Gold prices climbed on Tuesday after Federal Reserve Chairman Jerome Powell's comments increased the likelihood of a September rate cut, while investors waited for additional US economic data to provide further insights on monetary policy.

 

Spot gold increased by 0.7% to $2,440.01 per ounce, nearing its May 20 record of $2,449.89.

 

Powell stated on Monday that the three US inflation readings in the second quarter of this year "somewhat increase confidence" that the rate of price increases is aligning with the Fed's target sustainably. Investors awaited US retail sales data, due at 12:30 GMT on Tuesday, for additional guidance.

 

Gold reached new heights in April and May but pulled back in June when projected US interest rate cuts were reduced, and physical demand began to decline due to high prices. Greater optimism for a September rate cut in July pushed non-yielding bullion higher again.

 

"Uncertainty surrounding the protracted wait for US interest rate cuts could lead to a soft third quarter for gold before a rally gathers momentum to achieve a new high," stated Nitesh Shah, commodity strategist at WisdomTree.

 

According to WisdomTree's models, gold was overvalued by 7% at the end of June, indicating that most of this overvaluation will likely correct in the current quarter.

 

Central bank purchases, a critical demand category, have slowed in recent months, primarily due to the lack of buying by China's central bank.

 

However, with the impending likelihood of rate cuts, exchange-traded funds (ETFs) backed by physical gold, another vital demand segment, have resumed their acquisitions after several years of declines.

 

Gold ETFs, which store bullion for investors, reported inflows of $0.5 billion, or 7.6 metric tons, last week, according to the World Gold Council.

In a volatile day for the cryptocurrency market, Bitcoin experienced a brief spike above $59,000 during the early U.S. trading hours on Wednesday before retreating slightly to settle around $57,400 by the afternoon. The world’s largest cryptocurrency by market capitalization has remained range-bound, facing selling pressure from Germany and steady inflows into U.S. spot Bitcoin exchange-traded funds (ETFs).

 

German Bitcoin Sales and ETF Inflows

 

Germany’s decision to divest its seized Bitcoin holdings has been a significant factor in recent market movements. The German government, which initially seized nearly 50,000 Bitcoin from the online piracy site Movie2k, has reduced its holdings to 13,110 BTC, valued at less than $1 billion for the first time. The sales have been executed through cryptocurrency exchanges, adding selling pressure to the market.

 

Despite this, U.S. spot Bitcoin ETFs have seen robust inflows, with $511.2 million flowing into these funds on Monday and Tuesday alone, according to data from Farside Investors. This suggests that while some entities are offloading Bitcoin, others are seizing the opportunity to accumulate, reflecting a mixed sentiment in the market.

 

Congressional Vote on Crypto Custody

 

Wednesday could also be a pivotal day for U.S. crypto regulation, as the House of Representatives votes on an attempt to overrule President Biden's veto of a bill aimed at overturning the SEC’s special regulations for custodians of crypto assets. The SEC’s policy has been viewed as a significant hurdle for traditional financial institutions looking to offer crypto custodial services.

 

If overturned, the bill would make it easier for traditional banks to serve as custodians of digital assets. However, Caitlin Long, CEO of Custodia Bank, expressed doubts on social media about whether Congress has the votes necessary to overturn the veto, indicating that the policy may remain in place.

 

Interestingly, on the same day, a meeting was scheduled between crypto industry representatives, major Democratic leaders, and White House officials. Organized by Democratic Rep. Ro Khanna of California, this meeting highlights the growing political interest in crypto, though Democrats have been slower to engage with crypto supporters compared to Republicans. Recently, the Republican party has made various pro-crypto stances, such as support for Bitcoin mining and self-custody, part of their official platform.

 

CFTC Chairman Calls for Legislative Action

 

On the regulatory front, Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam testified before a Senate committee on Wednesday, expressing his concerns about the lack of legislative progress on digital asset regulation. In his opening remarks, Behnam emphasized the need for a completed legislative response to protect consumers from the risks associated with digital assets.

