While Blackrock’s spot bitcoin exchange-traded fund (ETF), IBIT, experienced a continuous influx for 71 days before halting this week, Grayscale’s Bitcoin Trust (GBTC) holds the record with 72 consecutive days of outflows, surpassing all other ETFs on record. “No ETF has ever done anything close to that,” observed Eric Balchunas, Bloomberg’s senior ETF analyst, on […]
Bitcoin News
Vanguard Says No to Bitcoin ETFs — Views Crypto as ‘Immature Asset Class’ With ‘No Inherent Economic Value’
Financial giant Vanguard has explained why the firm does not make spot bitcoin exchange-traded funds (ETFs) available on its trading platform. A Vanguard executive stressed that cryptocurrency is “an immature asset class that has little history, no inherent economic value, no cash flow, and can create havoc within a portfolio.”
Vanguard Explains Why It Disallows Spot Bitcoin ETFs
Vanguard published a blog post titled “No Bitcoin ETFs at Vanguard? Here’s why” on Jan. 24, explaining the firm’s stance on cryptocurrency and why it does not allow clients to trade the newly approved spot bitcoin exchange-traded funds (ETFs). Vanguard serves more than 50 million investors worldwide as of Dec. 31, 2023. The firm manages around trillion globally.
Following the approval of 11 spot bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) earlier this month, Vanguard has drawn attention for disallowing its clients to trade the newly launched products. The company also has no plans to launch its own spot bitcoin ETFs.
Janel Jackson, Vanguard’s global head of ETF Capital Markets and Broker and Index Relations, explained in the blog post why her firm is not offering spot crypto ETFs on its brokerage platform. “In Vanguard’s view, crypto is more of a speculation than an investment. This is at the root of our decision to not offer crypto products, whether our own or others,” the executive described, emphasizing:
While crypto has been classified as a commodity, it’s an immature asset class that has little history, no inherent economic value, no cash flow, and can create havoc within a portfolio.
“With equities, you own a share of a company that produces goods or services, and many also pay dividends. With bonds, you get a stream of interest payments. Commodities are real assets that meet consumption needs, have inflation-hedging properties, and can play a role in certain portfolios,” she noted.
Nonetheless, she expressed Vanguard’s interest in blockchain technology, stating: “We do have a lot of interest in blockchain, the technology behind cryptocurrencies. We believe its application to a number of other uses besides crypto will make capital markets more efficient, and we’ve been actively involved in research to use blockchain technology.”
Regarding whether Vanguard is planning to launch its own spot crypto ETFs, Jackson said:
Given the current state of crypto as an asset class, Vanguard does not have plans to launch its own bitcoin ETF or any crypto-related products.
“When deciding what investment products to offer, we consider a range of factors, including whether we believe they have enduring investment merit and meet our clients’ needs,” she clarified. “While the discussion about bitcoin and cryptocurrencies, in general, has increased recently, we do not currently believe that there is an appropriate role for them to play in long-term portfolios. A rigorous process guides every Vanguard product launch.”
What do you think about Vanguard’s explanation regarding spot bitcoin ETFs? Let us know in the comments section below.
Bulgarian Prosecutors Drop Charges Against Crypto Lender Nexo — ‘No Evidence of Criminal Activity’
The prosecutor’s office for Sofia, the capital city of Bulgaria, has dropped criminal proceedings against crypto lender Nexo. “The team of supervising prosecutors came to the conclusion that there was no evidence of committed crimes,” the authorities stated, adding that crypto assets are currently not financial instruments and their trading is not subject to regulation in the country.
Crypto Trading Not Subject to Regulation in Bulgaria
The Prosecutor’s Office of the Republic of Bulgaria announced Friday that the Sofia City Prosecutor’s Office has terminated criminal proceedings against Nexo. Pre-trial proceedings against the crypto lender commenced on Sept. 29 last year, with law enforcement officials reportedly probing the company for alleged money laundering and sanctions violations.
“There is no evidence of criminal activity” regarding the carrying out of banking activity without a corresponding permit, the announcement details, as translated by Google. “Also, no evidence of money laundering was collected against the defendants, and no evidence of tax crimes or computer fraud was collected.” The prosecutor’s office stated:
On the basis of the established factual situation, the team of supervising prosecutors came to the conclusion that there was no evidence of committed crimes.
The case lists K. Kanchev, A. Trenchev, K. Metodiev, and T. Nikolov as defendants, alleging that they were involved in an organized criminal group formed for profit between 2018 and January 2023. Kanchev and Trenchev also faced charges of conducting banking transactions without proper authorization. The transactions involved lending and deposit activities in U.S. dollars, British pounds, and euros through the Nexo online platform.
