Business Week: Crypto’s ‘Death Spiral’

In what some are calling a “death spiral,” a number of digital currencies have dropped in value last week, shaking investors’ faith in crypto markets. The boom was particularly jarring for TerraUSD, or UST, which is called a stablecoin, which means it is pegged to a stable asset and should not fluctuate in price. But it did fluctuate: A massive sell-off in its sister cryptocurrency dropped UST to 11 cents on Friday as Luna, a closely linked token to UST, dropped to $0. Bitcoin falls with the Nasdaq, a benchmark that weighs tech stocks, making it as risky an investment in cryptocurrency as any other tech stock. This The crash leads to an unpleasant reality for investors – that an asset they hoped will be transformative has failed to deliver on its promise.

Elon Musk said he is “temporarily holding” his $44 billion bid to buy Twitter as he seeks more details on the share of spam and fake accounts on the platform, which he estimates is around 5 percent. Mr Musk made the announcement in an early morning tweet on Friday, then tweeted that he was “still committed” to the deal. While trying to understand the volatile billionaire’s motivations may be futile, Mr. Musk may be using a tactic to lower the price of the acquisition or consider abandoning the deal altogether. The latter will be costly: Mr Musk’s deal with Twitter includes a $1 billion separation fee, as well as a clause that could force Mr Musk to pay the deal if he still has the financing. His tweets come a day after the Twitter CEO fired two top executives, frozen most new hires and said he was cutting spending. Earlier in the week, Mr. Musk said he would allow former President Donald J. Trump to rejoin the platform.

Annual inflation slowed for the first time in months in April, but the Consumer Price Index, which measures changes in prices for consumer goods and services, still rose 8.3 percent. The figure is uncomfortably high for households that have been grappling with rising prices for essentials like food, fuel and housing for months, and it’s dismal news for the White House and the Federal Reserve, which are trying to stabilize the economy. The Fed may have been particularly concerned to see core inflation rise 0.6 percent, which takes away the costs of food and fuel. Policymakers are watching this measure closely to determine the path inflation will follow in the coming months. Its acceleration has renewed concerns that the Fed will take a more aggressive approach to raising interest rates.

The S&P 500, which has come out of its sixth consecutive weekly decline, is on the edge of a bear market, which is Wall Street jargon for a 20 percent or more drop from the index’s latest high. Although the S&P 500 rallied on Friday, it’s still only a few percentage points from bear market territory. The Nasdaq Composite has been doing well in this region since early March, largely reflecting the performance of tech stocks. This steady decline in the markets shows how pessimistic investors have become about the economy. Worries about inflation, interest rate hikes and the ongoing pandemic abound, and investors can find another reason for concern and a new reason to sell at each new data point, like last week’s Consumer Price Index report.

Retail sales are expected to rise again for the fourth month in a row as prices continue to rise across the country. Indeed, economists will likely attribute much of the increase in spending in April to inflation, which is still at its fastest pace in decades. The retail sales report for March showed that spending at gas stations rose 8.9 percent and gas is likely to still make up a significant portion of Americans’ spending, despite falling prices in April. Some companies also passed the increased production costs largely to consumers they found willing to pay the higher prices.

As employers continue to consider how to attract workers, a new survey provides some helpful—and some, obvious—advice. Sixty-nine percent of job-seeking women said that childcare benefits could influence their decisions about where to work, according to a study by consulting firm McKinsey & Company and Marshall Plan for Moms, a campaign focused on women’s economic inclusion. mom’s. Almost half of mothers with young children leaving the workforce said they did so because of problems with childcare.

Jerome H. Powell is confirmed as chairman of the Federal Reserve for a second term. Instacart may go public. Disney said its streaming platform Disney+ added subscribers and averted the crash Netflix saw weeks ago.

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