowns and a significant loss of purchasing power for citizens.
• Bitcoin has emerged as a potential escape for Iranians seeking to preserve wealth amidst economic turmoil.
5. Corporate Bitcoin Treasury Movements:
• Strive has completed an acquisition of Semler Scientific for its substantial Bitcoin treasury, indicating a shift where companies with Bitcoin holdings become attractive acquisition targets.
• This trend demonstrates a growing recognition of Bitcoin as an asset class with the potential to drive corporate finance strategies.
6. Investment Perspectives:
• Fidelity Digital Assets released an outlook discussing Bitcoin’s correlation with global liquidity, highlighting its role as a "liquidity sponge. "
• Current market dynamics suggest that Bitcoin may function more as a macro-sensitive asset rather than strictly adhering to traditional four-year halving cycles.
• Analysts indicate that Bitcoin’s value may align more closely with macroeconomic conditions rather than solely its supply dynamics.
7. Bitcoin Adoption and Infrastructure:
• There are signs of increased Bitcoin adoption, with significant corporate treasury purchases and the establishment of regulated investment vehicles featuring Bitcoin combined with gold.
• Other developments include Germany’s DZ Bank preparing to launch a retail Bitcoin platform, further indicating mainstream financial institutions' engagement with digital currencies.
8. Understanding Monetary Dynamics:
• The Cantillon Effect illustrates how new money influences different economic tiers, often benefiting those closer to its source. Bitcoin's fixed supply aims to address disparities caused by this effect.
• The shift away from traditional monetary constraints has led many to reconsider money and savings, creating a potential paradigm shift toward decentralized financial systems.
Recent events signal profound changes in U. S. monetary policy and highlight the escalating interest in Bitcoin as both a secure asset and a financial strategy for companies. Concurrently, the crisis in Iran sheds light on the broader implications of currency collapse and the utility of Bitcoin in adverse economic scenarios. As the financial landscape evolves, traditional metrics of value and stability are increasingly being reexamined.
https://www.zerohedge.com/news/2026-01-19/things-are-getting-weird-out-there
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