Crypto’s Long, Hard Fall This Winter

Key takeaways

Bitcoin's failure to serve as a hedge against inflation raises doubts about its value as a safe haven asset.
Big tech companies are heavily investing in AI to stay competitive, though investor sentiment remains cautious.
The release of Epstein's files is causing major political repercussions for public figures, affecting their reputations and roles.
Preliminary data indicates a challenging start to 2023 for the U.S. labor market, with layoffs hitting a decade high.

Summary

Bitcoin's Price Decline

Bitcoin has recently fallen below $64,000, hitting its lowest level in over a year. The anticipated role of Bitcoin as a digital gold hedge against inflation has not materialized as expected. Instead of acting as a safe haven, Bitcoin has underperformed compared to traditional assets like gold, leading to concerns among investors regarding its value.

Big Tech's AI Spending Surge

Major tech companies, including Meta and Google, are announcing significant capital expenditures focused on artificial intelligence (AI). Meta plans to invest up to $135 billion, while Alphabet has projected approximately $185 billion, doubling last year's spending. Investor confidence is mixed, with some showing concern over the sustainability of such spending in an uncertain economic climate.

Political Fallout from Epstein Files

Recent releases of Jeffrey Epstein's files have significant implications in politics, particularly for UK Prime Minister Keir Starmer, who is facing scrutiny for appointing Peter Mandelson as ambassador to the U.S., given Mandelson's ties to Epstein. Additionally, Brad Karp, chair of the prestigious law firm Paul Weiss, has resigned following revelations about his connections to Epstein, raising questions about his firm's future.

Labor Market Weakness

The government shutdown has delayed the January jobs report, yet early data suggest a rocky start to the year for the labor market, with job openings decreasing and significant layoffs announced. These developments have contributed to a decline in major stock indexes, reflecting investors' worries about the economic outlook.

Show notes

P.M. Edition for Feb. 5. Even as stocks have been on a tear in recent months, the price of bitcoin has fallen, today closing below $64,000, its lowest level in more than a year. Journal reporter Vicky Ge Huang talks about why investors seem to have soured on bitcoin and crypto. Plus, the latest batch of Epstein files has led to political pressure on U.K. Prime Minister Keir Starmer and led Brad Karp, leader of the law firm Paul Weiss, to step down as chair of the firm. We hear from WSJ national legal affairs reporter Erin Mulvaney about what his resignation means for Paul Weiss. And the government’s January jobs report may be delayed because of the government shutdown, but other sources of data indicate it probably wasn’t a great month for the labor market. Alex Ossola hosts.

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