1st December 2022 > > Fidelity.

tl;dr

Fidelity is a leading light on the pathway to crypto adoption.

Market Wrap

Market Wrap 1

Two winning days for BTC now over $17k with no sign of leveraged shorts being put into forced liquidation, though I suspect we must be getting close to their pain point.

Bond markets are signalling the potential end game for inflation, not because of recent Central Bank interference, but the looming and very painful recession the West is about to endure exacerbated by fiscal tightening.

That will not be pretty.

Market Wrap 2

The Institute of International Finance claims that global debt now stands at $290 TRILLION. Once again, let’s remind ourselves what a TRILLION dollars looks like:

http://www.pagetutor.com/trillion/index.html

Can everyone who publicly supported Modern Monetary Theory (aka Magic Money Tree) now stand up to be counted?

Nah, I thought not.

…

In a separate report, there appears to be close to 100% correlation amongst politicians and central bankers of those who supported the simultaneous combination of lockdown and QE (quantitative easing), and those who cling to power.

Can everyone who publicly supported that demonstrably destructive combination now stand up to be counted?

Nah, I thought not.

Market Wrap 3

In entirely related news the US yield curve is now more inverted than for decades.

This situation is no less than a total dereliction of duty. How is it possible that any Governor of any Central Bank is still actually employed in that job?

Curious Cryptos’ Commentary — Fidelity and crypto adoption

Fidelity, an asset manager with $4.5 TRILLION AUM (assets under management) has long been a supporter of cryptos. Its name crops up frequently in these missives for the right reasons. The commitment to cryptos began in 2014 when it set up a BTC mining operation. You cannot get more far-sighted than that decision.

Now I bring you news that Fidelity has launched its first crypto trading accounts.

Retail investors who have a brokerage account at Fidelity can now buy and sell BTC and ETH commission free (the costs are in the bid-offer) from as little as $1 notional investment. With 32 million retail accounts this brings cryptos to a new audience, with little to no execution risk, no custodial risk, and familiarity for those clients with the trading platform.

I look forward to reading the quarterly updates from Fidelity as to the success or otherwise of this initiative (spoiler alert: wildly successful) but the key test is this one.

How soon until the other giants of the retail investment world, and especially BlackRock with $10 TRILLION AUM, follow suit?

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There is another important point to take note of.

Despite twelve months of price pain for BTC and the wider crypto market, businesses and banks are still building out their crypto capability.

They are not doing this just for the fun of doing so.

They are doing this in response to customer demand, in the belief that cryptos can provide new revenue streams and strengthen the bonds with customers.

When enthusiasm for all things cryptos returns, as it inevitably will, there will be many who wish they had continued to develop their knowledge of cryptos and had continued to deepen their involvement in cryptos during the dark times.

Curious Cryptos’ Commentary — How do I know I am right?

With perfect timing, two ECB (European Central Bank) officials published yesterday a blog entitled “Bitcoin’s Last Stand”.

You may read it here, but I suspect most of you have better things to do with your time:

https://www.ecb.europa.eu/press/blog/date/2022/html/ecb.blog221130~5301eecd19.en.html

I particularly enjoyed this quote:

“For bitcoin proponents, the seeming (price) stabilization signals a breather on the way to new heights. More likely, however, it is an artificially induced last gasp before the road to irrelevance.”

Ha, I did have a belly laugh at that one.

One other choice comment:

“Since Bitcoin appears to be neither suitable as a payment system nor as a form of investment, it should be treated as neither in regulatory terms and thus should not be legitimised.”

And of course, some guff about energy usage that reads like it was written by a journalist at the FT.

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The ECB, headed by Convicted Criminal Christine Lagarde, has long been an adversary of cryptos. As an institution it fears, rightly as it happens, losing some of its over extensive control.

For some unfathomable reason the prevailing narrative at the ECB is that the introduction of the digital Euro will make cryptos go away. This extraordinary belief is predicated on a fundamental misunderstanding – the bureaucrats and technocrats that inhabit every office and every job in the ECB think of CBDCs (Central Bank Digital Currencies) as being another form of cryptos, when nothing could be further from the truth.

This ignorance arises from a failure to comprehend the powerfully positive forces that are being unleashed by the concepts behind decentralisation.

But you pay your money, you take your choice.

I firmly believe that the opinions of the risk takers and the business drivers at Fidelity will always outweigh those of mandarins who work from home, cannot get fired, and who are happy to have already lapsed into intellectual irrelevance as they await their longed-for day of drawing down a fat pension.

But you are perfectly entitled to disagree.