Thursday, December 2, 2021

LOL: JPMorgan Capitulates, May Help Clients Trade Bitcoin Futures (For A Fee)

from Zero Hedge:

On September 12, Jamie Dimon caused a stir (and selloff) within the cryptocurrency community when he lashed out at bitcoin, calling it a “fraud” which is “worse than tulip bulbs, predicting “it won’t end well”, will “blow up” and “someone is going to get killed.” Oh, and just to make it clear, “any JPM trader caught trading bitcoin” would be “fired for being stupid.”

After briefly plunging, since then the price of Bitcoin has doubled, and earlier today, Bloomberg quoted money manager David Kotok who said that “clients bring up bitcoin all the time. They think it’s cool. It has the newness, which is attractive to some people, though others would say newness is a risk they don’t want to take.” For banks, as Lloyd Blankfein learned over the past month, this means they have a choice: either get with it, and make money on the latest investing craze, or stand aside and make nothing.

And now, none other than JPMorgan is “getting with it”, because as the WSJ reports, despite Dimon’s guarantee of a pink slip for any trader caught transaction in bitcoin, the bank is now looking at business opportunities in the planned bitcoin-futures market, which the CME has said it will launch by the end of the year. Specifically, J.P. Morgan is considering whether to provide its clients access to CME’s new bitcoin product through its futures-brokerage unit. That, the WSJ reports, means the bank’s customers could use it to trade bitcoin futures while J.P. Morgan collects fees for such services, seemingly in violation of its fiduciary duty considering its CEO just two months ago called the product a “fraud.”

The reversal is not definitive yet, and the process has involved assessing whether there is demand among J.P. Morgan’s customers for the proposed CME bitcoin contract, according to the WSJ source, although judging by the reverse inquiry, there clearly is.

And where JPM goes, others are sure to follow: 

Other banks must also make the call about whether to support CME’s bitcoin futures. Goldman Sachs Group Inc., Bank of America Merrill Lynch and Morgan Stanley are among the dozens of firms that offer their customers access to CME’s markets through their futures-brokerage arms.

But, as everyone knows courtesy of repeat media appearances by the outspoken CEO, none of those banks has chief executive who has been as critical of bitcoin as Dimon, who has blasted it as a “fraud” and compared it with past financial bubbles. “If you’re stupid enough to buy it, you will pay the price for it one day,” he told a conference last month.

 

And now, in delightful irony, JPM is preparing to make money by offering this “fraud” to clients. This, also, just days after JPM was busted for assisting money laundering in Switzerland after accusing bitcoin of being used as a tool for money laundering.

Here, we naturally commisserate with the JPM chief: In a world in which as Mike Novogratz said earlier, retail interest in equities has been waning over the past decade as “investors no longer trust financial institutions”, the only alternative to grip the public’s trading and investing interest has been the very bitcoin (and other digital currencies) so loathed by establishment commercial and central banks, especially since the “money” is printed not by some central bank, but the universe of users themselves: a lack of control central banks would never willingly cede.

JPM’s looming decision about whether to let customers trade bitcoin futures underscores the challenges that Wall Street firms face as the cryptocurrency emerges from the shadowy margins of the financial markets and draws growing investor interest. Meanwhile, CME CEO Terrence Duffy said in a CNBC interview this month he expects trading in bitcoin futures to begin the second week of December. Launching futures would bring the virtual currency a big step closer to the financial mainstream, making it easier for both large financial firms and retail investors to trade it.

Furthermore, as we showed in September, J.P. Morgan already gladly collects commcision for handling client trades of Bitcoin XBT, an ETN trading in Europe and tracking bitcoin. While the bank has said it doesn’t take positions in the note and simply routes customers’ buy and sell orders electronically to exchanges, it wouldn’t be the first time JPM has lied about it considers prop trades (see the London Whale). 

In any case, brokering trades in bitcoin futures would be similar, as JPM would be happy to collect a spread every time a client buys or sell the “fraud.” And once in, JPM will have no choice but – as a matter of ego – to be the biggest. J.P. Morgan is the second-biggest futures broker in the U.S., second only to Goldman, CFTC data show.

Read More @ ZeroHedge.com

The Bitcoin Psyop

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by James Corbet, The International Forecaster:

…the blockchain can be used to create digital currencies that represent the very vision of a totalitarian tyrant’s wildest wet dream. 

