Chaos in cryptoland (Justin Tallis/AFP via Getty Images)
Chaos in cryptoland (Justin Tallis/AFP via Getty Images)
Hey Snackers,
Happy Friday the 13th, the most feared day of the year. Even the markets may get a little extra spooked today: stocks usually dip on Friday the 13th since people invest, travel, buy, and work less.
Stocks closed mixed yesterday, with the S&P getting closer to bear-market territory (down 18% this year). Major cryptocurrencies continued to fall as investors weighed concerns about more stablecoins “unpegging.” About that…
It could be contagious… Crypto markets have caught a cold — or worse. The crypto industry has lost nearly $500B this week after two top stablecoins were “unpegged” — and caused investors to panic-sell other coins. Refresher: stablecoins are cryptos whose value is (theoretically) pegged to other assets, like the USD. A recap:
This could be a (decentralized) bubble… When an entire asset class (think: real estate, stocks) is overvalued, it’s often called a “bubble” — and if prices later crash, the bubble bursts. Some experts say crypto’s sell-off is starting to resemble the dot-com bubble that led to the 2000 tech crash, or the housing bubble that led to the Great Recession (2007-09). In both cases, a sharp panic-fueled sell-off followed years of soaring speculative prices. (Worth noting: both those crashes wiped out trillions in wealth, much more than the crypto sell-off has.)
Bursting bubbles are destructive… but they can be beneficial. If a crypto bubble pops, coins could disappear, companies could go bankrupt, and investors could lose billions. Yet more consumer protections, stronger regulations, and leaner companies could also emerge (Google and Amazon vaulted to global dominance after dot-com-era consolidation). That was what crypto-supporting Sen. Pat Toomey meant this week when he said that “failure should be an option” in the crypto space.
Endless “sold out” shelves… not again. A baby-formula crisis is rippling through the US, forcing parents to ration supplies or drive hours in search of inventory. Over 40% of formula is out of stock nationwide, up 10% from a month ago. Now top formula supplier Abbott Labs says it could take until July to get the product back on shelves. How we got here:
Pandemic stockpiles… The plant closure is just part of the story. Worried parents snatched up formula in droves in the early days of Covid. As they worked through their supplies, demand plummeted and formula makers slashed production. Inventory still hasn’t kept up with a resurgence in demand (#supplychain, #laborshortages). Now retailers from Target to CVS are capping how much formula shoppers can buy. On top of that:
This isn’t just a production issue… it’s a policy issue. The pandemic caused both the Trump and the Biden administrations to emphasize domestic manufacturing (aka: on-shoring). But the worsening formula shortage illustrates the pitfalls of limiting imports of basic necessities. Washington appears to be listening: the White House said yesterday it’s working to reduce red tape and make it easier to import formula.
The average American adult has a net worth of $79,952
Authors of this Snacks own: bitcoin, ethereum, and shares of CVS, Amazon, Twitter, Apple, and Google
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