This week, there are no major economic events in the U.S., aside from speeches by local Federal Reserve chairs, such as Governor Christopher Waller and Governor Adriana Kugler. The most notable events include the Empire State Manufacturing Survey, jobless claims data, and the ECB's interest rate decision.

Meanwhile, China is intensifying its efforts to stimulate its economy by injecting liquidity into the markets. The country recently announced a $325 billion plan to support the economy over the next three months, aimed at strengthening banks, reviving the real estate sector, and boosting consumption.

Leading Chinese banks have also stated that they will cut interest rates on existing mortgages starting from October 25. In regions that qualify, rates will be adjusted to at least 0.3% below the central bank’s benchmark lending rate.

The Market’s Paradox

The financial markets are one of the few places where you can be both right and wrong at the same time. Take, for example, Tom Lee from Fundstrat, who has been bullish on U.S. stocks for the past two years. He accurately predicted that the stock market would continue to rise and reach new highs, even as the Federal Reserve began raising interest rates.

In contrast, Michael Burry, known for his bearish outlooks and short positions, was right during the 2008 financial crisis when the market crashed, earning him massive profits. However, he has since maintained a negative view while the market rebounded and soared to new heights. As recently as August 2023, Burry predicted another market decline, yet stocks continued to rise.

The question remains: do you want to be right, or do you want to make money in the market?

As the saying goes: “The financial market is the only place where you can be both right and wrong at the same time.” This seemingly contradictory statement holds true during major events such as global interest rate hikes in 2022, the pandemic in 2020, the 2008 crisis, and the dot-com bubble of 2000. Both bulls (optimists) and bears (pessimists) can be correct, depending on the time frame. Asset prices might drop in the short term but reach new highs over the long run.

Ultimately, it’s not about how often you are right, but how much you profit when you are right, how much you lose when you are wrong, and in what time frame. What matters is what actions you take to improve your financial situation during these fluctuations.

Many people in the financial world seek to prove themselves right, but even when their predictions are accurate, they may still lose money. It’s essential to remember that during the pandemic, while economies were stagnating, unemployment was rising, and fears of collapse were everywhere, asset prices kept climbing.

In the end, it’s important to recall the old saying: Bulls make money, bears make money, but pigs (the greedy) get slaughtered.

The Concept of the Bitcoin Bank: An Old Idea Revisited

The concept of a "Bitcoin Bank" might seem new, but it’s actually an idea that dates back to 2010, when Hal Finney discussed it on a Bitcoin forum:

December 30, 2010 - Hal Finney on Bitcointalk forum:

“There’s a very good reason for Bitcoin-backed banks to exist, issuing their own digital cash, redeemable for Bitcoin. Bitcoin itself can’t scale to be the backbone of every financial transaction in the world. We need a second layer of payment systems that are more lightweight and efficient. Similarly, the time needed to confirm Bitcoin transactions would be impractical for most large and medium-sized transactions.

Bitcoin-backed banks would solve these issues. They could operate just like banks did before the nationalization of money. Different banks could have different policies; some would be more aggressive, others more conservative. Some could be based on fractional reserves, while others could be 100% backed by Bitcoin. Interest rates could vary. Cash from some banks could trade at a discount to others.”

Finney’s foresight highlights the potential for Bitcoin to serve as high-powered money, functioning as a reserve currency for banks that would issue their own digital cash. These banks could process transactions quickly and securely while being backed by Bitcoin.

Today, this vision is echoed by MicroStrategy, led by Michael Saylor, who champions the idea of the "Bitcoin Bank." Saylor has remained consistently optimistic about Bitcoin’s future and has positioned MicroStrategy as a key player in the Bitcoin space. Recently, he shared in an interview, “When I realized the value of Bitcoin, I would go to bed at night feeling anxious that others would figure it out and buy up all the Bitcoin before I could.”

While some accuse Saylor of pushing a FOMO narrative, MicroStrategy’s consistent strategy of accumulating Bitcoin has significantly benefited the company. The firm’s long-term Bitcoin accumulation has led to increased visibility, shareholder profits, and a sharp rise in its stock price.

Other Key Updates

• Former President Trump announced that the WorldLibertyFi Token sale will take place on Tuesday, October 15th (U.S. time).
• The South African Revenue Service (SARS) will include crypto assets in its tax compliance program, collecting data from the Financial Sector Conduct Authority (FSCA) and crypto service providers. SARS encourages voluntary disclosure for those not yet compliant but warns that individuals already under audit are ineligible for this program. SARS uses AI technology to detect and address tax evasion.
• Crypto companies have paid over $19 billion to settle lawsuits with U.S. regulators in 2024, accounting for nearly two-thirds of total fines issued to the industry. FTX and Alameda contributed the most, with $12.7 billion paid to the CFTC. Other major cases include Terraform Labs, which paid $4.47 billion, and Genesis, with $2 billion. Since 2019, a total of $31.92 billion has been recovered from crypto firms, with analysts predicting more fines before the end of the year due to increased regulatory scrutiny.

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