December Market Outlook

It is not going away.

Last week Fed Chairman Jerome Powell requested that the central bank’s preferred descriptor for the worst price inflation in 40 years (“transitory”) be “retired” from use.

Powell basically admitted that:

a) he was wrong (not always an easy thing to do when you’re the world’s most powerful person)

b) he now agreed with his early critics on this particular topic that inflation will be with us for the foreseeable future

Now, to be clear, heightened inflation (a debatable term) will likely one day “go away”, at least in the United States.

The last period of outsized US inflation started in the 1960s and lasted until the early 1980s, so these episodes can last a decade or more even in the land of the almighty dollar. But they do typically subside.

Powell’s capitulation reminded us of another thing that many of the powers that be have come to recognize is not going away.

Bitcoin.

For many years now we have expressed a view, backed-up by extensive empirical research, that bitcoin/crypto/web 3 are not a passing fad.

And regulators in the jurisdiction that still matters the most — the United States — have been echoing this sentiment since at least as far back as 2018, long before Chairman Gensler and Powell did a few months ago.

Now, there are still some holdouts that can be found atop the greying financial system food chain and in the bowels of academia.

But the smart money, innovators and most powerful regulators all generally recognize that crypto is also non-transitory.

As one of our Blockchain.com teammates recently mentioned, it feels great to work in an industry that is at last widely recognized as a legitimate fixture on the innovation landscape. Not a bad note to end another historic year on.