Several divisions of the U.S. government are exploring ways to mitigate the damage introduced by long-term elevated inflation. Bitcoin and cryptocurrency markets are making progress with national regulators. Bitcoin derivatives and collateralized loans are gaining attention from large financial institutions.

The U.S. Government Is Exploring Strategies To Reign In Inflation

President Joe Biden and congressional Democrats have reached a preliminary agreement regarding a budget resolution bill. Due to inflation concerns, the package will be worth $1.75 trillion following a massive reduction from the original $3.5 trillion proposal. If the Democratic party votes along party lines, they will not need Republican support to pass the spending resolution. U.S. GDP grew at an annualized rate of 2% in Q3. Declines in consumer and government spending contributed to the disappointing growth metric. U.S. equities struggled last week following worse than expected earnings reports from major companies. Reports from Apple and Amazon indicate that supply chain issues will continue taking a significant toll on many parts of the economy. The Fed will be holding a meeting next week to discuss tightening monetary policy in response to the past year's inflation spike.

New Cryptocurrency Product Offerings Are On The Way

The SEC and FDIC are expected to take a more significant role in stablecoin regulation. The committees hope to increase investor protection by ensuring that stablecoin issuers have proper reserves to meet their obligations. NYDIG has partnered with Post Oak Motor Cars to offer bitcoin-backed loans, allowing customers to finance car purchases, maintain their Bitcoin holdings, and delay associated capital gains taxes. The move may also lay the groundwork for similar products, such as bitcoin-backed mortgages. Steve Wozniak praised Bitcoin during a broader critique of monetary policy and the U.S. dollar. Wozniak asserted that "Bitcoin is mathematics, mathematical purity. There can never be another Bitcoin created." Facebook has changed its company name to Meta as part of a rebranding effort to focus on the virtual world.

El Salvador Throws Its Full Weight Behind Bitcoin

FTX US has finalized its acquisition of cryptocurrency derivatives marketplace LedgerX. Likely, this acquisition was executed to obtain LedgerX licenses and use them to begin offering derivatives through FTX's marketplace. El Salvador continues investing in national Bitcoin adoption. The country purchased an additional $25 million worth of Bitcoin, bringing the nation's total holdings to roughly $68 million. This purchase represents 0.1% of El Salvador's GDP. Mark Cuban's Dallas Mavericks have partnered with Voyager Digital to facilitate a Bitcoin giveaway to qualifying clients.

Market Recap

It appears that the U.S. government has finally woken up to the economic dangers they've introduced from 18 months of reckless spending. Congress and the Fed are taking measures to mitigate inflation, but it is a half measure introduced too late. Driven mainly by concerns about fiat currencies globally, Bitcoin is gaining steam for a broad range of financial use cases. Perhaps most importantly, Bitcoin is gaining support as an asset used to collateralize loans. This lays the groundwork for Bitcoin wealth to facilitate important financial transactions, similar to how wealth held in equities currently behaves.