How Coinbase rode crypto’s ‘inflection point’ to a rocky but momentous year

Dec 27, 2021

First Read

Hits & Takes
John Lothian & JLN Staff

Omicron is surging everywhere, exceeding Delta peak cases in the U.S.; more than 5,000 flights are canceled globally as crews and schedules are omicron(ed); the UK and France hit 100K in new omicron cases and I need to get tested but over the counter tests are nowhere to be found.

Someone I came in contact with was in contact with someone who tested positive for Covid-19. I am fully vaccinated and boosted and have no symptoms, but will get tested. I have moved to wearing the N95 or K95 masks due to the spread of omicron.

The Cboe announced plans to list the AMERIBOR® Term-90 Futures Beginning January 24, 2022, which follows launch of AMERIBOR® Term-30 Futures in September and further expands the suite of AMERIBOR® interest rate futures.

My most popular LinkedIn post over the holidays was about new bond futures at Borsa Istanbul. They are offering physically delivered bond futures and also adding palladium futures and U.S Dollar to Turkish Lira futures and options contracts that are physically delivered.

Want to know what was a good investment in 2021? Well, opening a bottle of champagne to celebrate your winnings would be the wrong thing to do. Champagne as measured by Liv-ex’s Champagne 50 index outperformed the FTSE All World stock index so far in 2021, the FT reported.

FTX US President Brett Harrison tweeted yesterday that FTX US has more than doubled its user count in the fourth quarter. See the chart with the numbers HERE. FTX’s Sam Bankman-Fried in an interview with Business Insider “lays out what he fears most as FTX’s growth explodes.”

J. Christopher Giancarlo‘s book “CryptoDad” received a less than favorable review from Paul Blustein in a review on Blustein is an award-winning journalist and author; he has written extensively about international economics, trade and financial crises. Sounds like Blustein has dad issues.

Thank you to all who sent Thomas J. Cashman birthday greetings last week. It was very kind of you and it meant a lot to him.

Thank you to Trading Technologies for matching the donation made by Melanie Budden to our MarketsWiki Education GoFundMe campaign. There is still some more room on TT’s pledge to match donations to the JLN GoFundMe campaign.

During the break between Christmas and New Year’s Day, JLN is on what is called “granted days.” On granted days the staff puts out JLN in the morning, but then gets the rest of the day off. This is a reward for all of the hard work they do the rest of the year and because it is normally a slow news time of the year. Thus, we won’t be publishing JLN Options or The Spread this week. Both will return in January. I think given the stress of the holidays normally, the omicron surge and the uncertainty again over future plans, a mental health break is in all our best interests.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL


Return to office paused (again) as COVID rages: Will we ever go back?
Paul Davidson – USA Today
The omicron variant has thrown America’s great return to the office
into disarray – perhaps for months. Most companies who had notified employees they would need to come back to the office at least part time early next year have pushed back those plans or are considering doing so because of the latest COVID-19 spike, according to human resources experts and surveys.

***** I need to go back to the office just one more time. Then, it is goodbye office (for now).~JJL


A Secret Weapon Leads to a Trading Challenge Win
Debbie Carlson – CME Group – Open Markets
The winning team for this year’s CME Group University Trading Challenge had a secret weapon: experience. Santiago Chisco, a senior law student at University of Bogota Jorge Tadeo Lozano, and the team leader for Tadeofutures, was part of a team that placed fourth in the 2018 tournament. Tadeofutures’ win this year makes them the second consecutive team from South America to win, as last year marked the first time a team from Latin America came out on top.

******Former MarketsWiki Co-Founder Jon Matte once had the secret weapon of focusing on just the 30-Year Treasury Bond futures at the CBOT and was the number one ranked commodity trading advisor of the 700+ that the Price Futures Group tracked back in the 1990s. That lead me to sign him to a marketing agreement and raise him more than $3 million, which began our commercial relationship.~JJL


Those Legos under the tree might be worth more than gold one day
Jason Fuller and Courtney Dorning – WBEZ Chicago
If you’re looking for a good investment to close out the year, you might not have to look any further than under your Christmas tree, especially if you’ve got a Lego set there.
Researchers from the Higher School of Economics in Moscow found that select unopened Lego sets on the secondary market saw an average annual return of 11% — that’s more than gold and some shares of large companies.

