The announcement comes after more than $1 trillion was wiped from the crypto market last week, though some coins are recovering as of Monday.
Goldman Sachs: Bitcoin Is an Asset Class
Goldman Sachs, the second-largest investment bank in the world, now officially considers the cryptocurrency Bitcoin as a new asset class.
The development comes from Mathew McDermott, the bank’s global head of digital assets. In a report published Monday, McDermott wrote that while Bitcoin does come with its own unique risks, “Clients and beyond are largely treating it as a new asset class, which is notable—it’s not often that we get to witness the emergence of a new asset class.”
Cash, stocks, bonds, mutual funds, and real estate are all examples of asset classes.
This is a big turn-around for the bank, which said just a year ago that cryptocurrencies, including Bitcoin, aren’t an asset class.
“As a whole, discussions with institutional clients revolve around how they can learn more on the topic and get access to the space — as opposed to questions around what Bitcoin or cryptocurrencies are — which was really the main topic just a few years ago,” McDermott said in Monday’s report.
“But beyond that, asset managers and macro funds are interested in whether or not crypto fits into their portfolios, and if it does, how to get access to either the physical — by trading the spot instrument on a blockchain — or exposure through other types of products, typically futures.”
Alongside this report, a different Goldman Sachs report, which was leaked over the weekend, predicts Bitcoin will be overtaken by Ethereum, the second largest crypto on the market, which the bank called the “Amazon of information.”
Big Swings in Crypto Over the Weekend
Both reports come amid another very volatile cycle for Bitcoin, Ethereum, Dogecoin, and crypto in general over the weekend.
Bitcoin first began to crash earlier this month when Tesla CEO Elon Musk announced that the company would no longer be accepting the coin as a form of payment due to environmental concerns. Last week, China furthered sell-offs in the crypto market after it told its financial institutions not to offer crypto services.
After both comments, the crypto market seemed to have a brief recovery, but that was hampered when China again threatened to crack down on crypto Friday. Ultimately, it led to over $1 trillion being wiped from the crypto market by the end of the week.
In fact, Bitcoin ultimately sank to under $32,000 Sunday, or about half of its all-time high of $64,000, which it hit last month. As is the name of the game with Bitcoin, that volatility continued into Monday, though on a more positive note as the coin managed to climb back up to $38,000 at one point during the morning.
See what others are saying: (Yahoo! News) (Business Insider) (Cryptoslate)
Initial Unemployment Claims See First Rise Since April as Fed Estimates Faster Inflation Growth Than Previously Predicted
The Fed also announced that it expects to raise interest rates in 2023, a year earlier than its previous prediction.
Unemployment Claims Rise
The Labor Department reported Thursday that, for the first time in nearly two months, weekly initial unemployment claims increased.
For the week ending on June 12, 412,000 people filed first-time claims. That’s an increase of 37,000 from the previous week’s estimate of 375,000. It’s also the highest that new claims have been in a month.
Still, there are positive signs that the labor market is improving. For example, while last week’s continuing claims were largely unchanged from the previous week, the four-week moving average for continuing claims fell to its lowest level since March 2020.
The Federal Reserve is also optimistic about the labor market eventually returning to form despite the country still being short 7 million jobs. Following a two-day meeting, the central bank predicted that the unemployment rate could fall back to pre-pandemic levels by 2023.
It also expects economic growth to hit 7% this year, up from the 6.5% it predicted in March.
Inflation Will Grow Faster Than Expected
At its meeting, the Fed said it now believes inflation will climb higher than it had previously estimated just three months ago. In March, it predicted inflation would rise about 2.4% this year. As of Wednesday, it’s expecting a 3.4% jump.
That comes on the heels of a report from the Labor Department last week that indicated consumer prices climbed at their fastest rate since 2008 year-over-year in May. Like economists explained then, the Fed said it expects this rise in consumer prices to be temporary.
While the Fed expects the prices for some goods and services to continue to increase over the next few months because of issues such as supply bottlenecks, it also said it believes the labor market will continue to grow since the economy is finally coming out of its massive, pandemic-induced downturn in spending.
Still, as Fed Chair Jerome Powell warned Wednesday, “Shifts in demand can be large and rapid. Inflation could turn out to be higher and more persistent than we expect.”
Powell added that the central bank will keep a close eye on inflation and that it would respond quickly if inflation becomes broader or more persistent than current estimates.
Interest Rates Stay at Historic Lows… For Now
Among other key points from the Fed’s meeting was its decision to move up a projection for an initial interest rate hike from 2024 to 2023. Notably, it also said there could be two rate hikes in 2023.
That then caused some major stock indices like the Dow Jones to initially stumble, though the markets were more mixed Thursday. That’s likely at least partially because the Fed kept internet rates near a historically low zero for the time being, as expected.
Some Republican lawmakers, such as Sen. Rick Scott (Fl.), have argued that the 2023 projection is too slow, saying interest rates need to go up sooner to prevent inflation from rising too much.
In testimony before a Senate committee on Wednesday, Treasury Secretary Janet Yellen said the inflation situation is being monitored “very, very carefully” and that while prices are rising, they’re also moving back toward “normal” levels.
See what others are saying: (The Washington Post) (CNBC) (ABC News)
Coca-Cola Lost $4 Billion in Market Value After Cristiano Ronaldo Hid Two Bottles During a Press Conference
After the snub by Ronaldo, another soccer player hid a bottle of Heineken during a separate press conference Wednesday.
Ronaldo Pushes Away Coke Bottles
Coca-Cola’s market value fell by $4 billion after famed soccer player Cristiano Ronaldo moved two bottles of the soda off-camera during a press conference Monday.
The incident happened just before his team’s match against Hungary at the 2020 UEFA European Football Championship. After hiding the Coke bottles, Ronaldo held up an unlabeled water bottle and said “Agua,” which is Portuguese for water.
The whole moment was likely very awkward for Coke as a company considering that it’s sponsoring the tournament; however, the situation was made tangibly worse for Coke when investors reacted by selling-off stock. That move caused its market value to fall from $242 billion to $238 billion.
Alongside that $4 billion loss, its individual share value fell 1.6%, which isn’t huge but is somewhat more notable given the fact that it was seemingly caused by one person in one moment. Ronaldo doesn’t exactly have the same level of stock market influence as that of Elon Musk on the cryptocurrency markets, and on top of that, minus several blips over the last 40 years, Coke’s stock has continued to climb overall.
Still, it’s not a great look to have one of the world’s top athletes at a major sports tournament criticizing your sugary drink. That’s likely why a Coke spokesperson later said, “Everyone is entitled to their drink preferences” and everyone has different “tastes and needs.”
“Players are offered water, alongside Coca-Cola and Coca-Cola Zero Sugar, on arrival at our press conferences,” the spokesperson added.
In the long run, this isn’t the end of Coke by any means. As Yahoo Finance noted, “It’s unlikely Coke’s stock will stay in the penalty box for too long as the business begins to partake in the global economic recovery.”
Ronaldo’s Healthy Diet
Ronaldo is known for basically being a machine in human form. He reportedly eats up to six very-calculated and clean meals a day and will also nap up to five times a day.
In the past, Ronaldo has indicated that he avoids alcohol and carbonated drinks in order to stay in shape. Earlier this year, he even directly spoke out against Coca-Cola when talking about his 10-year-old son.
“I’m hard with him sometimes because he drinks Coca-Cola and Fanta sometimes and no… And no, I’m pissed with him. And [I fight] with him when he eats chips and fries and everything. You know, I don’t like it.”
Besides his fame on the field, Ronaldo is also the most-followed individual on Instagram, with 299 million followers.
Pogba Seemingly Takes a Note from Ronaldo
It’s possible Ronaldo could have started a trend among athletes of speaking out more against unhealthy drinks, even if they are sponsors of games or tournaments.
In fact, on Wednesday, French player Paul Pogba removed a bottle of Heineken from the camera’s view at the start of a separate press conference.
While it was later learned that the specific Heineken was non-alcoholic, many believe Pogba, who is a devout Muslim, didn’t know that at the time or still didn’t want to promote the brand.
See what others are saying: (Business Insider) (Yahoo Finance) (The Athletic)
Woman From Viral Gorilla Glue Incident Launches Hair Care Line
While some applauded the woman for making use of her newfound attention, others said they would not trust hair products from someone who put superglue in their own hair.
Tessica Brown Launches “Forever Hair”
Tessica Brown, the woman who got Gorilla Glue spray stuck in her hair for more than a month earlier this year, has now launched her own hair care line called “Forever Hair.”
Brown was inspired to create the line after the viral incident, which came to an end when a plastic surgeon removed the adhesive during a four-hour procedure at no cost.
The line includes an $18 growth stimulating oil formulated to help with the hair loss and scalp damage she was left with, as well as a $14 hair spray and a soon-to-be-released $13 product for sleek edge control.
In an Instagram post on Wednesday, Brown raved about how the hair growth oil, in particular, helped her over the last two months.
“I needed this oil to one, heal my scalp. I needed it to grow my hair back. I needed it to stimulated my hair follicles, and on top of that, I needed everything to be all-natural. And in this oil, it has just that,’ she claimed.
Mixed Reactions Online
The move might not come as too much of a surprise given that Brown has likely spent the last few months focusing on her hair’s health.
Still, the reactions on social media have been mixed.
Some have applauded Brown for making use of her viral attention and turning lemons into lemonade.
Meanwhile, others have noted that they are not about to trust a hair product line from someone who put superglue in their own hair. Plus, there is a chuck of people pointing to a typo on her packaging.
It’s spelled “nourishes”… siiiiigh.— Caitlin Dineen (@CaitlinDineen) June 16, 2021