The days are getting shorter
Friday August 19, 2022 - Issue # 19
Our office is right in the heart of Toronto’s financial district and judging by how crowded the patios are at any time after Monday at 11am, it makes sense why there’s not too much going on in the markets these days. Summer is traditionally a slower time for all but this is even more true this year because people are celebrating the fact that they can enjoy a pint without a face mask on! As the days get shorter and the weather cools down, we can take solace in knowing that markets should start to heat up and get a hell of a lot more interesting in the Fall (midterms etc, etc.).
Now that I’ve ruined your Friday with talks of Summer ending (and BTC down ~9% at the time of writing) I should highlight some good stuff as well…
BlackRock (the largest investment management firm in the world with some $10T AUM) couldn’t stomach not having answers for another institutional client looking to gain spot exposure to bitcoin…so last week they announced a partnership with Coinbase.
The TL;DR is that this integration with Coinbase will allow BlackRock’s institutional investors to manage crypto trading, custody, prime brokerage and reporting in-house. This is big news. Here’s BlackRock CEO, Larry Fink discussing the fact that it has been impossible to ignore Bitcoin:
Larry has come a long way…
For now, both companies confirmed that the partnership will launch with bitcoin and it’s not clear if they will add other cryptos to the offering in the future.
So why just bitcoin and not ethereum or any of the other promising top 10 L1s? In short, bitcoin is complete, predictable (aside from price action), has regulatory clarity, and is fully decentralized.
Ethereum could very well be next up for consideration but I think heading into the merge there are some questions that need to be answered. Here are a few that I can think of off the top of my head:
Will the merge be successful?
If the merge is successful, how does the market react?
What happens when ETH miners (who have been the backbone of the Ethereum ecosystem and who will be left in the dust post merge) create a fork (ETHPoW)?
Could the transition from PoW to PoS lead to regulatory capture by centralized exchanges (CEXs) and staking platforms?
There are too many questions surrounding arguably the most monumental moment in crypto history for an institution like BlackRock to stake (lol, so punny) its reputation.
I saw Vitalik at the Futurist Conference in Toronto last week and thought he did a great job rallying the troops behind all the good that would come from the transition.
However, as I was watching, I couldn’t help but think that having a commander-in-chief to rally the plebs behind a massive transition for what is supposed to be a secure, immutable, and decentralized piece of technology that promises to underpin the Web3 economy might not be so ideal…just a thought.
Either way, what a time to be alive and I hope that the transition goes smoothly from my bags to yours.