Bitcoin’s Sizzle To Lead To Fizzle?

As the price of bitcoin surged this week, cryptocurrency (namely, Facebook’s Libra) has been under increased scrutiny by regulators.

The folks who bought their bitcoin at around $4,000 are feeling pretty smart.

The folks who bought at near $20,000 are feeling a bit less blue than they did when it was $4,000 – but they aren’t feeling as great as they were at $19,000 and change, when the sky seemed the limit.

At this writing, the marquee crypto name has been changing hands at about $11,700, up significantly from levels north of $9,200 that marked the beginning of the summer.

It’s been a wild summer for markets of all types amid battles over tariffs and as central banks have cut interest rates. The trade war, in particular, has sent stocks on a roller coaster while ostensibly underpinning bitcoin’s rise, as investors seek haven in holdings other than traditional ones, such as equities.

At least in some form, the trade war – and, more recently, China’s move to devalue its currency – has raised a debate over money (and how it works). Bitcoin, in one notable example, surged by 9 percent on Monday of this week, just as China broke its psychological barrier of seven yuan to the dollar for the first time in more than a decade.

Yet the idea that cryptos are a hedge against currency wars may be misplaced. Currencies, after all, buy things, worldwide. Or they can be exchanged, with relative ease and lack of friction, into other currencies to buy goods and services. Even if exchanges are done electronically, they are monitored and regulated by central banks. Conversely, it’s rather hard to buy things with bitcoin, and changing it to dollars is less than ideal (transaction times, as has been well-documented, are not all that swift).

Beyond that, walls may be going up to keep bitcoin from the mainstream. Last month, the European Union said crypto is not a currency, but is instead “an asset that … is very volatile.”

Just in the last several days, Capitol Hill hearings on cryptos have pointed to the fact that the unbanked (touted by some to be natural adopters of cryptos) transact in cash. The joint efforts of Facebook and several other companies to develop Libra are facing increasing scrutiny amid privacy and security concerns.

If there is one constant, it’s that the price swings wildly for bitcoin, up and down several percentage points in a day, which hardly proves a new use case against the vagaries of currency movements. Call speculation by any other name – perhaps this time around, a “safe haven” – but speculation is speculation.

Sizzle

Lyft: The ride-hailing firm’s top-line numbers get a lift, as revenue per active rider was up 22 percent to $39.77 in the latest quarter. Management pointed to a competitive landscape that is becoming more rational – and the firm has even raised prices in some cities, beginning in June.

Fast Food, Faster: Shake Shack has paired with Grubhub in a nationwide delivery rollout. The companies are using direct-to-order POS integration for order submission and menu syncing.

Dynamic Discounting: No discounting here, at least when it comes to investor backing: C2FO, an online loan marketplace connecting businesses with invoice financing, has announced $200 million in new funding. The company will look to expand its presence with small and medium-sized firms.

Fizzle

DeepMind, Deep Losses: DeepMind, the Google-owned AI firm, saw pre-tax losses grow to $570 million in 2018, up from $341 million last year. Cumulatively, losses are at around $1 billion.

Domino’s: The pizza giant is struggling with expansion plans in Europe, and internal clashes have led CEO David Wild to retire from the U.K. division of the firm.

Libra: Regulatory scrutiny is everywhere for the proposed crypto, and now add more to the queue: the Information Commissioner’s Office (ICO) in the U.K. said it sent out a statement to Facebook and 28 other firms. The ICO wants more “openness” about the project, according to reports, and information on how customer data will be used and protected.