**** I’m 54 years old. If someone gave me Legos I’m going to open it and play with it. ~JB

**** Now you tell me, two days after Christmas. ~JJL


Thursday, December 23rd’s Top Three
Our top story for Thursday, December 23 was Wall Street Is No Fun Anymore, a Matt Levine opinion piece from Bloomberg. Second was The Remote Work Revolution Spawns a New Class of Supercommuters, from Bloomberg Businessweek. Third was 4 observations from 4 years of CME Bitcoin futures, a LinkedIn post from Tim McCourt, managing director at CME Group, global head of equity products.


MarketsWiki Stats
26,680 pages; 236,635 edits
MarketsWiki Statistics


Lead Stories

How Coinbase rode crypto’s ‘inflection point’ to a rocky but momentous year
David Hollerith and Jared Blikre – Yahoo Finance
In 2021, Microsoft (MSFT) – Yahoo Finance’s company of the year – saw its market capitalization top $2 trillion. During the year, the ascendant cryptocurrency asset class set two major milestones: its market cap also topped $2 trillion, and Coinbase (COIN), the most popular U.S. based crypto exchange, went public on the Nasdaq through the largest ever direct listing. With a market cap of just over $70 billion, Coinbase’s value is just a fraction compared to tech heavyweights like Nasdaq, but is multiples higher than the $8 billion valuation it fetched only a few years before. That’s no small feat considering Coinbase Global CEO Brian Armstrong co-founded the company with Fred Ehrsam at a time when Bitcoin cost less than $10 (it traded above $50,000 on Friday).

NFTs and SNL: Crypto Keeps Burrowing Into the Mainstream; It was another crazy year in the crypto world, but traders didn’t seem to mind. Millions of new investors decided to try their hand at cryptocurrencies in 2021.
Paul Vigna
Crypto has been many things in its short history. 2021 was the year it became part of the mainstream. Elon Musk tweeted about it, often. It was parodied on “Saturday Night Live.” Collins Dictionary dubbed “NFT,” the acronym for nonfungible tokens, its word of the year. Institutional investors looked for ways to get in, and the first bitcoin ETF started trading. Individual traders bought crypto on their phones when they weren’t snapping up GameStop Corp. GME -1.21%

China will tighten rules on overseas IPOs, but won’t ban them entirely
Jill Disis, CNN Business
Hong Kong (CNN Business)China is planning to tighten restrictions for Chinese companies that want to list overseas, but the government won’t ban them from trading abroad altogether. The securities regulator proposed late Friday that any firm that wants to go public in another country has to register with the agency first, and then meet a set of requirements set forth by government officials.

China Imposes New Curbs on Offshore IPOs From Restricted Sectors
Bloomberg News
China will impose new restrictions on offshore listings by firms in sectors that are off-limits to foreign investment, a move that could plug a loophole long used by the country’s technology industry to raise capital overseas.

Libor Is Dead, Almost! What It Was, What Comes Next
William Shaw – Bloomberg
For half a century the series of interest rates known collectively as the London interbank offered rate, or Libor, has helped determine the cost of all sorts of borrowing around the world. But over the last decade it became seen as outdated and discredited, and a decision was made to kill off the benchmark at the end of 2021. That sent the financial world scrambling to adjust the terms in contracts on hundreds of trillions of dollars’ worth of products — from mortgages and credit cards to interest-rate swaps. Banks collectively spent an estimated $10 billion preparing for Libor’s demise, but fears of a messy transition mean that some existing contracts can linger on, though new deals based on Libor are set to end on New Year’s Eve.

Brussels signals cross-border banking curbs will not be sweeping; Proposed measures aimed at ‘core’ services, says EU’s Valdis Dombrovskis
Sam Fleming and Andy Bounds and Laura Noonan – FT
A proposed EU crackdown on the ability of banks outside the EU to sell services into the bloc is intended to focus on “core” banking, a senior EU official said, in words that will ease industry concerns that Brussels is pursuing more wide-ranging restrictions.

Miami wants to become crypto’s financial capital. New York’s response? Bring it on
David Gura – NPR
When was looking for a new home for its U.S. headquarters, it decided to leave New York and move to downtown Miami. “New York is a great city,” says Peter Smith, the cryptocurrency company’s co-founder and CEO. “But Miami was an easy choice for us.”

