IMF official saying public-private CBDC offers best of both worlds and more… |Crypto Market News
Thrilling market news with CoinMetro’s CEO, Kevin Murcko in This Week in Crypto!
Crypto Market News Highlights
Percentage increase makes sense, people are on lockdown in their houses, they’re trying new things, they’ve probably had Revolut for months or more than a year, and they never ever looked at that little “crypto thing” in the Revolut app.
It seems like the numbers are still small though.
Gemini has been running the rounds, they got a deal going with Samsung for their own blockchain wallet. And now they have this 401k Bitwage announcement. 401k is a retirement plan in the US.
Kevin sees more and more push this way, but he doesn’t really see how crypto assets make sense to have in a retirement portfolio — yet. If you’re super young, you usually have a higher percentage in high risk assets because you can afford to take the risk. But if you’re 50 years old, there isn’t much space to take on high risk.
But it’s interesting to see how the direction that a lot of these retail players in the US are going. Gemini, Coinbase. Coinbase is now really focused on institutional, and Gemini is focusing more on additional auxiliary services, where they can make more money rather than on trade income.
So a lot of the premonitions Kevin has been saying on here for a long time, about having multiple revenue streams and the fact that regulatory costs rise then exchange becomes an unprofitable business. And these guys are starting to see that en masse.
What he’s saying is that there should be a central bank issued currency, but issued on a public chain and not governed only by the central bank itself. So, basically a stablecoin, where the reserves are not held by Joe Shmoe in the Bahamas, they’re actually held by the central bank.
Kevin would say that yes, that could potentially be the best of both worlds. The question is, would a central bank ever allow governance to not be centralized by the central bank? Do we then stop calling them the central bank? Do we call them the decentralized bank? Or are they just now a decentralized issuer of a currency that’s pegged to a fiat currency controlled by a central bank?
This is probably not something the larger central banks will do. There have definitely been smaller banks around the world, like Marshal Island.
He is correct in saying that it would be the best of both worlds, but at the end of the day, it would be great to have a CBDC that has some of the qualities of a decentralized stablecoin, in the sense that they can’t just go and print a bunch more, out of nowhere. But there would be no mining or staking on their stablecoin. It would probably be a certain amount minted/issued, and there would be some restrictions on that.
What they’re saying is basically that they have a number they think is right, they have a number they know is wrong, and because they’re different, it means that the wrong number is wrong, and the right number is also wrong. So not really sure where that gets us.
Nasdaq has made technology to fight spoofing, fontrunning and different types of market manipulation. And it’s been on the market for 20 years. Does it work? Not really. Does it work in most cases? Yes. But it does not and will not ever work in all cases. When we get really intelligent machine learning/AI, then maybe we can stop these things.
But most of these “crypto” or “blockchain” companies, like somebody calling themselves a “blockchain lawyer”, what that secretly is saying is that “I’m a lawyer that isn’t very good at being a lawyer, so I had to attach something on to my name so I can get business from a specific sector”.
So as a “crypto data firm” it’s probably a data firm that simply needed to make some money. But Kevin hasn’t seen this one specifically, and will have to look at it more in-depth. But from what Kevin has seen from CoinMarketCap and other players that say they are going to be able to control or limit fake volume — doesn’t do anything. But Kevin will have a look at Nomics.
Definitely some good news for Enjin. They’re a gaming company that just made a plugin that plugs into one of the probably top 10 marketable games that brings in money. And it allows people to take blockchain assets and put them into a virtual world. Kevin thinks that’s pretty cool. Hats off to Enjin.
Another SEC settlement. These things are going to keep on coming. The SEC with the Telegram verdict and some other verdicts, are starting to get a bit more fired up. They know how to attack these things better and they got some judicial precedent. Judicial precedent in the US is gold to a prosecutor, and they’re going to continue to use it.
Kevin doesn’t think the ICO purge is going to continue forever. At some point they will move to the IEO purge, and the exchange purge. The exchange purge is going to be pretty nasty, in terms of exchanges not doing what they’re supposed to be doing, or not registered the way they should be. It all takes time, but they’re gearing up, and they’re taking little pieces away from the time.
The SEC is taking away the foundation, and then they will start moving and knock over the towers.
Kevin doesn’t consider hedge funds as institutional money. And most of the funds buying into Grayscale is hedge fund money. Plus, define the term “massive”. Stats can be easily skewed from one side to the other.
Kevin has read these numbers about Grayscale buying 30% of newly mined Bitcoin and 50% of newly mined Ethereum. And that sounds like “wow, fantastic” — but when you think of the number of Bitcoin and Ethereum that are actually mined, versus the number of Bitcoin and Ethereum that are traded OTC across all order books within the same time period it takes to mine, you realise that the number is miniscule.
It is just a way of getting a nice big percentage to make it seem like they really are the top dog of the top dog. But in reality, the amount that they’re trading, and/or the amount that they’re holding, is still rather miniscule. Even if they may be one of the biggest public holders.
Most very large scale institutions are not yet into Bitcoin, and they may never be. Because once the smaller scale institutions get in and you get enough liquidity where order books start to become fused — when Kevin says fused, prime brokerage is a big thing right now in crypto. You have Coinbase trying to get into prime brokerage, you have BitGo trying to get into prime brokerage. What is prime brokerage? “I have a connection to 15–20 liquidity providers, you only need to connect to me, and you can be serviced by all these providers”.
So what happens at the end of the day is that you have a very condensed market. And that condensed market starts to limit volatility. When volatility becomes limited, what is the upside?
Grayscale is not such a big deal.
“Capable of crypto mining”. They’re not necessarily intended for crypto mining. They want them to have a graphics card, which potentially could enable crypto mining. But it could also enable other things. So, it’s speculation that it would be about crypto mining.
They want regular ATMs that can also deal in crypto. There is a lot of talk about Russia trying to launch their own CBDC at some point, especially once the Chinese pushes their CBDC out. Kevin would say that within weeks of China pushing it out, Russia does the same thing. And they want to have compatibility. So these would probably go into their major cities.
Kevin sees this more as them gearing up for a potential “what-if”, and just want to be ready.
Kevin doesn’t know if the market is mature enough for futures and options expiry to actually stir up a lot of volatility, because the underlying retail guys who own most of that Bitcoin, would have to understand that the expiry could actually mean volatility.
These things are always self-fulfilling prophecies. If a future closes way below market value, people assume others will sell. And thus, they sell. Thus the price goes to match, or below, the future expiry price. It is always a self-fulfilling prophecy.
Well. I guess we can all sit back and smile that the intrinsic value calculator at JPMorgan says that Bitcoin is at the right price. Great.
Markets are generally driven by greed, hype, fear, and they become self-fulfilling prophecies. Everything you hear in the media, all ties into that cycle. If somebody says something in the media, it’s probably to push forward some type of self-fulfilling prophecy. What could be this one? Well “I’m JPMorgan and I say Bitcoin — the price is right”. Does that make people buy it? No, because it means it might not go up in value. Does it mean people sell it? Maybe, if they were hoping for the price to go up really quick. So maybe it allows the hedge funds and other big institutions that deal through JPMorgan to acquire a bit more without the price going higher.
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