15th August 2024 > > An attack on Operation Choke Point 2.0.

tl;dr

Football’s coming to crypto. Some bankers still just do not get it, but their numbers are dwindling fast. Operation Choke Point 2.0 is under attack.

Market Snap

Market Wrap

That drop yesterday afternoon from nearly $62k to below $59k was triggered by the movement of 10,000 BTC worth approximately $600mm from a known US government wallet to a known Coinbase Prime wallet. Clearly, this is in anticipation of selling this part of the US government’s stash.

I am a little confused though.

I know that some people see that transfer and think that the retail market is about to be flooded, but that is simply not the case. All of the US’s stash is for sale, and always has been, at least until November. Any institutional or private fund that wants to buy a decent clip of BTC off-market knows exactly who to call. This transfer is almost certainly in advance of a deal that has already been brokered and agreed, and now just needs to be executed. The new buyer is unlikely to be selling anytime soon, as that kind of cash investment implies a strategic, long-term buy.

The contrarian in me believes that this transfer suggests less immediate selling pressure, and the correct market response should have been to rally.

Some people just can’t be bothered to think it through, opening up an obvious trade idea regarding the rapidity and size of any price recovery following such movements. The CC research team will crunch the numbers.

Curious Cryptos’ Commentary – Lovely

The onboarding process to owning cryptos has just got a little faster.

Curious Cryptos’ Commentary – Goldman Sachs

On April 2nd, 2024 the CIO of the Wealth Management Unit of Goldman Sachs, Sharmin Mossaver-Rahmani, stated quite categorically in an interview with the crypto-denying Wall Street Journal:

“We do not think it (BTC) is an investment asset class.”

“We’re not believers in crypto.”

She also claimed – ludicrously so, in my humble opinion – that her clients had no interest in cryptos.

As a long-term and vocal sceptic of cryptos, Mossaver-Rahmani might now be regretting making these statements. The bank’s 13-F report shows that it is holding $400mm worth of spot BTC ETFs on behalf of its clients. Either she was fibbing to the WSJ, or she doesn’t know her client base. Neither of those two things are good looks, especially in an organisation rightly proud of its standards of excellence.

Perhaps she should take heed of her colleague Mathew McDermott, global head of digital assets at Goldmans, who recently asserted:

"The bitcoin ETF obviously has been an astonishing success. Institutions like ours actually see the potential in how it can transform where parts of the financial system can operate in a much more efficient way.”

We hope that this loudmouth wrong ‘un will keep her own counsel in the future, for the sake of her credibility amongst her peers.

Curious Cryptos’ Commentary – Fiat on/off ramp

The basis tactic of Operation Choke Point 2.0 was that banks were “advised”, sorry, continue to be “advised”, by the regulators to avoid having crypto businesses as clients. I have personal experience of this problem, but we already know that under the Conservative Party, and especially with Rishi Sunak as both Chancellor and Prime Minister, the UK was extremely hostile to the crypto revolution.

The attempt to prevent the fiat on/off ramp into crypto was a different angle but was still very much a core element of Operation Choke Point 2.0. One example should suffice.

I have never had any issues with transferring say £250 or £500 to Coinbase, a limited company with a very high profile. The one time I tried to transfer £10,000, oh boy, did the bank throw a wobbly. During the first few phone calls I was lied to by the help desk about why the money hadn’t been transferred. When I got my personal banker involved, he fought very hard to get me a one-off exemption from the Compliance department, but it never happened. This is despite a near decade of transfers from my personal account to Coinbase on a very regular basis.

I did receive a magnum of 2017 Rathfinny Classic Cuvee by way of an apology for which I am very grateful, but the whole episode still rankles a touch today. But as a wise man told me, perhaps that was the crypto gods reminding me to DCA every time.

…

I bring you news of another attack on this invidious pillar of Operation Choke Point 2.0.

MetaMask has announced a collaboration with Mastercard to allow users to spend cryptos directly from their self-custodial wallet.

Though limited in functionality at first – the only coins in the initial launch will be USDC, USDT and wETH on Linea – that will change soon enough. The launch will be limited to a few thousand lucky guys and gals in the US, and rather surprisingly, the UK too. Perhaps the change of government in the UK might be good for cryptos after all, a rather unexpected but very pleasing turn of events if true.

Mastercard is using the services of Baanx (https://baanx.com/) a crypto payments specialist.

Simon Jones, chief commercial officer, hints at the wider opportunity at bringing banking functionality to the unbanked across Africa and South America:

"Anybody who has access to a mobile phone should be able to get access to a basic range of financial services by default. This would have huge implications in countries with large numbers of unbanked or underbanked individuals."

The CCC has long maintained that this specific objective is a moral imperative for the crypto revolution. Banking the unbanked will be a huge gain for humankind.