Full Speed Ahead
More 'Masters of the Universe' Enter the Arena
A few big things have been announced in the past 48 hours.
Bridgewater Loses Its CFO to a Bitcoin Institution
First, John Dalby, the CFO of the largest hedge fund on the planet, Bridgewater Capital, founded by legendary investor Ray Dalio, has left Bridgewater to join NYDIG (New York Digital Investment Group), an organization that facilitates the acquisition of Bitcoin for major institutions, private clients, and banks. To see one of Bridgewater’s top associates move from this conventional investing space into the digital (cryptocurrency) space is quite notable.
Though Dalio recently came out to publicly state that Bitcoin “has proven itself,” it seemed to be too little too late for his CFO.
Goldman Sachs Joins the Crypto Party
Second, remember how I told you about how the banks were coming into the digital asset space? Well, an internal memo at Goldman Sachs unveiled the fact that they will be opening a cryptocurrency trading desk. So, within the span of two weeks, we’ve had Jamie Dimon announce that JPMorgan would be offering Bitcoin products to his wealthy clients, and now Goldman Sachs is dedicating a division of itself to trading cryptocurrency. So, if you are still wondering whether or not the government will ban cryptocurrency, my bet is on a big fat “NO”, as banks like JPMorgan and Goldman Sachs financed the current president’s election campaign (See: “‘Middle-class Joe’ Biden ‘Boosted by Almost $30 Million in donations from Wall Street types”). If Goldman Sachs - who my favorite journalist Matt Taibbi once so aptly described “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money” in his legendary article “The Great American Bubble Machine” - is making money off of something, you better believe the U.S. government has no choice but to be on board. As Taibbi went on to describe in both this aforementioned piece and in his masterpiece, Griftopia, Goldman has its former employees everywhere, and these people are in both Democratic and Republicans cabinets. Remember this class act?
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Goldman alum.
And remember “Sloppy Steve”?
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Goldman alum.
And here’s William C. Dudley, president of the New York Federal Reserve under Obama. Remember how banks got all that bail out money in 2008, and how you got none? He’s partially to thank.
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Goldman alum.
And Joe Biden actually made the Goldman alum below, Gary Gensler, the head of the SEC.
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Oddly enough, though, Gensler taught a class entitled “Blockchain and Money” at MIT, the lectures for which I am currently watching (for free). Given that Gensler understands Blockchain technology, the underlying technology of Bitcoin, and that his homies at Goldman will now be making a pretty penny off of it, my guess is that he doesn’t crack down too hard in regard to regulation. But who knows? Maybe he will try to mandate that banks must custody cryptocurrency for everyone. That would be cute.
(Also, if you are wondering why I like to cite Raoul Pal quite frequently, it’s because - you guessed it - he’s a Goldman alum.)
There is a reason the powers that be at Goldman Sachs are known as “masters of the universe”. They understand that “government is a slavish lapdog that the financial companies [JPMorgan and Goldman Sachs]…use as a tool for making money,” as Taibbi states in Griftopia. So, please pardon my diatribe, but, also, please consider what it means for the cryptocurrency asset class it in regard to it being banned or overly regulated when institutions like Goldman Sachs and JPMorgan come to the table and begin to make money off of it.
Citigroup on the Verge of Diving in the Crypto Waters
Third, we’ve got Citigroup on deck, weighing their entry into crypto markets as the demand from their clients continues to grow. My guess is that Citigroup is simply being ambiguous in its rhetoric as plans for their move into crypto are already in the works.
So, here we go. We’ve got the former CFO of the largest hedge fund in the world entering the space alongside JPMorgan and Goldman Sachs, with other big banks waiting in the wings. What do you think happens next?
Bitcoin Bounce Back
Based on what I’ve been piecing together, it seems like this consolidation period that Bitcoin has been in is starting to draw to a close. On-chain analysis shows that Bitcoin is likely nearing another significant leg up. Great piece on this here (same as the one featured in the Tweet below).
One More Big “Thank You”
Just a few days ago, I published an edition of this newsletter in which I thanked everyone for the support (and critique). I’d like to thank one more person here, as I received a very significant donation for this newsletter two days ago, and I was quite touched by it. I don’t know who it was that sent it, but I just wanted to say thank you very much for doing so. Receiving such a donation was deeply validating. I’ll likely be starting a Patreon account soon for people who would like to support, but in the meantime, if this newsletter has helped you to better understand what is happening in markets and you’d like to support, I have left my Venmo, PayPal, Bitcoin wallet and Litecoin wallet addresses (Litecoin is great for cheap, fast payments) in my signature below.
Thanks again for the support, and have a great weekend!
Best,
Frank
Twitter: @frankcorva
Venmo: @Francis-Corva
PayPal: @fcorva
