~Estimated Read Time: 3 Minutes and 49 Seconds
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Hey Tea Sippers 👋,
One last Friday before we hit September. Phew, look how far you’ve come. I guess this means the summer’s over…
Jumping right in, recent news shows that President Biden has relieved federal student loans estimating approximately $300 billion.
In other news, SEC Chairman Gary Gensler reiterates his stance on the cryptocurrency space and the need for firms to abide by preexisting laws and regulations.
Anyways, I will send you off now. We hope that you enjoy the stories we have for you today. Grab your tea and start sipping!
Cheers! ☕️
1. The Euro has fallen below parity with the dollar.
The dollar takes the crown and has now surpassed the Euro as the more superior currency. Previous to this, the dollar and the Euro were interchangeable at a 1:1 rate, but now that dollar is worth more than that Euro. But you’re probably asking yourself, “why is this such a big deal?” It only moved a few cents. Let’s dive in.
Dollar Parity.
This means that the two currencies are equal. In the past, if I took my dollar, I could exchange it for a Euro plus the conversion fees, of course.
Now, the price of the currency is being pulled in both directions due to macroeconomic factors causing the price discrepancy.
The Factors.
Energy prices are high.
Inflation has hit record highs.
Russian oil is a major demand driver from Europe, which has been stifled by the ongoing war.
The price of consumer goods and commodities like food and utilities have risen.
Gas prices also rose to highs, while the supply has begun to falter.
“If you think Euro at parity is cheap, think again,” Robin Brooks, chief economist at the Institute of International Finance banking trade group, tweeted Monday.
“Global recession is coming,” he said in a second tweet.
The last time this happened was in July 2002.
The Big Gulp ☕️:
The TL;DR is that the Fed has raised interest rates so high to combat inflation that investors are converting their funds to USD to take advantage. This means, less Euro and more USD, driving the price of the Euro down. The major worry here is that economic growth will slow due to an imbalance in the structure of the major power’s economies. Key things to consider are import and export (trade), foreign affairs and business, and wavering prices of goods, services, and amenities. Looks like this could go many ways. What will occur is within the hands of father time. Let’s see how this unfolds.
2. FTX posted $1 billion in revenue amidst the recent crypto bull run.
We just witnessed the extreme wild west of crypto and it just got even wilder as the exchange, FTX reports that they earned $1 billion in revenue from the recent crypto frenzy. Many people were curious and or investing in the crypto market these past few years, hence the reason for the major margins.
Revenues are going crazy.
They posted $1.2 billion in revenue up from $89 in 2020, indicating a 1000% price increase.
Still trailing…
Although they posted record numbers, they are still behind one of their competitors, Coinbase which reported $7.4 Billion in revenue last year.
How are they getting these numbers?
Derivative trading (Speculating the future price action of an asset).
Spot trading (Buying/selling assets).
Only 5% of this revenue came from the US.
The Big Gulp ☕️:
It looks like the FTX exchange has seen gains and losses similar to that of a casino. There have been some big winners as well as losers, but it looks as if FTX figured something out. With cryptocurrency curiosity hitting its peak interest and involvement, many individuals were throwing their money into the system. It seems as if FTX’s monetization strategy proved to be sustainable, and has allowed them to grow a major position in the space. These are exciting times for SBF and the team. I am looking forward to seeing what he does next in the space.
Extra Tea ☕️
Split- Tesla has announced a 3:1 stock split.
Inflation- Sony has risen prices on their PS5 in concerns that prices have risen high due to inflation.
Twitter- Whistleblower says Twitter lacked the necessary security needed and their bot count is much higher than stated.
Un-freeze- Tether (UST) will not freeze any transactions tied to Tornado Cash.
Tea Pods ☕️
Interested in learning about the future of digital finance? Listen to this podcast episode on The Scoop, with Plaid (a fintech infrastructure and payments provider aiming to simplify the digital financial ecosystem through a single API) executive Keith Grose.
Listen Here.
Sencha Tea Fact of the Week ☕️
“There are now 72 crypto custodians up from 1 in 2012.”
Since you made it this far!
If you or a friend know anyone interested in the space, feel free to recommend them.
Cheers!☕️