Crypto Winter comes after the SEC rejects the Key Bitcoin ETF

Grayscale – which had the support of the larger crypto industry behind it – has sought a former US lawyer to sue the SEC in what may be one of the most important legal battles in Bitcoin’s history.

Meanwhile, the SEC decision rules out the possibility of a major heat source in the coming “crypto winter”, a digital asset decline marked by a collapse in prices, a drought in venture capital investments and extensive job losses.

The cold winds have already set in. The market value of crypto has collapsed to $ 850 billion from nearly $ 3 trillion in November 2021, with Bitcoin heading for its worst quarter since 2011, a year in which the price broke $ 1 for the first time.

It is a desire to blame crypto, with flash, fraud and flip against traditional finance, for its own pain. This quarter’s price collapse has, after all, been driven by the meltdown of stablecoin Terra, the collapse of the popular digital asset lending area, and the disruption of a large hedge fund that threatens broader transmission.

But crypto itself cannot always control the weather. Bitcoin’s biggest problem right now is the stock market. A solid correlation with equities established over the past year has led to the S&P 500’s bear market – spurred by inflation, aggressive interest rate hikes from the Federal Reserve and the risk of recession – putting heavy pressure on tokens.

Despite all its anti-establishment roots and focus on decentralization, the uncomfortable truth is that Fed leader Jerome Powell is Bitcoin’s best hope for the spring.

– Jack Denton

*** Barron’s CEOs Lauren R. Rublin and Adam Seessel, founders of Gravity Capital Management discuss the prospects for technology companies and individual stocks. Sign up here.

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Powell says the clock “runs” when it hits high inflation

Federal Reserve Chairman Jerome Powell said he was less concerned about the risk of raising interest rates too high and pushing the economy into a recession than the “bigger mistake” of not restoring price stability and stopping high inflation.

• Powell told the European Central Bank’s annual economic policy conference in Portugal on Wednesday that central bank had to raise interest rates quickly to avoid a worse risk of higher inflation taking hold. “It’s a clock here,” he said.

• Economists surveyed by The Wall Street Journal now estimate the probability of recession over the next 12 months at 44%. Consumption costs grew by one softer annual rate at 1.8% in the first quarter than the estimate of 3.1% previously reported, according to the Ministry of Commerce.

• Momentum is expected to hold the US economy out of a recession this yearbut worsening supply chain disruptions, extremely high prices and aggressive Fed policies mean it is unlikely to emerge from 2023 “undamaged”, wrote S&P chief economist Beth Ann Bovino.

• Federal Reserve Bank of Cleveland President Loretta Mester said the central bank is on its way for another large interest rate increase in July. She said she might be in favor of a 0.75 percentage point increase because she had not seen the inflation figures suggest a half-point increase.

What’s next: Powell has signaled that another increase is likely at the Fed’s meeting on 26-27. July. The central bank has raised its reference rate for federal funds three times since March, including a 0.75 percentage point increase this month, the largest rise since 1994.

–Janet H. Cho

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Risks ahead for technology, analysts say

JP Morgan

Technology analysts lowered their financial expectations for all 26 companies they cover, citing lower consumption costs, rising fuel costs and higher recession risk. They pointed to the limited ability of technology companies such as Google

Alphabet

to offset broader macro trends.

• Analyst Doug Anmuth expects Google’s advertising hold out better than others as the search business is more robust than social media, and without extra pressure from

  apple
  ‘s

  changes in privacy. He believes Amazon, Booking Holding and Uber are the best choices in a downturn given their leadership positions and other dynamics.

• Facebook’s Meta Platforms share has fallen more than 51% this year, as it struggles with these privacy changes and increased competition from TikTok. Monness Crespi Hardt analyst Brian White cut the stock price target to $ 250 from $ 300, saying “almost no company is immune to an economic contraction.”

• Although the semiconductor sector has lost more than a third of its value this year, BofA Global Research analyst Vivek Arya believes the pain is not over. He cut his revenue forecasts for the industry to 9.5% in 2022, from 13% previously, and expects sales to fall 1%.

• Arya downgraded four chip names, and lowered the rankings for wireless chip vendors Skyworks and Qorvo to Underperform from Neutral, citing declining growth in the 5G smartphone market. He also reduced the ratings for Teradyne and Texas Instruments to neutral from purchases.

What’s next: As Apple prepares to close its books for the June quarter, Wedbush analyst Daniel Ives says his favorite technology stock will benefit from pent-up demand for the iPhone 14, and estimates that 240 million of about a billion iPhones have not been updated in 3 years.