Amsterdam Is Having a Financial Renaissance. Europe Must Take Note; SPACs, semiconductors and straight-talking have given the city a boost, but competing with hubs in the U.S. and Asia requires more coordination.
Lionel Laurent – Bloomberg
Amsterdam’s historical significance for global capitalism is hard to overstate. It created the stock market, the tulip bubble and a mega-corporation so big it had its own money, army and colony. Economists later wondered if there was something almost spiritual in the way the Dutch took to money.

Wall Street is pumped about the metaverse. But critics say it’s massively overhyped and will be a regulatory minefield.
Harry Robertson – Business Insider
The metaverse is the talk of Wall Street, with investors desperate to jump on the trend that many think could be the future of the internet. Jefferies has said it could be the biggest disruption to human life ever seen. Meanwhile, Ark Invest’s Cathie Wood has said it’s a multi trillion dollar opportunity.

Mark Gilbert’s View to 2022: Asset Management Gets Even Harder; The fund management industry faces a testing year. Plus a selection of the columnist’s best work in 2021.
Mark Gilbert – Bloomberg
What to Expect in 2022
For asset managers, next year is shaping up to be challenging, to say the least. Faster inflation will prompt central banks to slow, stop and possibly reverse their monetary support of economies, making financial markets trickier to negotiate. The pandemic is far from over. The industry will face even more pressure to allocate assets in environmentally friendly ways without drifting into greenwashing. And the urge to merge, with size bringing benefits of scale to alleviate the relentless downward pressure on fees, remains omnipresent.

The TRADE predictions series 2022: digital assets and decentralised finance (DeFi); These industry participants expect institutional demand for digital assets to continue to rise in the next year along with the growing trend of decentralised finance (DeFi).
The Trade
For an industry that is usually slow in adopting new technology, the emergence of decentralised finance (DeFi)/blockchain/crypto/tokenisation/metaverse is a theme that cannot be ignored as it will deeply transform the financial markets. There are already initiatives utilising Blockchain on repo and FX trades. We are also seeing digital new issues being brought to market.

How are trading floors likely to adapt to the ongoing pandemic? As the Omicron variant forces firms to rethink best-laid plans to fill trading floors again, what tools are firms likely need to help traders thrive in a distributed work environment?
Anita Hawser – The Trade
Just when trading floors were starting to get busy again, has the Omicron variant dispelled any expectations by buy or sell-side firms had that trading would get back to normal? “It seems unrealistic that firms will be able to get everybody back on the trading floor in the first half of next year,” Jim Miller, chief customer experience officer at financial markets’ infrastructure and technology platform specialist Symphony, told The TRADE.


Coronavirus Can Persist for Months After Traversing Body
Jason Gale – Bloomberg
NIH scientists release findings of comprehensive autopsy study; New research may inform understanding of long Covid symptoms
The coronavirus that causes Covid-19 can spread within days from the airways to the heart, brain and almost every organ system in the body, where it may persist for months, a study found. In what they describe as the most comprehensive analysis to date of the SARS-CoV-2 virus’s distribution and persistence in the body and brain, scientists at the U.S. National Institutes of Health said they found the pathogen is capable of replicating in human cells well beyond the respiratory tract.

Jump in child COVID hospitalizations in N.Y. sparks concerns in California amid Omicron
Rong-Gong Lin II, Luke Money – Los Angeles Times
A jump in child COVID-19 hospitalizations in New York is a warning to get more children vaccinated in California and elsewhere as the Omicron variant continues to surge, according to California health officials.

France New Covid-19 Infections Reach Record for Second Day – Bloomberg
US chief medical adviser Fauci warns Covid cases ‘will go much higher’ – FT
China Reports Most Daily Local Infection Cases Since January – Bloomberg
We’re Locked Down Again in the Netherlands. Here’s a Warning. – NY Times

Exchanges, OTC and Clearing

Cboe Futures Exchange to List AMERIBOR® Term-90 Futures Beginning January 24, 2022
Further expands Cboe’s suite of AMERIBOR® interest rate futures
Follows launch of AMERIBOR® Term-30 Futures in September
Credit-sensitive, forward-looking rate offers alternative to three-month LIBOR
CHICAGO – December 23, 2021 – Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced plans to launch futures on the AMERIBOR® (American Interbank Offered Rate) Term-90 interest rate benchmark. The new futures are expected to begin trading on Cboe Futures Exchange, LLC (CFE) on business date Monday, January 24, 2022.

