5 Things You Need to Know to Start Your Day: Americas

Good morning. It’s Bitcoin ETF decision day and the temperature is rising after the SEC’s X account was hacked. Plus, investors are clamorin [View in browser]( [Bloomberg]( Good morning. It’s Bitcoin ETF decision day and the temperature is rising after the SEC’s X account was hacked. Plus, investors are clamoring for new bonds, the oil market is indecisive and fake news is a key worry this year. Here’s what people are talking about. — [Sofia Horta e Costa]( Tell us what you want to see in the Five Things newsletter! Please [take our quick survey here.]( Bitcoin ETF deadline It’s today — the long-awaited deadline for the US Securities & Exchange Commission to vote on spot-Bitcoin ETF applications. If crypto markets weren’t dramatic already, the SEC’s X account [was hacked on TuesdayÂ](and a fake post was published claiming that the agency had approved the plans. The largest digital asset surged almost 60% in the final quarter of last year on bets that the products will help bolster Bitcoin demand. It’s why for some observers, the question now is whether the actual green light could become a reason for speculators to [trim some profits]( — especially as it remains uncertain whether the ETFs will succeed in making Bitcoin more of a mainstream asset. SEC Chair Gary Gensler [warned on X that people considering]( investing in crypto assets should ``be cautious’’ and there are ``serious risks involved.’’ Here’s [Bloomberg Daybreak’s podcast covering]( the Bitcoin drama. Fake news in election year Speaking of false information, a survey by the World Economic Forum of more than 1,400 risk experts, policymakers and industry leaders showed fake news poses the [biggest danger to the world]( in the next two years. That’s especially pertinent in this year’s big election year, with more than 3 billion people heading to the polls in what my colleagues counted as [40 national elections](. The calendar will kick off with Taiwan on Saturday, where the future of relations with China is one of the [biggest issues at stake](. The rhetoric between Beijing and Taipei is heating up ahead of the vote, even as relations between the US and China show [some signs of stabilization](. As a reminder, the World Economic Forum will next week host the world’s elite in the Swiss resort of Davos. Bumper bond demand Appetite for newly-issued bonds is off the charts as investors look to lock in yields before central banks cut interest rates. It was [Spain’s turn today to receive]( a record €130 billion ($142 billion) of bids for a 10-year sale, exceeding a previous all-time high set nearly four years ago. That’s after Tuesday’s [record day for issuance in the primary market]( across Europe and bumper demand for deals from governments in Belgium, the UK and Italy. In the US, Tuesday’s $52 billion auction of three-year notes was awarded at 4.105%, the lowest yield since May. [Debt supply](will ramp up over the next several weeks, with governments from the US, the UK, the eurozone and Japan due to sell a net $2.1 trillion of new bonds to finance their 2024 spending plans — a 7% increase from last year. Some bond analysts argue that it’s only a matter of time before markets [become nervous]( about the current supply dynamics. Volatile oil US stock-index futures [aren’t doing much]( but oil is swinging all over the place. Brent is nearing $77 a barrel, [reversing an earlier gain]( and following Tuesday’s advance of almost 2%. Prices have seesawed since the start of the year as traders attempt to gauge the outlook for the coming quarters. But it’s not a clear trend in either direction: slow global growth should translate to lower demand, and therefore lower prices, but [more attacks from Houthis on vessels in the Red Sea](are raising the risk that Middle East supply could be disrupted -- translating into higher prices. Smaller US inventories are also becoming a factor. As the market’s indecision continues, [here’s a good read]( on how Russia’s record oil drilling shows the country’s resilience to sanctions. And Bloomberg Opinion’s Javier Blas takes a look[at themes for the oil market]( in 2025. Yep, 2025. Coming up… The final read for US wholesale inventories is due for November. We’re also expecting weekly mortgage applications data for the period ending Jan. 5, the first such release of the year. New York Fed President John Williams will speak on the 2024 economic outlook later at an event in White Plains, New York, with a Q&A session due after. Will an aging society increase or decrease global demand for bonds? Share your views in the latest MLIV Pulse survey linked in the image below. What we’ve been reading This is what’s caught our eye over the past 24 hours. - Boeing’s CEO fights back tears and [admits mistakes]( over the 737. - A narco terror campaign is [worsening violence]( in Ecuador. - Poland has been thrown into a [constitutional crisis](. - TSMC’s sales [stop falling](, helped by AI demand. - John Authers looks at [Taiwan’s election]( through a markets lens. - Jane Street nets $7.3 billion in [trading revenue]( in nine months. - Activist investors are getting ready [to shake up]( corporate Japan. - The US suffered a record number of [weather disasters]( in 2023. And finally, here's what Joe’s interested in this morning Well for about 10 seconds yesterday it looked like a Bitcoin ETF had approved. Then [you know what happened next already](. Some announcement of something is expected this week still. At this point, there's probably not a ton new to say on the matter. But a point I've made in the past, which I still think about sometimes, is that when it comes to any cryptocurrency, price and market cap is very important. By that I mean, there is a connection between the actual functioning of a cryptocurrency and its dollar price value at any given moment. The reason is, imagine if a cryptocurrency ever actually become a means of paying for things. Whether we're talking about a coffee at Starbucks, a massive financial transfer, or some in-game virtual item, in theory currencies have to be able to fulfill a spending function. But at low prices and low market caps, this is difficult because transacting in the currency will distort the price. If I buy a cup of coffee with crypto, there are actually three transactions happening at once: 1) I buy the crypto with fiat 2) I transfer the crypto to a coffee shop in exchange for coffee 3) The coffee shop sells the crypto for fiat You can't do this in a tiny, illiquid coin, because that first step and that last step would both have distortionary effects on the underlying price, and the parties involved would pay a significant price in slippage or volatility. There's always a lot of talk about "scaling" in crypto. Various Layer-2 technological solutions or other techniques to improve the volume of throughput. And that's all fine and well. But the most important element of of scaling is "line go up", so that transactions can occur that don't wildly swing the price when they take place. So in theory, the higher the price of the coin and the more permanent money speculators have allocated to it, the more stable it should be and the more it might make sense to rely on it as a transacting currency. Now there are of course many other issues with paying for coffee with say Bitcoin (block times, and fees, and inconvenience, and also... what's the point?). But on some level, vehicles that bring more money into a given coin do help with scaling its functionality. Joe Weisenthal is the co-host of Bloomberg’s Odd Lots podcast. Follow him on X [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? 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