$2 Billion Merger: Bitcoin Miner Cipher Going Public Backed by Fidelity and Morgan Stanley

$2 Billion Merger: Bitcoin Miner Cipher Going Public Backed by Fidelity and Morgan Stanley

Cipher Mining, a bitcoin mining operation of Bitfury, has announced that it is going public via a merger with a special purpose acquisition company (SPAC). The deal values the combined company at $2 billion, with funding from investors such as Morgan Stanley and Fidelity.

  • Cipher Mining Technologies Inc., a newly formed U.S.-based bitcoin mining operation of Bitfury, announced Friday it will go public through a merger with Good Works Acquisition Corp. (Nasdaq: GWAC). The transaction is expected to close in the second quarter.
  • According to Cipher Mining, the deal values the combined company at $2 billion and “will provide the merged entity with gross cash proceeds of $595 million, which includes $425 million from investors including Fidelity Management & Research Company and Morgan Stanley’s Counterpoint Global,” Reuters reported. The deal is also backed by 25 other institutions.
  • The merged company, to be named Cipher Mining Inc., is expected to be listed on Nasdaq under the new ticker symbol CIFR. J.P. Morgan Securities and Wells Fargo Securities are serving as financial advisors on the deal to Good Works and Cipher Mining, respectively.
  • The new entity “will be established as an industrial-scale bitcoin mining company,” Cipher Mining explained, adding that its “goal is to be the leading bitcoin mining company in the United States.” Initially, four data centers are planned in Ohio and Texas.

  • According to the announcement, as a stand-alone company, the new entity will have the “potential to reach a cumulative deployed capacity of 745MW by the end of 2025.” Furthermore, its “U.S.-based data centers are planned to come on-line between Q4 2021 and Q2 2022 with a total of 445MW of power capacity and planned expansion of an additional 300MW deployed between 2023 and 2025.”
  • Good Works is a publicly-traded special purpose acquisition company (SPAC), with approximately $170 million in trust. SPACs are shell companies that raise funds to acquire a private company with the purpose of taking it public. This allows target companies to sidestep a traditional initial public offering (IPO).

What do you think about this bitcoin mining company going public? Let us know in the comments section below.

Jim Rogers Regrets Not Buying Bitcoin but Warns Governments May Outlaw Cryptocurrencies

Jim Rogers Regrets Not Buying Bitcoin but Warns Governments May Outlaw Cryptocurrencies

Renowned investor Jim Rogers, who co-founded the Quantum Fund with billionaire investor George Soros, now regrets not buying bitcoin. However, he is still worried that governments can outlaw bitcoin if it becomes a viable currency.

Jim Rogers’ Bitcoin Regret

Jim Rogers said in an interview with Real Vision this week that he wished he had bought bitcoin years ago. Rogers is George Soros’ former business partner and the co-founder of the Quantum Fund and Soros Fund Management.

He believes that bonds are in a bubble and expects the prices of gold and silver to skyrocket. As for bitcoin, he said:

I wish I had bought bitcoin. I will point out that many cryptocurrencies have already disappeared and gone to zero. We all hear about bitcoin. We don’t hear about the dozens that don’t exist anymore.

The price of bitcoin has surged about 54% this year, 612% since the beginning of last year, and 1,152% since the start of 2019. Surpassing previous all-time highs multiple times this year, the BTC price is currently $46,577 at the time of writing with a market capitalization of $871 billion, based on data from markets.Bitcoin.com.

Jim Rogers Regrets Not Buying Bitcoin but Warns Governments May Outlaw Cryptocurrencies
BTC’s price chart over several years. Source: markets.Bitcoin.com

Jim Rogers Warns Government May Outlaw Cryptocurrencies

However, Rogers is still in the mindset that governments will not let cryptocurrency flourish if it succeeds as a currency. In June last year, news.Bitcoin.com reported that the veteran investor warned that governments will stop cryptocurrency while discussing bitcoin being used as money.

During his interview with Real Vision this week, he was quoted as saying:

If bitcoin ever becomes a viable currency instead of a trading vehicle, they can outlaw it. Governments don’t want to lose control. They like their monopoly. Do you think they’re going to say, ‘OK, here are US dollars, and they’re on the computer, but if you want to use something else, you can’? That’s actually not my experience with governments at any time in history.

Popular television personality and bitcoin proponent Max Keiser has predicted that when the BTC price reaches $50K, Rogers will go all-in on bitcoin, as will Shark Tank’s Mark Cuban and gold bug Peter Schiff.

While Rogers is now regretting his decision not to invest in bitcoin earlier, Schiff still insists that the value of the cryptocurrency could fall to zero. Nonetheless, he has admitted that it can also reach $100K. Rogers is also not confident in the U.S. dollar. In September last year, he predicted the end of the dollar dominance.

Rogers is not the only person who has warned about governments stopping cryptocurrency. Harvard Professor Kenneth Rogoff has repeatedly said that governments and central banks will never allow bitcoin to go mainstream and he thinks they will win. Dan Nathan, the founder of Risk Reversal Advisors, said that the U.S. government will not keep allowing corporations like Elon Musk’s Tesla to replace the dollars in their balance sheets with bitcoin.

Another investor who strongly warned about regulators coming down hard on cryptocurrencies is Shark Tank star Kevin O’Leary, aka Mr. Wonderful. “Grown men are going to weep when that happens. You will never see a loss of capital like that ever in your life. It will be brutal,” he said. However, he changed his mind after the approval of two bitcoin exchange-traded funds (ETFs) in Canada. O’Leary is now a bitcoin investor and believes that cryptocurrencies are here to stay.

What do you think about Jim Rogers’ bitcoin regret and warning? Let us know in the comments section below.

Mark Cuban Argues Bitcoin Is Better Than Gold, Telling Peter Schiff ‘Gold Is Dead, Move on’

Mark Cuban Argues Bitcoin Is Better Than Gold, Telling Peter Schiff: 'Gold Is Dead, Move on'

Billionaire investor and Shark Tank star Mark Cuban, once a bitcoin skeptic who preferred bananas to the cryptocurrency, now sees utility in bitcoin. He has made a case that bitcoin is better than gold, telling gold bug Peter Schiff to “move on” because “gold is dead.”

Mark Cuban Says Gold Is Dead, Peter Schiff Should Move On

The owner of the National Basketball Association (NBA) team Dallas Mavericks, Mark Cuban, has argued that bitcoin is better than gold in response to Peter Schiff’s comments about the cryptocurrency.

Schiff tweeted this week: “Congratulations to those who bought bitcoin early, pumped up the price, and who’ve been dumping into the hype. You succeeded in getting Wall Street to buy into the mania. When I first learned about bitcoin I didn’t think smart investors would be dumb enough to buy. I was wrong.” Cuban responded:

Let me help Peter. Gold is hyped as much as crypto. Do we really need gold jewelry? Gold can make you a ring. BTC/ETH are technologies that can make you a banker, allow friction free exchange of value and are extensible into an unlimited range of biz and personal applications.

Schiff swiftly replied: “Mark, a lot of your athletes wear gold jewelry. Ask them why. Gold has many uses outside of jewelry that contribute to its value as a metal. It’s not hyped at all. Gold is money. Bitcoin is 100% hype. It’s nothing.”

The Shark Tank star further argued: “What we are seeing built w/crypto today is just proof of concept. As tech continues to get better/cheaper/faster there will be new applications and maybe even something that supersedes what we know as crypto today.”

He proceeded to compare crypto to gold. “But gold won’t ever change. Which is why it will die as a SOV [store of value],” Cuban told Schiff.

In addition, he emphasized: “Don’t forget, gold was a SOV built on technology. From picks and shovels to mining operations that keep trying to improve. Whoever could use the tech of the day to find and mine the most efficiently was the most rewarded. Much like crypto is today.” The Dallas Mavericks owner concluded:

Gold is dead Peter. Move on.

Refusing to concede, Schiff insisted that gold is superior to bitcoin. He even commented in a separate tweet that Cuban “should have stuck with bananas,” stating that the Shark Tank star “only changed his mind because the price went up and more people were foolish enough to buy it. There is no new information. It’s the same bubble it always was, only bigger.”

Cuban used to be a bitcoin skeptic, preferring bananas to bitcoin because he claimed he could at least eat a banana. Responding to a comment on Twitter about his previous stance on BTC, Cuban explained: “What I said a couple of years ago was that it wasn’t a currency and didn’t have any immediate utility. Unlike a banana that I could eat.” He further clarified:

What has changed is De-Fi. Now BTC/ETH/others can make you your own personal banker and facilitate many other types of trx. That’s utility.

Another Shark Tank star, Kevin O’Leary, also recently changed his mind about bitcoin. O’Leary, aka Mr. Wonderful, was also a bitcoin skeptic who was worried about regulators coming down hard on cryptocurrencies. However, with the approval of two bitcoin exchange-traded funds (ETFs) in Canada, he is now a bitcoin investor, putting 3% of his portfolio in cryptocurrencies.

Do you agree with Mark Cuban? Let us know in the comments section below.

Dogecoin Adoption Rises: Bitpay Lets Merchants Accept DOGE, Coinflip’s 1,800 ATMs Now List the Crypto

Dogecoin Adoption Rises: Bitpay Lets Merchants Accept DOGE, Coinflip's 1,800 ATMs Now List the Crypto

Crypto merchant service provider Bitpay has added dogecoin to its list of supported cryptocurrencies. One of its merchants, the Mark Cuban-owned Dallas Mavericks has become the first in the network to accept the meme coin. Meanwhile, a major crypto ATM operator Coinflip has made dogecoin available for purchase at its 1,800 crypto ATMs nationwide.

Dogecoin Added to Bitpay’s List of Supported Cryptocurrencies

In an official announcement Thursday, the cryptocurrency merchant service provider detailed:

[Bitpay] today announced the rollout of dogecoin payments for merchants and consumers.

Dogecoin was started as an internet meme. However, it has grown to a near $10 billion market cap in recent months due to support from celebrities such as Tesla and Spacex CEO Elon Musk, Snoop Dogg, Gene Simmons, and Kevin Jonas.

Bitpay further revealed that “An early adopter of cryptocurrency, the Dallas Mavericks will be the first to accept dogecoin.” The Mark Cuban-owned team has been accepting bitcoin as a method of payment for game tickets and merchandise for almost two years.

Prior to the addition of dogecoin, Bitpay supported BTC, BCH, ETH, and XRP cryptocurrencies as well as USD coin, Gemini dollar, Paxos Standard, and Binance USD stablecoins. The announcement adds:

The Mavs use Bitpay to process all cryptocurrency purchases including tickets and merchandise with all top cryptocurrencies including BTC, BCH, ETH, USDC, GUSD, PAX and BUSD and now DOGE.

The owner of the Dallas Mavericks, Shark Tank star Mark Cuban, commented: “The Mavericks have decided to accept dogecoin as payment for Mavs tickets and merchandise for one very important, earth-shattering reason, because we can … We have chosen to do so because sometimes in business you have to do things that are fun, engaging and hopefully generate a lot of PR.”

For those who are not familiar with dogecoin and would like to learn more, Cuban advised, “we strongly encourage you to talk to your teenagers who are on Tik Tok and ask them about it. They will be able to explain it all to you.” Dogecoin has been pumped numerous times on several social media platforms, including Tik Tok. Spacex and Tesla CEO Elon Musk has also had his fair share of pumping the coin’s price with various tweets.

Coinflip’s 1,800 Crypto ATMs Support Dogecoin

A growing number of cryptocurrency ATMs now support dogecoin. Coinflip, a major crypto ATM operator, announced Monday that dogecoin has now been listed on its 1,800-terminal network. Coinflip then confirmed Thursday that “you can buy DOGE with cash at any of our 1,800 Coinflip locations nationwide.” CEO Daniel Polotsky opined:

Given its growing popularity and recent mass adoption, we are dedicated to making sure that dogecoin is a part of our portfolio of coins, and encourage further support of this cryptocurrency in the coming months.

What do you think about the growing popularity of dogecoin? Let us know in the comments section below.

Banks Turn Away Customer Deposits due to Negative Interest Rates in Germany

Banks Turn Away Customer Deposits Due to Negative Interest Rates in Germany

Banks in Germany are reportedly turning customer deposits away due to the negative interest rate imposed on them by the European Central Bank (ECB). Some banks are even offering online tools to help customers take their deposits elsewhere.

Negative Interest Rates Imposed by ECB Force Banks to Turn Away Customer Deposits

Banks in Germany have been telling customers to take their deposits elsewhere as they can no longer sustain the cost of parking money at the ECB, the Wall Street Journal reported Tuesday. The central bank has been imposing negative interest rates since 2014. The rate is currently -0.5%, which is unlikely to change any time soon, according to the central bank.

After years of exhausting ways to pass on the costs of negative interest rates to customers, such as charging higher fees, banks in Germany are now turning away clients’ deposits, the publication noted, elaborating:

Banks are even providing new online tools to help customers take their deposits elsewhere.

More than 260 banks in Germany are currently charging private customers negative interest rates, whereas only 57 did so before the pandemic hit in March last year, according to price comparison portal Verivox.

The charges range between 0.4% and 0.6% for deposits beginning anywhere from €1 to €500,000. In November last year, another comparison portal, Biallo, found that more than 300 banks were charging negative interest. Germany’s biggest banks, Deutsche Bank and Commerzbank, have been charging new customers a 0.5% annual rate to keep large sums of money with them since last year.

In Germany, banks are harder hit by negative interest rates than in most other European countries because Germans are big savers. According to the ECB’s data, about 30% of all household deposits in the eurozone are from Germany.

The coronavirus pandemic has also played a major role in magnifying the effect of negative interest rates on banks in Germany. Last year, deposits in the country rose 6% to a record €2.55 trillion as people spent less during lockdowns and travel restrictions. The publication added:

Savings rates skyrocketed with consumers at home. And huge relief programs from the ECB have flooded banks with excess deposits.

What do you think about banks turning away customer deposits? Let us know in the comments section below.

North America’s First Bitcoin ETF Now Holds Over 11,000 BTC

North America's First Bitcoin ETF Now Holds Over 11,000 BTC

The first bitcoin exchange-traded fund (ETF) in North America now holds over 11,000 bitcoins. Purpose Bitcoin ETF saw strong interest at launch. An ETF researcher explained that the surge in interest was evidence of some combination of pent-up demand, the price of bitcoin, and investors switching from other means of getting cryptocurrency exposure.

First North American Bitcoin ETF Holding More Than 11K Bitcoins

The first approved bitcoin exchange-traded fund (ETF) in North America, Purpose Bitcoin ETF, is holding 11,141.2363 bitcoins as of March 2. According to Purpose Investments, which manages the fund, the bitcoin ETF currently has CA$669 million ($530 million) in assets under management.

Purpose Bitcoin ETF gained widespread attention when it launched on Feb. 18 on the Toronto Stock Exchange (TSX). The fund saw more than $165 million in trading volume on the first day. The ETF trades under the symbols BTCC.B (Canadian dollar-denominated ETF non-currency hedged units) and BTCC.U (U.S. dollar-denominated ETF non-currency hedged units).

Purpose Bitcoin ETF’s bitcoin holdings. Source: Glassnode

However, trading has slowed significantly since its launch. The volume stood at $17 million on Tuesday. Ben Johnson, Morningstar’s global director of ETF research, was quoted by Bloomberg as saying: “The initial surge in interest was evidence of some combination of pent-up demand, investors switching from other means of getting bitcoin exposure, and the fact that bitcoin’s price was notching new highs as the Purpose ETF began trading. Longer term, I expect volumes will be correlated with bitcoin’s price.”

Canada’s securities regulator has approved another bitcoin ETF. Evolve Bitcoin ETF started trading on the TSX one day after Purpose Bitcoin ETF. It trades under the symbol EBIT (which offers exposure to the daily price movement of bitcoin in Canadian dollars) and EBIT.U (which offers exposure to the daily price movements of bitcoin in U.S. dollars).

Evolve Bitcoin ETF’s volume at launch was about $15 million. Its volume dwindled to about $3.2 million shares on Tuesday. The ETF lowered its management fee from 1% to 0.75% on Feb. 24, making it cheaper than the fees charged by Purpose Bitcoin ETF. On March 2, Evolve filed to list and trade an ether ETF designed to provide investors with exposure to ETH.

Meanwhile, the U.S. Securities and Exchange Commission (SEC) has not approved any cryptocurrency ETF. President Joe Biden’s pick to lead the SEC, Gary Gensler, has yet to be confirmed as the SEC chairman. This week, the Chicago Board Options Exchange (Cboe) filed with the SEC to list and trade a bitcoin ETF.

Would you invest in a bitcoin ETF? Let us know in the comments section below.

Citigroup: Bitcoin Is at a Tipping Point, Could Become Preferred Currency for International Trade

Citigroup: Bitcoin Is at a Tipping Point, Could Become Preferred Currency for International Trade

Citigroup says bitcoin is at a tipping point and the cryptocurrency could become “the currency of choice for international trade.” The firm wrote in a report that “we could be at the start of massive transformation of cryptocurrency into the mainstream.”

Bitcoin Is at the Tipping Point, Citi Says

Citigroup’s Global Perspectives & Solutions (GPS) team released a 108-page report Monday entitled “Bitcoin At the Tipping Point.”

The Citi GPS report explains that “the biggest change with bitcoin is the shift from it being primarily a retail-focused endeavor to something that looks attractive for institutional investors.” The firm attributes the change to “Specific enhancements to exchanges, trading, data, and custody services” that are “increasing and being revamped to accommodate the requirements of institutional investors.”

Highlighting “the advantage of bitcoin in global payments, including its decentralized design, lack of foreign exchange exposure, fast (and potentially cheaper) money movements, secure payment channels, and traceability,” the report details:

These attributes combined with bitcoin’s global reach and neutrality could spur it to become the currency of choice for international trade.

The report also explains that bitcoin has seen three different stages of focus so far: technological oddity, censorship-resistant money, and digital gold. It further predicts that we will soon see a fourth stage of focus as bitcoin transitions to becoming an international trade currency. “This would take advantage of bitcoin’s decentralized and borderless design, its lack of foreign exchange exposure, its speed and cost advantage in moving money, the security of its payments, and its traceability,” the Citi report describes.

While pointing out a number of remarkable developments in bitcoin over the past seven years, the report outlines a few obstacles in the cryptocurrency’s way to becoming a globally-used “trade currency.” Among them are marketplace security — including tether’s role to bitcoin — the environmental impact of mining, and institutional concerns, such as capital lock-up, insurance, and custody limitations. The report adds:

There are a host of risks and obstacles that stand in the way of bitcoin progress. But weighing these potential hurdles against the opportunities leads to the conclusion that bitcoin is at a tipping point and we could be at the start of massive transformation of cryptocurrency into the mainstream.

“Bitcoin’s future is thus still uncertain,” the report additionally asserts, reiterating that “developments in the near term are likely to prove decisive as the currency balances at the tipping point of mainstream acceptance or a speculative implosion.”

Meanwhile, the report notes that “Large institutional investors and organizations are choosing to participate in and support bitcoin” while “Regulators are beginning to lay the groundwork for the asset to potentially enter the mainstream.”

It further emphasizes that this progression occurring “in just over a decade makes bitcoin remarkable regardless of its future,” concluding:

Bitcoin is at the tipping point of its existence and the path forward from here may have broad and widening repercussions.

What do you think about Citi’s view on bitcoin? Let us know in the comments section below.

Biden’s SEC Chair Pick Gary Gensler Reveals Policies on Bitcoin and Crypto Regulation

Biden's Pick Gary Gensler Reveals Policies on Bitcoin and Crypto Regulation as SEC Chairman

Gary Gensler, President Joe Biden’s pick to lead the U.S. Securities and Exchange Commission (SEC), has revealed his policies on bitcoin and other cryptocurrencies if confirmed as the SEC chairman. Gensler is a professor at MIT who teaches cryptocurrencies. He previously served as the chairman of the Commodity Futures Trading Commission (CFTC).

SEC Chair Nominee Gary Gensler Talks About Bitcoin Regulation

Professor Gary Gensler has spoken about what his focus will be regarding bitcoin and other cryptocurrencies if he is confirmed as chairman of the SEC. His statements were made during his confirmation hearing before the Senate Banking Committee on Tuesday.

Gensler is a professor at the MIT Sloan School of Management, where he is also co-director of Fintech@CSAIL and senior advisor to the MIT Media Lab Digital Currency Initiative. He teaches blockchain technology, digital currencies, financial technology, and public policy. Gensler is also a former Goldman Sachs partner who served as the chairman of the CFTC during the Obama administration.

At his confirmation hearing, he was asked what Congress and the SEC can do to create a more forward-thinking regulatory environment for innovators in the crypto space.

“As I teach at MIT on these subjects, these innovations have been a catalyst for change,” Gensler began, adding:

Bitcoin and other cryptocurrencies have brought new thinking to payments and financial inclusion but they’ve also raised new issues of investor protection that we still need to attend to.

“So I think, if confirmed at the SEC, I’d work with fellow commissioners to promote new innovation but also, at the core, ensure investor protection,” he continued.

Gensler clarified: “To the extent that somebody is offering an investment contract or security that’s under the SEC’s remit, and they have exchanges that operate there, then we have to make sure there’s investor protection.”

On the other hand, “If it’s not that, and it’s a commodity, as bitcoin has been deemed to be, then it’s either a question for Congress … or it’s possibly a question for the Commodity Futures Trading Commission,” he described.

Furthermore, the professor also said that the SEC must ensure that crypto markets “are free of fraud and manipulation,” elaborating:

I think that’s the greater challenge, frankly, because some markets, usually operating overseas, have been rife with fraud.

What do you think about the incoming SEC chairman’s policies on bitcoin? Let us know in the comments section below.

Crypto Bank Expands in India — Confident Government Will Approve Legitimate Use of Cryptocurrencies

Crypto Bank Expands in India — Confident Government Will Approve Legitimate Use of Cryptocurrencies

Crypto bank Unicas, a joint venture between Cashaa and United Multi State Credit Cooperative Society, has expanded its operations by opening another physical branch. The bank believes that the Indian government will introduce positive crypto regulation and not impose an outright ban on cryptocurrencies such as bitcoin.

New Physical Crypto Bank Branch Opens in New Delhi

Physical crypto bank Unicas has opened another branch, Cashaa announced last week. Unicas is a joint venture between crypto banking platform Cashaa and United Multistate Credit Cooperative Society. Noting that this will be the first of many branches in the city, the announcement details:

Unicas – the world’s first crypto financial institution with physical branches today opened in India’s capital, New Delhi. Unicas is banking on the Indian government introducing a bill to approve the legitimate use of cryptocurrency.

“We are proud to bring Unicas to the nation’s capital,” Unicas CEO Dinesh Kukreja commented. “Delhi is a key market for us and we look forward to opening many branches to service India’s rapidly growing crypto market in a regulated manner.”

The new branch is located at 611 A Devika Tower, Nehru Place, New Delhi 110019. This location is a short drive from the Parliament of India. The bank is headquartered in Jaipur and currently has one more branch located in Gujarat. According to Cashaa:

Unicas will continue to roll out its branches across NCT, Gujarat and Rajasthan. It plans to open 50 branches in 2021 and 100 branches by the end of 2022.

Customers will have access to a number of cryptocurrencies through Unicas, including BTC, ETH, XRP, and CAS, Cashaa’s native token.

Cashaa CEO Kumar Gaurav opined:

We are very confident that the government will create regulations that will reduce scams related to cryptocurrency, while encouraging its legitimate use. Such regulations will enable India to become a global leader in blockchain technology.

The Indian government is getting ready to introduce the cryptocurrency bill. It seeks to provide a regulatory framework for the digital rupee to be issued by the Reserve Bank of India (RBI) but ban private cryptocurrencies. The finance ministry recently confirmed that the bill is still being finalized. Meanwhile, the governor of the central bank revealed last week that the bank is working on the digital rupee and has communicated its concerns about cryptocurrencies to the government.

What do you think about Unicas opening more physical bank branches? Let us know in the comments section below.

Goldman Sachs Brings Back Bitcoin Trading Desk as the Firm Sees Crypto Market Becoming More Mature

Goldman Sachs Brings Back Bitcoin Trading Desk as the Firm Sees Crypto Market Becoming More Mature

Global investment bank Goldman Sachs has brought back its bitcoin trading desk and will start handling bitcoin futures next week. The firm is also reportedly exploring the potential for a bitcoin exchange-traded fund (ETF) and plans to provide a crypto custody service.

  • Goldman Sachs Group Inc. has restarted its cryptocurrency trading desk, Reuters reported Monday, citing a person familiar with the matter. Goldman first set up a cryptocurrency desk in 2018, after a bull run as the price of bitcoin was falling from record highs, muting investor interest in the cryptocurrency.
  • The desk will “begin dealing bitcoin futures and non-deliverable forwards for clients from next week,” the publication conveyed. It will also take on projects involving blockchain technology and central bank digital currencies (CBDCs).
  • The crypto desk will be within Goldman Sachs’ global markets division and will serve as a market-maker, buying and selling on behalf of clients but not actively managing cryptocurrencies itself, according to Forbes.
  • “The bank is also exploring the potential for a bitcoin exchange-traded fund and has issued a request for information to explore digital asset custody,” the source detailed. Currently, North America has two bitcoin ETFs, recently approved in Canada.

  • As bitcoin continues to outperform other assets, more companies are seeking to gain exposure to the cryptocurrency. For example, the Nasdaq-listed Microstrategy announced Monday that “it had purchased approximately 328 bitcoins for $15.0 million in cash” and “now holds approximately 90,859 bitcoins.” Moreover, 42 companies now collectively hold more than $65 billion worth of bitcoin.
  • The price of bitcoin has risen about 56% since the beginning of the year, currently standing at $48,677, based on data from markets.Bitcoin.com. Former Goldman Sachs CEO Lloyd Blankfein recently warned, “If I were a regulator, I would be kind of hyperventilating at the success of it [bitcoin].” Meanwhile, Goldman’s current global head of commodities research, Jeff Currie, said that the bitcoin market “is beginning to become more mature,” calling the cryptocurrency “a retail inflation hedge.”

What do you think about Goldman Sachs bringing back its crypto trading desk? Let us know in the comments section below.

Mad Money’s Jim Cramer Has a Plan to Save Gamestop With Bitcoin

Mad Money's Jim Cramer Has a Plan to Save Gamestop With Bitcoin

Mad Money host Jim Cramer thinks he has a solution to save troubled video game retailer Gamestop with the help of bitcoin. He suggests that Gamestop should raise money to buy the cryptocurrency, then convert its 5,000 locations into bitcoin stores. He believes his idea will work.

Jim Cramer Has Idea to Use Bitcoin to Save Gamestop

Mad Money Jim Cramer said on CNBC last week that he believes he has come up with a viable plan to help video game retailer Gamestop (GME). He said his idea will fix the company’s valuation. The Gamestop stock surged by over 100% last week after the company announced that its CFO Jim Bell would resign.

His idea is for Gamestop to “become a dealer in crypto.” He noted that it is what Square and Paypal are doing, which he initially thought “seemed ridiculous” but then it “was ok.” Cramer is the host of Mad Money on CNBC and a former hedge fund manager who co-founded the financial website Thestreet.com.

Cramer also pointed out that Nvidia is coming up with graphics cards for crypto. “Last night on the unbelievably good Nvidia call, as a side note, they talked about March. [They’re] going to have some actual cards just for crypto. It really won’t be important for Nvidia, but it could be important for a place like Gamestop,” the Mad Money host described. He continued:

If Gamestop were to turn itself into a 5,000-store introduction to crypto, make it so that they sell $1 billion worth of stock … and buy crypto with it, and then make it so it’s an international gaming place where you win bitcoin, I think you can justify the stock price.

“And it doesn’t have to be bitcoin. We can make it crypto,” he clarified. “But turn it into a crypto information palace and you have worldwide games, no latency, you play it.”

He tweeted telling Gamestop board member Ryan Cohen to tell “the board to sell 10 million shares of Gamestop at $200 and buy bitcoin and say Gamestop is now a bitcoin store that also sells games.”

Cramer has floated the idea of turning Gamestop stores into a bitcoin empire before. On Feb. 5, he tweeted:

Gamestop needs to be a 5,000 store bitcoin palace. I cannot believe how brilliant that would be … They can sell stock, buy a ton of bitcoin and just hold on. Call it Bitstop. Or Gamecoin.

“I have not been able to come up with anything else, but this works,” he concluded. “I have a feeling that this is the way to get this stock higher. I can’t come up with another way.”

Do you think Jim Cramer’s idea will be good for Gamestop? Let us know in the comments section below.

Shark Tank’s Kevin O’Leary Reverses Stance on Bitcoin, Says Crypto Is Here to Stay, Invests 3% of His Portfolio

Shark Tank's Kevin O'Leary Reverses Stance on Bitcoin, Says Crypto Is Here to Stay, Invests 3% of His Portfolio

Shark Tank star Kevin O’Leary, aka Mr. Wonderful, has begun investing in bitcoin. Having previously called the cryptocurrency “garbage,” he has now changed his mind and believes that cryptocurrencies are here to stay. He is also getting used to the volatility of bitcoin and believes that institutional investors are willing to hold through price fluctuations.

Kevin O’Leary Now a Bitcoin Believer

Canadian investor and television personality Kevin O’Leary has changed his mind about bitcoin. He previously called the cryptocurrency “garbage” and a “giant nothing burger,” but now he has invested in bitcoin and thinks that it is no longer a fad.

“I actually think that digital currencies are here to stay,” he said in an interview with CNBC last week. “Most people that are willing to hold them, including institutions over the last 90 days, are willing to deal with the volatility.” O’Leary elaborated:

I am fascinated. I’m investing. I’m holding a 3% weighting in it between ethereum and bitcoin. The volatility sickens me but I’m getting used to it.

“And, finally, I’m starting to think about how do I invest in the infrastructure of mining bitcoin,” Mr. Wonderful added.

Commenting on bitcoin’s volatility, O’Leary shared: “Given the volatility of cryptocurrencies, the main decision you have to make after you decide to participate in the first place is what % of your portfolio do you allocate. For me, 5% is the maximum.”

Morgan Creek Digital partner Anthony Pompliano, who had been trying to convince O’Leary to invest in BTC for years, responded to the Shark Tank star’s 5% allocation statement. “You forbid me to have 50% and you called it all ‘garbage,’ but now you think 5% is acceptable. Eventually, you will be 50% yourself.”

O’Leary replied, “Correct, I change when facts change.” He emphasized:

Canadian, Swiss and many other regulators have done a 180% on BTC. This is a game changer for many investors including me.

O’Leary had always been worried about regulators coming down hard on bitcoin. In December, he warned that “Grown men are going to weep when that happens. You will never see a loss of capital like that ever in your life. It will be brutal.” Nonetheless, he said that if a bitcoin ETF is approved, he would be willing to put 5% of his portfolio in it. Recently, Canada’s securities regulator approved two bitcoin ETFs.

Do you think Kevin O’Leary will keep putting more money in bitcoin? Let us know in the comments section below.

Stone Ridge’s Open-End Mutual Fund to Invest in Bitcoin — SEC Filing Opens the Door for Other Mutual Funds to Add BTC

Stone Ridge's Open-End Mutual Fund to Invest in Bitcoin — SEC Filing Opens the Door for Other Mutual Funds to Add BTC

Asset management firm Stone Ridge has filed with the U.S. Securities and Exchange Commission (SEC) for its open-end mutual fund to invest in bitcoin. “This is a big deal. Stone Ridge filing opens the door for every mutual fund to add bitcoin,” said a fellow asset manager.

Stone Ridge Wants Its Mutual Fund to Invest in Bitcoin

Stone Ridge Trust filed Form N-1A with the U.S. Securities and Exchange Commission (SEC) last week. The filing, which is expected to become effective on April 26, relates to the Stone Ridge Diversified Alternatives Fund.

The fund “seeks to generate total returns from diverse investment strategies that we believe have the potential for attractive returns and are diversifying from stocks and bonds,” the filing details. “These strategies include reinsurance, market risk transfer, style premium investing, alternative lending, single-family real estate, healthcare royalties, and bitcoin.”

For the bitcoin investment strategy, the filing explains:

[The fund] seeks to generate returns by gaining exposure to the price of bitcoin by selling put options on bitcoin futures contracts. This strategy may also invest in pooled investment vehicles, such as registered or private funds, that themselves invest in bitcoin.

Anthony Scaramucci, founder of another asset management firm Skybridge Capital, which itself has about half a billion dollars worth of bitcoin in its bitcoin fund, commented on the filing last week. “Important development in bitcoin. Stone Ridge filed with the SEC to become the first open-ended mutual fund to buy bitcoin,” he wrote. Scaramucci also sees heavy demand for bitcoin from his clients and expects the BTC price to reach $100K by year-end.

Noting that “Stone Ridge will be able to start buying bitcoin on April 26 (when their prospectus goes effective),” he opined:

This is a big deal. Stone Ridge filing opens the door for every mutual fund to add bitcoin (if they want to).

Stone Ridge founder Ross Stevens also founded the New York Digital Investment Group (NYDIG), a bitcoin-only financial services firm. Early this month, the firm filed for a bitcoin exchange-traded fund (ETF) with the SEC. Stevens recently said that he sees “a wall of money” coming into the asset class. NYDIG already has over $6 billion in bitcoin and the firm expects to have over $25 billion in the cryptocurrency by the end of the year.

What do you think about mutual funds investing in bitcoin? Let us know in the comments section below.

JPMorgan Says Investors Can Put 1% of Their Portfolios in Bitcoin Despite Calling It a Poor Hedge

JPMorgan Says Investors Can Allocate 1% of Their Portfolio to Bitcoin Despite Calling It a Poor Hedge

After saying that cryptocurrencies “rank as the poorest hedge for major drawdowns in equities, with questionable diversification benefits,” JPMorgan says investors can put 1% of their portfolios in cryptocurrencies. This can help “achieve any efficiency gain in the overall risk-adjusted returns of the portfolio,” the firm’s strategists explained.

Investors Can Allocate 1% of Portfolios to Bitcoin, Says JPMorgan

JPMorgan Chase now sees benefits in adding a small percentage of bitcoin to a multi-asset portfolio. The firm’s global head of research, Joyce Chang, and vice president of strategic research, Amy Ho, wrote in a note to clients Wednesday:

In a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio.

However, the strategists clarified: “Cryptocurrencies are investment vehicles and not funding currencies. So when looking to hedge a macro event with a currency, we recommend a hedge through funding currencies like the yen or U.S. dollar instead.”

While many analysts believe that bitcoin is a way to hedge against significant fluctuations in traditional asset classes, including stocks, bonds, and commodities, JPMorgan has doubts. It was only last week that the investment bank claimed bitcoin was an “economic sideshow,” adding:

Crypto assets continue to rank as the poorest hedge for major drawdowns in equities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed.

JP Morgan also said that the recent prices of bitcoin are well above the cryptocurrency’s fair value estimates. The firm further asserted that mainstream adoption increases bitcoin’s correlation with cyclical assets, which rise and fall with economic changes. This reduces bitcoin’s benefits of diversifying portfolios. Nonetheless, its most recent report recommends that investors can add a small percentage of bitcoin to their portfolios.

The investment bank has come a long way since its CEO Jamie Dimon called the cryptocurrency a fraud back in September 2017. Earlier this month, JPMorgan’s co-president Daniel Pinto said that he is certain the demand for bitcoin “will be [there] at some point.” The executive confirmed: “If over time an asset class develops that is going to be used by different asset managers and investors, we will have to be involved.” Moreover, the firm’s analysts have predicted that bitcoin’s price could reach $146,000 as the cryptocurrency’s competition with gold heats up.

What do you think about JPMorgan’s view on bitcoin? Let us know in the comments section below.

Harvard Professor Kenneth Rogoff Warns Central Banks Will Never Allow Bitcoin to Go Mainstream

Harvard Professor Kenneth Rogoff Warns Central Banks Will Never Allow Bitcoin to Go Mainstream

Harvard Professor of Economics and former chief economist at the International Monetary Fund (IMF) Kenneth Rogoff says that central banks won’t allow bitcoin and other cryptocurrencies to become mainstream. “Eventually over the long course of history, the government first regulates and then it appropriates, and I think we can see that happening here,” he warned.

Harvard Professor’s Warning About Bitcoin

American economist Kenneth Rogoff shared his views on the future of bitcoin, its regulation, and the recent bull run in an interview with CNBC TV18 last week. Rogoff is the Thomas D. Cabot Professor of Public Policy and a professor of economics at Harvard University. He also served as chief economist at the International Monetary Fund (IMF) from 2001–2003.

“Zero interest rates can produce a lot of funny asset valuations. So that is certainly part of it,” he responded to a question about the rise in popularity of bitcoin and its recent bull run. “Clearly, there are a lot of wealthy people and well-known financiers, often very senior, who publically said they are investing in it [bitcoin] and that has given confidence.”

Nonetheless, the professor of economics cautioned: “But I have to say, regulation is in its early innings – if there is no final use case for bitcoins, [and] I don’t think it’s going to be, [then] ultimately this bubble will pop, but it could take a decade.”

Given the recent BTC price surge and the subsequent spike in its market capitalization, Rogoff was asked why central banks and governments have not passed strict regulations to control its trading or even banned it. “I think they are all over it,” the professor replied, pointing out that the Bank for International Settlements (BIS), the G7, and the G20 are all closely watching the cryptocurrency. “Every central bank is looking at this and trying to decide what to do,” he emphasized.

“The real issue is that for the moment it is not really used for a lot of meaningful transactions, except in war-torn states, where I think people use it to get money in and out. That’s certainly a good use,” Rogoff opined.

The economist proceeded to predict: “As it really starts to compete with ordinary, fiat currencies, government currencies, I think they’ll clamp down on it like a ton of bricks. They are not going to allow that to happen.” Comparing bitcoin to modern art, the economist elaborated:

Right now it is an asset class and I suppose in the way modern art is, but it doesn’t necessarily mean that it is in the mainstream. I think that is extremely misleading. Central bankers will never ever allow that.

A growing number of companies are investing in bitcoin, such as Elon Musk’s Tesla, which recently put $1.5 billion in the cryptocurrency, and Jack Dorsey’s Square, which invested $170 million more in BTC. Tesla will also be accepting bitcoin as a means of payment in the near future. Citing bitcoin’s rising adoption and a growing acceptance as a legitimate means of payment, such as what is happening in the U.S. city of Miami, Rogoff was asked if regulating bitcoin would become more difficult for governments.

“I don’t think regulating it is all that difficult,” he replied. “I think that there has been a hesitation to move too quickly because there has been a lot of innovation in the cryptocurrency space and governments want to allow that to proceed.”

In conclusion, professor Rogoff warned:

But make no mistake, the governments need to retain control over taxation, controlling crime, etc. They need to maintain control over the unit of account — the currency. Yes, private innovation can come out for a while, but eventually over the long course of history, the government first regulates and then it appropriates, and I think we can see that happening here.

What do you think about professor Rogoff’s bitcoin warning? Let us know in the comments section below.

Institutional Investors Pile Into Crypto Exchange-Traded Products: Managed Assets Rise to $44 Billion This Month

Institutional Investors Pile Into Crypto Exchange-Traded Products: Managed Assets Surge 50% to $44 Billion This Month

The total assets under management across all crypto exchange-traded products (ETPs) worldwide have risen 50% this month to nearly $44 billion. Among listed products, Grayscale’s bitcoin trust tops the list with the most assets under management while Bitwise’s fund was the best performing bitcoin product by market price over the last 30 days.

  • Cryptocompare published its “Digital Asset Management Review” for the month of February on Friday. The report states that the total assets under management (AUM) across all exchange-traded products (ETPs) increased 50% to $43.9 billion from mid-January to Feb. 23.

Institutional Investors Pile Into Crypto Exchange-Traded Products: Managed Assets Rise to $44 Billion This Month

  • The price of bitcoin was above $50K on Feb. 23. It has since fallen to $46,876 at the time of writing, based on data from markets.Bitcoin.com.
  • The crypto exchange-traded product with the most AUM was Grayscale Bitcoin Trust (GBTC) with $35 billion in assets under management, according to the report. As of Feb. 26, GBTC’s AUM has dropped to $30.72 billion due to the lower BTC price. Other listed crypto products with the most AUM include Grayscale’s Ethereum Trust, Litecoin Trust, and Bitcoin Cash Trust. The bitcoin fund by 3iq (QBTC) also made the top five list with $1.27 billion under management.
  • Most of the investments into crypto exchange products are made by institutional investors, particularly hedge funds. In its Q4 2020 report, Grayscale wrote that “Institutions are here,” noting that institutions accounted for 93% of all its capital inflows during the period.

Institutional Investors Pile Into Crypto Exchange-Traded Products: Managed Assets Rise to $44 Billion This Month

  • As for exchange-traded notes (ETNs), ETC Group’s BTCE has the largest AUM with $1.01 billion. Wisdomtree’s BTCW came second with $314.8 million and 21shares’ ABTC with $257.8 million.
  • The report also ranks exchange-traded certificates. XBT Provider by Coinshares’ Bitcoin Tracker Euro holds the highest AUM with $1.72 billion, followed by Bitcoin Tracker One with $1.06 billion.
  • The best performing bitcoin exchange-traded product by market price over the last 30 days was Bitwise 10 Crypto Index Fund (BITW) with 156%, the report notes. Its performance exceeded both Cryptocompare’s CCCAGG BTC/USD Index performance (64%) and MVIS’ MVDA Index performance (48.9%).
  • Furthermore, North America now has two bitcoin exchange-traded funds (ETF): Purpose Bitcoin ETF and Evolve Bitcoin ETF. The former accumulated $165 million on its first day of trading.

What do you think about investing in crypto exchange-traded products? Let us know in the comments section below.

Berkshire Hathaway’s Charlie Munger Advises Investors to Never Buy Bitcoin or Gold

Berkshire Hathaway’s Charlie Munger Advises Investors to Never Buy Bitcoin or Gold

Berkshire Hathaway’s vice chairman and Warren Buffett’s long-time business partner, Charlie Munger, has advised investors not to buy bitcoin or gold. He believes the cryptocurrency is too volatile to serve well as a medium of exchange. Munger also says he doesn’t know which is worse between Elon Musk’s Tesla reaching $1 trillion in market cap or bitcoin hitting $50,000.

Billionaire Investor Charlie Munger Thinks Bitcoin Is Too Volatile to Be a Good Medium of Exchange

Legendary investor Charlie Munger answered some questions about bitcoin at the annual meeting of shareholders of the Daily Journal Corporation in Los Angeles on Wednesday. The Berkshire Hathaway vice-chairman and Warren Buffett’s long-standing business partner is also chairman of the Daily Journal. He is often known as Warren Buffett’s right-hand man.

The 97-year-old has never been a fan of bitcoin. He previously called bitcoin “rat poison” and likened its trading to “trading turds.” Buffett then called bitcoin “rat poison squared.”

During Wednesday’s meeting, Munger began by explaining why he does not see bitcoin as a future medium of exchange. “I don’t think I know exactly what the future of banking is, and I don’t think I know how the payment system will evolve. I do think that a properly run bank is a great contributor to civilization and that the central banks of the world like controlling their own banking system and their own money supplies,” he described, elaborating:

I don’t think bitcoin is going to end up the medium of exchange for the world. It’s too volatile to serve well as a medium of exchange.

“Bitcoin reminds me of what Oscar Wilde said about fox hunting. He said it’s the pursuit of the uneatable by the unspeakable,” Munger further opined.

Munger Talks About Tesla vs. Bitcoin

When asked about which he thought was crazier, the price of bitcoin hitting $50,000 or Elon Musk’s electric car company, Tesla, reaching $1 trillion in market cap, Munger referenced a quote by famous English writer Samuel Johnson. One of his well-known quotes was “Sir, there is no settling the point of precedency between a louse and a flea.”

Munger replied, “Well I have the same difficulty that Samuel Johnson once had when he got a similar question,” emphasizing:

I can’t decide the order of precedency between a flea and a louse, and I feel the same way about those choices. I don’t know which is worse.

Tesla’s market cap currently stands at $655 billion after its stock fell sharply since last Friday. Bitcoin’s price fell from the all-time high of above $58K on Sunday to $46,073 at the time of writing. Still, the cryptocurrency is up more than 43% since the beginning of the year based on data from markets.Bitcoin.com.

Moreover, some shareholders asked Munger whether his opinion on cryptocurrencies and bitcoin has remained the same and would the Daily Journal consider bitcoin or any other cryptocurrency as an asset on its balance sheet similar to what Tesla recently did. Elon Musk’s electric car company invested $1.5 billion in bitcoin in January, prompting many people to ask which other companies will be following its example and keep some cash reserves in bitcoin.

Responding to this question, Munger affirmed, “No, we will not be following Tesla into bitcoin.”

Munger’s Advice: Don’t Buy Bitcoin or Gold

The Berkshire Hathaway vice chairman proceeded to offer some advice regarding bitcoin and gold investing. He said:

It’s really kind of an artificial substitute for gold. And since I never buy any gold, I never buy any bitcoin, and I recommend other people follow my practice.

The crypto community was quick to comment on Munger’s remarks about bitcoin. Morgan Creek Digital partner Anthony Pompliano opined: “Charlie Munger and Warren Buffett haven’t beat the S&P 500 in over a decade. Stop asking them about technology.”

Tahinis, the restaurant chain that was among the first companies to convert all of its cash into bitcoin, commented: “Charlie Munger in his latest interview calls bitcoin a gold-like asset. He is wrong again. Bitcoin is rat poison to all fiat-based instruments.”

What do you think about Charlie Munger’s view on bitcoin? Let us know in the comments section below.

Coinbase Files for IPO via Direct Listing on Nasdaq — Valuation Soars Above $100 Billion

Coinbase Files for IPO via Direct Listing on Nasdaq — Valuation Soars Above $100 Billion

Cryptocurrency exchange Coinbase has filed for an initial public offering with the U.S. Securities and Exchange Commission (SEC). The company has chosen the direct listing route and has applied for its shares to be listed on Nasdaq.

  • Coinbase filed Form S-1 Registration Statement for its IPO with the SEC on Thursday. The company revealed in December that it had confidentially applied to go public.
  • The company explained that it is offering “Class A common stock for sale via a direct listing,” which means “any person or business with a brokerage account” can place an order for the shares in the opening order book.
  • The SEC filing explains that Coinbase has applied to list its Class A common stock “on the Nasdaq Global Select Market under the symbol COIN.”
  • Coinbase states that it currently has “approximately 43 million retail users, 7,000 institutions, and 115,000 ecosystem partners in over 100 countries.” As of Dec. 31, 2020, the platform had executed $456 billion in trading volume since its inception and stored over $90 billion worth of assets. In May 2020, the company became “a remote-first company,” which means, “we do not maintain a headquarters.”
  • Moreover, Coinbase’s valuation jumped to more than $100 billion ahead of the IPO. According to Axios, “The most recent batch of 127,000 shares was sold [last] Friday at $373, which works out to a valuation of $100.23 billion.” On FTX exchange, Coinbase’s (CBSE) pre-IPO contract soared when the SEC filing news broke but has since retreated slightly.

Coinbase Files for IPO via Direct Listing on Nasdaq — Valuation Soars Above $100 Billion

  • As for revenue, Coinbase declared that “Since inception through December 31, 2020, we generated over $3.4 billion in total revenue, largely from transaction fees that we earn from volume-based trades on our platform by retail users and institutions. For the year ended December 31, 2020, transaction revenue represented over 96% of our net revenue.”
  • For its IPO, the company explained: “We will be treated as an ’emerging growth company’ as that term is used in the Jumpstart Our Business Startups Act of 2012 for certain purposes until we complete this listing.”

What do you think about Coinbase’s IPO? Let us know in the comments section below.

Indian Central Bank Informs Government of Major Crypto Concerns — Digital Rupee ‘Receiving Our Full Attention’

Indian Central Bank RBI Tells Government of Major Crypto Concerns — Digital Rupee ‘Receiving Our Full Attention’

India’s central bank governor Shaktikanta Das has revealed that the bank has “major concerns” about cryptocurrencies, and it has informed the government of them. He expects that the government will soon make a decision on cryptocurrency. Meanwhile, the Reserve Bank of India (RBI) is giving its full attention to the digital rupee.

RBI Has Major Concerns About Cryptocurrencies

The governor of India’s central bank expressed concerns over the possible impact made by cryptocurrencies on the country’s financial stability and the economy Wednesday. In an interview with CNBC-TV18, RBI Governor Shaktikanta Das shared:

We have certain major concerns about cryptocurrencies. We have communicated them to the government. It is under consideration in the government.

He elaborated: “On crypto, we have major concerns from the financial stability angle and we have shared it with the government.”

The governor further clarified: “I do expect and I think sooner or later the government will take a call and if required Parliament also will consider and decide.”

While Das did not explain further what the major concerns are, the central bank has previously expressed concerns that cryptocurrencies are being used for money laundering and terror financing.

The Indian government is planning to introduce a cryptocurrency bill during the current session of parliament. The bill seeks to provide a regulatory framework for the digital rupee to be issued by the RBI but bans all private cryptocurrencies.

Regarding the digital rupee, Das confirmed that the RBI is “very much in the game” and is getting ready to launch its own digital currency. He detailed that the “Central bank digital currency [CBDC] is work in progress,” noting that the “RBI team is working on it, technology side and procedural side, how it will be launched and rolled out.” Regarding the launch date of the central bank digital currency, Das said:

It will be very difficult and not possible for me to give a date as there are several loose ends that need to be tied up and it is receiving our full attention.

A number of other central banks around the world are also looking at issuing their own digital currencies. China has been actively testing its digital yuan in major cities over the past months. The U.S. Federal Reserve said this week that the digital dollar is a very high-priority project for the Fed. As for the digital euro, the president of the European Central Bank (ECB), Christine Lagarde, has said that it may be ready within four years.

Do you think the Indian government will ban cryptocurrencies like bitcoin? Let us know in the comments section below.

Square Adds $170 Million More in Bitcoin to Balance Sheet — Company Now Holds 5% of Total Cash Reserves in BTC

Square Adds $170 Million More in Bitcoin to Balance Sheet — Company Now Holds 5% of Total Cash Reserves in BTC

Square has bought more bitcoin, adding $170 million worth of the cryptocurrency to its balance sheet. The company now holds 5% of its cash reserves in bitcoin. Its Cash App was used by more than three million customers to purchase or sell the cryptocurrency last year.

$170 Million Bitcoin Purchase

Square Inc. (NYSE: SQ) announced Tuesday its fourth quarter and full year 2020 results. The company also announced that it has purchased $170 million worth of bitcoin “as part of its ongoing commitment to the cryptocurrency.” This is the company’s second bitcoin purchase; the first was for $50 million made in October last year. According to the announcement:

It has purchased approximately 3,318 bitcoins at an aggregate purchase price of $170 million. Combined with Square’s previous purchase of $50 million in bitcoin, this represents approximately five percent of Square’s total cash, cash equivalents and marketable securities as of December 31, 2020.

“Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future,” the company explained. “The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis.”

Increased Bitcoin Adoption via Cash App

The NYSE-listed company, led by CEO Jack Dorsey who also heads Twitter Inc., is seeing increased bitcoin adoption. Its Cash App allows people to buy and sell BTC. According to Square’s earnings report released Tuesday:

In 2020, more than three million customers purchased or sold bitcoin on Cash App, and, in January 2021, more than one million customers purchased bitcoin for the first time.

“Furthermore, in the fourth quarter of 2020, bitcoin volumes per customer were up more than 2.5x year over year, primarily driven by buying activity,” Square continued.

In addition, the company disclosed that “During the full year 2020, we saw significant growth in bitcoin revenue year over year.” Noting that “Bitcoin revenue is the total sale amount of bitcoin to customers,” Square wrote:

For the full year of 2020, Cash App generated $4.57 billion of bitcoin revenue and $97 million of bitcoin gross profit, up 9x and 12x year over year, respectively.

As for the fourth quarter, “Cash App generated $1.76 billion of bitcoin revenue and $41 million of bitcoin gross profit … up approximately 10x and 13x year over year, respectively.”

What do you think about Square keeping 5% of its cash reserves in bitcoin? Let us know in the comments section below.

The Fed Is Carefully Examining Digital Dollar — Chairman Jerome Powell Says ‘Very High Priority Project for Us’

The Fed Is Carefully Examining Digital Dollar — Chairman Jerome Powell Says 'Very High Priority Project for Us'

Federal Reserve Chairman Jerome Powell has provided an update on the progress of a digital dollar. He confirmed that it is a “very high priority project” for the Fed, and agrees with U.S. Treasury Secretary Janet Yellen on the benefits of issuing a digital dollar.

The Fed Is Looking Carefully at a Digital Dollar

Fed Chair Jerome Powell testified on Capitol Hill before the Senate Banking Committee Tuesday, the first of two days of congressional testimony. He is speaking before the House Financial Services Committee on Wednesday.

Senator Bill Hagerty asked him about a digital dollar, referring to U.S. Treasury Secretary Janet Yellen’s remarks on the subject made on Monday. She said: “I think it [the digital dollar] could result in faster, safer, and cheaper payments, which I think are important goals.”

Powell began by confirming, “We are looking carefully, very carefully at the question of whether we should issue a digital dollar.” He pointed out that other central banks around the world are also looking into issuing digital currencies because “The technology now enables us to do that, and also enables private sector actors to create their own digital quasi-money type of instruments.”

Noting that “There are significant both technical and policy questions to do with how we would go about doing that,” the Fed chair elaborated:

I would say that we are committed to solving the technology problems and consulting very broadly with the public in very transparent way with all interested constituencies as to whether we should do this.

He stressed: “We are the world’s reserve currency, and we have the responsibility to get this right. We don’t need to be the first. We need to get it right.”

Emphasizing that “This is something we are investing time and labor in right across the Federal Reserve System,” Powell reiterated that “We are doing research here at the Board.” Furthermore, he noted that the Federal Reserve Bank of Boston has partnered with MIT to explore this area.

The Federal Reserve chairman then agreed on the benefits outlined on Monday by Treasury Secretary Yellen. He added that the digital dollar “could help with financial inclusion as well.”

Nonetheless, Powell cautioned: “At the same time you want to avoid creating things that might be destabilizing or might draw funds away from the banking system … We want to be careful about what the implications are.” The Fed chair concluded:

[It’s a] very high priority project for us.

Do you think the Fed should issue a digital dollar? Let us know in the comments section below.

Microstrategy Buys $1 Billion More Bitcoin — Company Now Holds Over 90,000 BTC

Microstrategy Buys $1 Billion More Bitcoin — Company Now Holds Over 90,000 BTC

Microstrategy has purchased an additional $1.026 billion worth of bitcoin, raising the total number of bitcoins it has accumulated to about 90,531. Its CEO explained that his company remains focused on its two corporate strategies of growing its enterprise analytics software business and “acquiring and holding bitcoin.”

More Than $2 Billion Worth of Bitcoin Now in Microstrategy’s Treasury Reserves

Microstrategy Inc. announced Wednesday that “it had purchased an additional approximately 19,452 bitcoins for approximately $1.026 billion in cash at an average price of approximately $52,765 per bitcoin, inclusive of fees and expenses.” The announcement continues:

As of February 24, 2021, the company holds an aggregate of approximately 90,531 bitcoins, which were acquired at an aggregate purchase price of approximately $2.171 billion and an average purchase price of approximately $23,985 per bitcoin, inclusive of fees and expenses.

The company used the proceeds from its $1.05 billion convertible note offering which it completed last week to purchase the additional bitcoins.

The pro-bitcoin CEO Michael Saylor explained that his company “remains focused on our two corporate strategies of growing our enterprise analytics software business and acquiring and holding bitcoin.”

The amount of bitcoin the company holds reaffirms its “belief that bitcoin, as the world’s most widely-adopted cryptocurrency, can serve as a dependable store of value,” Microstrategy explained.

What do you think about all the bitcoins Microstrategy has been buying? Let us know in the comments section below.

India’s Warren Buffett Wants Regulators to Ban Bitcoin and Focus on Digital Rupee

India’s Warren Buffett Wants Regulators to Ban Bitcoin and Focus on Digital Rupee

Indian billionaire Rakesh Jhunjhunwala, sometimes referred to as the Warren Buffett of India, says that the government should ban bitcoin. Calling the cryptocurrency “speculation of the highest order,” the billionaire investor stated that he will never buy bitcoin.

Billionaire Rakesh Jhunjhunwala Thinks Indian Government Should Ban Bitcoin

Rakesh Jhunjhunwala believes that the Indian government should step in and ban bitcoin, CNBC reported Tuesday. Jhunjhunwala, who currently manages his own investment portfolio as a partner at asset management firm Rare Enterprises, is sometimes known as the “Warren Buffett of India” and the “King of Bull Market.”

Jhunjhunwala was quoted as saying:

I think regulators should step in and ban bitcoin. And they should focus on the digital rupee.

The Indian government is planning to introduce a cryptocurrency bill in the current parliament session. The bill provides a regulatory framework for the digital rupee to be issued by the central bank, the Reserve Bank of India (RBI), but bans all private cryptocurrencies. The finance ministry recently confirmed that the bill is being finalized and would soon be presented to the cabinet for approval.

Meanwhile, the price of bitcoin has risen sharply over the recent months but has since retracted over the past few days. At the time of writing, the price of BTC stands at $50,630, which is more than a 73% increase since the beginning of the year, according to data from markets.Bitcoin.com.

The Internet and Mobile Association of India (IAMAI) emphasized last week that cryptocurrencies and the digital rupee can co-exist and that the central bank does not need to ban bitcoin in order to launch the digital rupee.

“Existence and use of crypto assets by Indian consumers open up a wide scope for Indian entrepreneurs to issue such currencies and it is likely that Indians who comprise 15% of global buyers will prefer an Indian crypto asset,” the association detailed.

Jhunjhunwala further said on Tuesday that he “will never buy bitcoin,” elaborating:

I think it’s speculation of the highest order. I don’t want to join every party in town. I think the hangover is much worse.

What do you think about Jhunjhunwala’s view on bitcoin? Let us know in the comments section below.

Federal Reserve Appoints Pro-Bitcoin Chief Innovation Officer

Federal Reserve Appoints Pro-Bitcoin Chief Innovation Officer

A pro-bitcoin head of digital assets from TD Ameritrade has been appointed as the Federal Reserve System’s chief innovation officer. This is “a new role in which she will lead efforts to identify, research, enable and advocate for new technologies,” the Fed explained.

The Fed’s New Chief Innovation Officer Is Pro-Bitcoin

The Federal Reserve Bank of Richmond serves as the hub of the Federal Reserve’s enterprise IT organization. This nationwide team delivers technology solutions and support across the Federal Reserve System and the Board of Governors. The Richmond Fed announced Monday:

Sunayna Tuteja has been appointed as the Federal Reserve System’s chief innovation officer.

The announcement explains that this is a new role and Tuteja “will lead efforts to identify, research, enable and advocate for new technologies while fostering a culture of innovation, collaboration and experimentation.” The appointment became effective on Feb. 22.

Prior to joining the Fed, Tuteja worked at TD Ameritrade, one of the largest online brokers in the U.S., where she was head of digital assets. She also previously served as head of strategic partnerships and emerging technologies as well as head of digital strategy, experience and innovation at the company.

The crypto community sees Tuteja’s appointment as bullish. Lawyer Jake Chervinsky opined, “Continuing the trend of leadership roles in government being filled by extremely talented people with deep crypto knowledge & experience.” Bitcoin bull Mike Novogratz congratulated Tuteja, tweeting, “This is a big deal.”

Tuteja shared her thoughts about bitcoin and its supporters in a series of tweets on Dec. 16, 2020. The former head of digital assets at TD Ameritrade wrote:

[The] Thing I admire most about the bitcoin community is resilience. Sheer amount of shade & schadenfreude directed at bitcoin and the community over the years is enough to make anyone curl up into a ball.

“Yet like bitcoin, this is a community that keeps bouncing back every time they are written off, and bounce back stronger, having been stress tested in ways expected and unexpected,” she continued. “I am sure there are many twists and turns yet to come that we’ll have to suit up and slay … but for today, take a moment and enjoy the power of this movement.”

What do you think about the Fed appointing a pro-bitcoin chief innovation officer? Let us know in the comments section below.

Moneygram Halts Using Ripple Due to SEC Lawsuit Over XRP Cryptocurrency

Moneygram Halts Using Ripple Due to SEC Lawsuit Over XRP Cryptocurrency

Moneygram has announced that it has suspended using Ripple’s platform due to the lawsuit against Ripple Labs and its executives by the U.S. Securities and Exchange Commission (SEC). Last year, the company earned $50.2 million from Ripple for using the platform.

Moneygram Stops Using Ripple’s Platform

Moneygram International announced Monday that it has suspended trading on Ripple’s platform. The announcement came as part of the company’s earnings report for the fourth quarter and full year 2020. For the year 2020, Moneygram recorded total revenue of $1,217 million; its money transfer revenue was $1,105 million.

As part of its first quarter 2021 outlook detailed in the report, Moneygram wrote that it “is not planning for any benefit from Ripple market development fees in the first quarter,” adding:

Due to the uncertainty concerning their ongoing litigation with the SEC, the company has suspended trading on Ripple’s platform.

How Much Ripple Is Paying Moneygram

Moneygram has had a commercial agreement with Ripple since June 2019 to “use Ripple’s foreign exchange (FX) blockchain trading platform (ODL) for the purchase or sale of four currencies,” the company explained. The platform utilizes the XRP cryptocurrency. Its use by Moneygram is subsidized by Ripple.

In its earnings release Monday, Moneygram revealed that “In the first quarter of 2020, the company realized a net expense benefit of $12.1 million from Ripple market development fees.” In the fourth quarter, it generated “$8.5 million net benefit from Ripple market development fees of $9.2 million, partially offset by related transaction and trading expenses of $0.7 million.”

Meanwhile, its financial statements for the year 2020 and 2019 include Ripple market development fees of $50.2 million and $11.3 million, respectively. These figures were partially offset by related transaction and trading expenses of $11.9 million and $0.4 million, respectively.

Moneygram Cites SEC Lawsuit as Reason for Suspending Use of Ripple’s Platform

The SEC filed a lawsuit in December against Ripple Labs Inc., its CEO Brad Garlinghouse, and co-founder Christian Larsen, charging them with conducting a $1.3 billion unregistered securities offering of the XRP cryptocurrency.

The SEC lawsuit alleges that “Much of the onboarding onto ODL was not organic or market-driven. Rather, it was subsidized by Ripple.” The regulator further described: “Though Ripple touts ODL as a cheaper alternative to traditional payment rails, at least one money transmitter … found it to be much more expensive and therefore not a product it wished to use without significant compensation from Ripple.”

Without naming the money transmitter in question, the SEC detailed, “The money transmitter has served that principal purpose for Ripple in exchange for significant financial compensation,” adding:

The money transmitter became yet another conduit for Ripple’s unregistered XRP sales into the market, with Ripple receiving the added benefit that it could tout its inorganic XRP ‘use’ and trading volume for XRP.

What do you think about Moneygram’s decision to stop using Ripple’s platform? Let us know in the comments section below.

Janet Yellen Warns Bitcoin Is ‘Extremely Inefficient’ and ‘Highly Speculative’ as BTC Price Plunges

Janet Yellen Warns Bitcoin Is 'Extremely Inefficient' and 'Highly Speculative' as BTC Price Plunges

U.S. Treasury Secretary Janet Yellen has warned about the dangers of bitcoin as the price of the cryptocurrency took a nosedive. She sees bitcoin as a highly speculative asset and is worried about potential losses investors can suffer. Yellen also believes that bitcoin is not widely used as a transaction mechanism due to its inefficiency, reiterating her view that the cryptocurrency is often used for “illicit finance.”

Janet Yellen’s Warning About Bitcoin

Janet Yellen has blasted bitcoin again Monday in an interview with CNBC at the New York Times Dealbook conference. The treasury secretary “issued a warning about the dangers that bitcoin poses both to investors and the public,” the news outlet conveyed.

Regarding bitcoin, Yellen was quoted as saying:

It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer.

The price of bitcoin started falling sharply Sunday afternoon, dropping almost 18% from the high of above $58K to $47,827 at the time of writing, based on data from markets.Bitcoin.com. Its market capitalization has fallen below $1 trillion.

Janet Yellen Warns Bitcoin Is 'Extremely Inefficient' and 'Highly Speculative' — BTC Price Plunges
BTC’s price chart showing prices between Feb. 17 and Feb. 23. Source: markets.Bitcoin.com.

The treasury secretary further opined:

I don’t think that bitcoin … is widely used as a transaction mechanism. To the extent it is used, I fear, it’s often for illicit finance.

“It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering,” she added.

Many bitcoiners bashed Yellen’s remarks on social media, accusing the treasury secretary of not understanding bitcoin and advising her to do some research before making statements on the subject.

“Sec Treasury Janet Yellen states: ‘Bitcoin is extremely inefficient,'” Rich Dad Poor Dad author Robert Kiyosaki commented. “Give me a break. Does she think printing trillions of fake dollars is efficient? Does she not know the more fake dollars she prints the more efficient and valuable bitcoin becomes? God bless her.”

During the same interview, Yellen also touched on the subject of central bank digital currencies. The Federal Reserve has said that it is studying the digital dollar, which could roll out over the next several years. Yellen said: “I think it could result in faster, safer and cheaper payments, which I think are important goals.”

The treasury secretary has talked about bitcoin and cryptocurrencies several times since her Senate confirmation hearing in January. She has promised to work with other federal regulators to implement effective regulation for cryptocurrency. Claiming that the misuse of cryptocurrencies is a growing problem, she stressed last week the importance of regulating institutions that deal in bitcoin to make sure that they adhere to their regulatory responsibilities.

What do you think about Janet Yellen’s remarks about bitcoin? Let us know in the comments section below.

Russian Bill to Recognize Cryptocurrencies as Property Advances in Parliament

Russian Bill to Recognize Cryptocurrencies as Property Advances in Parliament

Russia’s parliament has advanced the bill that proposes to recognize cryptocurrencies as property. The proposed law will provide legal protection for cryptocurrencies but income from their activities will also be subject to taxation.

