This week’s Crypto in the News sees Brexit wreaking havoc with the UK’s blockchain ambitions, the Wall Street Journal only being a few weeks behind crypto Twitter with news about Bakkt and crypto exchanges faking volume, and a critique on the (alleged) Facebook coin. Read all about it!
The New York Times reported that investors in emerging markets “have started to show signs of hesitation”, with a recent Bank of America Merrill Lynch survey describing emerging markets as the “most crowded trade”. They point to Bitcoin in 2017 as an example of a previously “crowded trade”, illustrating its well known slide from its $20,000 peak its current $4,000 valuation as what happens when a trade is too crowded. Fifteen months later, it can be said with confidence that Bitcoin is no longer a crowded trade.
The New York Times also reported that Brexit is having a negative impact on its ability to compete with other nations in the field of financial technology. The report says that up to a fifth of the skills needed to fill roles in coding, cloud computing, machine learning, software development, cyber, artificial intelligence, and blockchain in recent years has come from EU countries, and the potential impact of Brexit has left individuals from the EU unwilling to move to the country to fill these jobs. This could result in a huge skills shortage and could lead to the UK falling behind in the fintech race.
The Wall Street Journal, as well as reporting something that anyone in crypto has known for years – that most volume on crypto exchanges is fake – said on Thursday that the launch of Bakkt was being further delayed by CFTC regulations. Again, this is something that most people inside crypto have known for weeks, but the mainstream media tend to be off the pulse somewhat with these things, so their own delay can’t come as a surprise. Citing anonymous sources “familiar with the matter”, a wonderfully vague terms mainstream media likes to use to describe someone not directly involved, the WSJ says that Bakkt needs to take further steps to show how they plan to hold and protect customers’ Bitcoin to comply with regulations, which would then necessitate a public comment period. All in all it looks like a March launch is out the window.
In the UK, the Independent took a look at Facebook’s forthcoming cryptocurrency. Cutting through the hype, Alistair Milne is doubtful that the thing will even get off the ground, given that “of 103 projects announced since 2015 applying blockchain technologies to financial services, all but a handful have quietly disappeared.” He also suggests that the technology Facebook will implement won’t help reduce remittance costs once end-of-the-line conversions are taken into account. Only time will tell on that one. The Independent also reported that Bitcoin this week “surged” past $4,000. Surged? You’ll know when it surges.