Polish-Hungarian Agreement in the GPW Group
On 16 December 2021, the Warsaw Stock Exchange (GPW), Towarowa Gielda Energii (TGE), the Hungarian National Bank and the Budapest Stock Exchange have signed a Term Sheet with a view to establishing a commodity market post-trade operator Central Post-trade Solutions (CPS) on or before 30 September 2022. Under the Term Sheet, Towarowa Gielda Energii will be the majority shareholder of the company to be established.

HKEX Reaches Agreement with Mainland Partners on Adding ETFs to Stock Connect
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Friday) it has reached an agreement with Shanghai Stock Exchange (SSE), Shenzhen Stock Exchange (SZSE) and China Securities Depository and Clearing Corporation (CSDC) on the Stock Connect inclusion arrangements for eligible ETFs. The agreement is made in accordance with a previous joint announcement by the Securities and Futures Commission (SFC) and China Securities Regulatory Commission (CSRC).

HKEX to Introduce New Stock Futures Contracts and Stock Option Classes
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Friday) the launch of six new stock futures contracts and six new stock option classes on Monday, 10 January 2022. HKEX recorded strong growth in the trading of stock futures and stock options this year. In the first 11 months, there were 2,243,181 stock futures contracts and 148,249,463 stock options contracts traded, showing 96 per cent and 13 per cent increase from the full year volume in 2020 respectively, both setting new records.

Borsa Istanbul to Launch Government Bond Futures Contracts at its Derivatives Market (VIOP); Borsa Istanbul is ready to launch Government Bond Futures Contracts.
Borsa Istanbul
Borsa Istanbul continues to expand products and services it offers to investors. Following recent additions of Platinum and Palladium Futures and USDTRY Futures and Options Contracts with Physically Delivery, Government Bond Futures Contracts will be the new addition to the product range. Government Bond Futures Contracts will enable the financial sector and institutional investors, in particular, to manage their interest rate risks more effectively. These contracts will be settled with the physical delivery of the relevant Government Bond Futures Contracts at the end of the maturity and Takasbank will serve as the central counterparty.

MIAX Options: Extension Of SPIKES Options Market Maker Incentive Program
MIAX Options will extend the monthly Market Maker Incentive Program (the “Incentive Program”) for SPIKES Options until March 31, 2022. Please refer to MIAX Options Regulatory Circular 2021-83 for details regarding the Incentive Program.

IGBM index new composition for the first half of 2022; The index will comprise 115 stocks, following the inclusion of Acciona Energías Renovables and the exclusion of Barón de Ley, Biosearch, Codere, Euskaltel and Solarparck
The Indice General de la Bolsa de Madrid (IGBM) Management Committee, during its ordinary index review meeting has decided that the Indice General de la Bolsa de Madrid (IGBM) and the Indice Total will be made up of 115 stocks in the first half of 2022, following the exclusion of Barón de Ley, Biosearch, Codere, Euskaltel and Solarpack and the inclusion of Acciona Energías Renovables.


TradeStation Group, Inc. and Quantum FinTech Acquisition Corporation Announce Filing by TradeStation of Registration Statement on Form S-4 in Connection with Proposed Business Combination Through Which TradeStation is to Become a Public Company
TradeStation Group, Inc.
TradeStation Group, Inc. (“TradeStation”), whose subsidiaries provide award-winning self-clearing online brokerage services for equities, options, futures and cryptocurrency, and Quantum FinTech Acquisition Corporation (NYSE: QFTA), a special purpose acquisition company (“Quantum FinTech”), announced today that TradeStation has filed with the U.S. Securities and Exchange Commission (“SEC”) a registration statement on Form S-4 (the “Registration Statement”) in connection with its recently announced proposed business combination with Quantum FinTech.

Fintech CEO takes on perils of banking for cannabis businesses
Richard Vanderford – WSJ via Mint
Abaca chief executive Dan Roda says compliance technology helps in a high-risk industry
Cannabis sales are now legal in the majority of U.S. states, with several states expecting to usher in regulated dispensaries in 2022, but the provision of financial services for the industry still occupies a gray area.

Innovation, Fintech and the Future of Investing
Artem Milinchuk – Entrepreneur
The global reach of finance is undeniable. Around 15 billion shares of stock are traded every day, while 100 million credit card transactions occur daily. The incredible capacity of global monetary networks is only made possible by evolving, innovative technologies that connect parties around the world and create never-before-seen financial instruments.