Behnam’s testimony comes at a time when crypto regulation is a hot topic in Washington, with both parties grappling with how to approach the rapidly evolving digital asset landscape.

 

Federal Reserve Watch

 

In addition to the developments in the crypto world, market participants also kept a close eye on Federal Reserve Chairman Jerome Powell’s second day of testimony before Congress. Observers are looking for clues about the future direction of interest rate policy, which could have broader implications for financial markets, including cryptocurrencies.

Wednesday’s developments underscore the dynamic and often unpredictable nature of the cryptocurrency market. While Bitcoin’s brief spike above $59,000 shows that investor interest remains strong, the ongoing regulatory uncertainty and external pressures, such as Germany’s Bitcoin sales, continue to create a complex trading environment. As the week progresses, market participants will be closely watching both the U.S. political landscape and international developments for further cues on where the crypto market might be headed next.

Chip stocks were rallying across the board on Wednesday, driven by a big earnings beat from AMD and Morgan Stanley naming Nvidia a top stock pick.

 

AMD spiked as much as 11% before paring gains to about 5% higher. Nvidia surged 12% at intraday highs. Other stocks getting a lift included ASML (up 11%), Qualcomm (up 6%), and Samsung (up 4%).

 

AMD beat on both the top and the bottom lines, while showing strong growth in its data-center business, fueled by sales of graphics processing units, which power AI technology.

 

In addition to riding AMD's wave higher, Nvidia was renamed Morgan Stanley's top semiconductor stock pick. The firm said a recent sell-off in the stock "presents a good entry point as we continue to hear strong data points short term and long term, with overblown competitive concerns."

 

The analysts said the stock had slid on concerns that would likely fade with time, like tighter customer capital-spending budgets, a tough competitive landscape, export controls, and supply-chain concerns.

 

"Through those concerns, the earnings environment is likely to remain strong, for NVIDIA and for the whole AI complex," the analysts said.

 

The semiconductor industry is also likely getting a boost from a Reuters report that said new US restrictions on chip exports from foreign companies to China may not apply to US allies such as the Netherlands, Japan, and South Korea.

European stocks started the new trading week with gains as regional investors embraced the results of the first round of extraordinary parliamentary elections in France.

 

Europe's Stoxx 600 index was up 0.34 percent by 4 p.m. London time, recovering from four consecutive losses. This was helped by a sharp rise in France's CAC 40 index, which first jumped more than 2.5% before slipping to 1.23%.

 

European markets are reacting to the results of the first round of extraordinary parliamentary elections in France, which showed a sharp rise in votes for the anti-immigrant National Rally party.

 

Early results show it will fight for an outright majority in the second round of voting to be held on July 7, but analysts say it will be the "least bad" result from a market perspective. French President Emmanuel Macron's centrist alliance came in third place on Sunday.

 

On the data front, German inflation fell in five key states in June and the EU's national consumer price index fell to 2.5 percent from 2.8 percent in May. Economists polled by Reuters had expected a reading of 2.6%.

 

This came ahead of the release of euro zone inflation data on Tuesday.

 

Markets in the Asia-Pacific region had a mixed start to the second half of the year as investors assessed June business activity data in China as well as business confidence data in Japan.

 

Meanwhile, U.S. stock futures rose in overnight trading on Sunday as Wall Street looks ahead to the second half of 2024 after a strong finish to the first half of the trading year.

Algorithmic Trading: Revolutionizing the Financial Markets

Introduction to Algorithmic Trading

Algorithmic trading, often abbreviated as algo trading, refers to the use of computer algorithms to execute trading strategies at speeds and frequencies that are impossible for human traders. These algorithms are designed to make trading decisions based on pre-defined criteria, which can range from simple conditions to complex mathematical models.

 

The Evolution of Trading

Traditional trading was primarily manual, relying heavily on the instincts and judgments of human traders. However, with the advent of technology and electronic trading platforms, the mode of trading has drastically evolved. The introduction of algorithms in trading has brought about efficiency, speed, and the ability to leverage complex strategies that can't be manually implemented. For instance, high-frequency trading (HFT) can execute thousands of trades per second, something beyond the realm of human capability.