Yes, the blockchain is truly revolutionary. Yes, bitcoin is Tulipmania 2.0. Yes, cryptocurrency is a nail in the coffin of the bankster parasites. Yes, digital currency is a tool of the totalitarian tyrants. No, these statements are not contradictory. But don’t worry if you think they are. You’re a victim of the bitcoin psyop.

What’s the bitcoin psyop? Well, look at a headline like this: “Former Chairman of Federal Reserve to Speak at Blockchain Conference”

If you immediately think “Aha! I knew it! The Fed is behind this bitcoin nonsense, after all!” then you might want to stop and contemplate this headline from two years ago: “Ben Bernanke: Bitcoin Has ‘Serious Problems’

Do you think there’s some kind of contradiction here? Or do you think that Bernanke has “flip-flopped” on the issue? Or do you suspect that Bernanke was always secretly behind bitcoin but couldn’t admit it until now? If so, then you have fallen for an embarrassingly simple trick. That trick is to use the words “bitcoin” and “blockchain” and “cryptocurrency” and “digital currency” interchangeably, as if they are all the same thing. They are not.

Confused? Well, fear not! Our good friends at the Bank for International Settlements have written a handy-dandy article that explains everything to you in simple, everyday language. They’ve even illustrated that article with easy-to-understand infographics!

Just kidding. Their unwieldy article on “Central Bank Cryptocurrencies” is a predictably hot mess of monetary jargon and Venn diagrams that somehow make things look even more complicated than they sound, like this and this.

Now, to be fair, their proposed new “taxonomy of money” has real explanatory power, and the diagrams that result are genuinely insightful, but it hardly makes for light bedtime reading. So, let’s see if we can make it a little easier, shall we?

A blockchain is a decentralized, cryptographically secured ledger.

The geeks in the crowd will appreciate the fact that the blockchain is a stupendously elegant solution to some incredibly complicated problems in the obscure recesses of arcane subjects like distributed computing and payment processing. But for the non-geeks, perhaps this will suffice: Some of the oldest documents ever discovered have been ledgers of one sort or another. Medical records, legal and business contracts, accounting ledgers; as long as there has been civilization, there has been the need for secure and accurate record-keeping of transactions and events. And since the birth of civilization there has only been one way to keep those records: a system where a recognized central administrator stores, secures and updates that ledger.

Until now, that is. With the advent of the blockchain, an accurate ledger can now be maintained without a single, central point where that information is stored, maintained or updated. Registrars? Notaries? You might as well be talking about farriers and chimney sweeps.

But talking about the blockchain is like talking about the printing press. Yes, it’s revolutionary. Yes, it will change the course of history. But what, specifically, does it print? Well, whatever you want it to, of course. A papal bull or the ninety-five theses, the 9/11 Commission Report or The Road to 9/11, a GMO cookbook or The Anarchist Cookbook, colorful pieces of toilet paper or Federal Reserve notes (but I repeat myself).

So what does the blockchain record? Well, whatever you want it to, of course. It can be used as a tool for creating smart contracts or registering land ownership or creating decentralized cryptocurrencies.

This is where bitcoin comes in. What’s bitcoin? Bitcoin is a peer-to-peer cryptocurrency whose transactions are recorded in a public blockchain ledger.

There are three things to note about this description of bitcoin.

Firstly, bitcoin is just one application of the blockchain ledger technology. They are not the same thing. Bitcoin is not blockchain. Blockchain is not bitcoin. Bitcoin uses the blockchain innovation to run an electronic payment system.

Secondly, bitcoin is a cryptocurrency. That means it uses cryptographic functions to secure and verify transactions on the network and to control the issuance of new units. Bitcoin conforms to a certain protocol, and that protocol defines the rules by which the bitcoin network operates. You can tweak those rules and create similar-but-separate payment systems, each with its own qualities. These bitcoin-like cryptocurrencies (Namecoin, Litecoin, Dash, etc.) are called altcoins.

Thirdly, bitcoin uses a specific kind of blockchain ledger called a “public” or “permissionless” blockchain. This means anyone can join the network and contribute to the maintenance of the ledger (“mining,” in the bitcoin parlance). There is another kind of blockchain, called a “private” or “permissioned” blockchain, that requires nodes to be invited to join the network or otherwise given permission to participate in maintaining the ledger.

And as a further level of analysis, it should be noted that all cryptocurrencies are digital currencies, but not all digital currencies are cryptocurrencies.

OK, this is starting to get confusing, isn’t it? This is about the point where we’d need to bust out the Venn diagrams and start colouring the overlapping parts, right? Well, if you’ve followed all of this, good for you. If not, don’t sweat it. The point for right now is that there are a lot of separate-but-related concepts here, and to talk about them as if they are all just one big monolithic thing is not just unhelpful but actually misleading.