Fintech firm iCapital Network valued at over $6 bln after latest funding
Financial technology platform iCapital Network said on Thursday it had fetched a valuation of more than $6 billion after raising $50 million in a funding round led by private equity firm WestCap.

Robinhood Gets Robbed in Heard’s Annual Stock-Picking Contest; Heard on the Street columnists bet against retail brokerage Robinhood Markets in more ways than one this year
Aaron Back – WSJ
The winner of this year’s Heard on the Street stock-picking contest, at least in spirit, appears to have been the Sheriff of Nottingham. The competition, in which Heard on the Street columnists and ordinary Wall Street Journal readers make virtual picks to see who fares best—on paper—between early August and late December, took place this year against a particularly fitting backdrop. Real-life stock picking caught fire early in 2021 as many small-time investors picked up tips from online forums such as Reddit. They then flocked to retail-oriented brokerage platforms like the promisingly named Robinhood Markets HOOD 2.83% to place fee-free trades.


Tim Culpan’s View to 2022: Chips, Cybersecurity and Taiwan
Tim Culpan – The Washington Post
What to Expect:
A global shortage of semiconductors will ease a little in 2022 — likely driving stock prices down — leaving a lot of executives, bankers and shareholders left to question their ebullience in pouring record amounts of money into production facilities, and sending the market value of chipmakers ever higher. But it’ll take a while before the real pain from such misplaced confidence starts to show, so expect a transition year as we shift from boom to bust. One of the big takeaways from this crisis is the world waking up to the plight of Taiwan and its importance to not only the global tech industry, but in holding off the spread of China’s authoritarianism throughout the region. An easing of the supply chain crunch won’t change that role, because cybersecurity is becoming the major battleground between world powers. Taiwan is on the frontlines there, too.

How Legal Departments Can Help Define A Company’s Cybersecurity Benchmarks
Tariq Akbar – Forbes
In today’s electronically driven business environment, everybody is under the threat of a cyberattack. As technology has advanced, cybersecurity evolved from a nice-to-have functionality to an essential tool in corporations’ technical arsenals.
It is not hard to see why: Verizon’s 2021 Data Breach Investigations Report (registration required) revealed that global companies confronted 79,635 suspected cyber incident cases in 2020 alone. Of these cases, 5,258 were confirmed data breach incidents. Even law firms are not immune to these pressures, as 29% of law firms experienced at least one data security breach in 2020, according to a report by the American Bar Association. This figure is up from 26% in 2019.

Trend Micro predicts cybersecurity for the year 2030
Aaron Raj – TechWire Asia
While most tech companies have been announcing predictions for 2022, Trend Micro has gone a step beyond. In fact, the cybersecurity company recently released a visionary new report and video dramatization articulating how the world might look at the start of the next decade, including how the security sector might respond to evolving cybercrime innovation.

Capital One settles a class-action lawsuit for $190 million in a 2019 hacking.
Lananh Nguyen – NY Times
Capital One has agreed to pay $190 million to settle a class-action lawsuit filed by customers of the bank after a hacker stole the personal data of more than a 100 million people in 2019.


Vitalik Buterin created a ‘fellowship of the ring’ to build ethereum. But the founders have a history of feuds and are now competing for crypto dominance.
Harry Robertson – Business Insider
Vitalik Buterin compared the eight founders of the ethereum blockchain to JRR Tolkien’s close-knit “fellowship of the ring”, according to the Financial Times. Yet, the story of the group is one marked by feuds and competition, with two members splintering off to create ethereum rivals cardano and polkadot. Buterin recently said choosing seven other founders “nondiscriminately” to build the network was his biggest regret.

Over 50 Countries Have Issued Bans on Cryptocurrency; Nine countries have outlawed crypto entirely.
Sarah Kearns – Hypebeast
More than fifty countries have placed bans on cryptocurrency, according to a report from the Law Library of Congress. The November report served as an update to research that was published in 2018. Since 2018, “the number of countries found to have issued cryptocurrency bans has increased significantly,” the report said. As of November 2021, nine countries have placed an “absolute ban” on crypto, meaning that it’s completely illegal. Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Nepal, Qatar and Tunisia have all joined China in outlawing crypto.

