Fidelity’s Bitcoin Thesis:
Fidelity Investments, the largest broker-dealer in the U.S, which has $5.4 Trillion total customer assets released a 19-page document on Tuesday titled: Bitcoin investment thesis: Bitcoin as an aspirational store of value system. Within this document, Fidelity highlights a lot of Bitcoin’s important characteristics such as; scarcity, its prospects due to unknown consequences of record low interest rates and its overall potential with unprecedented levels of global monetary and fiscal stimulus. In conclusion of the article, Fidelity writes: "Bitcoin’s inherent properties have given rise to the perspective that bitcoin has the potential to be a store of value, with complementary and interdependent components.” Fidelity has shown its interest in Bitcoin before but this article gives a clear indications that mindsets are changing among large institutions.
Big Tech Hearing:
Lawmakers took aim at the big tech executives on Wednesday in the attempt to shed some light on information that we already know to be true. Fortunately, if you missed the hearing, absolutely nothing was accomplished in a usual dramatic fashion. Lawmakers were allotted only 5 minutes to speak but wanted to ask 100 questions. Every single time a lawmaker would ask a question, an executive would get 3 words out of their mouth and then the lawmakers would then interrupt them and ask to proceed to their next question. It was akin to watching a CNN/Fox News panelist yell over each other to get their points across. The highlights of this hearing include: one lawmaker asking the CEO of Google, “why isn’t my dad receiving my campaign emails”, to another lawmaker being screamed at to put on his mask after raising his voice. At the end of the day, these companies are definitely guilty of anti-trust laws, however, 5 minute non-nuance conversation isn’t going to uncover anything or change anyone’s understanding of what’s going on. This shows you that lawmakers have no real understanding, nor do they care to fix these problems. This hearing was a gross misuse of our tax dollars and the executive’s time.
As of Thursday the 30th, Republicans and Democrats are still working on the details of the next stimulus package. Here are some of the current proposed details:
Tax-free Stimulus of up to $1,200 (it is presumed to be the same income standards as before)
$100 Billion dedicated to reopening schools this fall
An extension of the unemployment benefits that expired on Saturday. (The amount is up for debate, but looks to be less than the $600 per week in the CARES act)
Additional funding for the Payroll Protection Program; which are forgivable loans to small business who keep employees on payroll.
Employee retention tax credit, which will give refundable tax credits for wages paid to their employees.
Return-to-work payment of up to $450 each week. This would be a huge boost for people who get a new job or are rehired.
Rental assistance to help temporarily pay rent for those who qualify.
Payroll tax cut to give you more take-home pay.
It will be interesting to see what does and does not get passed. What we do know is the bill will result in the fed "printing" $1-$3 trillion dollars. If you have read my Bitcoin vs Your Dollar article, you know that this printing will result in the devaluing of your money. I understand this money is essential for many individuals, however, If you are someone who doesn’t need this stimulus check, I would highly recommend you place it in some form of an asset to hedge against this upcoming inflation. If you would have put your last $1,200 stimulus check in Bitcoin, it would now be worth roughly $1900. I did not place my check into Bitcoin, rather, into my stock portfolio.
Tesla was able to secure $780 million in bonds on Thursday. Tesla ended the last quarter with a record $8.5 billion cash position, however, they are always looking to secure cheap cash flows in order to fund their growing operations across the world. They are currently working on three factories: Germany, Nevada, Texas and will need as much cash flow as possible to ensure there are no hiccups with production. Luckily, there are plenty of investors who are willing to throw cash at Tesla and they were able to secure these bonds at cheaper levels than initially anticipated. The building of these factories is quintessential to ensure that Tesla is a successful company for years to come.