Bloomberg’s crypto coverage has gotten its fair share of interest in the past 18 months. Credit the financial news organization for being forward-thinking enough to, at a minimum, build out a cryptocurrency team of journalists before other mainstream financial news organizations found their way into the space. But that is where the accolades should stop.
In an article that should be considered an embarrassment, Bloomberg uses a headline and one bearish source to declare crypto to be “on the brink of implosion” – and that headline has made its way across the world as quickly as Bloomberg terminals can squeeze it through hardline and wifi connections.
And we are probably being a bit kind when we say that the article is an embarrassment. It nearly rises to the level of the often improperly used term, fake news.
Here are a few lines from the article that are particularly egregious:
“In short, given our concerns around both the innate valuation of Bitcoin and of the operating practices of many exchanges, we feel that the industry is on the brink of an implosion,” Juniper said.”
“The market as a whole has contracted quickly as well. In the first quarter, cryptocurrency transactions totaled just over $1.4 trillion, compared with less than $1.7 trillion for 2017 as a whole, Juniper said. However, by the second quarter, transaction values had plummeted by 75 percent, with total market capitalization falling to just under $355 billion.”
“Based on activity during the first half of Q3, Juniper estimates a further 47 percent quarter-on-quarter drop in transaction values in that quarter,” the researcher said in an accompanying white paper.”
So to recap, let’s compare volumes from the absolute height of the bull market in crypto in late 2017 to the depths of the bear market in 2018 and declare crypto on the “brink of implosion.” Again, this is embarrassing.
A quick reminder for Bloomberg’s crypto team, just in case they’ve missed the last six months of institutional FOMO news that seems to hold slightly more weight than a Juniper analysts musings:
ErisX – “ErisX and its scale and scope has been driven by DRW (and their crypto team is largely based in Chicago – as is the larger percentage of most of the firm) and in the works since January of 2018. The firm has been working closely with leadership at ErisX to provide a solution that taps into the trading opportunities inherent in the crypto asset class while also checking the regulatory boxes associated with custody and warehousing that seemed to have been laid out via the CFTC; (**the chairman of the CFTC, Christopher Giancarlo, just yesterday on CNBC made the claim that cryptocurrencies are ‘here to stay’).”
Bakkt – **A reminder of what Bakkt is and what it will actually launch in November of this year, via Forbes’ excellent article in early August: “Bakkt plans to offer a full package combining a major CFTC-regulated exchange with CFTC-regulated clearing and custody, pending the approval from the commission and other regulators. Bakkt will provide access to a new Bitcoin trading platform on the ICE Futures U.S. exchange. And it will also offer full warehousing services, a business that ICE doesn’t have. “Bakkt’s revenue will come from two sources,” says Loeffler, “the trading fees on the ICE Futures U.S. exchange, and warehouse fees paid by the customers that buy Bitcoin and store with Bakkt.”
Goldman Sachs – “Goldman Sachs has been actively exploring the creation of a client offering that is based on Ethereum futures in the way of a ‘non-deliverable forward’, much like the NDF Bitcoin product that they are offering clients at the moment. This would represent the penultimate global investment bank staying significantly ahead of its competitors in the race to gather client crypto assets.”
Citigroup – “Citigroup is rushing to leap ahead of its Tier I banking rivals across the globe by getting a Bitcoin trading product to market. Based on sources inside Citigroup and in and around crypto hedge funds it has become apparent that Citigroup is getting legally ‘creative’ to serve its customers with a tradeable, physical (digital/custody/warehouse’d) Bitcoin asset. The intelligence that we’ve been passed sheds light on the strategy that has been proposed within the hallways of Citigroup and shown to a select few institutional clients. As per sources inside Citigroup, the product is being discussed as a ‘digital’ ADR. Effectively functioning as a foreign security product.”
And that is just a few of the headlines. There is so much more connected to JP Morgan, Morgan Stanley, Fidelity, Bakkt, Nasdaq, Gemini, etc, etc. The institutional rush to claim space in the crypto ecosystem.
We are not fans of the term ‘FUD’ but if ever there was an appropriate use of the term when describing an article, this would be it. Whatever the processes are at Bloomberg and the crypto team for producing their work product, this doesn’t rise to any reasonable standard. Do better.