So, let’s look at those Bernanke headlines again. “Former Chairman of Federal Reserve to Speak at Blockchain Conference” and “Ben Bernanke: Bitcoin Has ‘Serious Problems’

Are you at least beginning to get a handle on how those headlines are not contradictory? How it could be that a central banker could be interested in blockchain technology but dislike the bitcoin application of that technology?

If not, think of it this way: the same DVD player that can play Century of Enslavement can also play The Federal Reserve and You. The same printing press that can print Crossfire: The Plot that Killed Kennedy can also be used to print the Warren Commission report. The same web browser that can take you to The Corbett Report can also take you to The New York Times.

Read More @ TheInternationalForecasster.com

Trump Administration Popped 2017 Bitcoin Bubble, Ex-CFTC Chair Says

by Brady Dale, Coindesk:

SAN FRANCISCO — The Trump administration acted to deflate the bitcoin bubble of 2017 by allowing the introduction of futures products, a former official said Monday.

Christopher Giancarlo, who left the U.S. Commodity Futures Trading Commission (CFTC) at the end of his five-year term as chairman in April, told CoinDesk in an interview:

“One of the untold stories of the past few years is that the CFTC, the Treasury, the SEC and the [National Economic Council] director at the time, Gary Cohn, believed that the launch of bitcoin futures would have the impact of popping the bitcoin bubble. And it worked.”

An Insider’s View Of The Bitcoinization Of Venezuela

from ZeroHedge:

With Venezuela ‘almost’ defaulting on their government debt this week, Daniel Osorio, of Andean Capital Advisors, has had a front-row seat in the collapse of the socialist utopia, spending at least a week every month in the almost-failed state.

In a brief but fascinating interview on CNBC, Osorio discussed the fact that as Washington unleashes ever tougher sanctions on Maduro, China and Russia are all that’s left for the country with the largest proven oil reserves in the world.

Then exposed the realities of living under Maduro’s crazed policies:

“Venezuela was one of the richest per-capita nations in the world… but now, hyperinflation is a very difficult thing to understand until you have to buy lunch…

 

The country has not yet dollarized…  but there’s not enough dollars in Venezuela for that to have happened…”

 

“Venezuela is becoming a cashless society… we are starting to see in Venezuela, the first bitcoinization of a sovereign state.”

Watch the full interview below…

Read More @ ZeroHedge.com

Bitcoin Saved My Life…

by Joe Withrow, International Man:

Eli’s mother was dying from cancer. Eli is 33 years old. He owns a shoe store in Caracas, Venezuela. His mother has bone cancer.

Venezuela’s currency is the bolivar. It lost 62{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of its purchasing power in February. (It lost 67{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} the month before that.)

That means prices for everything (food, water, and utilities) increased 62{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} over a month.

Eli couldn’t afford his mom’s medication. So he turned to bitcoin.

You see, Venezuela has capital controls on traditional safe havens like the U.S. dollar (more on that in a moment). That makes it hard for Eli to buy them.

So he buys bitcoins and sells them to a friend in Colombia—which won’t accept bolivars. The friend then buys cancer treatment and medical supplies for Eli.

Said Eli…

Treating my mother’s cancer would have been very difficult without using bitcoins because my business is going bankrupt and I have a lot of debts, so bitcoins enabled me to stay afloat while our currency is collapsing.

Eli’s not the only Venezuelan using bitcoin to survive.

Arley is from the Táchira state on the border with Colombia. He said he buys drugs in Colombia with bitcoins… then resells them after legally importing them to Venezuela.

Things have gotten so bad that authorities are investigating the theft of zoo animals in the Venezuelan state of Zulia. Police believe people are stealing the animals and eating them. It’s another sign of hunger in a country struggling with chronic food shortages.

As you probably know, Venezuela is on the verge of collapse.

President Nicolás Maduro’s socialist government has eroded 99{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the bolivar’s value. That has created a humanitarian crisis.

Today, I want to show you how Venezuelans are fighting back—using bitcoin.

A Worthless Currency

Venezuela has the highest inflation rate in the world at 741{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. The Venezuelan bolivar is basically worthless. You can’t even buy a loaf of bread with a wheelbarrow full of them.

So it’s no surprise that Venezuelans are looking for alternative currencies. And the U.S. dollar is one of their favorites.

