$7 Trillion Worth of Stocks Are Exposed to Crypto Risks (bloomberg.com) 43
Attention institutional investors: Whether you're a bonafide and laser-eyed true believer or a skeptical holdout, the risks from cryptocurrencies could be steadily "creeping" into your portfolio, according to MSCI. From a report: At least 52 companies representing $7.1 trillion in market capitalization have some exposure to cryptocurrencies, according to an analysis by MSCI. They range from all-in players like Coinbase to Bitcoin balance-sheet "hodlers" like Tesla and MicroStrategy to those dipping a toe into crypto-market services such as JPMorgan Chase. The growing importance of the volatile digital asset class brings with it an assortment of challenges for investors and companies alike as they try to assess the environmental, social and governance risks that come along with it, the report says. These include questions about everything from greenhouse gas emissions stemming from mining coins, to a lack of accounting standards for crypto and questions about transparency surrounding how the networks are run, according to MSCI. "Really simple questions start to become really tricky here," Harlan Tufford, who leads MSCI's North American corporate-governance research, said in a podcast discussing the report. "Like, who in the company knows the passkey to access your private anonymous wallet that stores, you know, a billion dollars in Bitcoin? And how do you monitor that?"
what are they implying? (Score:1)
Re:what are they implying? (Score:4, Insightful)
They are implying that everyone should blame crypto when the whole stock market shit-show collapses in a month or two.
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If the stock market does get taken down by Tulipmania 2.0, that would be a reasonable thing to do. Or it could greatly exacerbate a collapse from another cause - when the chips are down, shit gets real, and these dumb suits realize that, oh shit, this Internet funny money is actually worthless, and another $2T of "value" goes poof.
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I'm not saying crypto will take down the stock market. Is that what you mean by "tulipmania?" I mean, I get the reference but I don't get what you are referring to? Crypto? Or Meme stocks?
It's not retail investors that are destroying the stock market, and it isn't crypto. Crypto is a red herring. It's illegal naked shorts. Again.
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>It's illegal naked shorts. Again.
It's whatever it needs to be to let them keep legal that which they paid good money to make legal.
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when the chips are down, shit gets real, and these dumb suits realize that, oh shit, this Internet funny money is actually worthless, and another $2T of "value" goes poof.
That appears to be standard business practice in what is called "investment banking". Bitcoin is just another gambling opportunity. These "suits" are not stupid. The general idea is to make money wherever you can, but make damn sure you don't take the consequences of your failures. So my investment company goes bust. Big deal. I still got my stash. I notice a distinct lack of speculators throwing themselves out of office windows on Wall Street these days.
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Well of course, they always blame the shitshows on whatever did not cause it.
Last time the banking system collapsed they blamed "mortgages of poor people" worth about $68 billion in sub prime loans rather than the $1.4 Quadrillion in speculative investments that kept bundling insurance and titles as new financial instruments over and over again being used as a scheme to make lot's of profits and leave someone else holding the bag.
However, when I hear about Crypto Currencies, the "musical chairs" song plays
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Irresponsible policies? No, but MOASS will. Short hedges R fukt, as they say.
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What happened in 2008 is happening again. It's not crypto. Well, crypto plays a peripheral roll: it is being pumped and dumped in a desperate ploy to unfuck the short positions major hedge funds have taken. It's naked shorting all over again.
No, the first domino to fall in this whole thing will be because retail traders just figured out the final trick to fuck the short hedge funds: direct registering of shares, at ComputerShare, in their own names instead of letting their brokers hold them. That way, the s
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Since the total market cap of crypto is currently at $2 trillion, I doubt this will affect those $7 trillion too much no matter the crypto markets movement. Or are they implying that the great part of the crypto market cap is not based on illegal money laundering, but actual legitimate financial investing?
The total value of sub-prime mortgages wasn't that great, either... but still 2008 happened.
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I don't think they mean to imply that a collapse of crypto could actually wipe out the entire $7 trillion. OTOH, it can have a disproportionate impact depending on some things. In particular, leverage. In the case of Microstrategy, I'm given to understand that quite a bit of leverage has been used to finance BTC purchases. The stock meme'd up from the 100s to the 700s in the past year. Leverage is a double-edges sword. It amplifies gains on the upside, and losses on the downside. (oversimplifying a b
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They are just planning ahead.
If they said "$50 trillion" they could get even MORE attention to the problem in the future.
Exposed as in benefitting? (Score:2, Insightful)
With the US dollar going the route of Zimbabwe or 1930s Germany, cryptocurrencies are not spiking in value, they are actually staying the same, and the dollar is decreasing, especially because ones like BTC only will have a certain amount made, and no more. In a period of hyperinflation, there is no better bet than going to a deflationary currency, and one that as time progresses, just keeps gaining momentum.
In fact, aren't all fiat currencies starting to show the emperor has no clothes, while cryptocurren
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The LAST WORD. I have it.
Where is your Dollar Minimalist God now?
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You had me going for a second. Then I thought; "hey, what is the exchange rate for the US Dollar?"
So I looked; https://www.xe.com/currencycha... [xe.com]
A bit above it's level from the same time last year.
