Traditional Markets

We’d like to wish all of our colleagues and clients in the United States a very happy Columbus Day. Today is also a national holiday in Japan and Canada so we can expect volumes to be a bit light, especially in the afternoon.

China, on the other hand, is just coming back from a week off and have wasted no time catching up on the declines in the stocks and bond markets that we saw at the tail end of last week.

China’s Fresh Cash

It is a bit strange that shares are dropping in China though, especially after this…

As we know, the fiat system relies on a system called fractional reserve banking. Which means that banks are allowed to create new money based on a smaller amount of money they’re holding.

These reserves are monitored by the central bank and the central bank of China, the People’s Bank of China has just allowed some of their banks to increase the amount of money created by lowering the minimum amount of cash required to be held in reserve.

This move was intended to boost confidence in the system but it seems to have backfired as many analysts are seeing this move as too small, and that China’s central bank will simply have to take more drastic measures down the road.

In this chart, we can see that the Yuan is also taking a hit from this announcement.

Segwit adoption Growing

One of the harshest criticisms of bitcoin is the difficulty we’ve seen in scaling the network. One of the possible solutions is SegWit.

Even though SegWit was installed on the main bitcoin blockchain in August 2017, adoption of this service has been, well… slow.

The way it works is that it allows some of the information from each transaction to be stored in a separate place, which is off the main blockchain. That way, each transaction takes up less space and you can squeeze more transactions on each block.

However, this does require each wallet provider to actually begin using the solution.