Eric Katz's Avatar
Eric Katz
published in Blogs
Mar 28, 2018
Are Banks Losing Big by Ignoring Cryptocurrency?

Are Banks Losing Big by Ignoring Cryptocurrency?

Cryptocurrency’s ongoing relationship with traditional banks can be referred to as “lukewarm at best”. But it shouldn’t be that way according to Daniel Masters, who thinks that banks are foregoing an enormous opportunity to innovate. Masters, a former top trader at J.P. Morgan, has criticized banks for “[having] absolutely failed to innovate in any way, shape or form,” in reference to banks’ slow adoption of cryptocurrency and its underlying blockchain technology.

Masters, who ran J.P. Morgan’s New York energy trading business in the 1990s before leaving to establish his own commodities fund, pivoted his firm’s focus to digital currencies in 2014. In a recent interview with Business Insider, Masters touted the “true revolution” that he believes cryptocurrency represents as an example of “trench warfare” between “analog financial service companies and digital financial services companies”.  

Traditional banks have typically characterized cryptocurrency as a type of scam. High-profile detractors abound – since the beginning of 2018, World Bank president Jim Yong Kim and European Central Bank executive board member Yves Mersch have described it as a Ponzi scheme. Bank of Settlements general manager, Augustin Carstens, went a step further calling it a “combination of a bubble, a Ponzi scheme, and an environmental disaster” while lecturing at Frankfurt University. Charlie Munger, the 94-year-old vice chairman of Berkshire Hathaway, has referred to bitcoin as a “noxious poison”, and J.P. Morgan CEO Jamie Dimon called it a fraud (though he later apologized for his comments, and the company’s attitude seems to be warming as evidenced by a recent J.P. Morgan research report on cryptocurrency).

 

 

Masters believes that cryptocurrency’s foundational principle of decentralization, coupled with its removal of middlemen, is threatening to legacy bankers. Regulations have created too much friction to previously facilitate innovation, and they are now paying the price. "Banks have sat on their laurels for 30 years,” Masters said. “I just threw out my checkbook, it looks exactly the same as it did in 1985. Why should I still have it when I'm doing Uber instead of cabs, Airbnb instead of the Sheraton?”

Despite traditional financial institutions’ collective misgivings, as well as a rough start to 2018, bitcoin’s 1,500% rise in value in 2017 has forced financial service providers to take notice. Exchange operators Cboe and CME have begun offering bitcoin futures trading, and Goldman Sachs indicated on a recent earnings call that they are considering opening bitcoin trading desks. Meanwhile, Global Advisors, which owns a 75 percent stake in fellow fund Coinshares, announced in January that they collectively manage more than $1 billion in assets – numbers that would have seemed outrageous in the recent past.

Masters thinks 2017’s gains represent a well-earned victory for the first-wave of cryptocurrency investors, who weathered significant ups and downs as the market found its footing. He characterized the landscape as “the fog of war”: “You might be able to see the few people around you, you can see the hill over there, but very few people can see the whole landscape. We're in a very fortunate position because we touch so many different parts of it. For us, it is abundantly clear that we are in the midst of a true financial revolution." Traditional banks would be wise to get a piece of action should he prove to be correct.

Interested in learning more about cryptocurrency, and perhaps even investing in it? Tickeron.com has educational resources you can tap to learn more, and has also developed Artificial Intelligence to track patterns in the cryptocurrency markets. Learn more and get started today.

Related Tickers: BTC.X
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 07, 2021
4 Tricks Hedge Funds Use to Get Ahead

4 Tricks Hedge Funds Use to Get Ahead

If the stock market were Major League Baseball, hedge funds and institutional investors would be the pros on championship teams while everyday self-directed investors (SDIs) are the benchwarmers in the minors.It’s how they get ahead, and it’s why 90% of SDIs lose money trying to play (invest and trade) in the major leagues. The 4 tricks we discuss below are rooted in one common theme: they all use Artificial Intelligence and algorithms to generate data and ideas.
John Jacques's Avatar
John Jacques
published in Blogs
Mar 22, 2018
A.I. Stock Market Predictions: Head & Shoulders

A.I. Stock Market Predictions: Head & Shoulders

Statistics for the Head-and-Shoulders Bottom Pattern The days where only hedge funds used algorithms to trade stocks are officially over. Now retail investors can use Artificial Intelligence (A.I.  Here’s an example of the algorithm in action: Late last year, Tickeron’s A.I.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Jul 10, 2020
3 Stocks to Buy if Coronavirus Second Wave Hits

3 Stocks to Buy if Coronavirus Second Wave Hits

By analyzing market trends from the first wave, you can predict behavior for the second. Technology stocks have performed at historic levels this year, but the market is severely overbought.To compensate for that, look at performance during Q1 and Q2, the height of global Covid shutdowns.
Edward Flores's Avatar
Edward Flores
published in Blogs
Feb 06, 2021
How to Become the Millionaire Next Door

How to Become the Millionaire Next Door

The Golden Gate Bridge is always a fixture of these walks too, one of man's most beautiful creations.  As we were walking, at one point she turned to me and said, "Man, I'll never have a million dollars."" My girlfriend is 27 years old and works as a graphic designer, making about $75,000 a year.
Alla Petriaieva's Avatar
Alla Petriaieva
published in Blogs
Feb 23, 2021
Is Ethereum’s Bomb about to Explode?

Is Ethereum’s Bomb about to Explode?

Ethereum’s software is set for an update in October.Until it is finished, participants in the Ethereum blockchain must determine how to delay the difficulty bomb – code that necessitates a steadily increasing amount of computer power to mine blocks and unlock rewards – that is already in place.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Aug 07, 2018
When Is the Next Recession Coming?

When Is the Next Recession Coming?

However, we also know that economists predicted 22 recessions out of 11 that took place since 1945. Are there real recession signs we should watch for?Indeed, the answer is yes, and here are a few very important ones: The first one is almost obvious and known to everyone – it is the Fed.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 22, 2020
Central banks have been buying $2.4 billion in assets every hour for the past two months

Central banks have been buying $2.4 billion in assets every hour for the past two months

Some $17.8 billion has been poured into  bond markets over the past week, the biggest move in more than three months.Around $3.5 billion has been invested into gold, the second largest on record. 
Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Feb 07, 2021
Mid-January Short Interest Report Shows 8 Stocks with Good Fundamentals and High Short Interest
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 10, 2021
How to Start Trading Penny Stocks

How to Start Trading Penny Stocks

Penny stocks have long been marginalized within the professional investment community, oftentimes being painted with a broad brush of simply being “too risky.” Leonardo DiCaprio’s depiction of the penny stock peddling conman, Jordan Belfort, in the Wolf of Wall Street certainly didn’t help.Here are four reasons to start trading them now. Reason #1: Let’s State the Obvious -- Penny Stocks are Cheap A single share of Apple Inc. costs over $350.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 08, 2020
US unemployment rate jumps to 14.7%, the highest in series history

US unemployment rate jumps to 14.7%, the highest in series history

The U.S. economy’s employment fell by -20.5 million in April. The coronavirus crisis led to unemployment rate soaring to 14.7% in the U.S, the highest rate in the Bureau of Labor Statistics-tracked series history that goes back to 1948. However, the figures were better compared to several economists'/analysts' forecasts of 22 million job losses and 16% unemployment rate.  Another unemployment measure that includes those who have stopped looking for work as well as those holding part-time jobs for economic reasons also touched an all-time high of 22.8%.