CoinMetro’s CEO, Kevin Murcko brings you the most recent crypto market news during the weekly AMA every Friday.
Crypto Market News Highlights
It was obvious that Bakkt was going to grow. It’s a regulated futures exchange that has physically settled Bitcoin. Bakkt had a really bumpy and slow start, but it will definitely be used by exchanges and market makers to offset/hedge.
It’s a new method for price discovery, and will be one of the main price discovery mechanisms in the future. It will lead to solving one of the problems why there hasn’t been an approval for an ETF or an electronically traded Bitcoin, in the US. One of the (many) reasons it hasn’t been approved is because there hasn’t been an accurate price discovery mechanism. A regulated futures exchange sitting in the US, will lead to a more accurate mechanism for price discovery.
Even during the ICO bubble, China pushed to not have ICOs in China. China doesn’t want money to flow into areas they can’t control. That’s why there has been restrictions on how much money one can move out of the country, pretty much forever. Crypto is a way for people to move money without China being able to stop it, and this is a push to stop it.
And they could break everything else on the internet. Quantum computing will probably arrive at some point. Most industry leaders in every industry knows what’s happening, and they’re preparing. There will be some things that happen if and when quantum computing goes live.
There are many other things to worry about in blockchain before worrying about quantum computing breaking the chain.
Nouriel Roubini is a globally known economist. He’s also one of the most famous Bitcoin sceptics. He gets paid to go around and debate about it, so obviously he wants to keep the revenue stream open for himself.
“Crypto-carnage” — everybody that’s a sceptic on anything will be happy about something bad happening. When good things happen, they’re going to spin it to make it seem bad so they can still be happy about it. The maximalists are going to say the bad things are good. That’s just how it works.
Nouriel is wrong, that’s it. He’s wrong on many things. He makes truthful statements, but the reasoning for those statements, is wrong.
This is actually pretty cool. It has been done in other countries too. However, these ‘good’ news where tax authorities and governments recognize crypto are also not great news. A lot of guys in crypto are in crypto because it’s pseudo-anonymous, and they don’t worry about tax filings and statements of wealth.
With this, a company that makes payments in crypto to get around employment tax, can’t do that anymore. The good thing is that if you’re a crypto company and your money is sitting in Bitcoin and you don’t want to sell it to put it on your books because you need minimum capital for something or that your company is profitable — now you can do that.
Another day, another exchange “hack”. Upbit has been around for quite some time. Just like every other hack, a lot of this is social engineering and protocols that were not created or not followed.
Most of these companies are run by people that don’t have experience.
You don’t need to be a bank to operate like a bank in crypto. There are many other licenses that can be acquired and that are much less of a headache.
Bank charters are not necessarily easier to get, and when you get them, you deal with the intermediate banks. It creates more problems. Kevin thinks it would make much more sense for Robinhood to go after a different type of license.
There was an article a year ago that said 90% of exchanges did no KYC. So we’re improving as an industry, that’s good. A lot of those exchanges that didn’t do it, no longer exists, or have started doing some KYC. This strengthens everyone’s ability to maintain the industry.
Likely a majority of small exchanges trying to grow, are doing next to no KYC. The number of medium-sized exchanges that are trying to grow are starting to do more KYC as they have more eyes on them, and have more risk. Large and very large exchanges are doing some type of KYC, but likely aren’t doing everything they’re supposed to.
It mentions the proposed “fourth money laundering directive” (MLD4), and that was relevant a year ago. The fifth money laundering directive has already been implemented by several countries in the EU, and needs to be implemented by everybody by the end of the year.
This is not really specifically related to crypto, it’s related to the fact that banks wanting to get involved in different businesses — and crypto was one of the main businesses — need to have separate entities to handle those assets.
That already happens around the world, banks normally have a separate entity to handle their credit card business, for risk mitigation. This doesn’t change so much. It does streamline things.