- A “Fed Coin” is almost ready. Here’s what it means for bitcoin
- Genetic sequencing for the masses…
- Can CRISPR cure damaged joints?
Welcome to our weekly mailbag edition of The Bleeding Edge. All week, you submitted your questions about the biggest trends in technology. Today, I’ll do my best to answer them.
If you have a question you’d like answered next week, be sure you submit it right here.
But first, I have to share one more insight for the week…
“Muscle memory” is a hard thing to change.
I use the term loosely to mean the systems or processes that organizations and people become used to.
Intel is a perfect example. It spent decades building its muscle memory for developing its semiconductors. Its methods worked fantastically for decades… until about 10 years ago.
About a decade ago, computing shifted from desktop computers to handheld mobile devices. Intel infamously missed the largest shift its industry has ever seen.
And if things couldn’t get worse for the company, it also missed the second-largest shift – the shift to artificial intelligence (AI) and machine learning (ML).
Intel didn’t recognize what was happening again in its own industry, and it didn’t create the products that the market needed to run AI/ML software.
Intel is now years behind because of its old habits… decades of muscle memory.
The same problem exists in ecosystems.
Silicon Valley is a perfect example. Since Intel’s birth, there has been no better place on earth to generate ideas, start a company, find risk-tolerant capital, and grow into a multibillion-dollar company.
The talent, ideas, capital, venture capitalists, and technology are all in the same place. It’s a microcosm unlike any other on earth.
Until now. A major catalyst came along that made us realize that there has been a lot of muscle memory.
That catalyst, of course, is COVID-19. And we are already seeing the “second-order” effects on Silicon Valley. (Every action has a consequence, and each consequence creates another consequence.)
Google already threw the towel in and proclaimed that offices won’t reopen until July 2021.
As it turns out, we don’t need to physically work in centralized offices to keep a company running properly. Google’s business is better than ever.
And just a couple days ago, one of high tech’s greatest success stories, Palantir, announced that it would relocate its headquarters in Palo Alto, California, to Denver, Colorado.
This was something that the CEO had been thinking about already. He has been quoted on his dislike for the “increasing intolerance and monoculture of Silicon Valley.”
I’ve worked and invested in Silicon Valley companies for three decades now. I know what he is talking about.
It is rarely discussed openly, but it is a well-known problem. The Valley and San Francisco are crowded, expensive places with high taxes. They have a ridiculously high cost of living due to real estate prices, terrible local government, and the kind of cultural problems that Palantir’s CEO referred to.
Yet companies have stayed and suffered through it all because of muscle memory.
Companies like Palantir needed a catalyst to force the issue. They needed to make the final, bold decision to make the move away from Silicon Valley.
And this is just the start. Working environments and capital formations for technology companies will continue to change.
This is a healthy development that has been a long time coming. It will lead to a far more distributed workforce and a better quality of life for many who work in the tech space.
Now let’s turn to our mailbag…
How will a “Fed Coin” affect cryptos…
Let’s begin with a reader who wants to know more about the impact of a central bank digital currency (CBDC)…
I would like Jeff to weigh in on this. I’ve written and asked, I but haven’t seen any information in letters regarding how a Fed Coin could affect cryptos and [precious metals].
Thank you for helping to get this!
– Mary L.
Hi, Mary, and thanks for sending in this question. As I wrote yesterday, Federal Reserve governor Lael Brainard just announced that the Fed is working closely with the Massachusetts Institute of Technology (MIT) to develop a central bank digital currency (CBDC). In fact, she revealed that the project is several years underway.
That likely means we can expect a “Fed Coin” to be released sometime over the course of the next few years.
As for your question, the effect this Fed Coin will have depends on the cryptocurrency.
For example, bitcoin is the “reserve currency” in the digital asset space. A finite number of bitcoins can ever be mined, unlike the U.S. dollar or any other fiat currency.
A Fed Coin would have a monetary policy similar to the U.S. dollar’s, as it will be controlled by the government. We can expect the government to “print” more and more U.S. dollars… and it will do the same thing with a digital version of the U.S. dollar.
This will be good for a digital asset like bitcoin, which has a limited supply. Bitcoin’s monetary policy is written into its code, and we all know what it says.
Other successful blockchain projects with cryptocurrencies will also continue to do well. Those projects function with the use of their own cryptocurrencies, and I doubt the creation of a Fed Coin will impact them.
The one area of cryptocurrencies that will be most impacted is stablecoins.
Stablecoins are cryptocurrencies backed by a specific asset. A stablecoin can be backed by the U.S. dollar.
For example, Tether (USDT) is a popular U.S. dollar-backed stablecoin, as is TrueUSD (TUSD). Both are essentially backed one-to-one with U.S. dollars.
Stablecoins are very useful cryptocurrencies that allow investors and speculators to convert their digital holdings into a “stable” digital asset without having to convert holdings back into fiat currencies. This is useful because converting from fiat to digital and back again is expensive to do.
With a Fed Coin – almost certainly a digital representation of the U.S. dollar – there would be very little use for other U.S. dollar-backed stablecoins any longer.
My key assumption, however, is that the U.S. government would allow “Fed Coins” to trade on cryptocurrency exchanges and function with popular digital wallets. If the U.S. government restricted this, then there would still be a need for stablecoins.
And something positive would come out of the widespread adoption of a Fed Coin.
With a digital asset replacing paper money, theoretically, there would no longer be a fiat-to-digital conversion cost. I envision that transaction fees would drop dramatically, making it simple and very cheap to convert from a Fed Coin to bitcoin and so on.
This would be a fantastic development for all consumers and investors.
As for gold, Fed Coin or not, it will continue to trade based on supply and demand, monetary policy, and fear (or lack thereof).
