Displaying items by tag: crypto

Bitwise CIO Matt Hougan believes the long-observed four-year cryptocurrency cycle may be breaking down, suggesting this cycle could be “bigger and last longer” than expected. Traditionally, crypto markets follow a rhythm of three bullish years followed by a correction, often tied to Bitcoin halving events or macroeconomic shifts. 

Hougan argues that despite recent regulatory headwinds, the foundational infrastructure—like stablecoins, DeFi, and tokenization—has quietly strengthened and is now poised to accelerate. He likens the industry to a “coiled spring,” ready to expand rapidly as regulatory barriers are lifted, especially under more crypto-friendly political leadership. 

While he acknowledges the potential for a correction driven by speculative excess, Hougan believes any downturns will be more muted and short-lived than in past cycles. 

Finsum: With maturing markets and a broader, more value-focused investor base, could 2026 bring another crypto winter—or simply the next phase of a longer growth era.

As traditional 60/40 portfolios face challenges from high interest rates, large deficits, and geopolitical uncertainty, BlackRock suggests evolving asset allocations by incorporating alternatives like liquid alts, gold, and bitcoin. Their Target Allocation model portfolios follow a structured process—sourcing, screening, and sizing—to thoughtfully reconfigure bond-heavy portfolios for modern conditions. 

This involves reducing standard bond exposure in favor of bond-like alternative strategies such as market neutral or merger arbitrage, while preserving resilience in recessionary scenarios. 

Screening over 500 liquid alt funds, BlackRock emphasizes operational quality, performance consistency, and true diversification potential before inclusion. Ultimately, portfolio sizing is optimized to align with investor risk profiles, often making alternatives a significant component—up to half of the fixed income portion in balanced portfolios—while adjusting for more conservative or aggressive strategies.

Gold and bitcoin, though more volatile, should be considered for diversification, with gold typically replacing bonds and bitcoin funded from equities.

Meta is quietly re-entering the crypto landscape, years after shelving its high-profile Libra project amid intense political pushback. The company is now exploring the use of stablecoins—cryptocurrencies pegged to traditional currencies—for global payouts, especially to creators, and has hired fintech veteran Ginger Baker to guide the effort. 

Discussions with crypto infrastructure firms remain in the early stages, but the focus is on leveraging stablecoins to reduce cross-border payment costs and eliminate wire transfer fees. 

Meta’s renewed interest follows a wave of stablecoin momentum across the financial industry, including moves by Stripe, Visa, and Fidelity, and a regulatory environment that may soon offer clearer rules. Unlike its earlier crypto attempt, Meta appears more cautious and flexible this time, showing openness to different stablecoin providers without tying itself to a single issuer. 

While Libra ended in failure, Meta’s second try reflects a broader industry shift—and the company’s ongoing drive to stay competitive in digital payments and fintech innovation.

When evaluating new forms of digital money, it’s essential to clarify what problems they solve and how effectively they do so. The new USDi stablecoin aims to serve as an inflation-protected form of cash by tying its value to changes in the Consumer Price Index (CPI) since December 2024. 

Unlike traditional inflation-protected securities like TIPS, which can lose value when interest rates rise, USDi offers a form of cash that maintains its purchasing power without interest rate risk. Michael Ashton likens USDi to an inflation-linked savings account, calling it a potential “end of the risk line” for holding cash.

The coin is designed to be minted and burned based on daily CPI updates, anchoring it to real-world inflation data. However, for stablecoins like USDi to achieve mainstream use, they must overcome key challenges like merchant adoption, user-friendly wallets, and seamless onboarding to compete with familiar payment systems.

Finsum: This is a leg up in the crypto world, and a sign that creators are thinking about the relationship with traditional macro pressures. 

Bitcoin climbed over 2% on Friday to $83,959, outperforming equities after China announced retaliatory tariffs against U.S. goods. While most major cryptocurrencies like Solana and Dogecoin also gained around 6%, crypto-related stocks such as Coinbase fell, though MicroStrategy rose nearly 4%. 

Analysts suggest the decentralized nature of crypto may insulate it from geopolitical shocks, potentially attracting capital away from traditional markets. 

Investors reacted sharply to escalating trade tensions, with China’s 34% levy mirroring Trump’s earlier tariff hike, further pressuring U.S. markets. Despite recent volatility, bitcoin has held steady in the $80,000–$90,000 range, showing resilience compared to stocks. 

Finsum: As global trade realigns and dollar reliance weakens, bitcoin is increasingly seen as both a liquidity source and a hedge against uncertainty.