Economics in the News – Nov. 7–13, 2022
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Bitcoin is experiencing one of the biggest crashes in history. Research from Bank of America notes that the latest crypto crash is the fifth-worst all-time and the worst since the 1970s. Bitcoin – the largest cryptocurrency – has declined 77 percent since it traded at $70,000 last November. The crypto market has plummeted from $3 trillion to $900 billion.
The cryptocurrency crash is reminiscent of the dotcom crash from March 2000. The two have similarities in their rise in popularity came in bull markets but like cryptocurrencies, companies raised a lot of cash without a business plan. [FORTUNE]
o With gas prices soaring, some consumers are turning to electric cars for their mode of transportation. Registration outside California, which has 39 percent of all U.S. electric vehicles registered, is up 50 percent. Battery-powered vehicles are the fastest-growing segment of the auto market, with 70 percent higher sales through October compared to last year. Sales of conventional cars fell 15 percent over that same period.
Costs are factors in consumers decisions to purchase electric cars, as driving on electricity is generally less expensive. High gas prices have convinced customers that buying an electric vehicle can save costs on gas and oil changes. However, the lack of a charging network in rural areas can make a long-distance road trip difficult to make. [The New York Times]
o Have you been tempted to buy alt-meat substitutes? The market for meat substitutes that led to consumer curiosity and were seen as an alternative to do less harm to the environment, animals and their health has softened. Sales of alt-meat brands were 10 percent lower in the past year with some companies, such as Beyond Meat, announcing it would lay off 19 percent of its workforce.
With the global consumption of meat doubling since 1990 and the estimated rise to 374 metric tons of meat by 2030 by the United Nations Food and Agriculture Organization, why have alt-meat brands struggled. The Washington Post gives five explanations which some include price, too many players in the market, and restaurants not buying in. [The Washington Post]
o Travelers headed home for the holiday season will spend more this year. Travel experts expect huge demand this year, as airlines are still operating fewer flights than in 2019. Government data suggests that airfare costs 43 percent more this year compared to last year. Meanwhile, hotels are still struggling with labor shortages, another reason for the higher prices. While the price for car rentals has declined since peak 2021, prices remain elevated.
The number of travelers going through security checkpoints was 95 percent of 2019 traffic, according to Transportation Security Administration officials in October. It is expected that this year’s holiday travel might top pre-pandemic levels. [Associated Press]