Dispatch #57: Battle of the Bankers on Bitcoin
In this patch of your weekly Dispatch:
- What bankers think of Bitcoin and crypto
- A big week for crypto adoption at Nexo
- The US is now number one in Bitcoin mining
The Big Idea
Dueling Takes on Bitcoin, Circa 2021
Ahhh, Jamie Dimon. Although Bitcoin is up like 7,000% since the first time he ragged on it, he just can’t miss an opportunity to take a shot. This week, the JP Morgan Chase CEO said “personally, I think Bitcoin is worthless” and called into question whether its supply will actually stop at 21 million. This is, meanwhile, a week after his strategy team put out a note that said “Institutional investors appear to be returning to Bitcoin, perhaps seeing it as a better inflation hedge than gold.” JPM is also now offering Bitcoin and crypto-related products.
Jamie wasn’t the only big bank CEO to have an opinion this week, however. On a third-quarter earnings call, James Gorman, CEO of Morgan Stanley, said “I don’t think crypto is a fad. I don’t think it’s going to go away. I don’t know what the value of Bitcoin should or shouldn’t be. But these things aren’t going away, and the blockchain technology supporting it is obviously very real and powerful.” Morgan Stanley also is offering crypto products like direct Bitcoin access for wealthy clients as of this year.
But wait! It continues. Citigroup CEO Jane Fraser said “We’re fairly cautious around crypto as a bank. We proceed with great caution on that one as to where the value is and isn’t. I am frankly much more excited about the technologies behind crypto than some of the products themselves.” Love a good throwback to the “blockchain, not Bitcoin” days. And she wasn’t the only one!
Blackrock CEO Larry Fink threw his hat in, saying he’s “more on the Jamie Dimon camp” and reiterated his asset agnosticism "I'm not a student of Bitcoin and where it's going to go so I can't tell you whether it's going to $80,000 or zero. But I do believe there is a huge role for a digitized currency and I believe that's going to help consumers worldwide.”
Ultimately, this is a great example of watch what they do, not what they say. Blackrock started trading Bitcoin futures in April. Morgan Stanley announced Bitcoin funds in March. JPMorgan opened crypto trading to all wealthy clients over the summer. Citi announced that they were considering Bitcoin futures trading in August.
So sure, guys, continue that public skepticism while your organizations race to catch up.
The Latest In…
Nexo x Crypto Adoption
Got a bank card? Got your sights set on $BTC, $NEXO, $SOL, or any other cryptocurrency we support on the Nexo platform?
If not, it’s time to contemplate your life choices. #NotFinancialAdvice
If yes, we think we have just released THE feature for y’all. You can now easily and instantly buy 18 cryptocurrencies on the Nexo platform with your Visa or Mastercard. The best part? You start earning high yields on your new crypto immediately!
The Latest In…
It wouldn’t be 2021 if a week went by without serious regulatory intrigue. Here’s just a small sample of what went down:
- The Biden Administration has prepared an executive order dealing with cryptocurrencies but is still weighing whether to release it.
- The UK’s gambling regulator is looking into Sorare’s fantasy soccer league.
- Coinbase and venture firm Andreessen Horowitz have both released public policy proposals and crypto regulatory frameworks to add industry voice to the Washington DC conversation.
- Uniswap Labs has hired Hari Sevugan to manage public facing communications. Sevugan has worked for the Democratic National Committee, as deputy campaign manager for Mayor Pete Buttigieg’s presidential campaign, and as President Barack Obama’s senior spokesperson in 2008.
- SEC Commissioner Caroline Crenshaw came out against her fellow commissioner Hester Peirce’s safe harbor concept. (Love you, Crypto Mom)
- The Bank of England Deputy Governor for financial stability likened the crypto industry to the subprime mortgage market before the great financial crisis.
The Latest In…
If you thought a little regulatory intrigue was going to keep private crypto fundraising down, think again! TradingView isn’t strictly crypto but is certainly used by a huge portion of the market and just raised nearly $300M at a $3B valuation. Binance launched a $1B fund to support ecosystem development for Binance Smart Chain. Crypto payment startup MoonPay booked $400M on a $3.4B valuation. Elliptic, one of the better-known blockchain analytics firms, raised $60M in a Series C round. Crypto VC Paradigm is in the middle of a $1.5B raise and ConsenSys is considering another investment round valued at $3B. Phew!
The Latest In…
2021 is really getting pretty clear: institutions, regulations, fundraising, NFTs, rinse, repeat. NFTs saw not one but two major exchanges announce NFT platforms: FTX.US and Coinbase. Crypto Twitter is aflame with what the entrance of these big fish into the NFT marketplace pond might mean. Speaking of NFTs and increasingly bigger ponds, Bored Ape Yacht Club is now being represented by the same manager as Madonna, U2, Britney Spears, and The Weeknd.
The Week’s Most Interesting Data Story
USA Leads the Bitcoin Mining Way
We’ve followed the story of the Great Hashrate Migration. From a true China mining ban in May to about half the Bitcoin network’s hash power disappearing within a month to now a close to 90% recovery. Maybe the most interesting thing, from a geopolitical perspective, is who has benefited most. New research out of the Cambridge Centre for Alternative Finance shows that the US is now by far the world’s global mining leader, with 35.4% of hashpower, up from under 17% in April. Kazakhstan and Russia both benefitted as well, with the former jumping from 8%-18% April-September and the latter jumping from a little under 7% to 11%. While not necessarily surprising, the US’ new global leadership in the Bitcoin network represents a major political opportunity. The question is whether the US government is keen to take it?
What the Community Is Discussing
Crypto Economics 101.
The latest on a Bitcoin futures ETF.
And on an actual Bitcoin ETF.
What to Watch for Next Week:
- Is this Bitcoin futures ETF happening or what?
- Will another US exchange introduce yet another US regulatory framework?
- When will we see our first NFT-based movie announced?