Silicon Valley has won (Andrey Rudakov/Bloomberg via Getty Images)
Wall Street, the Federal Reserve and the financial arm of Silicon Valley can’t believe their luck. The cryptocurrency movement, the very rebellion that set out to defeat their hegemony, has provided them with the necessary technology to become even more dominant.
When Bitcoin, the first ever cryptocurrency, was launched in 2008, it was hoped its “Blockchain” technology — which records transactions and cannot be hacked — would spark a digital revolution. If a transaction could be carried out securely without the need for an established bank, it would, we were promised, mark the end of corporate capitalism — and the dawn of a new era of decentralisation.
Just over a decade later, however, Blockchain has become the centre of the financial elite’s new-age banking system. Indeed, behind the scenes, they’re going all in on crypto.
Using its very own cryptocurrency, the world’s largest bank JPMorgan has completed its first “interbank crypto trade” with fellow Wall Street titan Goldman Sachs. They carried out the transaction of JPMCoin, JPMorgan’s version of a digital dollar, using its new blockchain system. And with more than a dozen institutions now signed up to it, exchanging more than $1 billion daily, a digital financial revolution is in the making.
Ordinary citizens, however, won’t be part of it. When it was first conceived, crypto’s leading advocates insisted that we had entered a new era of financial autonomy: all you needed to defeat crony capitalism was a Bitcoin wallet and an internet connection.
But in reality, the crypto rebellion has failed to liberate us, or achieve anything else its founder Satoshi Nakamoto envisioned. Rather than producing a more open, more liberating, more financially free society, the crypto movement has empowered not just another cabal of corrupt financiers, but a hidden cartel of criminals, Wall Street rejects, and what U.S Senator Liz Warren has described as “shadowy super-coders”.
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SubscribeLove it, the dark side to crypto, which is most of its sides. – I tend to like Peter Schiff on Bitcoin, also Jim Rodgers, Munger, and hosts of others say it will return to its true value, Zero. Rodgers (was Soros’s partner breaking the Bank of England) says it will be crushed by the Fed as a competitor, Munger (Partner with Buffett in Berkshire Hathway, world’s biggest Hedge Fund) says it is evil as it is speculation with no asset, and Schiff is a gold bug, so thinks it is pure Ponzie. (Market Cap, $883 Billion, going to leave a big hole)
The Tether thing I keep waiting to play out – as theories abound that it is not more than 50% backed with $ – as no audit exists (and the $ are all supposed to be in a bank in the Caimans, 86$ Billion), but as the vast majority of Bit Coin uses Tether in exchanging from Fiat/Bitcoin both ways – that the huge inflation in Bitcoin price is just ‘Imaginary’ Tether buying bit coin to pump up the price.
No mention of Ethereum? When I started posting here this spring I mentioned I was tempted to buy some ether when crypto came up – it was $1300 a coin, now $3800. Etherum is supposebly the faster and cheaper blockchain that others ride on….
But most people’s real fear is when CBDCs hit, and if the Central Banks are who you hold your wallet with, and then we are all owned by the Central Banks as every penny we get, or spend, will be logged to us – and now the Fed will be directly monetizing all it prints without bothering with the Treasury.
I have a fascination with the current finance as the more you look the more unbelievable how it works is, and how impossible it seems that it keeps lumbering along. I am to afraid to have my money in Equities, Bonds, or Crypto, so am watching it inflate away…..
Thanks Sanford. Just how does it keep lumbering along? I too am afraid that this time we have run out of correctional tools and understanding capable of avoiding significant currency and asset collapse. Noteworthy perhaps that it was 1521 a Mr. Fugger from Augsburg demonstrated that lending money and requiring recipients to pay interest on that money could both enrich his family and keep the savings of others safe also. Sadly 500 years of lumbering along can no longer keep our savings safe. But still a lot of enrichment going on. How did that happen?
I visited the fascinating Fuggerai, founded by Peter Fugger, in Augsburg. It is some of the oldest social housing in the world. Tenants still pay the equivalent of one guilder a year for a historic four room house and say a daily prayer for Peter”s soul. (Is this following the advice in Matthew 6, 19-20 about storing up treasure in Heaven?). No surprise that its assets are invested in solid stuff like forestry. Very low yield, around 1%, but it goes on for ever.
It this why real estate around the world seems to have become the ‘safest’ investment ??
Private Frazier (Dads Army) was right, we are doomed.
So, big names on Wall Street are dabbling in crypto.
Surely, it does make sense to wonder if those same big names on Wall Street are doing it merely to coopt the movement. But, /what/ would coopting crypto look like? Could the author lay out the mechanisms, or are we just stuck with some suggestions that something is up? No smoking gun has been identified here, and we can’t even discern any smoke.
“to wonder if those same big names on Wall Street are doing it merely to coopt the movement” ??? Nope, they’re doing it to make money
I do wonder how it is that Tether has lasted this long – everyone knows they are complete crooks and yet it carries on going.
It is very useful in Bit-Coin ‘Pump and Dump’.
The thing is they pumped it up well, but as most bit-coin is owned by ‘Whales’ (few owners, massive quantities of the asset) that if they attempted to dump and get their money it would trigger a collapse. They have the tiger by the tail, and must hold on or it all fall apart.
Also as Bitcoin is sold into tether, which is then converted to fiat money – what happens if mass Bit coin selling happens? Do you want tons of Tether if it is not bought by the Fiat money buyers because it is too stretched? There are two layers of crypto to get through to convert to cash, and it is a bottle neck which means flow has to be moderate or it all breaks apart.