–Barron’s Staff and Janet H. Cho

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The world’s 3,000 billionaires became nearly $ 12 trillion richer by 2021

The world billionaire club not only added 107 people in 2021, but their collective wealth increased by 17.8% to a record $ 11.8 trillion, according to a report by Wealth-X, a global provider of wealth information and insights.

• Twenty so-called “super billionaires” are each worth more than $ 50 billion, including Tesla and SpaceX’s Elon Musk (worth an estimated $ 234.5 billion); LVMH Chairman and CEO Bernard Arnault (whose family owns more than $ 151 billion); and Amazon founder Jeff Bezos (worth $ 142.2 billion).

• More than half The world’s 3311 billionaires are considered “lower”, meaning they own $ 1 billion to $ 2 billion, the report said. But 192 billionaires with a net worth of at least $ 10 billion each own a total of 41% of all billionaires’ wealth, or $ 4.8 trillion.

• North America is home to 1,035 billionaires (including 975 in the United States), while 954 live in Europe and 899 live in Asia (China has 400 except Hong Kong). Russia’s billionaire population has shrunk 10.8% to 107 billionaires at the end of 2021.

• The median age of billionaires are 66. Forty percent of billionaires are 70 years or older; while 11% are younger than 50. The average age of technology billionaires is 55. About 87% of billionaires are men and 13% are women.

What’s next: Although 135 billionaires live in New York, followed by Hong Kong (114) and San Francisco (85), Kuwait City has the world’s largest population of billionaires, with one for about every 33,000 inhabitants.

–Janet H. Cho

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Spirit Airlines delays shareholder voting in the middle of JetBlue, border bidding war

Spirit Airlines

postponed its shareholder vote on

Limit
‘s

offer to buy the company. It had been planned today, but will now meet on July 8.

• Spirit’s management recommended Frontier’s cash and share offer. JetBlues is all cashand it appeals directly to shareholders to support the offer.

• Spirit
  
  said that postponing the vote will allow it continue discussions with both JetBlue and Frontier as well as requesting proxies from shareholders.

• Both

  JetBlue
  
  and Frontier has increased its bids over the past week, raising the amount offered for each share and raising the breach fee if regulators do not approve the deal. Both combinations will create fifth largest US airline.

What’s next:Movements in the shares after the announcement indicate that investors see that the delay improves the odds of JetBlue winning. The Spirit share rose 1.9% in aftermarket. Frontier rose while JetBlue fell.

–Lina Saigol

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Social Security checks can increase by $ 120 a month in 2023

Social Security checks are expected to grow by $ 120 a month starting in 2023 for the average recipient, and could jump by as much as $ 180 a month, according to estimates from the Center for a Responsible Federal Budget.

• The Social Security Administration calculates the annual cost of living adjustment by comparing the average consumer price index for July to September with the average for the same period the year before. With today’s pace of at least 7.9%, that is an additional $ 121 for an average of $ 1657 Social Security checks.

• The consumer price index increased by 8.6% year-on-year in May, higher than the annual inflation adjustment of 5.9% that social security recipients received in January. Retirees have seen theirs Costs are rising from high inflationwhile the turmoil in the financial markets reduces their savings in equities and bonds.

• If social security recipients receive an increase of 8.6% in 2023, it will be largest annual cost of living adjustment for more than 40 years, according to another forecast earlier this month.

• A recent Senior Citizens League survey found that 20% of respondents had deducted more their pension savings than usual in the past year, and 47% had visited a pantry or applied for federal benefits of food aid.

What’s next: The Social Security Administration will announce the annual cost of living adjustment for 2023 in October.

–Janet H. Cho

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What are the most common IRA rollover errors, and how do I avoid them?

If you have left your job, it is usually a tax-smart move to make an IRA gruel of the balance in the company’s pension plan. A rollover allows you to continue to defer tax on the amount you roll over. But our beloved Congress left some federal income tax traps for the careless. Do not be among the careless. How to avoid the pitfalls.

Arrange direct transfer from the company plan to your IRA

After you leave your old job, you will probably want to transfer money from your previous employer’s qualified retirement plan (or plans) to an IRA. That way you get full control over the funds while you continue to defer tax. But it is a tax trap to avoid. Avoid this by providing a direct trustee-to-trustee transfer from the plan to your IRA. In other words, the check or EFT from the plan should go directly to the executor or custodian of your IRA. While you must have an IRA set up and waiting to receive the transfer, your account may be empty before then.

Read more here.

–Bill Bischoff

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– Newsletter edited by Matt Bemer, Steve Goldstein, Brian Swint and Rupert Steiner