Market Notes
market notes: Proof of Progress
Change is slow, until it is fast. Integrating digital assets into the mainstream economy is now a US national policy priority by way of Executive Order. It is the first time that a whole-government Order has cut across all government agencies. This marks an inflection point, a new era of private-public cooperation to harness the value of these new technologies.
market notes: Higher Volatility, More Stability
How does digital fit into a portfolio? The conventional macro narratives are challenged by the close correlation between digital assets and equity markets when markets fall. We see this as a byproduct of risk management, a short-term cyclical correlation. It is driven by leveraged trading, and such downturns are the perfect time for longer-term asset allocators to engage.
market notes: Fed loves digital (CBDC...not so much)
BOTTOM LINE: It’s complicated. That’s the simple message from the long-awaited Fed report on a central bank digital currency. Policy is encouraging private US dollar stablecoins to lead the digital transformation of the global economy. And they will. Are financial stability risks a limit to scaling private stablecoins? No. Stability is a matter of regulatory design. The regulatory path for stablecoins as they enter the mainstream will set the tone for digital innovations.
