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Investors expect cryptocurrencies to be volatile. But the severity and extent of the pullback worries traders about a potential bubble, and observers are asking tough questions about whether coins are good stores of value.
The crash follows increased interest from institutional investors in crypto assets, a trend highlighted by Tesla’s decision to buy $ 1.5 billion worth of bitcoin. Adoption by other large companies and investors may now slow.
But the week also provided two major announcements from the U.S. government that could, over time, help integrate cryptocurrencies and resolve some issues commonly associated with digital coins.
The first major announcement was made by the US Treasury, which requested that crypto transfers worth more than $ 10,000 be reported to the Internal Revenue Service.
“As with cash transactions, companies that receive cryptoassets with a fair market value over $ 10,000 would also be reported,” he said in a law enforcement report released Thursday. .
Involving the IRS may not seem like a positive development for cryptocurrencies. But the government treating coins the same way it treats cash could be a key step in bringing cryptocurrencies into the mainstream.
But wait, there’s more: The second development came from the U.S. Federal Reserve, which announced further steps in the development of a potential digital dollar that would be controlled by the central bank.
President Jerome Powell said in a rare recorded video message on Thursday that the Fed will release a discussion paper this summer exploring digital payments technology, “with particular emphasis on the possibility of issuing a digital currency from the US central bank.” . He is seeking public comments on the matter.
“Our goal is to ensure a safe and efficient payment system that offers broad benefits to American households and businesses while fostering innovation,” added Powell.
The Fed believes a digital dollar could be an improvement over current offerings, including “stablecoins” which are pegged to the value of other assets, including reserve currencies.
“To date, cryptocurrencies have not been a convenient way to make payments, given, among other factors, their fluctuations in value,” said Powell. “Stable coins aim to use new technologies in a way that has the potential to improve payment efficiency, speed up settlement flows, and reduce end-user costs, but they can also involve potential risks for these users and for the financial system at large. “
Background: The Fed has been studying digital currencies for some time, but other central banks are moving faster. China is already doing real-world testing with a digital version of the yuan, for example.
Even as the Fed works to deepen its push into crypto, the central bank has made it clear that cash is still king.
“We think it is important that any potential [central bank digital currency] could serve as a complement, not a replacement, for cash and current private sector digital forms of the dollar, such as deposits in commercial banks, ”said Powell.
Tim Cook speaks
Apple CEO Tim Cook is expected to speak on Friday as the company’s high-profile antitrust lawsuit with Epic Games comes to an end.
At the center of the lawsuit is Fortnite, the hugely popular video game created by Epic that was kicked from the App Store last summer for flouting Apple’s rules on digital payments by establishing its own system.
Apple gets 30% off many in-app purchases on iOS devices and doesn’t allow alternative payment systems. Removing Fortnite from the App Store prompted Epic to sue Apple, reports my colleague Rishi Iyengar.
Lines of battle: Epic accuses Apple of exercising monopoly control over its “walled garden” iOS operating system. Apple says there are several other places users can purchase apps and that its commission helps the company improve and secure its devices.
Cook’s testimony is likely to set the tone for Apple’s fight against the growing antitrust pressure it faces. Other enemies such as Spotify and Match Group, which owns Tinder, have accused the App Store of being anti-competitive. And regulators in Europe, the United States and the United Kingdom are investigating Apple’s rules.
Cook appears to be preparing at length for his day in court. He endured several hours of mock questioning by former prosecutors to mimic what he might face on the stand, according to the Wall Street Journal.
“What must be a little scary for Epic is that Tim Cook is by reputation a very persuasive witness,” said Herbert Hovenkamp, professor of legal studies and business ethics at the Wharton School of Business. from the University of Pennsylvania. “He does what he was hired to do, which is to present Apple’s cause to the public.”
Goodbye, Internet Explorer
The end is finally near for Internet Explorer, one of Microsoft’s most hated products that refused to die. Microsoft (MSFT) announced this week that it will end support for Internet Explorer 11 on June 15, 2022, reports my CNN Business colleague David Goldman. . That final nail in the coffin came after years of flirting with IE’s demise.
For example, in August 2020, Microsoft turned its back on IE for its own products. Teams stopped working with IE last fall, and its 365 apps (including Office) will no longer run on IE by mid-summer 2021.
Once the most widely used web browser, IE had been on a steady downward trajectory for almost two decades. Its browser market share fell below 50% in 2010 and now stands at around 5%, according to browser usage tracker NetMarketShare.
In its death announcement, Microsoft said that IE was slow, was no longer compatible with many modern web tasks, and was much less secure than modern browsers. So this is the end of an era.
following
Booz Allen Hamilton (BAH), Deere (DE) and Foot Locker (FL) report results ahead of US markets opening.
Also today :
Sales of existing homes in the United States at 10:00 a.m. ET.
Coming next week: Profit season continues with results from Nvidia, Dollar General, Medtronic, Costco, Dell and Gap.
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