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What’s happening: Bitcoin and Ethereum prices jumped on Monday as investors showed willingness to increase their exposure even after recent pullouts. Bitcoin, which hit an all-time high of nearly $ 65,000 in April, fell to $ 28,800 last week. It was last trading above $ 34,000.
Over the weekend, the UK financial regulator banned Binance, one of the world’s largest cryptocurrency exchanges, from offering certain services in the country.
The Financial Conduct Authority said in a statement on Saturday that Binance “is not authorized to undertake any regulated activity in the UK.” Cryptocurrency trading is not directly regulated in the UK, but other related activities such as the sale of derivatives require approval.
Japan’s watchdog also said on Friday that Binance was not registered to do business in the country.
The moves against a major player in the industry come as the digital coin business grows in popularity.
Earlier this month, the FCA published a study indicating that around 2.3 million Britons now own crypto assets despite warnings about the risks. Only 38% consider their bets to be a bet, up from 47% in 2020, and around half say they plan to invest more.
Yet regulators around the world are starting to take a stronger stance.
Financial and banking authorities in China have said that financial institutions and payment companies should not participate in any cryptocurrency-related transactions and should not provide crypto-related services to their customers. The government is also tackling bitcoin mining.
Earlier this month, the Bank for International Settlements said banks that hold crypto assets would face tougher rules.
“While banks’ exposure to crypto assets is currently limited, continued growth and innovation in crypto assets and related services, coupled with increased interest from some banks, could heighten global financial stability concerns and the risks to the banking system, “the institution said. .
And the U.S. Securities and Exchange Commission recently kicked again the question of whether to approve a bitcoin exchange-traded fund, which could make it easier for investors to gain exposure to the market. market.
Rollback: Stricter regulation has long been a threat to widespread crypto adoption, but governments have been slow to act. Today, regulators appear to be more concerned, citing the need for greater consumer protection and the exposure of the wider financial system.
This could limit prices even though the market still has its share of bulls.
Meet the Short Seller Who Hopes Stocks to Dip
It should come as no surprise to learn that the founder of an investment firm named after Hindenburg is looking for stocks that will collapse and burn.
Nate Anderson, the founder of Hindenburg Research, has made a name for himself targeting companies he considers overvalued and whose finances are questionable. In other words: it chases imminent stock market explosions resembling the infamous German zeppelin that crashed in New Jersey in 1937, writes my CNN Business colleague Paul R. La Monica.
Hindenburg Review: Anderson is best known for attacking electric truck company Nikola last year. More recently, Hindenburg has targeted electric vehicle startup Lordstown Motors as well as fantasy sports company DraftKings.
The companies vehemently denied most of Anderson’s claims. But Nikola has since admitted he faces an investigation from the Securities and Exchange Commission, and Lordstown recently announced the abrupt resignation of its CEO and CFO.
The backstory: Anderson worked for market data firm FactSet as well as several hedge funds before establishing Hindenburg in 2018. He told CNN Business that he was often drawn to researching fraud, money laundering and money laundering. money and Ponzi schemes.
Now he is very interested in “blank check” special purpose acquisition companies, or SAVS. Nikola, Lordstown Motors, and DraftKings all went public by merging with PSPCs instead of pursuing standard initial public offerings.
“If you have strong finances and think your outlook is good, you usually go public the traditional way. PSPCs tend to be very speculative,” Anderson said. “I haven’t seen a PSPC yet that I think is a good one but I’m trying to keep an open mind.”
Opponents: Critics accuse Hindenburg of trying to bring stocks down with his research reports to make a profit. The company often actively bets against the stocks it is investigating. Anderson says the flashback comes with the territory.
“Some investors will have a visceral reaction to negative hedging,” he said. “I don’t agree with the critics, but I support the right to be critical.”
Fed official warns of housing boom and bust
Readers of this newsletter are familiar with the exuberance that has recently gripped the global housing market, pushing prices past their 2008 highs and sparking fears of a dangerous bubble.
But it’s not just Before the Bell to keep an eye out. In an interview with the Financial Times published Monday, Eric Rosengren, chairman of the Boston Fed, expressed growing concern.
“It’s very important for us to get back to our inflation target of 2%, but the goal is for it to be sustainable,” Rosengren said. “And for that to be sustainable, we can’t have a boom and bust cycle in something like real estate.”
He added: “I am not predicting that we will necessarily have a crisis. But I think it is worth paying close attention to what is happening in the housing market.”
The median price of existing homes in the United States in May was $ 350,300, up 24% from the same month last year, according to a report by the National Association of Realtors last week.
Remember: Experts have noted that there are safeguards to prevent a 2008-type housing market collapse, including much stricter lending standards in the wake of the Great Recession.
But the Fed and other policymakers would be remiss not to keep a close watch on soaring prices, especially as the central bank continues to buy $ 40 billion worth of mortgage-backed securities per month, thus contributing keep borrowing costs artificially low.
following
The Mobile World Congress begins in Barcelona. It is the first major tech event to be partially hosted in person since the start of the pandemic.
Coming tomorrow: The S&P Case-Shiller Home Price Index arrives as policymakers keep a close watch on the hot housing market.
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