Maybe the ALL currency is going lower than bitcoin -- and bitcoin is merely holding it's value at a feverish pace? /LOL
Bitcoin lost almost half its value (Score:2)
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Obviously criminal use has played a role in t
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With the US dollar going the route of Zimbabwe or 1930s Germany...
I don't know how you can justify that comparison. People are not carrying barrow loads of worthless paper money when they go shopping. Bitcoin might be rising in dollar value, based on current speculative trading, but that certainly does not imply that the dollar is declining in value.
In fact, aren't all fiat currencies starting to show the emperor has no clothes, while cryptocurrencies, are holding steady?
In a word, no. My salary still buys the goods I need, just like it did years ago. You might have a point if there were rampant inflation, which devalues your conventional fiat currency, but I have not experienced that in the U
Re: Exposed as in benefitting? (Score:2)
stocks are not valued by balance sheets. (Score:2)
But, how exposed? (Score:3, Informative)
The title of the summary and the article is misleading (and maybe wrong).
Both are about "52 companies representing $7.1 trillion in market capitalization [that] have some exposure to cryptocurrencies".
So, the companies represent $7.1 trillion and have SOME exposure. How much of their value is actually linked/tied to cryptocurrencies?
The summary and the article do not say. It could be significant (10%, 25%, 30%) or insignificant (0.1%, 0.001%)?
Yea, this is deliberately hyperbolic (Score:2)
to drive clicks, obviously.
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Tesla has a market cap of over $800B, and roughly $2B in crypto currency holdings currently (11% of the total market cap identified). [Coinbase has a market cap of about $60B, but I don’t know what their current holdings are.] At a high end, there could be a total of about $18B in crypto holdings by my estimates, but companies like Coinbase might skew it a bit higher if they lack all fiduciary responsibility
Risks? (Score:3, Insightful)
From where I stand the biggest risk is keeping your money in fiat currencies. Bitcoin has a limited number of "coins" in circulation. The US dollar used to sort of follow that convention, as it was tied to the gold standard. The US government would only print as many dollar bills as it had gold reserves to back it up. Then it went off the gold standard, effectively giving governments the green light to enact endless deficit spending without any regard to how much debt was incurred.
Ever since then, with the exception of a few years of the Clinton administration, the US has run massive deficits. Fast forward to today when governments casually talk of multi-trillion dollar deficits. Rather than trying to do something about it their answer is to spend even more. By the way, this strategy applies to both Democrats and Republicans. Trump ran up deficit spending just like Biden is.
It comes as no surprise to me that governments are trying their best to torpedo Crypto currencies. It represents a threat to their effective monetary monopoly. It presents alternatives to people that no longer trust governments to manage their currency responsibly. In short, it represents a threat.
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From where I stand the biggest risk is keeping your money in fiat currencies. Bitcoin has a limited number of "coins" in circulation. The US dollar used to sort of follow that convention, as it was tied to the gold standard. The US government would only print as many dollar bills as it had gold reserves to back it up. Then it went off the gold standard, effectively giving governments the green light to enact endless deficit spending without any regard to how much debt was incurred.
The gold standard was abandoned during the Great Depression. It's a little bit late to be blaming that for today's financial woes.
Anyway, the value of currency is measured by the faith in the government that backs the currency. A US dollar is worth more than, say, the Brazilian Real because of the faith that the US government will be here tomorrow. Backing currency with gold (or crypto) doesn't make sense, because it artificially constrains an economy.
But, if gold reserves give you faith in a currency I've got a Zimbabwe banknote I'll trade with you, so long as it's 1:1.
Without fiat to give it value... (Score:2, Insightful)
Backing currency with gold (or crypto) doesn't make sense, because it artificially constrains an economy.
Did you ever notice how the bitcoin bros are always boasting about the price of it? And how they always use a fiat value?
Without fiat to give it value, their precious gold/bitcoin is worthless.
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Backing currency with gold (or crypto) doesn't make sense, because it artificially constrains an economy.
Did you ever notice how the bitcoin bros are always boasting about the price of it? And how they always use a fiat value?
Without fiat to give it value, their precious gold/bitcoin is worthless.
This needs moderating as insightful
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Re: Risks? (Score:2)
Just nitpicking, since the rest of your arguments seem solid,... The above isn't true, there would just be deflation, which just isn't desired if the government is spending above budget and even more if it has been doing so for some time and is saddled with lots of debt.
Like I told the other guy (Score:2)
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From where I stand the biggest risk is keeping your money in fiat currencies.
Does a dollar still buy what it used to? A feature of a properly functioning currency is stability. If you can rely on its value between earning the money, and spending it on goods you want, the currency is working.
...with the exception of a few years of the Clinton administration, the US has run massive deficits.
That would be a problem for the value of the national currency, if the US could not service its debts. Bitcoin as a currency would do nothing to reduce national debt. Maybe you are thinking of stashing your dough in bitcoin rather dollars, ready for when the global financial system experiences a
So stock brokers are salemen (Score:2)
In short, they're used car salesmen.
And we just gave those used car salesmen a ton of fancy looking cars with sawdust in the transmissions and the odometer rolled back by 100,000 miles. i.e. Crypto currency
Thanks to how interconnected our economy is it's b
Stocks with cryptocurrencies (Score:1)