Two for Two


 ​​​On Friday, January 12th the two-year United States Treasury Note closed trading at 5 PM New York time with a yield of 2.002%. This security has not traded with a “two handle” since September of 2008.


Finance people can sometimes be offended when activities like stock investing are likened to betting. Some would be quick to point out nuances such as betting being won largely by luck whereas investments are influenced by factors that can be studied and analyzed. Perhaps they are simply reacting to the negative connotation betting carries.

Although cryptocurrencies are the ‘it’ topic of the moment, the technology that makes them possible—blockchain—is having an equally successful run. Blockchain uses a decentralized network of nodes to handle processing and verify transactions, creating blocks of data that form a public, unalterable ledger of every transaction that was logged on the network. Additionally, the technology has proven itself an effective tool to build applications, offering significant advantages over existing infrastructure.

Though bitcoin’s existence spans a relatively short 10-year period, it has gone through many stages of growth. The price of one bitcoin has skyrocketed and crashed several times, but the cycle of interest has always seen its trajectory rise upwards over time. This steady (and often volatile) trend has taken the seminal cryptocurrency to new heights, but its relationship with participants is always changing.

In the aftermath of the 2008 financial crisis, countries all over the world suffered dire consequences. The irresponsibility of the globe’s biggest banking institutions, institutional investors, regulators, and consumers plunged economies in the United States, Europe, and Asia into a panic. The blame lies with those who exercised poor judgment in their creation and sale of shoddy derivative assets, but also with regulators for perpetuating a broken system of opacity

The trading paradigms that dominate today’s investing landscape have undoubtedly served some of us well. For those who play by the rules, buying options or futures contracts is no strenuous exercise, and there is a huge market open at all hours of the day to serve willing participants. However, no matter how streamlined these practices are, or how fast online platforms become, the commodities trade will remain fragmented from bottom to top unless something changes.