China’s evolving crypto policy

plus, the insurance debate heats up

“You can observe a lot just by watching.” – Yogi Berra ||

Hello everyone, and happy Friday!

Jobs Day is here, that hallowed occasion when macro analysts get in a lather about a monthly economic data release that invariably confirms previous convictions. Later today, we can expect more “yes, the payrolls number looks strong but have you seen the slump in part-time construction workers?” or “sure, unemployment may be rising but that’s concentrated in temporary job losses” or some combination of “don’t look at that, look at this”.

On Monday, I’ll give my version of “yes, but” and probably end up repeating my mantra of “this is a normalization, not a collapse”. I still hold the unpopular opinion that we’ll get fewer US rate cuts than the market is pricing in – although, as I wrote yesterday, I am concerned about the wider impact of the California fires on the financial system. We could end up getting more rate cuts, for bad reasons.

Below, I offer another controversial take, but one that crypto watchers would be happy with: that we could see a relaxation of China’s crypto stance this year.

(I will be sending out a recording later, despite a raspy voice!)

IN THIS NEWSLETTER:

• China’s evolving crypto policy

• The insurance debate heats up

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WHAT I’M WATCHING:

China’s evolving crypto policy

I’m hearing from everyone who knows China better than me that a shift in official policy towards crypto is not on the table – but, I think it is. There are signs.

I wrote recently about the potential significance of statements from a high-ranking party official suggesting that China should reconsider its approach to cryptocurrencies. That was back in October and there haven’t, as far as I know, been any repeats of that kind of surprise. But other hints are trickling through.

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