The investigation included witness interviews, analyses of payment account movements, complex forensic and evaluation reports, and various investigative actions such as searches and seizures. Despite permission to spend 0,000 on an expert, supervising prosecutors considered it unnecessary.
The regulatory status of cryptocurrencies in Bulgaria also significantly influenced the prosecutors’ decision. Noting that Bulgaria lacks a specific legal framework for services involving crypto assets, the prosecutor’s office stated that activities conducted by Nexo are not regulated, and there is no requirement for permits, registration, or licensing.
“It can be concluded that the products offered by Nexo are not financial instruments. The provision of services to clients in relation to these products does not fall within the scope of investment services,” the prosecutor’s office detailed, elaborating:
Given that crypto assets are not currently financial instruments, their trading is also not subject to regulation.
Virtual currency is not recognized as a legal means of payment in Bulgaria, and its activities are not classified under Article 4 of the Law on Payment Services and Payment Systems, the prosecutor’s office clarified, noting: “The supervising prosecutors came to the conclusion that no crime had been committed and terminated the criminal proceedings.”
What do you think about Bulgarian prosecutors dropping criminal charges against crypto lender Nexo? Let us know in the comments section below.
Robert Kiyosaki Doubles Down on Biggest Crash Prediction — ‘No Time to Play Russian Roulette With Your Life’
Rich Dad Poor Dad author Robert Kiyosaki has warned that the biggest crash in history may be starting. Emphasizing that the U.S. banking system is bankrupt, he warned that the S&P 500 will be next to collapse, which will “toast millions” of U.S. retirement plans. There’s “no time to play Russian Roulette with your life,” he stressed.
‘No Time to Play Russian Roulette With Your Life’
The author of Rich Dad Poor Dad, Robert Kiyosaki, has doubled down on his greatest crash warning. Rich Dad Poor Dad is a 1997 book co-authored by Kiyosaki and Sharon Lechter. It has been on the New York Times Best Seller List for over six years. More than 32 million copies of the book have been sold in over 51 languages across more than 109 countries.
He wrote on social media X Sunday that bank credit just sold off like in 2008. “This may be the start of the biggest crash in history,” he warned, cautioning that there’s “no time to play Russian Roulette with your life.”
In a follow–up post on X, Kiyosaki said he wants to thank people who laughed at him for recommending his followers to buy and save silver since 2010. “It’s not easy being Paul Revere or Chicken Little warning people the U.S. government is stealing our wealth viz our money. Yet laugh all you want. It’s still not too late,” he wrote, adding:
Our banking system is bankrupt. Buy gold, silver, bitcoin while you still can.
The famous author predicted that once you buy gold, silver, and bitcoin, “your friends and family will laugh at you.” However, he emphasized: “Laugh all you want into a global banking crisis. Please remember my warning in Rich Dad Poor Dad published in 1997 predicting ‘Savers are losers’ and ‘Your home is not an asset’ which came true in 2008. People are still laughing at those 1997 predictions.” Kiyosaki concluded:
Watch for my next warning. The S&P is next which will toast millions of 401ks and IRAs [retirement plans].
The renowned author has repeatedly warned about an upcoming crash. Earlier this month, he said the next crash may turn into a depression. He also cautioned about a giant market collapse, another war, and “really hard times ahead” for millions. In November, he urged investors to get into bitcoin now before it’s too late.
What do you think about the warnings by Rich Dad Poor Dad author Robert Kiyosaki? Let us know in the comments section below.
Argentina’s President-Elect Javier Milei ‘No Anarcho-Capitalist’ Says Former Greek Finance Minister
According to Greece’s former finance minister, Yanis Varoufakis, Argentina’s president-elect Javier Milei is “no anarcho-capitalist.” The former finance minister said Milei’s plan to fight inflation with dollarization “is like nuking a country to get rid of Covid-19.”
Milei a Dictator in Libertarian Clothing
Former Greece finance minister and anti-capitalist, Yanis Varoufakis, has warned that Argentina’s incoming president Javier Milei is “no anarcho-capitalist” as many libertarians would like to believe. Instead, Varoufakis, now an economics professor, said he sees the far-right winner of the Nov. 19 poll as another (Jorge Rafael) Videla but in libertarian clothing. Videla was Argentina’s military ruler between 1976 and 1981.
The remarks by Varoufakis, who led Greece’s debt renegotiation talks with the European Central Bank (ECB) in 2015, followed reports that Milei is planning to honor his promise to abolish the country’s central bank. In addition to shutting down the central bank, Argentina’s president-elect has reportedly promised to privatize the state energy company YPF and dispose of all public broadcast networks.
Milei is no anarcho-capitalist. Robert Nozick (author of ANARCHY, STATE & UTOPIA) was that. No, Milei is a new Videla in libertarian clothing determined to end the mere possibility of Argentinian democratic sovereignty. As for dollarisation vs inflation, it is like nuking a… https://t.co/QR2IZGC3A8
— Yanis Varoufakis (@yanisvaroufakis) November 20, 2023
Milei’s unorthodox solutions to problems afflicting Argentina similarly piqued the interest of many bitcoiners and crypto enthusiasts around the world. In addition, Milei’s past positive remarks about the crypto assets have greatly endeared him with the bitcoin community.
However, in a post on X (formerly Twitter), Greece’s former finance minister rejected the notion that Milei is proving to be an anarcho-capitalist. Instead, he said he sees the American philosopher and author Robert Nozick as the real anarcho-capitalist.
Varoufakis Against the Use of Dollarization as an Inflation-Fighting Tool
According to Wikipedia, anarcho-capitalism is an anti-statist, libertarian political philosophy and economic theory. This theory is supported by those who advocate for the replacement of centralized states with stateless societies with “systems of private property enforced by private agencies.”
#ARGWatch: In celebration of Javier Milei’s election victory, Argentines have headed to the streets, where they are ripping up their worthless pesos and using them as confetti.
Finally, it looks like Argentina will DITCH THE PESO & OFFICIALLY DOLLARIZE.pic.twitter.com/rVLol2ahcb
— Steve Hanke (@steve_hanke) November 20, 2023
Meanwhile, as previously reported by several media outlets including Bitcoin.com News, Milei had pledged to dollarize the economy. Many experts, including Johns Hopkins economics professor Steve Hanke, support the president-elect’s idea of reining in inflation by dollarizing the Argentine economy
However, concerning Milei’s plan to fight Argentina’s runaway inflation via dollarization, Varoufakis said:
“As for dollarisation vs inflation, it is like nuking a country to get rid of Covid-19. Argentinians deserve our solidarity in the nightmare they are about to descend.”
What are your thoughts on this story? Let us know what you think in the comments section below.
Aave V2 Ethereum Market and Several Assets Paused — Team Says ‘No Funds Are at Risk’
The decentralized finance (defi) protocol Aave’s so-called guardian said on Nov. 4 it had paused the Aave V2 Ethereum Market and frozen “certain assets on Aave V3 on Polygon, Arbitrum, Optimism.” At the time when the update was issued, Aave said an analysis of what happened would be made available when the issue is resolved.
‘Temporary Prevention Measure’
On Nov. 4 the guardian of Aave, the open-source and non-custodial liquidity protocol, paused the Aave V2 Ethereum Market and certain assets on Aave V2 on Avalanche. It also froze assets on Aave 3 on three chains, namely: Polygon, Arbitrum and Optimism. The step, which has been framed as a “temporary prevention measure,” was taken after the Aave team received a report concerning the protocol.
Today we received a report of an issue on a certain feature of the Aave Protocol. After validation by community developers, the guardian has taken the following temporary prevention measure (no funds are at risk):
— Aave (@aave) November 4, 2023
In an update shared via X (formerly Twitter), the Aave team insisted that no user funds were at risk. The update added that neither the Aave V3 markets on Ethereum, Base and Metis, nor the V2 markets on Polygon and Avalanche were affected by the reported issue. At the time when the update was issued, Aave said an analysis of what happened would be made available when the issue is resolved.
“A governance proposal to restore the normal operation of the protocol will be submitted shortly. [A] detailed postmortem will be released once the issue is fully resolved,” the Aave team said.
Users ‘Can Still Withdraw or Repay Positions’
The team also reminded Aave users supplying or borrowing from the frozen assets that they “can still withdraw or repay positions.” However, due to the pause imposed on some Aave markets, users will only be able to supply or borrow more once the undisclosed issue has been resolved, the team added.
On X, some social media users complained about the apparent freeze while others asked why the team seemingly failed to provide further updates. Meanwhile, one user queried why they could not repay or withdraw as per the team’s announcement.
“Can’t repay USDC/USDT or withdraw from Aave V3 on Avalanche chain. Buttons greyed out. But above you said you can repay/WD. Could you clarify pls? TY,” the social media user said.
What are your thoughts on this story? Let us know what you think in the comments section below.