But the government has tight controls on currency exchanges. It restricts the number of dollars people can buy… and what they can do with them.

The government-controlled exchanges have created a black market for U.S. dollars.

In 2014, you needed 6.25 bolivars to get $1 on the black market. Today, using the black-market rate, you need 16,000 bolivars to get that same $1.

The rising cost of black-market dollars—and tight government controls on their purchase—has pushed Venezuelans into bitcoin.

Bitcoin volume has surged to record highs in Venezuela since the crisis deepened…

Venezuelans are using bitcoins to buy Amazon gift cards. They need to buy the gift cards so they can order goods and food from the online store in the U.S. and other countries. The goods are delivered by courier to Venezuela.

One Caracas-based bitcoin trader said, “Bitcoin is a way of rebelling against the system.”

Protection Against Chaos

We love bitcoin at the Palm Beach Research Group. Personally, I’ve been mining bitcoin since it was trading at $450 over a year ago.

Read More @ InternationalMan.com

The Rise and Fall (and Rise Again?) of Bitcoin

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by Kerry Lutz, Financial Survival Network:

This wasn’t supposed to happen. As this article is written, Bitcoin is trading around $11,200. It’s up from breaking the $6000 barrier, but this could well be a dead cat bounce. That’s down from nearly $20,000 in mid December. After all, everyone knows that Bitcoin only goes up. Just like the stock market and housing prices. What gives? What’s happened in cryptocurrencies was completely predictable. In fact, I wrote an article about this very scenario back on December 25, 2017.

Of course no one listened, because when you’re under the influence of dopamine (a powerful neurotransmitter) you’re unable to listen to reason and act accordingly. Effortlessly making money in a bubble is quite gratifying and euphoria inducing. No one wants to come down from the high, you want it to keep going forever. But nothing lasts forever, especially financial driven manias. Just ask the tulip farmers in Holland.

Bitcoin and all of its Johnny Come Lately followers are in for some more tough times ahead. If it retraces 80-90 percent of its gains the past year, that will put it in a range of $3800-5600. Such a pullback would not be out of the realm of experience. When a bubble pops, it’s look out below.

There were many other signs that this crypto crash was coming. There were 4 major negative stories running in the media prior to the crash. While these articles didn’t cause it, they were indicative of a shift in the MSM media narrative. Until recently, the media treated the emerging cryptocurrency marketplace as an oddity or a curiosity. It was the province of millenials and geeks. It wasn’t to be taken seriously. But suddenly all that changed. First, BOA, JP Morgan Chase, Citibank and others stopped allowing credit card purchases of cryptocurrencies. Next, there was a stink raised about the North American Bitcoin Conference’s networking event at a Miami strip club. A NY Times story appeared on 1-31-18 “Worries Grow The Price of Bitcoin is Being Propped Up. And a scholarly paper was released early in the month detailing manipulation that occured when Bitcoin went from $150 to $1000 prior to the collapse of the Mt. Gox exchange. On February 6, 2018 the NY Times posted another article As Bitcoin Bubble Loses Air, Frauds and Flaws Rise to Surface.

Were these articles random or happenstance? Well coincidences do happen. While proof is lacking, there’s an argument to be made that the Bitcoin crash was clearly orchestrated between the government and the media. High profile investigations, pump and dumps taking place all over, and the delayed realization that maybe these cryptocurrencies are really are a threat to the central banks’ monopoly power to issue currency, may all have contributed to the takedown. The only surprise is that Bitcoin has retained as much of its value as it has.

But what about the future? Is this the final curtain for cryptocurrencies? Are they entering a more mature phase that will enable them to go mainstream? Can governments effectively regulate these digital currencies or do they even want them to exist? Cryptocurrencies are going to be with us for a long time to come. They exist because they address people’s needs that government issued fiat currency can’t. Fears of currency instability, the desire to lower transaction costs, the desire for private currencies that are free of government manipulation are just a few reasons why cryptos came into existence. These reasons have not disappeared simply because the Bitcoin Bubble has popped. Rather, they will drive crypto entrepreneurs to seek out better ways of insuring value and prices. Currently, several gold-backed blockchain tokens are in the works. They will provide tokens backed up by provable gold reserves kept in jurisdictions that are free from the fear of confiscation. This means that there will actually be cryptocurrencies that have asset backing, much like the US Dollar was until 1971. This should act to stabilize the market and create new confidence.

Read More @ FinancialSurvivalNetwork.com

FBI, CoinBase and BitCOiN

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from TruthNeverTold: