The Daily Update: Bitcoin / FOMC / Table Grapes

Yesterday saw a staggering dive in crypto currencies after a statement from the People’s Bank of China reiterated that digital tokens cannot be used as a form of payment. This added to the already nervous feelings in crypto-land following Elon Musk’s Tesla retracted plans to accept Bitcoin for its electric cars. The sell-off dragged Bitcoin over 30% lower at one point, with the coin testing nearly $30K at its session lows (it traded at over $63.5k in mid- April), before finding support. At the intraday low, the cryptocurrency’s loss for the past week was over 40%. At time of writing Bitcoin was trading at just under $40k.

We also had the latest FOMC minutes last night. It revealed that ‘a number’ of participants had brought up the possibility of discussing a plan for asset tapering ‘at some point over its upcoming meetings’ if data warranted it. However, the minutes also stressed that it would likely be ‘some time’ before ‘substantial further progress’ on its mandates was seen. So, as has been the way of it over the last few months, the comments are littered with conditionality, however, it does seem that the members are gearing up to have the conversation, if and when the data improves.

Lastly, the ongoing trade spat between Australia and China has a new casualty, the humble table grape. Dan Tehan, federal Trade Minister, says he ‘won't jump to any conclusions’ over reports that the annual $300m table grape exports to China could be the latest target in the trade war with its Asian neighbour. Over the last year China has stopped importing billions of dollars of Australian goods including timber, coal, red wine, meat, seafood and cotton after Australia supported the growing call for an international inquiry into China’s handling of the coronavirus last year.

Personally, I think they are taking the pip!