Libra v Congress
This week starts off with David Marcus, head of Facebook’s Libra project, being hauled up in front of the US Congress; the Senate Banking Committee, to be precise; As eminent a collection of grey eminences as they come, with an average age north of 60. It will likely be a theatre of the absurd. Politicians typically grandstand at these events, and these peculiarly American events are tailor-made for grandstanding, pandering to the lowest common denominator in public opinion, unsurprisingly. If you wanted to get to the truth of the matter, if you wanted to truly understand an issue, the approach would be truly different. It would not involve summoning a reluctant tech executive and trying to score brownie points off him, while asking him questions prepared by an over eager aide that probably looked up the subject on wikipedia the previous night; and whose only KPI is to make their boss, the politician asking the questions look good. Typically this involves making the executive squirm in his or her seat by asking them ‘smart’ and ‘pointed’ questions that can often verge on the inappropriate and the personal. Especially when it is clear, as in this case, what the tech executive is going to say. Apparently, a large portion of the ‘defence’, as it were, is going to be around, how Libra is a distributed entity with only a loose affiliation to Facebook, and regulated out of Switzerland.
What is more, US regulators now want to sponsor a bill that will prevent the Big Tech companies from offering financial services. Which is a bit ironic, as the large financial services firms are increasingly reliant on technology more than ever. By some accounts, more than 30% of Goldman’s work force is composed of software engineers, and large parts of trading and even traditional investment banking have now been automated to levels unthinkable even a few years ago. Goldman has also been aggressively investing in technology companies including in the crypto currency space, with its investments in Poloniex and Circle. JP Morgan is setting up a large fintech focused office in the Valley, in addition to much publicized crypto efforts.
On the brighter side, American regulators are addressing the problem front and centre, and at least engaging in a dialogue, unlike for instance, the Indian regulator, which is literally sleeping on the issue, with nary a mention of it in the recent annual budget by the nation’s finance minister.
Crypto Summer turning into Crypto Fall?
Ever since Bitcoin reached its yearly high of $14k recently, the market has been very choppy with the price largely oscillating between $10k to $12k and alts persistently losing value both in dollar terms and against bitcoin. One peculiar trend in the recent Bitcoin bull run is the unusual underperformance of altcoins. On most occasions previously, altcoin price movements closely tracked bitcoin’s, although with a lag. This time around, altcoins’ performance is seemingly disconnected from the price movement of Bitcoin.
Another thing to call out over the weekend was ETH’s fall of 27% after a large sell order on Bitstamp moved the price down to 190.
There was also some sports over the weekend, in and around London. A little bit of tennis and some cricket, and some blokes racing cars. Not sure who won the cricket thing, but the English ended up getting the cup. For a change!