Peter Schiff: ‘No One Needs Bitcoin’
Peter Schiff, a renowned economist and gold bug, has criticized Bitcoin’s role and utility in today’s economy. According to Schiff’s remarks, Bitcoin is useless, and its advocates are like a cult, trying to convince people to buy bitcoin after buying it themselves.
Peter Schiff: ‘Bitcoin Is Nothing’
Peter Schiff, chief economist and global strategist at Europac, has railed against the utility and scarcity traits attributed to Bitcoin. In a recent post in X (formerly known as Twitter), Schiff stressed that Bitcoin had no purpose and that its advocates resembled a cult.
Schiff stated:
No one needs Bitcoin. So people only buy it after someone else talks them into doing so. Then once they buy, they immediately try to convince others to buy too. It’s like a cult.
Schiff made these remarks after pondering statements made by Galaxy Digital CEO Mike Novogratz on CNBC’s Squawk Box, where besides talking about the possible approval of a spot bitcoin ETF this year, he stated that Bitcoin “has always been an instrument that is sold, not bought,” with institutions “getting people in the first time and explaining to them what it is.”
Schiff has repeatedly attacked Bitcoin and its economic thesis before, calling it a con, a collectible digital token, stating that it was undesirable, and stressing that there were other ways of losing money besides buying bitcoin.
Not Scarce at All
Schiff also referred to the scarcity of bitcoin, criticizing the value of this property for the currency. Answering a follower who indicated that Bitcoin was “digital gold” and a “finite resource with unlimited fiat chasing,” Schiff declared:
Bitcoin is not a resource. It’s nothing. There are also 2.1 quadrillion Sats. So there is plenty of nothings to go around.
Another user compared bitcoin with gold, adding that, as Schiff had previously said about bitcoin, gold was also sold instead of bought and that gold traders tried to convince other traders to buy gold. Schiff disregarded the comment, stating that the user making these remarks knew “nothing about gold.”
Another user remarked that Bitcoin had value for individuals living in high inflationary environments and those unable to have a bank account. “Owning gold would put a target on their back. Not to mention a quick evacuation with gold is nearly impossible and totally impractical,” the user concluded.
What do you think about Peter Schiff’s vision of bitcoin and its use? Tell us in the comments section below.
ECB Tightens Grip With 12th Consecutive Rate Hike; Lagarde Asserts ‘No Cuts’ Amid Lingering Inflation Concerns
The European Central Bank (ECB) has raised the benchmark bank rates by 25 basis points (bps) citing that inflation was down but still remained “too high for too long.” When ECB president Christine Lagarde was pressed about cutting rates by reporters, Lagard insisted the central bank was “not going to cut.”
ECB Boosts Interest Rates Amid Inflation Woes
The European Central Bank’s (ECB) Governing Council announced that it has raised three key ECB interest rates by 25bps on Thursday. The ECB’s move follows the U.S. Federal Reserve hiking the federal funds rate by 25bps the day prior. Similarly to the Fed’s decision, the ECB members of the Governing Council insisted that the bank looks to get annual inflation down to its 2% target. The interest rate hike will be the ECB’s 12th rate hike in a row.
“The rate increase today reflects the Governing Council’s assessment of the inflation outlook, the dynamics of underlying inflation, and the strength of monetary policy transmission,” the ECB detailed. “The developments since the last meeting support the expectation that inflation will drop further over the remainder of the year but will stay above target for an extended period.”
The ECB hinted at pausing the rate hikes in September but when reporters pressed ECB president Christine Lagarde about when the central banks would cut rates, she insisted it wasn’t going to happen. “We are not going to cut,” Lagarde stated. The ECB’s rate hikes have had an impact on mortgage rates in the euro area, which have risen significantly since the beginning of 2022 and the ECB’s rate hikes. For instance, the average mortgage interest rate exceeded 9% in Poland in Q4 2022.
The ECB detailed on Thursday that the principal refinancing operations interest rate, along with the rates of the marginal lending facility and the deposit facility, will be elevated to 4.25%, 4.50%, and 3.75% respectively, taking effect from August 2, 2023. Following the ECB’s announcement, the euro slid against the U.S. dollar by 0.78%. Euro area yield curves also experienced a downward shift.
What do you think about the ECB’s latest rate hike? Share your thoughts and opinions about this subject in the comments section below.
Latam Insights — IMF States Latam’s CBDC Interest Rises, Lula Emphasizes Bretton Woods Institutions ‘No Longer Function’
Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue, the International Monetary Fund (IMF) reports interest in central bank digital currencies (CBDC) in Latam and the Caribbean is picking up, Lula criticizes the current international economic system, and Venezuela integrates the Russian Mir payments system.
