Weak Economies Raise Concerns about Economic Downturn
The U.S. stock market ended April deep in the red. Last week's Amazon earnings brought the entire market further into negative territory, as the retail giant reported its first net loss since 2015. Market volatility in April was primarily attributed to tech companies releasing earnings reports throughout the last few weeks, with many notable companies missing expectations and shaking investor confidence.
New economic data that emerged last week from European economies show that Vladimir Putin's war on Ukraine weighs heavily on Russia's neighbors, creating concerns about the future of energy and food prices, supply constraints, and more. The new data came after the United States released data that showed its economy experienced an unexpected contraction of 0.4% last quarter. The Chinese currency fell more than 4.2% over the same period to about RMB ¥6.6 per dollar, one of the largest drops in its thirty-year history.
Overall, weak global growth, rising commodity prices, and several expected rate hikes are expected to continue suboptimal economic expectations for the foreseeable future, most notably an abnormally large upcoming rate hike from the U.S. Fed of 50 basis points. Moreso, some economists are beginning to raise their concerns over inflation evolving into stagflationary conditions in Europe.
Bitcoin Receives Support from U.S. Institutions and Governments
Investment giant Fidelity recently announced plans to allow 401(k) investors to allocate into Bitcoin, becoming the first major retirement plan provider to do so. The initiative will enable over 23,000 companies that use Fidelity to administer retirement plans to offer Bitcoin as a legitimate option in their portfolios.
To jumpstart commercial mining of Bitcoin in Oklahoma, the lower chamber of Oklahoma's state legislature approved a mining-focused bill last week. The bill's primary objective is to subsidize a portion of the electricity costs needed to run mining hardware, reducing spending related to electricity and hardware costs incurred by commercial miners.
Fort Worth, Texas, became the first city government in the United States to officially mine Bitcoin after their announcement to run three Bitmain Antminer S9 rigs in a climate-controlled technology wing of their City Hall. Mayor Mattie Parker, who was elected last year as the city's first millennial mayor, expressed her support for Bitcoin, stating that she wants to bring attention to Fort Worth as a city that supports technological innovation.
On Monday morning, Bitcoin miners and industry experts, including Jack Dorsey and Michael Saylor, collectively submitted a refutation to claims made by House Democrats calling on the Environmental Protection Agency (EPA) to take a more scrutinous look into the effects of crypto mining. In their letter, experts argued claims made by House Democrats are confusing to the public and that bitcoin miners should be thought of no differently from large data centers owned and operated by Amazon, Google, Apple, and Microsoft.
Bitcoin's Trend as Legal Tender Continues
Internationally, Panama became the latest country to support cryptocurrencies officially. Last Thursday, legislation was passed that allows for the private and public use of digital assets. The bill, which lawmakers say is more robust and comprehensive than El Salvador's, will enable Panamanians to buy goods and services at any civil or commercial business with cryptocurrencies if it is passed.