Cryptocurrency

Crypto hangs on by an unraveling thread

28 Mar 2023

U.S. agencies targeted Coinbase and Binance for how they engage with customers. A crypto deal is being blocked. A respected stablecoin lost its peg. As FTX founder Sam Bankman-Fried is charged with bribing Chinese officials, it’s clear digital currencies’ issues weren’t just his.

Bitcoin is a solution looking for a problem

24 Mar 2023

Peter Thiel says the cryptocurrency is an inflation hedge, and bitcoin’s price has soared since Silicon Valley Bank’s collapse. But his actions don’t match that advice, and the Fed’s backing of the system is antithetical. Plus, importantly, bitcoin, unlike gold, is speculative.

Capital Calls: Nike, Stablecoins, Meme stocks

22 Mar 2023

Concise views on global finance: The Air Jordan maker grew quarterly revenue 14% despite inventory woes and China’s slow reopening; diverging demand for Circle and Tether cryptocurrencies raises questions about how investors are assessing risk; and GameStop’s shares surged 40%.

Bad news salvo gives Bank of Japan some cover

16 Mar 2023

The collapse of U.S. lender Silicon Valley Bank knocked down sovereign bond yields. Consumption remains soft, and while Japan Inc is hiking wages by 3% on average, that’s well below inflation. There’s nothing to cheer, but it takes pressure off the BOJ to adjust rates.

Capital Calls: BlackRock and ESG, UK pensions

15 Mar 2023

Concise views on global finance: Bank ructions and inflation give Larry Fink, boss of the $8 trln asset manager, cover to talk about something other than climate change in his annual letter; Britain’s abolition of a retirement tax threshold is an expensive way to help the rich.

Capital Calls: Uber’s risky gig, Meta’s NFTs

14 Mar 2023

Concise views on global finance: A California court ruled in favor of classifying drivers as independent contractors, but investors may be overlooking other risks; after less than a year, Mark Zuckerberg’s $465 bln social media company is getting rid of its NFT capabilities.

Bank trouble could turn crypto into Monopoly money

7 Mar 2023

Silvergate Capital, once the bank of choice for now-bankrupt crypto exchange FTX, may be on the brink of insolvency. Its main competitors are pivoting away from digital assets. If Silvergate falls, crypto companies – already lacking liquidity – will struggle to turn digital assets into cash.

Court dunk changes game for digital collectibles

28 Feb 2023

U.S. regulators didn’t say whether non-fungible tokens are financial securities before the $40 bln market swelled. Now it’s up to the courts. A judge’s ruling against fantasy basketball card developer Dapper Labs raises big risks for NFT companies. But there’s still no referee.

Politicians could do better with FTX donations

24 Feb 2023

Recipients of cash from Bernie Madoff and Allen Stanford had to hand it back. In Madoff’s case some $14 billion was recouped. The people overseeing the FTX bankruptcy vow to go after politicians. In a perfect world, lawmakers would voluntarily give money back.

Picking crypto exchange winner is a fool’s errand

22 Feb 2023

As questions about Binance mount, $15 bln Coinbase is benefiting. Despite swinging to a loss last quarter, its shares have doubled this year. If anything, it’ll be the smallest loser. The industry’s post-FTX fate increasingly rests with U.S. regulators, who are losing patience.

Hermès’ “MetaBirkin” win misses the big picture

17 Feb 2023

A court ruled an artist’s digital version of the $198 bln group’s iconic Birkin bag violated trademark rights. The verdict gives luxury firms more clout to commercially exploit the metaverse. Yet the jury is still out on whether such forays will be anything more than marketing.

SEC unhelpfully takes reactive approach to crypto

10 Feb 2023

The regulatory body is fining Kraken and forcing it to shut down a U.S. business. That contrasts with the SEC’s approach to market structure reform. Crypto firms will now have to guess how SEC enforcement will be enacted. It’ll cripple the market rather than legitimize it.

Capital Calls: U.S. jobs, Crypto data-miners

3 Feb 2023

Concise views on global finance: Rapid hiring in America has bad and worse consequences; blockchain analytics company Chainalysis is cutting staff, but those tracking crypto crimes, including governments, could use more of its services.

Crypto’s big unwind is far from over

2 Feb 2023

Investors piled into digital assets last month for the first time since the summer, and prices have recovered from FTX’s collapse. But issues – regulation, fraud, volatility – still threaten popular currencies, like bitcoin. Another big event will wipe out newfound confidence.

Capital Calls: Cryptocurrency, Chelsea FC

1 Feb 2023

Concise views on global finance: Britain delivers a blow to digital assets by aiming to regulate them the same way as traditional ones, while the UK soccer team’s new owner Todd Boehly splashes the cash.

Expansionist dreams threaten ECB digital euro plan

17 Jan 2023

As the European Central Bank develops its own online currency, politicians want a big say. Hostility from some rubs against the ECB’s cautious enthusiasm. Yet if political forces push a digital euro to be more global than the ECB is ready for, it may weaken financial stability.

Crypto bank run vindicates watchdogs’ vigilance

5 Jan 2023

Silvergate Capital, which takes deposits from digital-asset companies like FTX, had to raise funds and flog assets fast after customers pulled $8 bln. It’s a disaster for investors and the ambitions of CEO Alan Lane. For regulators who’ve kept crypto on a tight leash, it’s a win.

FTX sins don’t absolve its big-money enablers

13 Dec 2022

The SEC, CFTC and federal prosecutors said the crypto group’s founder Sam Bankman-Fried defrauded investors and users. But venture backers were gullible and regulators idle. Institutions can try to pin blame on just one bad actor. But they can’t ignore their own culpability.

Sam Bankman-Fried lacks cover of systemic risk

13 Dec 2022

The former boss of bankrupt crypto firm FTX has been arrested. That hasn’t happened to financial hall-of-shamers that are more mainstream. The decentralised nature of crypto makes isolating people easier. The more complex the institution or blow-up, the harder it is to pin blame.

SPACs and crypto are just the tip of the iceberg

6 Dec 2022

Low rates pushed investors into risky pools of money – blank, digital, illiquid or otherwise. A defunct deal involving stablecoin issuer Circle shows that the go-go days are over. But other, much bigger, problems may be lurking in the murkier worlds of buyouts and private credit.