iExchange? One Bank’s Plan For Apple’s Crypto Future

iExchange? One Bank’s Plan For Apple’s Crypto Future

Meanwhile, from the "why not?" files. On a day when Tesla disclosed a $1.5 billion balance sheet "flier" on Bitcoin, RBC's Mitch Steves upped his price target on Apple to $171 from $154. Those two things might not sound like they're related -- and they aren't -- but there's an amusing tie-in. Over the past couple of weeks, the volume of the perpetual background chatter around a possible push by Apple into the electric vehicle market increased materially. And while RBC thinks an EV adventure
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9 thoughts on “iExchange? One Bank’s Plan For Apple’s Crypto Future

    1. If Apple actually does this… I’m a little lost for words. Regulators need to send a message ASAP that it will be banned and introduce a bill. The fact this discussion continues shows that Washington does not understand what is happening, and will likely miss the opportunity. That was my last holdout honestly.

  1. AS Fed rates remain stuck near zero, with little hope of going anywhere this year (or decade) maybe it makes sense to hedge bets with crypto and take advantage of the evolution of Capitalism. The general disconnect from reality during the last few years has opened up Pandora’s Box of magical digital experiments, so the idea of Apple opening a digital wallet sandbox seems fairly tame.

    Meanwhile:

    Zoltan Pozsar

    8 February 2021

    We begin our analysis with the observation that the long, three-year period of front-end collateral glut – which lasted from early 2018 to last week – is over. Treasury bill yields no longer push o/n rates up within the Fed’s target range, and after three years of “irrelevance,” the o/n RRP facility, not Treasury bills, is the true floor to the o/n tri-party repo rate. Broadly speaking, these rates collapsed to zero last week; however, the effective fed funds rate (EFFR) hasn’t.

    https://plus.credit-suisse.com/rpc4/ravDocView?docid=V7pAR92AN-VHSK

  2. I noticed a headline today how Miami city officials are considering adding bitcoin to the municipality’s investments.

    It also happens that I just started reading McKay’s 1841 book “Popular Delusions and the Madness of Crowds.”

    Mixing state finances with speculative monopoly or private schemes has a long history. If only John Law, Ivar Kreuger and the directors of the South Sea Company could aid in these plans we could reach complete ruin even faster.

    1. Reminds me of Orange County, but that’ll never happen again, because now, people have smart phones …

      From Wiki: “Citron controlled several Orange County funds including the General Fund, the Investment Pool, and the treasury Commingled Pool. He sent out the county’s tax bills with catchy slogans, such as “Taxes paid on time never draw fines.”[6] He won re-election seven times; in his last election victory, his opponent, John Moorlach, charged that his handsome gains were the result of risky betting.[6]

      As controller of the various Orange County funds, Citron had taken a highly leveraged position using repurchase agreements (repos) and floating rate notes (FRNs). The loss incurred by the use of these financial instruments reached the amount of $2 billion and was caused by being too highly leveraged for rising federal interest rates.[6] In other words, if federal interest rates had not risen, the massive trading position would have been a substantially profitable position; if interest rates did rise, the trading position would result in substantial losses. In fact, rates rose.

      The Orange County funds, managed by Citron, were worth $8 billion.[6] However, Citron went out to the repo market and leveraged the County Pools to amounts ranging from 158% to over 292%. To obtain this degree of leverage, he used treasury bonds as collateral. Profits of the fund were excessive for a period of time and Citron resorted to concealing the excess earnings. He pleaded guilty to improperly transferring securities from the Orange County General Fund to the Orange County Treasury Commingled Pool.”

  3. I thought there was a set limit of Bitcoins? If the acceptance and use of Bitcoins increases doesn’t the number of Bitcoins also have to increase or do you divide the set number of Bitcoins into smaller and smaller fractions of Bitcoins? I don’t see how, at any point, offering to pay for something in fractions of a Bitcoin is ever going to work.

    1. Set limit of 21 million (not counting forks), each can be divided into 100,000,000 parts. The smallest unit being a ‘Satoshi’, or .00000001 bitcoin. The payments probably won’t ever work, for a variety of reasons.

  4. Having seen my share of large notional gains and losses during the ’17 run, I remain amazed at what the last month has brought. Absolutely rampant speculation, across nearly every altcoin project. And yet, as someone who dumped half their btc at ~33 and knows this run is divorced from reality, even I am starting to feel my share of regret and fomo. If companies continue to buy, even stodgy retail types will have to hold their nose and follow. Whatever the end is for bitcoin, the current bull run has some serious legs. Bill Miller is right. The upside is just too great. And we are all too greedy.

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