Crypto Market Cap Tips Under $1T as US Inflation Hits 40-Year High

red bitcoin image

Crypto markets plunged over the weekend after Wall Street sank on Friday; with US stock markets suffering their worst week since January. Many economists chalked up the losses to the release of continuing higher-than-expected inflation figures.

Although inflation concerns swelled, crypto experts were quick to point out that inflation and its associated effects were exactly the reason that crypto was created. 

Elsewhere, Block Inc confirmed that a Web5 platform was being developed to improve upon the centralized aspects of Web3, and entrepreneur, Jack Dorsey, announced a collaboration with world-renowned rapper and artist, Jay-Z, to form an education-focused Bitcoin Academy.

  • US inflation reaches a 40-year high of 8.6%
  • Block Inc subsidiary, TBD, works towards Web5
  • Deloitte survey shows that enabling crypto payments is a high priority for 85% of merchants
  • Jack Dorsey and Jay-Z team up to form the Bitcoin Academy
  • American Express network hosts first crypto rewards credit card

US inflation reaches a 40-year high of 8.6%

The US Bureau of Labor Statistics reported on Friday that the Consumer Price Index (CPI) had increased to a new 40-year high of 8.6%. The CPI, which measures the price of a basket of goods and services, is commonly used as a reference point for inflation. As inflation worries were confirmed markets dived sharply.

Since April’s lower CPI figures, many economists had theorized peak inflation had passed and that the ongoing efforts from the Federal Reserve were already working to curb rising costs. Unfortunately for global consumers, May’s result indicates that peak inflation has not yet been reached.  

As inflation has continued to climb, many experts now point the finger of blame toward the Fed’s loose monetary policy that was implemented to combat the effects of Covid-19 lockdowns. Policies, such as Covid-19 stimulus cheques and the purchase of government bonds, forced new money into the economy, which many believe has continued to devalue the US dollar. 

Unfortunately, the latest inflation figures were not warmly welcomed by market participants, with both stocks and crypto falling as the latest CPI was released. Both the Nasdaq 100 and S&P 500 dropped by over 2% on Friday, while Bitcoin moved below the key level of support at $29,000. 

However, crypto enthusiasts were quick to point out that money printing, and the associated inflation effects, are exactly why cryptocurrencies, such as Bitcoin, were created. The pseudonymous Plan B aired his thoughts on Twitter following the news stating that “Inflation is NOT transitory. Inflation is NOT caused by Putin. Prices will stay high and increase further. Inflation is always and everywhere a monetary phenomenon. Inflation is caused by central banks debasing currency (money printing). Inflation is why Satoshi created #bitcoin.”

US CPI figures between May 2002 and May 2022. Greyed-out areas indicate times of recession.
US CPI figures between May 2002 and May 2022. Greyed-out areas indicate times of recession.

Block Inc subsidiary, TBD, works towards Web5

Block Inc., formerly Square, has revealed plans for a decentralized internet built around the world’s leading cryptocurrency and blockchain, Bitcoin. Block Inc., which is known for its digital services and payment facilities is working on the project through its Bitcoin-focused subsidiary called, TBD. 

Pushed by the CEO of Block Inc. and Bitcoin bull, Jack Dorsey, the new project is called “Web5”. Although Web3 is still a new term for many and is associated with blockchain technology and the tokenization to decentralize processes, Dorsey believes there is another way.

According to TBD documentation, Web5 utilizes only one blockchain and uses an identity-based system. The aim is to produce a decentralized web-based platform that can be utilized by application developers and accessed using a BTC-based monetary network. All apps built within Web5 will keep a user’s data locally with them rather than storing it centrally.  

At the end of last year, Dorsey tweeted that, in his opinion, Web3 is not truly decentralized. The entrepreneur believes that VCs and their LPs own Web3, and that the ecosystem is still a “centralized entity with a different label.” 

Diagram from TBD’s Web5 proposal documentation explaining the difference between the current internet and Web5
Diagram from TBD’s Web5 proposal documentation explaining the difference between the current internet and Web5

Deloitte suggests that crypto payments are a high priority for 85% of merchants

The international professional services company, Deloitte, published a new report last week outlining that a high percentage of merchants were seeking to implement crypto payment options.

The report, titled “Merchants getting ready for crypto”, was released on Wednesday and was completed thanks to a collaboration with PayPal. 

Over a 13-day period in December, 2000 executives working for large retail companies were asked about their intentions for crypto adoption. Companies were restricted to those generating revenues between 10 million and 500 million and, in most cases, the executives chosen to complete the survey were the decision-makers for choosing whether a company would begin accepting crypto.

The report states that “more than 85% of the organizations are giving high or very high priority to enabling cryptocurrency payments, while roughly 83% are doing the same for stablecoins.” Many participants were quick to point out that they saw a clear distinction between cryptocurrencies and stablecoins.

The report then explains that “there are also shared expectations of broad adoption in the future. Around 85% of surveyed merchants expect that digital currency payments will be ubiquitous among suppliers in their industry in five years.”

Out of those interviewed, 48% said that the adoption of crypto payments would improve customers’ experience, while 46% said it would increase the number of customers for an organization.

Photograph of Deloitte offices

Jack Dorsey and Jay-Z launch Bitcoin Academy

The CEO and Founder of Block Inc., Jack Dorsey, confirmed on Thursday that he is collaborating with world-renowned musician, Jay-Z (Shawn Carter), to launch a Bitcoin Academy. Based in Brooklyn, New York, the Academy will aim to provide crypto-focused education to the area.

In a tweet thread, Dorsey explained that “Mr. Shawn Carter and I are funding The Bitcoin Academy, a program for residents of Marcy Houses in Brooklyn New York where Jay grew up,”. Dorsey went on to outline that the Academy would be “designed in collaboration with CryptoPlug3 (Najah J. Roberts) and BlkBTCBillions (Lamar Wilson).”

Dorsey ended his Twitter thread by saying “Education is where we start. This isn’t just about bitcoin…it’s about long-term thinking, local economies, and self-confidence. Courses are free to all Marcy residents, including kids. And to make it even easier we’re providing devices and data plans for all who need it.”

According to the Bitcoin Academy website, classes are scheduled to begin from June 22nd and will be exclusively for the residents of Marcys House. It is not currently known if the Academy will one day open its doors to the wider population of New York.

An orange 3D Bitcoin logo standing in front of the Brooklyn Bridge

American Express network hosts first crypto rewards credit card

Payments giant, American Express (Amex), has announced plans to support the first crypto credit card on its network. In conjunction with Abra, a crypto trading platform and wallet provider, the new Abra Crypto Card will work on the American Express network and offer user’s crypto rewards on all purchases.

Regardless of the amount, all purchases will be eligible for a ‘cash-back’ type reward which will be distributed in crypto. It is not yet clear which cryptocurrencies will be used to distribute rewards. 

However, the CEO of Abra, Bill Barhygt, said that all rewards would be tradable for over 100 different cryptos through the Abra platform with no annual or foreign transaction fees. In addition to crypto-back rewards, Abra Credit Card holders will gain access to presale tickets, global dining benefits, and purchase protection. 

Speaking at the Consensus Conference in Austin, Texas, American Express representative, Mohammed Badi, said “We’re thrilled to combine the strength of our payments network with Abra’s innovation and expertise in crypto. This is a credit card for crypto explorers and enthusiasts alike.”

Interested users can now join a waitlist, with arrival of the card expected in late 2022. 

A credit card showing the American Express logo in the bottom right corner

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