Dispatch #33: J.P. Morgan Takes the Orange Pill

In this patch of your weekly Dispatch:

• J.P. Morgan set to begin offering a Bitcoin product
• Tesla sells 10% of its crypto stash
• $15 minimum crypto purchases on the Nexo Exchange

The Big Idea

J.P. Morgan: If You Can’t Beat ‘Em…

J.P. Morgan CEO Jamie Dimon has been one of Bitcoin’s most vocal critics. He has called it a fraud, said it was worse than tulips, and threatened to fire any trader caught trading BTC.

Now it’s true that the firm has actively invested in the wider blockchain space – even launching their own internal stablecoin JPMCoin for settlement last year and a cryptocurrency exposure basket back in March 2021. Dimon himself had also softened his tone, saying more recently that Bitcoin “wasn’t [his] cup of tea.”

But ahhh how sweet it is to see the pressure of the market doing what it does best and forcing the previously stuck-in-the-mud firm to change their tune. According to Coinbase, JPMorgan is soon to launch an actively managed Bitcoin product for their wealth management clients. The offering could be live as early as this summer. News also broke that the investment bank is joining hands with DBS Bank and Singapore’s sovereign wealth fund Temasek to create a joint venture for payments and settlement.

Remember, this is the biggest bank in America, with more than $3T in assets. If you want to see what mainstream adoption looks like, this is it.

The Latest In…

Tesla’s Institutional Buy

Say it ain’t so, Elon! On Tesla’s earnings call on Monday, the company revealed they had sold 10% of their crypto – at least of the amount they told us about to much fanfare in February. Bitcoin Twitter was saddened and betrayed. The thing is the story is a little more complicated than it seemed at first glance. Both Musk and CFO Zach Kirkhorn – self-pronounced ‘Technoking of Tesla’ and ‘Master of Coin’, respectively, said that the sale was largely about validating the liquidity of the market. Due to semiconductor scarcity and port shortages, Tesla needs to be able to add more resources quickly, and actually lauded BTC for how liquid it was. It’s hard not to feel like the whole thing made them more, not less bullish on Bitcoin.

The Latest In…

Nexo Exchange

We’ve got some great news! You can now buy crypto for or swap between assets worth as little as $15 on the Nexo Exchange! And as if that weren’t enough, we’ve also doubled the maximum transaction amount to $100K on as many orders as you wish. Perfect when you want just a little bit (or a lot) more NEXO Tokens or when you’re stacking BTC for your grandchildren. Happy big swapping, folks!

The Latest In…

Nexo, Through the Ages

So, you’ve probably heard, but we’re turning three today. Grand old age in crypto, this is — we’re practically senior citizens. Thematically — because we’re three-whopping-years-old — we’ve got three activities in store for you. Join the celebrations by either entering our $3,000 giveaway, donating towards an awesome cause and enjoying Jimmy Kimmel, Mark Rober, Jack Black and plenty of other cool folks’ antics, or watching our boss Antoni get grilled by the Nexo team in a pretty uncomfortable, special edition AMA. Choose wisely. Or just choose all — easiest.

The Latest In…

Ethereum

Here’s something epic and, honestly, very validating of the evolution of the Ethereum blockchain. The European Investment Bank, which is the investment division of the European Union, is pricing $100M of two-year investment bonds on the Ethereum blockchain. This is acknowledgment of the underlying technology at the highest level and the banks involved in the offering include Goldman Sachs, Banco Santander, and Societe Génèrale.

The Latest In…

NFTs

NFTs are in a weird place. On the one hand, the markets have been – at best – really choppy and – more realistically – on a pretty clear downward trajectory. That hasn’t stopped celebrities from continuing to pour into the space, however. In the last week or so alone, we’ve had NFT drops from Ellen, Eminem, and an NFT-related controversy at the Oscars. What’s more, Binance announced that it is launching an NFT platform this summer. Gotta say it feels like this is still just getting started.

The Latest In…

Bitcoin and Central Banks

It’s been a bit of a wild week for Bitcoin and central banks. Let’s start with Turkey. A few weeks ago, they announced that using crypto as a currency would be banned starting April 30. Then they sort of walked that back, saying bannings wouldn’t help. Now it sounds like they might be planning to create a central custodial crypto bank in order to eliminate counterparty risk. Which sort of sounds to us like a central bank custodying crypto? Bullish. Another similar story comes from Iran, where financial institutions are now allowed to use Bitcoin mined by approved miners to pay for imports.

The Week’s Most Interesting Data Story

Blue Chip Crypto Correlation on the Decline

It’s inevitable that in every crypto bull market, people ask “what’s different this time?” Well, here’s something really fascinating. For nearly all of 2019 and 2020, the correlation between the top ten crypto assets was extremely high – between 60% and 80%. In other words, everything in the industry sort of moved together. Not so for 2021, where blue chip correlation has been steadily on the decline, dipping all the way down meaningfully to under 40%. This is a sign of a mature market, where people are actually distinguishing assets rather than buying (or selling) blindly.

Hot Topics

What the Community Is Discussing

Ten years ago this week, Satoshi vanished. Fascinating historical read.

Last week’s dual dips were pretty brutal. There was a fair bit of discussion about how the two moves down were and weren’t alike.

BTC isn’t the only asset capturing macro attention. Check out this note from JP Morgan about ETH.

Our Take

@AntoniNexo This Week

• What does the future of crypto lending look like? Are traditional banks sticking around? Award-winning journalist, author, and futurist Paul Barron hosted Antoni earlier this week to talk CeFi lending. Watch the Tech Path video podcast and prepare for the future.
• DOGE. Dogecoin’s market cap is $40B but “value is in the eye of the beholder”, commented Antoni to Bloomberg about the growing popularity of the controversial cryptocurrency.
• WTF are NFTs? Although in Dispatch we’ve made sure you are up to speed with everything NFT-related, Antoni was invited to help break down the basics in this Raconteur piece, part of The Times’ special Trading Strategies report.

What to Watch for Next Week:

• Is Ethereum going to hit $3,000?
• What will happen to BTC after this month’s $4.2B options expiry?
• Will any more companies announce crypto programs on their earnings call?