BLOCKCHAIN GOES MAINSTREAM
World Digital Divide Gapes as JPMorgan Peddles Cryptocurrency Gateway Drug
An SEC filing by JPMorgan has the financial world on the brink of opening
the cryptocurrency markets wide open as digital assets on the blockchain go
mainstream.
by Raul Diego
March 12th, 2021
By Raul Diego
NEW YORK - Per SEC filings, JPMorgan is set to offer a new kind of
derivative stock that will allow its clients to invest in cryptocurrencies
and other digital assets through a special vehicle that circumvents current
federal restrictions on cryptocurrency investing. The finance giant will
bundle the stock of a select number of companies, whose recent sizable
investments in Bitcoin will represent the underlying derivative value of the
novel stock types, much like subprime mortgages represented the underlying
value of the instruments that brought the financial system crashing down in
2008.
Square, Inc., MicroStrategy, and NVIDIA Corporation, which makes the chips
used by cryptocurrency miners around the world, will account for 68% of the
basket's market value. If approved, the structured note offerings will
provide a way for more "risk-averse" investors to take part in the growing
crypto and digital asset market. But not everyone is keen on the idea of one
of the world's leading financial services firms spearheading a
cryptocurrency investment "gateway drug."
Jeff Dorman, chief investment officer of the L.A.-based digital asset
investment company Arca, called JPMorgan's new product a "garbage portfolio"
in a recent tweet. While valid in the sense that the profitability of the
companies, which these instruments are attached to, has (currently) little
to do with the cryptocurrencies themselves, Dorman's criticism fails to
account for the rise of impact investment markets anchored in the
blockchain, an emerging investment model that seeks to fashion securitized
debt instruments out of social and health problems.
JPMorgan has estimated that impact investments could yield up to $1 trillion
this decade, representing potential profits of $667 billion. Meanwhile,
forecasts by the International Finance Corporation (IFC) predict that more
than a quarter of the world's global assets under management will be tied to
"some aspect of environmental, social or governance issues." These, in turn,
can reach the necessary scale required by global financial institutions only
via the "transformations" enabled through the blockchain in order to meet
the "innovative deal structures that accommodate the needs of impact
investors and investees."
Podcast: Raul Diego on the Rise of Digital Currencies and Human Capital
Markets
The latest anti-Chinese lockdown narrative is obscuring a much broader
effort by the financial and tech sector to create state-backed digital
currency that will turn humanity into data assets.
MintPress News | Raul Diego | Mar 5
By tying these new investment vehicles to a company like MicroStrategy,
JPMorgan reveals the long-term vision behind these seemingly tentative first
steps to bring a broader investor pool into the digital asset space.
MicroStrategy is a business intelligence firm, helping companies like Apple
develop their mobile apps since 2010 and "pioneering" a cloud-based
analytics platform for Facebook - critical aspects of the digital asset
ecosystems, which are rounded out by the payment processing/asset holding
side courtesy of Square.
Likewise, NVIDIA's inclusion in the "basket" denotes the seriousness of
JPMorgan's move, considering the chip-maker's relevance to cryptocurrencies'
dependence on computational power and the ongoing restructuring of the
semiconductor chip supply chain.
The only hurdle to full-on investment schemes seems to be the restrictions
currently imposed on cryptocurrency investments by the SEC, which JPMorgan's
special vehicle manages to skate around. "What really needs to happen is
that the SEC needs to provide some guidelines," says Forbes crypto and
blockchain advisor Jack Tatar, who insists that the world of finance, in
general, must stop "denying [Bitcoin is] the best performing asset of the
decade."
George Soros, who recently invested $200 million alongside Morgan Stanley in
a Bitcoin investment firm, certainly seems to agree, as all signs point to
the inevitable reality that crypto has finally gone mainstream.
Peer-to-Peer or Corp-to-Corp
By the time the elusive Satoshi Nakamoto published the Bitcoin whitepaper in
2008, peer-to-peer sharing networks like Napster and Pirate Bay had been
stared down by the authorities and all but forced to shut down their
operations in what marked the end of the internet's glory days of free
flowing information and content.
Lasting just over a decade, the adolescence of the internet produced a
generation of cyber rebels who took pride in making copyrighted content -
from books to music - freely available through these peer-to-peer networks,
and formed the basis of what we now call the "dark web" and the scaffolding
upon which forums like Reddit and 4-Chan were built.