 

How Algorithmic Trading Works

At its core, algorithmic trading involves the use of predefined sets of rules (algorithms) to place trades. These rules can include timing, price, quantity, or even sophisticated mathematical models that can be derived from historical data. The process generally involves the following steps:

1. Strategy Formulation: Traders or quants design a trading strategy based on rigorous research and analysis. This usually involves backtesting the strategy using historical data to ensure its robustness.

2. Coding the Algorithm: The trading strategy is then converted into an algorithm using programming languages such as Python, C++, or MATLAB.

3. Live Testing: The algorithm is tested in a live market environment, often with simulated trades to gauge its performance.

4. Deployment: Once the algorithm passes through rigorous testing, it is deployed in a live trading scenario, automatically executing trades based on the predefined criteria.

 

Types of Algorithmic Trading Strategies

Algorithmic trading encompasses a broad range of strategies, each designed to achieve different objectives. Some of the most common types include:

1. Market Making: This strategy involves placing buy and sell orders at different prices to capture the spread. The algorithm continuously updates these orders based on market conditions.

2. Statistical Arbitrage: This strategy involves identifying price inefficiencies between related financial instruments and taking opposite positions to profit from the convergence of their prices.

3. Momentum Trading: Here, the algorithm identifies stocks that are moving in a particular direction with high momentum and places trades to capitalize on these trends.

4. Mean Reversion: This strategy assumes that asset prices will revert to their historical mean or average over time. The algorithm identifies deviations from this mean and places trades to exploit the expected reversion.

 

Advantages of Algorithmic Trading

Algorithmic trading has revolutionized the financial markets by offering several key advantages:

1. Speed: Algorithms can execute trades in milliseconds, far faster than a human trader could.

2. Accuracy: Automated trading reduces the risk of human error, ensuring that trades are executed precisely as per the algorithm's criteria.

3. Quantitative Analysis: Algorithms can process vast amounts of data in real-time, enabling traders to leverage complex quantitative models for better decision-making.

4. Reduced Costs: Automated trading minimizes transaction costs by optimizing trade execution and reducing the need for human intervention.

5. Consistency: Algorithms can ensure consistent execution of trading strategies, eliminating the emotional biases that can affect human traders.

 

Risks and Challenges

Despite its numerous advantages, algorithmic trading also comes with its share of risks and challenges:

1. Technical Failures: System glitches, software bugs, or hardware failures can lead to significant financial losses.

2. Overfitting: Algorithms that perform well in backtesting may not necessarily perform well in real market conditions. This can lead to overconfidence and eventual losses.

3. Market Impact: High-frequency trading can exacerbate market volatility and contribute to flash crashes.

4. Regulatory Challenges: The regulatory environment for algorithmic trading is constantly evolving, requiring traders to stay updated with the latest compliance requirements.

 

Future of Algorithmic Trading

The future of algorithmic trading looks promising, with advancements in artificial intelligence, machine learning, and big data analytics shaping the landscape. These technologies have the potential to make algorithms even more sophisticated and adaptive, enabling traders to navigate increasingly complex market environments with greater precision.

Moreover, the democratization of trading technology has opened the doors for individual traders and small firms to participate in algorithmic trading, leveling the playing field previously dominated by large financial institutions.

As we move forward, the integration of quantum computing and blockchain technology may further revolutionize the financial markets, offering unprecedented levels of speed, security, and transparency.

 

Conclusion

Algorithmic trading has undoubtedly revolutionized the financial markets, bringing in a new era of speed, efficiency, and complexity. While it offers significant advantages, it also comes with its set of challenges that traders must navigate carefully. As technology continues to evolve, the landscape of algorithmic trading will likely undergo further transformations, promising exciting opportunities and challenges alike. Whether you're an institutional player or an individual trader, understanding the intricacies of algorithmic trading is crucial for staying ahead in today's dynamic financial markets.

 

European markets rallied on Tuesday, with the FTSE 100 index hitting an intraday record high as investors built on the previous session's positive momentum.