And there is one more thing I would mention…
State-backed and even company-backed digital currencies are inevitable. But 99% of investors are so distracted by a “Fed Coin” that they’re missing the bigger picture.
When these new digital currencies do arrive, it will raise the profile of one technology: blockchain. And investors positioned in a handful of blockchain stocks could see triple-digit returns in the years ahead.
I’ve outlined my favorite blockchain investments in a free presentation. You can watch it right here.
Getting our genomes sequenced even if we’re healthy?
Next, a reader poses a question about getting our genomes sequenced…
Thank you for sharing your research, analysis, and insights. Your daily post is one of my top favorite reads.
Recently you wrote about genetic sequencing and tailored medicine. You mentioned that anyone could get their genome sequenced for an affordable cost.
That got me wondering: As a preventative step, should a (normally healthy) family get it done now in order to detect potential future issues and address them in advance?
Will doctors participate in applying preventative measures based on the results, or will they only act when a symptom surfaces?
– Tomer K.
Hi, Tomer, and thank you for your kind remarks. Your question is very astute. I’ve written about genetic sequencing a lot in my research – and for good reason. Genetic sequencing is one of the key technologies on the road to precision medicine.
Precision medicine is an emerging approach to treat and prevent diseases by considering each person’s genes, environment, and lifestyle.
In other words, we won’t have to wait until we present symptoms of a disease before we seek treatment. Our genes can alert us to a future condition years before symptoms manifest.
And if we get sick, we won’t use a “one size fits all” approach to treating the disease. Currently, many treatments just address the symptoms, not the underlying causes. Precision medicine will cure the underlying cause of the disease.
And nowadays, it’s cheaper than ever to sequence a human genome. Think of genome sequencing as creating a “blueprint” of our genetic makeup. We can spot genetic mutations from a single genetic sequencing of our DNA. That means we can diagnose these genetic diseases quickly and cheaply.
In 2001, it cost $100 million to sequence a human genome. Today, it’s a tiny fraction of that – less than $1,000.
And as I wrote about back in March, a Chinese company even claims to be able to sequence a genome for $100.
The $100 price point changes the game for health insurance companies. At just $100 per patient, health insurance providers can cover full genome sequencing for all patients. This will dramatically save costs on unnecessary and ineffective treatments. More importantly, it will result in better outcomes for patients.
Doctors will no longer have to make educated guesses when patients come in sick. Instead, they can run genetic tests and determine with certainty whether a patient’s illness is the result of a genetic condition.
That means patients will no longer have to suffer the trial-and-error process. Instead, they will get the right treatment to target the root cause of their illness, not just the symptoms.
And we’ll see health care costs plummet. That’s because it will no longer be necessary to run extensive tests, searching for the problem, or to have patients try out different drugs, looking for what works. Instead, full genome sequencing for $100 will provide the answers.
Going back to your question, Tomer – yes, I am a firm believer that if we want to be proactive about our own health and the health of our family, we should sequence our genome.
Better yet, the younger we do it, the better. In a matter of years, I believe that the standard process for health care will involve healthy (or asymptomatic) individuals having their genomes sequenced and analyzed. That way, they can understand if there are any areas they need to be concerned about.
Insights learned and shared by a geneticist can allow us to get in front of future disease. Sometimes, that might mean a lifestyle change, a dietary adjustment, or eventually a therapy that removes or corrects a genetic mutation that would have eventually caused a disease.
I’m going to be writing a lot more about this topic in The Bleeding Edge soon. I recently underwent some advanced screening myself, and I am preparing to share my experiences and insights.
It might be as early as next week, so please stay tuned. I’ll have a lot more to share on this subject that I’m sure readers will find interesting.
Will joint replacements become obsolete?
Let’s conclude with a question about how genetic therapy can help make legacy treatments redundant…
I love your research reports and today’s report of the two-year-old with no tears made me think of this; I have a knee that has been injured, resulting in the cartilage on one half disappearing, which is beginning to become a candidate for a knee replacement.
I am not alone with this condition and am wondering if the progress in the genome research area is likely to bring treatment that will cause the cartilage to regenerate and thus make joint replacement redundant. Thank you for your response to this.
– Ian S.
Hello, Ian, and thanks for writing in. I’m sorry to hear about your knee. I had surgery last year on my left knee. It wasn’t a replacement, but it was a long and painful recovery process.
I worked hard at physical therapy, which was the secret to my success. The good news is that with hard work, and about six months, you’ll probably be as good as new.
There are some studies that aim to address the type of trouble you’re having.
Some studies looking into gene therapies have successfully delivered therapeutic proteins to help repair damaged cartilage. And impressive advances have been made in that area over recent years. At present, the challenge appears to be achieving optimal concentrations of the target proteins to create greater and lasting effects.
Other studies have looked at using CRISPR genetic editing – one of our favorite topics in The Bleeding Edge – to deliver stem cells known as SMART cells (Stem cells Modified for Autonomous Regenerative Therapy) to cartilage damaged by arthritis.
Those cells are designed to develop into new cartilage cells that will actually produce an anti-inflammatory response to help protect against chronic inflammation and preserve the joints.
These studies are all still in the early stages. There’s a ways to go before we will be able to stop using joint replacements as a treatment. But we’re on the right track, and we absolutely have a lot to look forward to in this area.
And the good news is that the field of biotechnology is accelerating at a faster pace than ever before.
As I’ve said, the COVID-19 pandemic has shined a light on the incredible potential of biotech. We’re seeing incredible progress on a monthly and even weekly basis toward treating many different diseases and conditions.
And that’s going to enable us to live longer and healthier than ever before.
Good luck with your surgery.
That’s all we have time for this week. If you have a question for a future mailbag, you can send it to me right here.
Have a good weekend.
Editor, The Bleeding Edge
Like what you’re reading? Send your thoughts to [email protected].