Bitcoin galvanized many within this particular virtual demographic, who saw
the cryptocurrency - and its underlying blockchain technology - as the
ultimate firewall between them and the government. For years, the narrative
that Bitcoin was the money of the people, beyond the reach of the taxman,
was furiously promoted by adherents and almost always tied to
quasi-patriotic rhetoric and libertarian notions of economic "freedom."
BitFreedom
BTC Revolution | Creative Commons
The far deeper roots of blockchain - going as far back as the 1970s with the
development of asymmetric key cryptography systems, upon which all
blockchain technology is based - were largely ignored by most fans of
Bitcoin. So too, was the fact that among the "revolutionary" technology's
first adopters were none other than the Winklevoss twins - who also happened
to be the initial investors of Facebook, which arose almost simultaneously.
Banks and financial institutions have been on top of the Bitcoin and
blockchain phenomena from the beginning and have slowly effectuated the
changes that are just now allowing for the full flourishing of the new
capitalist paradigm of a data-driven, blockchain-based economy to come
online. Emerging in tandem with the controlled demolition of the old
financial system, which took place the same year "Satoshi" released the
Bitcoin whitepaper, the socially-awkward chat-room geeks who first pushed
the cryptocurrency can now be cast aside as the once obscure 'art' of
cryptocurrency mining goes "truly global.
Liquid assets, non-fungible life
Perhaps no better signal that digital assets are now ready to be fully
implemented as a core pillar of the economy is the highly-publicized sale at
auction for $69.4 million of a digital art piece by an artist known as
Beeple, which was purchased as a so-called non-fungible token (NFT).
NFTs are, in essence, certificates of authenticity that exist on the
blockchain - cryptographically verified assets tied to a "smart" contract
which, as in the case of the digital nature of Beeple's work, may also
contain the artwork itself.
The non-fungible token "craze" has been making the rounds on mainstream
entertainment media for a few weeks now as the concept is introduced to a
broader public. Rock band Kings of Leon made the news earlier this month by
announcing it would release their next album as an NFT and the topic has
been on the lips of popular YouTube podcasts like "The Tim Dillon Show" and
others.
The Bits and Bytes of The Great Reset: COVID-19 and the Scaling Up of
Data-Capitalism
The so-called Great Reset amounts to little more than a campaign to turn
humanity into datasets, and Covid-19 has provided the perfect cover.
MintPress News | Raul Diego | Mar 3
Beyond the flashy, attention-grabbing headlines boasting of overnight
millionaires of the new digital space, there are more substantial signs that
we have entered into a brave new world where the analog world many of us
grew up in is being completely replaced with digital counterfeits.
Startups like Securrency, which "enables the programming of rules,
conditions and compliance safeguards into the crypto assets," represent part
of the strict, inflexible digital enclosure currently being built around us,
where pre-programmed laws and algorithms determine what our choices are and
how we can interact with one another in the marketplace and, increasingly,
in society itself.
Dan Doney, Securrency's CEO and co-founder, dispels the notion that Bitcoin
or any other cryptocurrency is beyond the reach of governments: "In the end,
anyone who figures that governments are going to turn away and not intervene
is just flat out wrong," Doney says of suspicious Bitcoin transactions.
The former NSA, DHS, FBI agent and the Defense Intelligence Agency's former
Chief Innovations Officer is bullish on the future prospects of his
company's success. After all, blockchain allows debt to be priced
automatically and "therefore much easier to become liquid in this market.So,
this is where the market's already going [and] very quickly."
At the end of the day, a programmatically-enforced marketplace through the
use of cryptographic technology the vast majority of people cannot access,
much less understand, takes away our power to set the terms of the deals we
choose to make in our lives. Instead, it hands virtually all power over to
the hedge funds and other entities, who have the ability to control these
systems by virtue of their ownership of the data that is being collected
day-in and day-out through the numerous data funnels placed all around us.
Worse still are the ultimate designs to convert human beings themselves into
the next digital asset through the rise of impact investment markets, which
the widespread adoption of cryptocurrencies will only accelerate, preparing
the groundwork for a fully digitized existence.
Feature photo | A JPMorgan Chase ATM in New York.