Why Portfolio Managers Will Need to Look at Altcoins in 2022
Lawrence Lewitinn – Bloomberg
With 2021 just about in the rearview mirror, it’s a good time to reassess the notion that cryptocurrency is still a risk-on asset class. After all, crypto’s risk will help determine how to allocate assets in 2022.

Bitcoin Mining Entry Triggers a 6,700% Surge in Thai Tech Stock
Anuchit Nguyen – Bloomberg
Jasmine Technology shares are world’s top gainer among peers; Thai firm’s Bitcoin mining unit yet to generate much revenue
A world-beating share rally by a Thai technology company after it unveiled an expansion into Bitcoin mining has surprised even the firm’s chairman. Jasmine Technology Solution Pcl stock has more than tripled since the plan was announced in late July, although the cryptocurrency project has yet to generate significant earnings for the firm. Year-to-date, the share surge is nearly 7,000%, most among global tech companies with a market value of at least $2 billion, according to data compiled by Bloomberg.

China Urged to Close Loopholes in Crypto Mining Ban
Bloomberg News
Chinese authorities must crack down on individuals who are still mining cryptocurrencies and taking advantage of regulatory loopholes, according to the state-run Economic Daily.

Kraken’s Powell Wants You to Borrow Against Your CryptoPunk
Emily Graffeo – Bloomberg
Jesse Powell is working on a custodial NFT marketplace; The push follows that of larger competitors FTX, Binance
Kraken founder and Chief Executive Officer Jesse Powell says the cryptocurrency exchange is working on a non-fungible token marketplace that could appeal to customers who want to do more than just collect digital art.

Binance Appoints Singapore CEO as Middle East Head
Chanyaporn Chanjaroen – Bloomberg
Richard Teng, who joined Binance Singapore as its chief executive officer four months ago, has taken on a new role as the global entity’s head for the Middle East and North Africa, according to his LinkedIn profile.

If the metaverse is the next big thing, then NFTs are the ground floor, says creator of Winklevoss-owned Nifty Gateway
Natasha Dailey – Business Insider
The market for non-fungible tokens exploded in 2021, but that’s just the start, according to one of the twins behind Nifty Gateway — the NFT exchange known for selling works from the likes of Beeple and Grimes.

Crypto exchange Binance gets in-principle nod from Bahrain
Binance has received in-principle approval from the Central Bank of Bahrain (CBB) to become a crypto-asset service provider in the kingdom, the company said on Monday.


Putin says Europe only has itself to blame for surging gas prices
Vladimir Soldatkin and Natalia Zinets – Reuters
The European Union can only blame its own policies for record gas prices as some of its members resell cheap Russian gas at much higher prices within the bloc, Russian President Vladimir Putin said on Friday.

How the Capitol Riot Turned a Partisan Congress ‘Toxic’; Fallout from Jan. 6 attack fractured House relationships, further undercutting comity; magnetometers serve as daily reminder of threat
Natalie Andrews, Eliza Collins – WSJ
For four years, Rep. Brad Schneider, an Illinois Democrat, partnered with Rep. Paul Gosar, an Arizona Republican, on a bill to offer leave to parents who have lost a child. That relationship ended after Jan. 6, when Mr. Gosar objected to certifying the Electoral College results and defended the rioters who broke into the Capitol. “If you can’t recognize the legitimacy of the election, the legitimacy of the new president and you’re unwilling to stop trafficking in the lies that led us to Jan. 6, then I’m not going to work with you,” Mr. Schneider said. “That was the threshold.”

Crypto assets inspire new brand of collectivism beyond finance; Decentralised autonomous organisations, or DAOs, are being created for various purposes including city planning
Miles Kruppa and Hannah Murphy – FT
Near the edge of Yellowstone National Park in Wyoming, a group of cryptocurrency enthusiasts have launched a new experiment in city building — just don’t ask who is going to be mayor. The collective, CityDAO, has no official leader. Its members organise themselves using the chat app Discord. Every major decision must go up for a vote.

Bitcoin-Owning Senator Lummis to Propose Crypto Overhaul Bill Next Year
Cynthia Lummis – Bloomberg
Bill would provide guidance on classifying digital assets; Proposal would create a new regulatory body to oversee crypto
Wyoming Republican Senator Cynthia Lummis, one of the crypto industry’s staunchest supporters in Congress, is planning to introduce a comprehensive bill next year that would cover everything from how digital assets are taxed and categorized to consumer protections.


