A weekend Top 5: Crypto contagion, supply chain resilience, mortgage interest rate caps & more

This Top 5 comes from interest.co.nz’s Gareth Vaughan.

As always, we welcome your additions in the comments below or via email to [email protected] And if you’re interested in contributing the occasional Top 5 yourself, contact [email protected].

See all previous Top 5s here.

1) How contagious is crypto?

Bloomberg opinion writer Matt Levine casts an eye over this week’s massive sell-off in cryptocurrencies, fanned by crashing stablecoin Terra USD, and the unmooring of fellow stablecoin Tether from its US dollar peg. Supposed to maintain a value of one dollar, Terra USD fell as low as 23 cents.

Levine wonders about potential contagion flowing into the rest of the financial system. This is US focused. But as we know if Wall Street and/or the US economy sneezes, we tend to catch a cold.

If you asked a normal person, you know, two weeks ago: “How would it affect your life if the prices of some monkey JPEGs and algorithmic stablecoins crash,” I think most people would reasonably have said “I do not own a monkey JPEG and do not aspire to own one, so this will not affect me at all.” My guess is that they would have been right. My guess is that the real world is not too affected by the crypto world, and that if crypto prices crash there will not be a ton of contagion in the rest of the financial system. But I think it is, at this point, debatable. Crypto has at least started to work its way into the real financial system. Some traditional investors also own crypto; if their crypto goes down they might have to sell regular stuff. Some public companies are exposed to crypto (because they are crypto…

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