 

The pan-European benchmark Stoxx 600 index rose 0.6% in early trading, with most sectors trading in positive territory. Technology stocks led the gains, rising 1.8%, while mining stocks fell 1.3%.

 

Britain's FTSE 100 index continued to rise, rising 0.55% to reach an all-time high of 8067.73 by 8:10 a.m. London time. This came after the index posted its fourth straight daily gain on Monday and surpassed the previous record close set on February 20, 2023.

 

U.K. stocks rose while sterling fell against the U.S. dollar as investors raised bets on a summer interest rate cut by the Bank of England.

 

Investors in the region are looking ahead to bank earnings this week and will also keep an eye on a number of technology news in the US, with Tesla reporting during US trading hours on Tuesday.

 

In Europe, Renault, Kering, OVH, Novartis and Associated British Foods all posted profits on Tuesday. On the data front, preliminary manufacturing and services purchasing managers' index data for the eurozone for April will be released.

 

In the evening, Asia-Pacific markets extended gains from Monday as investors await the release of flash data on business activity in Australia, Japan and India. U.S. stock futures were little changed Monday evening.

 

European stocks opened higher Tuesday, with the benchmark Stoxx 600 index up 0.6 percent by 8:05 a.m. London time.

 

Britain's FTSE 100 index was up 0.5 percent at an intraday high, France's CAC 40 was up 0.3 percent and Germany's DAX was up 0.8 percent.

 

- Karen Gilchrist

 

Swiss drugmaker Novartis raised its full-year outlook after reporting better-than-expected first-quarter results thanks to the success of drugs such as heart failure drug Entresto and psoriasis drug Cosentyx.

 

The company said it expects net sales to grow by one to several double-digit percent in 2024 and adjusted operating income to grow by several double-digit to mid-tenths of a percent.

 

Previously, the company projected that adjusted operating income would increase by a "high single-digit" percentage and sales growth would increase by a "mid-single-digit" percentage.

 

- Karen Gilchrist

 

French automaker Renault on Tuesday reported a 1.8 percent rise in first-quarter earnings, helped by strong performance in its finance business.

 

The company sold 549,099 vehicles in the three-month period and posted revenue of 11.7 billion euros ($12.47 billion). That was slightly higher than the company's forecast for annual revenue to fall to 11.49 billion euros.

 

- Karen Gilchrist

 

According to an analysis of recent data, six stocks in the S&P 500 tend to rise when Tesla shares fall.

 

The stock price performance of these six companies has been inversely correlated with Tesla's stock performance in the past month. They have tended to rise this year, in contrast to Tesla stock's 40% drop.

Tesla shares fell just over 3% on Monday, extending its year-to-date drop to 34% after the company laid off more than 10% of its workforce, or more than 14,000 employees.

 

Tesla CEO Elon Musk sent out a memo to employees on Sunday announcing that the EV maker would be cutting jobs due to "overlapping roles and job functions in some areas."

 

Two top executives left Tesla in connection with the layoffs, including Senior Vice President Drew Baglino, who led the company's engineering efforts in batteries, motors and energy products. Baglino worked at Tesla for 18 years and was often on the same stage as Musk during product announcements and co-hosted the company's earnings calls.

 

The other departing executive was Rohan Patel, who served as Tesla's vice president of public policy and business development.

 

Usually when a company announces job cuts, its stock price jumps as investors welcome the cost-saving measures and expect higher profits in the future.

 

However, the drop in Tesla's stock after the job cuts is causing wariness on Wall Street as investors are increasingly concerned about weakening demand for electric cars.

 

Earlier this month, Tesla reported first-quarter deliveries that far exceeded Wall Street forecasts and marked the company's first quarterly year-over-year sales decline since 2020.

 

"Inventory accumulated in Q1 and it appears that the primary reason for the decline in deliveries was lower demand for electric vehicles across regions, particularly in North America, where EV sales have been essentially flat since the summer of 2023," Bank of America said in a note last week.

 

For his part, Musk said in the memo that the job cuts "will allow us to be lean, innovative and ready for the next cycle of growth."

