Week 49, and the Pen team is back with another weekly wrap-up from all things finance, money, markets, crypto, and more. The week presented progression toward positive changes for the future and redeeming past events. 3 weeks away from the year's end, with markets settling after mind-numbing actions from walks of the financial world, 2023 may look a lot less darkening. Enjoy the read, yours truly the Pen Team.
GOLDMAN LOOKING FOR GOLD
Goldman Sachs has long been known to “hoard gold” where others dump it like dried-up cookies. In their recent quest for gold, Goldman Sachs is digging for bargain crypto company deals after the fiasco fall of FTX. Their plan is to spend 10’s of millions of dollars (really Goldman? Crypto firms being valued at billion will now go for pennies?), to either buy or invest in crypto companies, as they believe the collapse of FTX has hit company valuations and lessened investor interest. Let’s see who lets Goldman short, by selling themselves short.
BLACKROCKS BET FOR THE FUTURE
As the world of crypto is struggling to figure out where the future is headed, BlackRock CEO Larry Fink has already called out the next big thing in the financial world. In a keynote talk at the New York Times’ 2022 DealBook Summit held on Nov.30, he said that the future for global markets, and where the blockchain technology is headed will be tokenization. While he still sees ETFs as the driving force behind historic investing evolution, tokenization will power the next rally. Instant settlements of bonds and stocks, no middlemen and fees brought down dramatically, is what the investment management giant is betting on next. But that’s pretty much the basics of blockchain, nice to see the world is finally waking up.
THE PAYPAL PLAY
The pioneer of mass adaption payments PayPal is rolling out its crypto service to its first European Union market (Luxembourg) in the near future. Once the MiCa regulation comes into place their European headquarters could enable expansion into other 26 countries in the bloc. Last year PayPal expanded their 2020 US rollout crypto service into the UK, and once available users will be able to buy, sell and hold crypto at low rates and fees.
NIGERIA BANS CASH WITHDRAWALS
As PayPal is playing the field to expand its crypto services to the European Union markets, Nigeria has banned ATM cash withdrawals exceeding $225 in order to impose the use of CBDC. Africa a forerunner in the world of digital payments, is experiencing quicker adaptation of its "Cash-less Nigeria" policy. Should businesses and individuals want to exceed those limitations they will be imposed with outrageous fees of 5% and 10% respectively. Will see a greater advancement if decentralized finance in the African region or will the eNaira prevail of centralizing its society entirely?
A (then) unknown basement trader in the U.K. made $ 70 million throughout his trading career after he, what many believe, invented the now criminalized trading practice called “spoofing”. In its malicious essence, spoofing is executed by placing buy and sell orders at high volumes to drive the price in any direction they wish and then canceling the orders in order to enter the asset at the preferred price. In recent events, an Ex-JP Morgan & Credit Suisse trader was recently convicted in the U.S. for spoofing in the markets. Why this is an “important” read for this week’s Pen, is to showcase the lack of regulation and exploitative loopholes in TradFi which the blockchain technology could very easily solve. Let’s hope other financial giants like BlackRock will follow suit.
SEC AND THE QUEST FOR TRANSPARENCY
As the crypto space is leveling up its game by offering Proof-of-Reserves (which should just be the beginning hopefully, as it proves absolutely nothing)., The U.S. Securities and Exchange Commission (SEC) will vote, on December 14th, on whether to propose some of the biggest changes to the American Equity markets. The changes include new rules that would require marketable retail stock orders to be sent to auction before they are executed (blockchain much?) so that brokers can see how to get the best possible execution for client orders, as well as offering lower trading increments and access fees on exchanges. SEC Chair Gary Gensler (if no one heard that name before, he was the one helping SBF gain regulatory power in the U.S. markets), said in an interview that “it’s about driving greater competition, transparency, and efficiency in the marketplace.” Makes sense he would want that.
THE SOROS SAGA
Take out the tinfoil hat for this. George Soros, known as the man who crashed the pound, and before the Shiba-Inu trade in 2020/2021 was recorded as being the greatest trade in history is also the biggest disclosed Democratic Donor in the 2022 election cycle. He recently gave another $ 50 million to a super PAC in the fall, adding to an already large investment in Democratic groups for the upcoming election cycle in 2024. Now, it’s well-known that SBF had donated north of $ 50 million to the democratic party as well, there just seems to be something about high-level financiers and the democratic party. We’ll leave that speculation up to you.
CRYPTO.COM PLAYING THE ODDS
One of the many beauties of blockchain has been transparency and safety, but malicious actors in the space showed that nothing is perfect, and innovative novelty needs necessary measures to perfect itself. After the fall of FTX, crypto giants and lesser-known exchanges are showcasing that they have enough crypto assets to back their liabilities to customers, and this includes crypto.com which is on the top of the list of vegasodds.com for the next crypto exchange to file for bankruptcy. While giving their customers some level of confidence, it still doesn’t prove the strength of the company nor any risky trades they’ve made to make their mark in the market.
TOXIC RED FLAGS
Seemingly and in extension to the previous point, crypto.com CEO, Kris Marszalek has a history of red flags, which includes bankruptcy and quick exits. Prior to founding crypto.com, Kris was involved in multiple ventures that ended in spectacular failure, including one where suppliers claimed that they were unable to access their earnings. Over a decade ago, Kris and his business partner were paid millions of dollars by their manufacturing company shortly before it entered bankruptcy. A pattern amongst many crypto company founders, SBF and Mashinsky “disrespectively”.
SBF TO TESTIFY
SBF has agreed to testify before the House of Financial Services Committee, conveniently after rep. Maxine Waters would not be pursuing a subpoena. In a recent tweet, SBF also said that he’s willing to testify if the committee thinks so even though he doesn’t have access to much of his data, both professional and personal. Hopefully, he has a good memory.
MASS MEDIA MANIPULATION
During the Gutenberg printing revolution, the masses became aware of the lies that were being to them through religious leaders. The printing technology also enabled mass media to print en masse and feed its readers whatever they so wish. In came the revolution of the internet which opened vast access to data and information which overshadowed the manipulative nature of the printing media which was well-funded by powerful members of the global elite. In a recent revelation, it has come to the community’s knowledge that FTX was secretly funding crypto news media company The Block by sending its CEO money over the course of a year. There need to be no tinfoil intricacies happening at this point, so we’ll leave it up to the oracles to decide the verdict.
GREED VS ENVY
What has happened throughout this past year, can make one wonder whether the infamous quote from the movie “Wall Street” holds true. However, the 98-year-old billionaire investor Charlie Munger, recently said that the world is not driven by greed but rather envy. Let’s hope the trend of showing proof of reserve won’t spark any envy, and if it does, let’s hope it’ll be for the better by always one-upping each other in the pursuit of transparency and the road to redemption.
Till we yield again