Bitcoin driving economic prosperity

June 28, 2019

–It was a pretty bland day yesterday unless you happened to be trading bitcoin.  A parabolic rise in June took BTC from around 7500 in the beginning of the month to over 14000 Wednesday, only to crash  3000 yesterday to around 11000.  After exhaustive research (feeding the data through our proprietary models) we’ve developed a working theory of bitcoins ebbs and flows.  Hackers are targeting vulnerable Florida cities with ransomware.  These cities are buying bitcoin to pay the ransoms, thus driving up the price.  Having received bitcoins, the perpetrators recycle the bitcoin back into the real economy, buying Teslas and Beyond Meat burgers and the services of tattoo parlors.  This temporarily drives the price of bitcoin back down.  Initial targets like Baltimore had to be changed because strained city finances caused officials to balk at paying.  However, wealthy Florida residents who have fled the high tax districts in the north are more amenable to paying the fines.  It’s like Bastiat’s broken window fallacy for the modern, interconnected, world. Economic vibrancy with an added element of wealth redistribution. The only thing left to do is buy CrowdStrike.–Yields fell yesterday with tens falling 4 bps to 2.007% as auctions ended and we wrap up the month/quarter.  Eurodollar strip rose 3 from reds thru golds.  
–News today includes Personal Income and Spending, expected +0.3 and +0.5.  Core PCE Deflator +0.2% with yoy Core expected 1.5% from 1.6%.  Chicago PMI expected 53.5.  The big event happens this weekend as Trump and Xi meet.  There has been sizable buying of EDU9 puts in the past few sessions, with the hope that the meeting goes well and the Fed tries to hold fire on easing.        

–Lake City FL paying 42 bitcoins (roughly $480k), this from June 25.

–Riviera Beach also in Florida paid $600k in bitcoin. 

–Key Biscayne data breach earlier this week….

From the Guardian
“We have an exponentially increasing problem,” said Katie Moussouris, founder and CEO of Luta Security, which helps businesses and governments work with hackers to identify vulnerabilities. “We don’t have an exponentially increasing workforce. If we don’t see cities and towns … start pouring a bunch of resources into hiring more people, we are going to see it happening over and over again.”

https://www.theguardian.com/cities/2019/jun/03/ransomware-attacks-hackers-cities-baltimore

From the NY Times

It was the second city to agree to a large ransom in two weeks. Riviera Beach, in Florida’s Palm Beach County, signed off on an extraordinary $600,000 payment last week, also in Bitcoin, a cybercurrency that is difficult to trace.

ORLANDO (CBSMiami/AP) — The Village of Key Biscayne reported a data breach earlier this week, becoming the third Florida city to do so in the last few weeks.

The Village of Key Biscayne hacking comes a week after Riviera Beach in South Florida agreed to pay $600,000 in ransom to hackers last week.

Lake City pays 42 bitcoin ransom to cyber attacker to restore hacked systems

The city’s insurance began negotiating with the attacker, resulting in an agreement to pay 42 bitcoins–roughly $480,000.

Posted on June 28, 2019 at 5:15 am by alexmanzara · Permalink
In: Eurodollar Options

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