 

This is Tesla's first major job cut since it laid off employees at its Buffalo, N.Y., plant in February 2023.

Oil prices rose in early Asian trading after hopes diminished that talks between Israel and Hamas would lead to a ceasefire in Gaza and ease tensions in the Middle East.

 

Brent crude futures rose 40 cents to $90.78 a barrel by 0032 GMT. U.S. West Texas Intermediate (WTI) crude rose 35 cents to $86.78.

 

A new round of ceasefire talks between Israel and Hamas in Cairo ended a multi-season rally on Monday, sending Brent crude down for the first time in five sessions and WTI crude down for the first time in seven, amid the prospect of weakening geopolitical risks.

 

But then Israeli Prime Minister Benjamin Netanyahu said Monday that an unspecified date had been set for an Israeli invasion of the Rafah enclave in Gaza, "ending the short-term hopes that gripped the market yesterday that geopolitical tensions in the region might be easing," Tony Sycamore, a market analyst at IG, wrote in a note.

 

Hamas rejected Israel's latest cease-fire offer made at talks in Cairo, a senior Hamas official said Monday.

 

The market continues to weigh the risk of oil supply disruptions. Iran's response to Israel's alleged attack on its consulate in Syria "could drag the oil market into a conflict that has barely touched it since the Hamas attack on Israel," ANZ analysts said in a client note.

 

Tehran said last week it would retaliate after an airstrike that killed two of its generals and five military advisers in Damascus, although Israel did not claim responsibility for the attack.

 

Meanwhile, broader fundamentals are supporting prices. Fuel demand in India hit a record high in the 2024 financial year thanks to a rise in gasoline and jet fuel consumption, data showed on Monday. Improved manufacturing activity in China, announced last week, is expected to boost fuel demand.

 

The market will be watching inflation data due from the U.S. and China this week for further signals on the direction of the economies of the world's two biggest oil consumers.

 

In the Americas, Mexico's state-owned oil company Pemex said it would cut crude exports by 330,000 barrels a day to be able to supply more oil to domestic refineries, reducing by a third the amount of supply available to the company's customers in the U.S., Europe and Asia.

The dollar remained broadly steady on Monday as data showing a decline in U.S. prices bolstered bets that the Federal Reserve may cut interest rates in June, while the yen held near 152 per dollar, keeping traders on guard for the threat of intervention.

 

The price index for personal consumption expenditures, or PCE, rose 0.3 percent in February, the Commerce Department's Bureau of Economic Analysis reported Friday, compared with the 0.4 percent increase that economists had forecast.

 

The report also showed that consumer spending last month rose the most in a year, underscoring the economy's resilience. Most markets around the world were closed Friday.

 

Federal Reserve Chairman Jerome Powell on Friday said the latest U.S. inflation data was "consistent with what we would like to see," in comments that echoed his remarks after the Fed's policy meeting last month.

 

Markets now rate the probability of a Fed rate cut in June at 68.5% versus 57% at the end of last week, as CME's FedWatch tool shows. Traders also estimate the probability of a rate cut this year at 75 basis points.

 

Citi strategists say the Fed remains on track to start cutting rates in June. "If activity persists, the Fed could make three rate cuts this year. But further softening in labor markets leads us to expect five rate cuts this year."

 

The euro rose 0.06 percent to $1.07945, near the more than one-month low of $1.0769 hit last week. Sterling was at $1.2637, up 0.12% for the day.

 

The dollar index, which measures the U.S. currency against six peers, fell 0.038% to 104.42, but remained near the six-week high of 104.73 it reached last week.

 

The currency market has been centered on the yen as its move toward levels last seen in 1990 revives the threat of intervention by Japanese authorities.

 

The yen hit a 34-year low against the dollar at 151.975 on Wednesday and was last at 151.315 per dollar on Monday, a slightly stronger level.

 

Japan intervened in the currency market at 2022, first in September and then in October, when the yen fell to a 32-year low of 152 per dollar.

 

Japan's plans for the yen remain difficult to predict. Its fiscal year is over, which means the Bank of Japan doesn't have to worry about a sudden yen move affecting balance sheets.

