Bitcoin Hits $100K, RBI Holds Rates, and Waymo Expands: This Week in Finance 🚀

Money Masters' Market Pulse Week 49

December 06, 2024

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Dear Money Master,

It’s been a landmark week as Bitcoin hit the historic $100K milestone, though it later retracted slightly below this level. This event marks a major moment for cryptocurrency enthusiasts and highlights the growing mainstream interest in digital assets. In addition, the U.S. labor market rebounded strongly in November, setting the stage for potential Federal Reserve rate cuts later this month. Tech also made headlines with Waymo’s ambitious robotaxi expansion, and earnings season brought mixed results, with Lululemon thriving internationally while American Eagle faced challenges.

In honor of Bitcoin’s achievement, our Deep Dive this week unpacks how Bitcoin and blockchain technology actually work—broken down in the simplest terms. 🧐

📰 Your Daily Financial Digest - December 6th, 2024

🌍 Economics:

  1. India Holds Interest Rates Amid Slowing Growth and Rising Inflation Risks 📊
    The Reserve Bank of India kept its benchmark rate at 6.50%, as inflation remains above the target and GDP growth projections were lowered to 6.6% for fiscal 2025. Despite slowing growth, the RBI ruled out immediate rate cuts. ReadMore

  2. OPEC+ Delays Oil Production Hikes to 2026 🛢️
    Citing weak global demand, OPEC+ extended output cuts of over 2 million barrels per day through Q1 2026. Despite the cuts, oil prices remain subdued, reflecting tepid demand growth. Read More

  3. November Jobs Report Shows Rebound With 227K Jobs Added 📈
    Nonfarm payrolls surged by 227,000 in November, recovering from October's low due to storms and strikes. The unemployment rate edged up to 4.2% as labor force participation dipped, bolstering expectations of a Federal Reserve rate cut later this month. Read More

  4. Treasury Yields Dip Amid Rate Cut Expectations 📉
    The 10-year Treasury yield fell to 4.14%, its lowest since October, as markets digested the jobs report. Declining yields reflect increasing bets on a Federal Reserve rate cut at its upcoming December meeting. Read More

💻 Technology:

  1. Bitcoin Briefly Hits $100,000 Milestone Before Retreating 📈
    The cryptocurrency crossed the $100,000 mark for the first time before profit-taking brought it down. Institutional interest and new SEC leadership fueled the surge. Read More

  2. Waymo Expands Robotaxi Operations to Miami 🚖
    The autonomous vehicle company announced plans to launch services in Miami by 2026, leveraging its expertise in navigating adverse weather. Waymo will first test vehicles with safety drivers in 2025. Read More

  3. Vodafone-Three Merger Gets UK Approval with Conditions 📡
    The $19 billion merger was approved on the condition of significant investments in 5G infrastructure and tariff caps to protect competition in the telecom market. Read More

💹Earnings:

  1. Lululemon Sees 9% Sales Growth as International Expansion Pays Off 🌎
    The retailer beat Q3 expectations with $2.4 billion in revenue, up 9%, driven by a 25% surge in international sales, even as U.S. growth slowed. Shares rose 8% in after-hours trading. Read More

  2. Ulta Beauty Beats Expectations, Raises Outlook Amid Holiday Optimism 💄
    Ulta’s Q3 earnings of $5.14 per share topped forecasts, driven by new products and digital innovation. The company slightly raised its full-year guidance but warned of a challenging consumer landscape. Read More

  3. American Eagle Stock Falls 13% on Weak Holiday Guidance 👖
    Despite a strong back-to-school season, the retailer issued subdued forecasts for Q4 due to inconsistent demand, with full-year sales growth revised down to 1%. Read More

🔍 Deep Dive: How Bitcoin and Blockchain Work (Simplified)

Bitcoin works because of blockchain—a clever system that records and verifies transactions using many computers (called nodes) worldwide. Let’s break it down step by step:

1. The Transaction

Imagine Alice wants to send 1 bitcoin to Bob. She broadcasts her transaction (how much she’s sending and to whom) to the Bitcoin network. This message includes her digital signature, like a secure stamp proving the transaction is hers.

2. The Blockchain

The blockchain is like a giant, shared notebook that records all transactions. Each "page" in this notebook is a block, and when a block is full, it’s sealed and added to the previous blocks, forming a chain. Once a block is added, it can’t be changed, making the system super secure.

3. The Nodes and Verification

Nodes are computers that keep copies of the blockchain. When Alice sends bitcoin to Bob, the nodes check:

  • Does Alice have 1 bitcoin to send? They check the blockchain for her balance.

  • Is this transaction valid? They ensure her digital signature matches her wallet.

If everything checks out, the transaction is grouped with others to form a block.

4. The Miners and the Puzzle

To seal the block, miners compete to solve a complex math puzzle. Think of it like a giant sudoku. The first miner to solve it shares the solution with the network, and all nodes agree on the answer (called consensus). This process is called proof of work.

5. Adding the Block

Once the puzzle is solved, the block is added to the chain, and everyone’s copy of the blockchain is updated. Alice’s transaction is now permanent, and Bob has his bitcoin!

Example: Sending Bitcoin

  • Alice starts with 5 bitcoins. She sends 1 to Bob.

  • Nodes verify she has enough and the transaction is valid.

  • Miners add the transaction to a block, solve the puzzle, and update the blockchain.

  • Bob receives the bitcoin, and Alice’s balance is now 4.

This decentralized system means no single person controls bitcoin, making it secure and trustworthy. However, it’s energy-intensive, and prices can be volatile, so investors need to be cautious. 💡

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To your financial empowerment, The Money Masters Team

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Disclaimer: This information is for educational purposes only and should not be construed as financial advice. Always conduct your own research or consult with a financial advisor before making investment decisions.