Cryptocurrencies to Be Considered Property in Russia

Russia’s State Duma, the lower house of Parliament, adopted a bill that recognizes cryptocurrencies as property and subjects income from them to taxation in the first reading, RIA Novosti reported last week. Noting that the document was submitted to the parliament by the government on Dec. 1, 2020, the publication detailed:

The bill proposes to recognize digital currency as property for the application of the tax code. As Prime Minister Mikhail Mishustin explained earlier, this will allow the owner of the cryptocurrency to count on legal protection and defend his rights in court.

Prime Minister Mishustin talked about the Russian government’s plans to recognize cryptocurrencies as property back in November when he outlined initiatives, including cryptocurrency regulation, to fight against the spread of the coronavirus pandemic.

The bill imposes taxes on income from cryptocurrency activities. Russian citizens and organizations will have to submit a declaration if the value of cryptocurrency transactions during the year exceeds 600,000 rubles ($8,100). Meanwhile, cryptocurrency will not be subject to depreciation, and transactions related to its circulation will not be subject to VAT, the publication conveyed.

For non-payment or incomplete payment of tax, there will be a 40% penalty of the amount owed. There will also be a fine for failure to submit, untimely submission, or submission of a declaration with inaccurate information.

For declaration violations, a fine of 50,000 rubles will be levied. The Federal Tax Service will have the authority to request individuals’ bank statements of accounts used for cryptocurrency transactions.

The State Duma Committee on Budget and Taxes intends to clarify which crypto transactions are exempt from VAT when finalizing the draft for the second reading. In addition, it will specify the declaration requirements for disposing of digital currency and submitting reports on transactions.

What do you think about Russia recognizing cryptocurrencies as property? Let us know in the comments section below.

Skybridge Capital Founder Predicts $100K Bitcoin Price This Year Due to ‘Heavy Demand’ and Diminishing Supply

Skybridge Capital Founder Predicts $100K Bitcoin Price This Year Due to 'Heavy Demand' and Limited Supply

The founder of asset management firm Skybridge Capital, Anthony Scaramucci, has predicted that the price of bitcoin will reach $100,000 before the year-end simply due to supply and demand. “You don’t have a lot of supply out there and very heavy demand,” he said. His firm currently has over half a billion dollars in bitcoin.

Skybridge’s Founder Expects $100K Bitcoin Before End of Year

Skybridge Capital founder and managing partner Anthony Scaramucci talked about his expectations for the price of bitcoin and his firm’s investment in the cryptocurrency during an interview with CNBC last week.

Noting that he sees ferocious demand in bitcoin while its supply is decreasing, Scaramucci expects the price of the cryptocurrency to double by the end of the year. The Skybridge Capital founder remarked:

I do think we see $100,000 in this coin before year-end … It’s just a supply and demand situation. You don’t have a lot of supply out there and very heavy demand.

Bitcoin’s price has been climbing rapidly, hitting multiple all-time highs over the past week. The cryptocurrency has already gained almost 76% since the beginning of the year. Its market capitalization has surpassed $1 trillion. At the time of writing, the price of bitcoin stands at $56,575.

The demand for bitcoin has been fast growing, particularly from institutional investors, which did not exist during the 2017 bitcoin bull run. However, according to blockchain analytics firm Glassnode, 78% of the bitcoin supply is not liquid. The firm says: “Currently 14.5M BTC are classified as illiquid, leaving only 4.2M BTC in constant circulation that are available for buying and selling.”

Scaramucci cautioned individual investors: “The thing is volatile, and again I want to be cautious with individual investors … Be cautious.” As for his own asset management firm, he said:

We like it. We have over a half a billion dollars in bitcoin right now. And obviously, our bitcoin fund started in December. It’s done quite well.

Skybridge launched its bitcoin fund in December last year with $25 million of its own capital. The fund opened to outside investors in January and debuted with $310 million. Scaramucci said his firm “could be at the precursor of an avalanche of institutional investors heading in,” as orders were “building up from a large swath of institutions for the first quarter of 2021.”

Major companies have recently been scooping up bitcoins, including Elon Musk’s Tesla, which bought $1.5 billion worth of BTC in January. Other major companies that have already invested in bitcoin include Jack Dorsey’s Square Inc. and mega insurer Massmutual.

Furthermore, the Nasdaq-listed Microstrategy had accumulated 70,784 bitcoins as of Jan. 27 and has completed a $1.05 billion convertible note offering to buy more BTC. A large number of bitcoins are also acquired by investment funds, including Grayscale Bitcoin Trust and an array of bitcoin exchange-traded products (ETPs) and bitcoin exchange-traded funds (ETFs).

What do you think of Skybridge’s prediction? Let us know in the comments section below.

‘Big Short’ Investor Michael Burry Warns Governments Could ‘Squash’ Bitcoin

'Big Short' Investor Michael Burry Warns Governments Could 'Squash' Bitcoin

Hedge fund manager Michael Burry, famed for forecasting the 2008 financial crisis, has warned that governments could “squash” bitcoin in an inflationary crisis. Expecting more massive stimulus from the government, he said to “prepare for inflation.”

Michael Burry Shares His View on Bitcoin

American investor Michael Burry has warned that governments could “squash” bitcoin and even gold to protect their own currencies. Burry founded hedge fund Scion Capital and is best known for being the first investor to foresee and profit from the U.S. subprime mortgage crisis that occurred between 2007 and 2010.

In a series of tweets Thursday night, Burry wrote, “Prepare for inflation.” He expects more stimulus from the government to drive up prices, fuelling inflation, as the economy tries to recover from the coronavirus pandemic. He tweeted:

In an inflationary crisis, governments will move to squash competitors in the currency arena. $BTC #gold

Burry became famous after his billion-dollar bet against the U.S. housing bubble was chronicled in the book and movie “The Big Short.” The film was directed by Adam McKay and starred Christian Bale as Burry, Steve Carell, Ryan Gosling, and Brad Pitt.

In addition, his hedge fund was holding 1.7 million Gamestop shares but sold all of its holdings in the fourth quarter of last year, before the massive surge fuelled by Wallstreetbets. According to Forbes, “The stock sales mean Burry missed out on a Reddit-fueled 2,000% surge in the video game retailer at one point in 2021, which would have made him over $1 billion.”

Burry further clarified his stance on bitcoin in a tweet Saturday:

I don’t hate BTC. However, in my view, the long term future is tenuous for decentralized crypto in a world of legally violent, heartless centralized governments with lifeblood interests in monopolies on currencies. In the short run anything is possible – why I am not short BTC.

Do you agree with Michael Burry about bitcoin? Let us know in the comments section below.

Federal Reserve Bank President James Bullard Confident Bitcoin Not a Threat to US Dollar

Federal Reserve Bank President James Bullard Confident Bitcoin Not a Threat to US Dollar

The president of the Federal Reserve Bank of St. Louis, James Bullard, has shared his view on the future of bitcoin. He is confident that the cryptocurrency poses no threat to the U.S. dollar. Referencing the unpopularity of various versions of dollars issued before the Civil War by banks, Bullard predicts the same fate will happen to bitcoin.

St. Louis Fed’s President Says Bitcoin’s Popularity Won’t Threaten the Dollar

James Bullard said in an interview with CNBC last week that increasing interest in bitcoin, coupled with all-time high prices, does not pose a threat to the U.S. dollar as the world’s reserve currency. Bullard is an economist who has been the president of the Federal Reserve Bank of St. Louis since 2008.

“I just think for Fed policy, it’s going to be a dollar economy as far as the eye can see — a dollar global economy really as far as the eye can see — and whether the gold price goes up or down, or the bitcoin price goes up or down, doesn’t really affect that,” the St. Louis Fed president explained.

Bullard expressed concerns about widespread financial transactions using different cryptocurrencies that are not issued by governments. “Dollars can be traded electronically already, so I’m not sure that’s really the issue here. The issue is privately issued currency,” he asserted.

He then referenced the time before the Civil War, describing that at the time it was common for banks to issue their own currencies. He likened the situation to financial institutions — such as Bank of America, JPMorgan, and Wells Fargo — all having distinct brands of dollars, elaborating:

They were all trading around and they traded at different discounts to each other, and people did not like it at all. I think the same thing would occur with bitcoin here.

“You don’t want to go to a nonuniform currency where you’re walking into Starbucks and maybe you’ll pay with ethereum, maybe you’ll pay with ripple, maybe you’ll pay with bitcoin, maybe you’ll pay with a dollar. That isn’t how we do this. We have a uniform currency that came in at the Civil War time,” he affirmed.

Regarding whether bitcoin or other cryptocurrencies pose a threat to the U.S. dollar, Bullard stressed that competition is nothing new and has existed for centuries. “It is a currency competition, and investors want a safe haven. They want a stable store of value, and then they want to conduct their investments in that currency,” he described.

The president of the Federal Reserve Bank of St. Louis proceeded to make examples of the euro and the Japanese yen as competing currencies. “Neither of those is going to replace the dollar,” he emphasized, concluding:

It’d be very hard to get a private currency that’s really more like gold to play that role so I don’t think we’re going to see any changes in the future.

Meanwhile, some analysts are not as optimistic about the U.S. dollar as Bullard. Morgan Stanley Investment Management’s chief global strategist, Ruchir Sharma, said last week that “Bitcoin is also starting to make progress on its ambition to replace the dollar as a medium of exchange.” In July last year, Goldman Sachs warned that the U.S. dollar risks losing its world reserve currency status. In Russia, gold has already exceeded the U.S. dollar in the country’s reserves as Russian President Vladimir Putin focuses on de-dollarization.

Do you think bitcoin poses a threat to the U.S. dollar? Let us know in the comments section below.