 

But news of last week's emergency meeting of the three monetary authorities - the Ministry of Finance, or MOF, the Bank of Japan and the Financial Services Agency - and the officials' entreaties seemed to help bring the yen back from 34-year lows.

 

Finance Minister Shunichi Suzuki said Monday that he was not ruling out options against excessive currency movement and would react accordingly, reiterating his warning against a fast-moving yen.

 

Citi analysts still expect the Japanese authorities to intervene somewhere in the 152-155 per dollar zone, noting that the yen has weakened against the Chinese yuan as well.

 

"We do not expect the IFS to intervene in the Chinese yuan, but further appreciation of this currency pair could be a contributing factor to currency intervention by Japan," they said in a client note on Friday.

 

In other currencies, the Australian dollar rose 0.21% to $0.654 and the New Zealand dollar gained 0.20% to $0.599.

 

In cryptocurrencies, bitcoin was last up 1.83% to $70,927.00. Ether was last up 3.46% to $3,619.20.

Gold prices rose on Tuesday thanks to a weaker dollar as investor attention shifted to U.S. inflation data due out later this week that could shed light on the timing of the Federal Reserve's first interest rate cut of the year.

 

Spot gold rose 0.4 percent to $2,179.43 an ounce. U.S. gold futures added 0.2% to $2,202.7.

 

Gold hit a record high last week after Fed policymakers said they still expect to cut interest rates by three-quarters of a percentage point by the end of 2024, despite recent strong inflation readings.

 

"Unless there is significant news indicating an acceleration in the pace of rate cuts, gold is unlikely to reach a new record high before Easter," said Nitesh Shah, commodity strategist at WisdomTree. "However, we expect new records to be broken by the end of the year," he said. WisdomTree expects gold prices to hit $2,350 in the first quarter of 2025.

 

Traders estimate a 64% probability that the Fed will start cutting rates in June.

 

The dollar index, meanwhile, fell 0.4% against its peers, making gold less expensive for holders of other currencies. The focus will now turn to the core US personal consumption expenditure price index data due for release on Friday.

 

Gold prices have also been supported by increased physical demand from Chinese households amid some skepticism about the outlook for the country's real estate and stock market. This helped offset weaker demand from price-sensitive Indian buyers.

 

Purchases by central banks, which are less price-sensitive than retail consumers, also remained strong, providing additional support for the metal. China's central bank has been the most active buyer since the end of 2022.

 

"The motivation for their gold purchases is to diversify away from G7 currencies, after these currencies were used as weapons in 2022 after the (Russia-Ukraine) war," Shah said.

European markets were flat on Tuesday as global investors await the start of the U.S. Federal Reserve's two-day policy meeting.

 

The pan-European Stoxx 600 index was down 0.01% in early afternoon trading, while sectors traded in mixed territory. Shares of automakers were up 1%, while utilities were down 0.6%.

 

U.S. stocks opened mixed ahead of the Federal Reserve meeting in Washington. Recent inflation reports may prompt the Fed to signal that interest rates will remain higher for longer than expected. Fed funds futures are currently forecasting a 99% probability that the Fed will leave benchmark interest rates unchanged this week, according to the CME FedWatch tool.

 

Meanwhile, it was a dramatic night for Asia-Pacific markets after investors priced in the latest central bank monetary policy decisions from the Bank of Japan and the Reserve Bank of Australia.

 

The Bank of Japan officially ended its negative interest rate policy at its March meeting, raising interest rates for the first time in 17 years and raising the benchmark interest rate from -0.1% to a range of 0% to 0.1%. The bank also lifted its yield curve control policy, a historic change in policy. Markets in the Asia-Pacific region were mostly down on Tuesday following the move.

 

U.S. stocks opened mixed on Tuesday as Wall Street awaited the Federal Reserve's two-day meeting.

The S&P 500 Index fell 0.3% and the Nasdaq Composite lost 0.8%, while the Dow Jones Industrial Average added 0.1%.