City regulator under fire amid mystery of mis-selling ‘swaps’ scandal penalties
James Hurley – The Times
The City regulator has been asked to explain what happened to a plan to hit bankers in the pocket as punishment for a multibillion-pound mis-selling scandal.

Business Continuity Planning and Lessons From the COVID-19 Pandemic
In February 2019, FINRA published Regulatory Notice 19-06, launching a retrospective review of Rule 4370 (Business Continuity Plans and Emergency Contact Information) to assess its effectiveness and efficiency (the BCP Rule Review). The COVID-19 pandemic, beginning in early 2020, caused unprecedented regulatory and operational impacts on member firms and other market participants, as well as regulators. During the early stages of the pandemic and while the BCP Rule Review was still underway, FINRA published Regulatory Notice 20-08 (March 2020) encouraging each member firm to review its business continuity plan (BCP) to consider pandemic preparedness and to review its emergency contacts to ensure that FINRA has a reliable means of contacting the firm.

Value of FCA fines reaches six-year high; Due to four high-value fines
Elliot Gulliver-Needhamclock – Investment Week
The value of fines issued by the Financial Conduct Authority has increased nearly fourfold to £577m this year, reaching a six-year high, research by law firm RPC shows. The increase in the value of fines was largely due to four large fines worth well over £50m issued this year, compared to just one fine over £50m issued last year.

Investing and Trading

Municipal bonds may not be for rookie investors, says bond watcher
Yahoo Finance
Ian Weinberg, CFP and CEO at Family Wealth & Pension Management, says young investors should look at index funds or bond funds rather than investing directly in munis.

Global bond markets on course for worst year since 1999; Asset class falls 4.8% in 2021 due to hot inflation and central banks’ efforts to tame price growth
Tommy Stubbington – FT
Global bond markets are on course for their worst year since 1999 after a global surge in inflation battered an asset class that is typically allergic to rising prices. The Barclays global aggregate bond index — a broad benchmark of $68tn of sovereign and corporate debt — has delivered a negative return of 4.8 per cent so far in 2021.

Gigantic Stocks Are a Reason to Worry; As Apple, Microsoft and Amazon cross the trillion-dollar mark, index investors should be concerned about concentrated portfolios
Spencer Jakab – WSJ
Remember when a trillion dollars was a lot of money? With five American companies having touched that astounding level of market value recently and one, Apple, on the cusp of breaching $3 trillion, investors should ask what it means for their portfolios. The precedents aren’t encouraging.

A chocolate company’s key ingredient for warding off supply chain, inflation pressures: its customers
Brooke DiPalma – Yahoo Finance
Supply chain backlogs and inflationary pressures have taken a toll on consumer-facing brands throughout 2021, but one specialty chocolate company has defied the trend. Jeff Stoeckel, the CEO of Connecticut-based Bridgewater Chocolate, told Yahoo Finance the company is able to avoid the disruption thanks to its niche focus, loyal customers and planning in advance.


Credit Suisse Fund Accuses SoftBank Over $440 Million Investment; Court filing seeks subpoena on a U.S. arm of SoftBank, deepens conflict over Greensill Capital’s downfall
Charles Forelle – WSJ
A Credit Suisse Group AG CS 1.68% fund accused SoftBank Group Corp. 9984 -2.40% in U.S. court filings of orchestrating transactions that rendered worthless a $440 million investment the fund had made to finance a SoftBank-backed company. The filing, made Thursday in a U.S. District Court in California, asks a federal judge to permit the Credit Suisse fund to serve a subpoena on a U.S. arm of SoftBank. The filing, which says that the fund is preparing to sue SoftBank in the U.K., deepens the dispute over the demise of Greensill Capital, a supply-chain finance company that tumbled into insolvency earlier this year.

T Rowe Price chief warns of ‘free-form risk-taking’ in buoyant markets; Bill Stromberg, head of $1.6tn fund group, sees increased speculation as stocks hit new records
Madison Darbyshire – FT
The outgoing head of one of the largest active US fund managers warned that investors should “step away from risk” to avoid being burnt in an increasingly speculative market.


