Another One Bites the Dust
First Republic Bank Is the Latest Fatality in the TradFi System
The FDIC is preparing to place First Republic Bank under receivership.
In other words, First Republic Bank — a bank whose market cap was about $41.4 billion in November 2021 — is now on the brink of insolvency.
Here’s a chart of the bank’s stock price:
Looking good.
First Republic is following the likes of Silvergate Bank, Silicon Valley Bank and Credit Suisse into the shitter.
(If I had to guess which big bank is next in line to fall apart, I’d say Charles Schwab. It’s got a ton of unrealized losses on its balance sheet and has a lot of long-dated bonds — a very risky financial instrument to hold as a bank in this current environment.)
There are really only three letters that come to mind as I watch all of this unfold: L, O, and L, which spells “LOL”
It’s quite possible the US government in conjunction with the Fed has set in motion a global financial crisis in their attempt to go after the crypto industry.
And the great irony is that as all of these banks are failing, the price of bitcoin (BTC) has been increasing.
If I had to guess, this will only make the powers that be angrier and will prompt them to step up their Operation Chokepoint 2.0 efforts to stop Bitcoin/crypto.
Those in power in the United States seem like they want to trap us on the sinking ship they’ve created.
On a recent episode of What Bitcoin Did, investments analyst Luke Gromen, commented on Operation Chokepoint 2.0, stating the following:
“Gosh, it sure looks like they’re trying to chain the theater doors before they light the joint on fire.”
I highly recommend watching the section of the interview in which Gromen discusses Operation Chokepoint 2.0. It runs from 20:44-24:09.
Also, a friend of mine — a US citizen who lives in Japan — told me recently he’s been having a very difficult time sending money from his US bank account to his Japanese bank account.
Operation Chokepoint 2.0 and banking restrictions are forms of capital control — or when a government, central bank or regulatory body limits the flow of funds into and out of a country.
Capital control isn’t such a “land of the free” thing to do.
But the powers that be in the US don’t want to look silly as they do something silly, and trying to enforce capital controls seems to be their way of reducing how silly they might look.
Let me explain.
Gromen stated in the interview mentioned above that the US has little other option but to inflate away its debt.
He claimed that it might opt to let inflation run at up to 100% for 2-3 years in efforts to get it under control long-term.
But he said that the US doesn’t want to look bad in the process. While it wouldn’t mind the stock market increasing dramatically during these years of hyperinflation, it would mind seeing Bitcoin/crypto (or gold) do well during these massively inflationary years, because would really make them look silly.
I agree with his perspective.
And while I’m obviously a massive proponent of Bitcoin, I think it’s still a good idea to consider the message in the title of the video below.
(And it’s an even better idea to like the video and subscribe to my channel, as I’m trying to grow the viewer base so I can attract interviewees.)
I know that may sound counterintuitive — and please do as you will, as I’m not a financial advisor and nothing in this newsletter is financial advice — but I say it because I still think the US government will try to blow the on and off ramps to Bitcoin/crypto (the centralized exchanges) at some point.
They may even get real dumb and try to outlaw Bitcoin/crypto.
IMHO, it’s best to have enough cash or investments on the TradFi side of the money world to survive for the next few years before this battle between the Bitcoin/crypto and despots in the US government like Warren and Gensler plays out. In the long run, the US government will lose, but all things Bitcoin/crypto in the US in the short- to medium-run will likely be quite rocky.
In an ideal world, we want to see more of the following and we want to see it real soon:
(Link to article in the tweet: Sens. Warren, Marhsall Delay Reintroducing Crypto Bill Due to Lack of Sponsors (Blockworks))
But more of that isn’t guaranteed.
So, again, in my very humble opinion, it’s good to play it safe when it comes to the amount you invest in BTC — whatever safe means to you.
Cathie Wood Continues to Bet on the Exponential Age
I wrote the following piece this week: “Cathie Wood’s Big Bet on the Exponential Age” (Nasdaq)
In it, I discuss some of the drivers of the “Exponential Age” and detail why Wood has increased her Tesla (TSLA) bet.
Please be advised that I’m not endorsing TSLA as a good investment in the piece.
I simply wanted to share why I thought Wood recently increased her TSLA holdings as well as what investing in TSLA over the course of the next four years might look like.
Binance Stats
I had the following report published this week: “Binance statistics 2023” (Finder)
In it, visualized some data on Binance, Binance.US and BNB Chain.
I was most surprised to learn just how much more trading occurs on Binance — the largest crypto exchange in the world by trading volume — compared to its main competitor, Coinbase.
And that’s all for this week’s edition of the newsletter!
Again, if you could subscribe to the YouTube channel (above), it would be greatly appreciated.
And if you’d like to support financially, feel free to “upgrade” to the paid version, (which is the same as the free version). Doing so will help me to expand the quality of my content as well as its reach.
Take it ease.
Best,
Frank
Twitter | LinkedIn | MuckRack | Finder | QWOTED