 

- Karen Gilchrist

Shares of consumer goods giant Unilever rose Tuesday after the company announced plans to split its ice cream division, which includes Ben & Jerry's and Magnum, as part of a restructuring that will affect 7,500 jobs.

Unilever shares rose 5.6% immediately after the news was released, before paring back the gains slightly, rising 2.9% in the afternoon.

On the other hand, Reckitt Benckiser shares fell 3.9%, cutting gains from the previous session, after a lawsuit was filed in the U.S. over Enfamil infant formula.

 

- Karen Gilchrist

Atos shares fell more than 18% and were suspended Tuesday morning after the French IT company announced that Airbus had ended talks to buy its cybersecurity business.

As a result, Atos is postponing the publication of its 2023 earnings to "evaluate strategic options," the company said in an update to the market.

"Atos is analyzing the current situation and is actively evaluating strategic alternatives that will take into account the sovereign imperatives of the French state," the statement said.

 

- Elliott Smith

While investors are focusing on artificial intelligence companies, Berenberg strategists see one sector as a relatively bargain.

The investment bank noted that investors in the sector outperformed the market by an average of 108% - or more than doubled their money - when they invested on three occasions in the past when valuations were as low as current levels.

Pro-crypto Republican candidate Vivek Ramaswamy has officially withdrawn from the United States presidential race, marking the end of his nearly year-long campaign. Ramaswamy, who gained attention for his outspoken stance on cryptocurrency and blockchain technology, announced at a press conference in Des Moines, Iowa. Despite his efforts to bring a pro-crypto agenda to the forefront of American politics, Ramaswamy cited challenges and an uncertain path to victory as the primary reasons for suspending his presidential campaign. He, however, expressed his decision to throw his weight behind former President Donald Trump, endorsing him for the upcoming election.

 

Vivek Ramaswamy’s Pro-Crypto Agenda

 

Vivek Ramaswamy entered the political arena as a relatively unknown candidate but quickly captured the attention of the crypto community with his bold policy proposals surrounding Bitcoin and other digital assets. Notably, he was the only presidential candidate to introduce a comprehensive crypto policy framework, unveiling “The Three Freedoms of Crypto” on November 16. The policy aimed to protect crypto developers from being held liable for user actions, establish clear regulatory guidelines for new cryptocurrencies, and prevent federal agencies from imposing restrictions on self-hosted wallets. His pro-crypto agenda was built on the belief that these technologies could foster economic growth, innovation, and financial inclusion. Ramaswamy argued that a forward-thinking approach to digital assets could position the United States as a global leader in the crypto space.

 

Ramaswamy’s commitment to the crypto cause was further evident as he actively participated in the “Stand With Crypto” campaign initiated by Coinbase Global Inc (NASDAQ: COIN). He engaged in discussions surrounding digital assets and blockchain-related issues. In December, Ramaswamy took a strong stance against the United States Securities and Exchange Commission (SEC) and its Chair, Gary Gensler. He criticized the SEC’s failure to keep pace with crypto regulation and expressed disappointment that Gensler couldn’t affirm before Congress that Ether should be considered a commodity.

 

Ramaswamy pointed to the limitations of the existing regulatory framework, citing incidents like those involving Sam Bankman-Fried at FTX as evidence that the current structure is ill-equipped to govern the crypto space.

 

The Future of Crypto in US Politics

 

Ramaswamy’s departure from the presidential race leaves a void in terms of a candidate explicitly championing pro-crypto policies. His proposed regulatory reforms included a reduction in the SEC workforce and advocating for a more relaxed regulatory approach within the crypto industry. Ramaswamy’s vision extended to treating most cryptocurrencies as commodities outside the SEC’s jurisdiction. Members of the crypto community were quick to pay their respects to Ramaswamy, with Nic Carter, a general partner at Castle Island Ventures, hailing him as the “most talented” Republican candidate in a generation.

 

However, with Ramaswamy’s exit from the presidential race, the crypto community is left wondering who will champion their cause and advocate for sensible and forward-thinking regulation in the United States the way Ramaswamy attempted. As the 2024 election season unfolds, the fate of crypto-friendly policies in American politics remains uncertain.