India’s Renewables Boom Set to Lift Power Exchange Spot Trading
Rajesh Kumar Singh – Bloomberg
A surge in renewable energy in India is set to massively increase spot power trading, according to the country’s largest electricity bourse. Buyers will increasingly turn away from traditional long-term contracts in favor of cheaper renewable energy, said Rohit Bajaj, head of business development at Indian Energy Exchange Ltd. More than a quarter of the nation’s electricity could be purchased through spot deals within a couple years, quadruple the current level.

China’s offshore listing rules seen easing market uncertainty
Kane Wu and Julie Zhu – Reuters
China’s plan to tighten scrutiny over mainland companies’ overseas share sales is likely to ease the regulatory uncertainty that roiled financial markets this year and stalled offshore listings, bankers and analysts said.

Singapore Adjusts Omicron Approach on Quarantines, Workplaces
Susanne Barton – Bloomberg
Issues seven-day risk warning, instead of 10-day quarantine; Health ministry expects cases to double, but cases less severe
Singapore is adjusting its approach to managing omicron cases and will issue a seven-day health risk warning to close contacts of the variant rather than quarantining them for 10 days, the Ministry of Health said in a statement.

Canada says completes important step for resuming potato exports to U.S.
Canada has completed an important step for eventually resuming exports of fresh potatoes to the United States from the province of Prince Edward Island, the Canadian Food Inspection Agency said on Friday.

Swadeshi Jagran Manch calls for ban on crypto trading
The Hindu
It sought a short time window for those already holding them to sell or exchange them with disclosures to the Income-Tax authorities. The Swadeshi Jagran Manch (SJM) has urged the Government to impose an ‘outright ban’ on dealing in cryptocurrencies for Indian residents while granting a short time window for those already holding them to sell or exchange them with disclosures to the Income-Tax authorities.

Electronic gold receipts are now ‘securities’, says Finance Ministry; Move to enable trading of receipts in gold exchanges, existing bourses
KR Srivats – Business Line
The Finance Ministry has specified ‘Electronic Gold Receipt’ (EGR) as ‘securities’ under the Securities Contracts (Regulation) Act 1956, paving way for trading of such instruments on any new gold exchanges that may come up in the country.


Money Clinic Podcast: Crypto in the classroom, and why we need better financial education
Claer Barrett
Your money. Your life. Your problem? We’re so busy earning money, we don’t have time to learn how to manage it. But that’s where Money Clinic comes in. Each week, the FT’s money-making expert Claer Barrett responds to real-life money questions from a range of millennial guests. Every 25-minute episode is packed with nuggets, tips and takeaways shared by top FT writers and financial experts. Where and how to invest your cash is our main focus; going beyond crypto and ‘meme stocks’ for those who aspire to ‘get richer slowly’ and become more confident making financial decisions in the wake of the pandemic. From getting on the property ladder to finding side hustles that boost your income and making full use of tax-breaks, this podcast is on the money for millennials. There are no short-cuts to wealth, but Money Clinic promises to tell you things you didn’t know about your finances in ways that anyone can understand. Want to talk to Claer on the show? Email or drop her a line on Instagram @Claerb

Take a Vacation. Boss’s Orders; No executives want to see their staff burn out — and some are starting to take mandatory time off as seriously as they take their work.
Emma Goldberg – NY Times
The symptoms set in sneakily — foggy judgment, mounting malaise. They build into fatigue, frustration. Then there’s the inability to make key decisions: Pizza for dinner or Pad Thai? People need a vacation. They always have. But especially when the office is closed, and work is what happens when you’re near your phone, which is to say every waking hour, employees need to recharge. Some are quietly asking permission to rest. Others know that their break is overdue, and now they’re getting nudges from the boss: log off.

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The Spread

Volatility ETFs Aren’t Flashing Signs of Market Fear

Observations & Insight The FIA is seeking fintech startups for its annual fintech showcase, the Innovators Pavilion, at the Futures and Options Expo in Chicago November 14-15. All selected fintech startups will participate in a pitch competition and one will be...

Past JLN Newsletters

SEC charges 11 in ‘massive’ crypto Ponzi scheme

SEC charges 11 in ‘massive’ crypto Ponzi scheme

First Read Hits & Takes John Lothian & JLN Staff Here is your mood brightener of the day from a story in The New York Times by Farnaz Fassihi and Michael Levenson. The lead paragraph reads: The secretary general of the United Nations warned on Monday that...

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