Inflation therefore finally appeared in the consumer price index this week. And it has been hot, with year-over-year inflation in the United States hitting 5.4%, well above the Federal Reserve's 2% target. It also marks a peak in 13 years (FYI, it was in 2008, not exactly a good economic year ). The kicker? Professional investors didn't seem to care.
The yield on 10-year Treasury bonds, which is the benchmark for setting borrowing costs, mortgage rates and debt.his business in America initially went down. Expectations of higher inflation and economic growth tend to stimulate, not dampen, yields on government bonds. As the 10 years eventually grew, the initial reaction was surprising.
With the markets in mind, I wanted to use this week's newsletter to talk about the alleged lack of interest in the target bitcoin these days. (Hint: Obviously there's no shortage of it.) I also wanted to explain why I think the industry is able to see another resurgence of institutional interest in cryptocurrencies following the upcoming listing. Circle's public in Q4 2021.
Institutions Supposedly, don't worry about crypto
Comments from BlackRock CEO Larry Fink on CNBC's "Squawk Box made the headlines last week after claiming that there was "very little demand " for crypto assets. “In the past you have asked me questions about crypto and bitcoin. Again, in my last two weeks of business travel, no questions were asked about this, ”Fink said.
Certainly , Fink was referring to retirement investing and how registered investment advisers, pension funds and insurance companies should build portfolios on behalf of their clients over the long term. He wasn't talking about the institutional investment strategies of hedge funds, venture capitalists, or venture capitalists.s big business.
So while I don't think Fink was suggesting institutional interest in crypto assets in general is low, I want to hang on to the flawed conclusions of his comments that institutions don't care about crypto. This is something people have asked me about ever since the price of bitcoin started to drop from its all-time high of $ 64,888.99, and since anecdotal evidence like claims by Fink began to suggest that smart money was no longer in the crypto space.
Crypto Direct Investments and Venture Capital Funds
We have not seen the glut of companies buying bitcoin to put on their balance sheets in Q2 as we have itdone in Q1 . What we saw instead was a huge amount of capital poured into crypto companies through venture capital funds or direct investments. There has been more activity for blockchain-focused companies in the first half of 2021 than there has been throughout the year 2020 . Global venture capital funding across all industries has reached record levels so far this year, but even so, the share of transactions in crypto and blockchain startups is also on the rise, going from 0.89% to 5.97% from H2 2020 to H1 2021.