IMF Finds Interest in CBDC Picks up Steam in Latam and the Caribbean
A report published by the International Monetary Fund (IMF) revealed that interest in central bank digital currencies (CBDC) remains high in Latam and the Caribbean. According to a recent survey with governments of the region, “half of the respondents were considering both retail and wholesale CBDC options.”
Brazil is one of the countries experimenting with a two-tiered CBDC model, which is in its proof of concept stage. If issued, it would be connected to the “Open Finance” concept of the Central Bank of Brazil.
The reasons for researching CBDCs in the region are diverse, including financial inclusion, monetary sovereignty, and strengthening the access and effectiveness of payment systems.
Brazil’s Lula Declares Bretton Woods Institutions ‘No Longer Function’
Brazilian President Luiz Inacio Lula Da Silva stated that the institutions driving the current global financial order derived from the Bretton Woods agreement are outdated. At the closing of the summit for a new global financial pact, Lula stated:
The Bretton Woods institutions no longer function and no longer meet the aspirations and interests of society. We have to be very clear about this.
Lula, who also explained he would push a de-dollarization agenda at the next BRICS meeting, railed against the role of the International Monetary Fund (IMF) as a financing entity, accusing the institution of causing the bankruptcy of nations. He concluded:
We cannot continue with the same institutions that are functioning erroneously, and the same goes for the United Nations Security Council… The representatives from 1945 cannot be the same as today.
Venezuela Integrates Russian Mir Payments System
The government of Venezuela announced that it was working to integrate Mir, a Russian card and transfer payment system, into its network. According to statements of Calixto Ortega, president of the Central Bank of Venezuela, almost 40,000 point-of-sale terminals were updated to receive payments from Mir-compliant cards.
Ortega stated the central bank aims for 30% of the point-of-sale terminals to accept these cards and convert the payments made in rubles to national fiat currency. Venezuelan President Nicolas Maduro supported this development, stating:
They tried to isolate us monetarily and financially, unfairly, with blockades and criminal sanctions, however, with the incorporation into the Russian Mir Payment System, we are building financial and monetary systems of the new world.
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What do you think about this week’s Latam Insights report? Tell us in the comment section below.
Warren Buffett Sees ‘No Option’ Other Than US Dollar as Reserve Currency, but Warns Fed Can’t ‘Just Print Money Indefinitely’
Warren Buffett, CEO of Berkshire Hathaway and one of the most renowned investors in the market, stated that he saw no viable option to become the world’s reserve currency besides the U.S. dollar. However, he warned about the dangers that printing too much money could bring to the strength of the currency in the future.
Warren Buffett’s Only Valid Option for Reserve Currency Is the U.S. Dollar
Warren Buffett, CEO of Berkshire Hathaway, also known as the ‘Oracle of Omaha’ due to his city of origin, gave his opinion about the status of the dollar as a reserve currency and how this could change in the future.
During the 2023 Berkshire Hathaway annual meeting, the legendary investor was asked about his thoughts about the process of de-dollarization that world markets are experiencing, with countries like India and Brazil seeking to reduce dollar dependence, and its relation with the U.S. Federal Reserve money printing processes and rising interest rates to control inflation.
Buffet explained that, in his opinion, the dollar was the only candidate to be considered the world’s reserve currency at the moment, but also raised concerns about how much the U.S. Federal Reserve could print without putting this reserve currency status in jeopardy.
The Dangers of Printing Money Indefinitely
Buffett explained that nobody knew the situation better than Jerome Powell, the President of the U.S. Federal Reserve, but added he was not in charge of the fiscal policy of the country.
The Oracle of Omaha warned about the actions of the U.S. regarding printing, stating:
Nobody knows how far you can go with a paper currency before it gets out of control, and particularly if you’re the world’s reserve currency. You don’t want to try and pick out the point where it does become a problem because then it’s all over.
Buffett remarked that when people lose faith in the currency, they behave in an entirely different manner than they do when they put some money in the bank or have a pension plan that will give them something with equal purchasing power. This can create other problems for the economy that Buffett concedes he cannot predict fully.
He concluded his answer reiterating his warning about money printing. He declared:
America is an incredible society, rich; you know, we got everything going for us, but that doesn’t mean we can just print money indefinitely.
What do you think about Warren Buffett’s thoughts on the U.S. dollar as a reserve currency and the dangers of printing money indefinitely? Tell us in the comments section below.