Corn and crypto POLITICO

With the help of Steve Heuser, Constantine Kakaes and Derek Robertson.

If you still consider the crypto boom to be something new for intraday traders, or maybe those cousins ​​you only meet during the holidays are brawl brews at small Washington regulatory agency it speaks to how much this could change the world of traditional finance.

Sam Bankman-FriedThe billionaire founder of global cryptocurrency exchange FTX wants U.S. retail investors to be able to place highly leveraged bets on cryptocurrency futures and other digital derivatives—not just during regular trading hours, but around the clock, 7 days a week .

While cryptocurrency margin trading is widely available outside of the US, FTX’s push to convince the Commodity Futures Trading Commission to approve these products for domestic traders has sparked a wave of resistance.

Opposition comes not only from players you would expect to resist change – traditional financial giants like the owners of the NYSE and Chicago marketplaces – but also from big competitors in the crypto world who are concerned that FTX will get a big first-mover advantage. from launching a new type of high-risk trading.

Bankman-Fried’s ambitions have already been the subject of a three-hour hearing in the House Agriculture Committee. Later this week, the CFTC will hold Round table all day where FTX and its opponents will defend their positions.

“We’re surprised at the amount of tension – the attention – it’s received,” Bankman-Fried said. in an interview. “Some people might approach it in terms of, you know, what’s important to their business.”

Argument for/against a new platform will seem familiar to anyone who has seen the emergence of new exchanges and trading systems in traditional finance. FTX says their plan will reduce market inefficiencies by bringing the speed and agility of cryptocurrency trading to the old market models that have long ruled derivatives, such as soybean futures or soybean futures. orange juice contracts from Trading Places – and eliminate the need for financial intermediaries that slow transactions and increase the cost of trading.

Derivatives market fundamentals argue that this will actually increase risk and increase the speed at which things can go awry, as these same intermediaries play a critical role in absorbing price shocks and keeping farmers, commodity traders and financial institutions who rely on them. trades to hedge their positions.

“This proposal is fraught with danger,” said the CEO of CME Group. Terry Duffywho heads one of the world’s largest derivatives exchange operators, said during a May House Agriculture Committee hearing.

There are also concerns about the extent to which this could push FTX to eventually move away from bitcoin and into more traditional futures markets like energy contracts or pork belly. While Bankman-Fried says he has no plans to expand beyond crypto trading into other, more traditional derivatives, there is reason to believe that his three-year-old company has the entire industry on its radar.

The company recently launched a beta program that will allow its customers to buy traditional stocks and exchange-traded funds, and the president of FTX.US Brett Harrison told The Wall Street Journal that long-term plans include the creation of a “comprehensive financial services application” that could include other asset classes, including futures contracts.

Read full story here.

The digital future is a big presence at Davos this yearwith panel after panel on cryptography, artificial intelligence and the metaverse.

But what does that really mean for the leaders attending an event that is largely a celebration of (largely analogous) traditional power?

One disturbing response to a question came in the sidebar Ukraine war and geopolitics.

Brad Smiththe president of Microsoft, said that his company has a completely different view of the war than the generally accepted one.

First, he proposes to postpone the start of the Russian offensive to February. February 23, the day before the “official” date of the invasion. 24. That’s when Microsoft saw how Russia launched a surprise full-scale attack on Ukrainian institutions, many of which Microsoft was already working with. Smith counted 300 coordinated Russian cyberattacks against the Ukrainian government and Ukrainian banks. The company monitored (and defended) against attacks not in Kyiv, but from Seattle.

Smith also offered a disturbing perspective for people in the West who see the war as basically a Russian misfire: “There is often a misunderstanding when people say, ‘Oh, the Russians didn’t bring their A-team into cyber warfare. They absolutely are. They simply concentrated all their assets in Ukraine itself, so they did not engage in cyber attacks, say, on the rest of Europe or on other NATO countries.” – Steve Hueser

Because 63,575 percent of the world’s dirty bastards gather in Davos, Switzerland, many of them are unhappy with cryptocurrencies. Managing Director of the International Monetary Fund Kristalina Georgieva targeted a big player on the block: “Bitcoin can be called a coin, but it’s not money,” she said. according to Luck. Christine Lagardethe president of the European Central Bank, agreed, telling the founder of the World Economic Forum Klaus Schwab that “cryptocurrencies are not currencies at all.”

This is the first half of each quote. The second half shows why Georgieva and Lagarde protest so strongly. “The prerequisite for something to be called money is a stable store of value,” continued Georgieva. Lagarde believes that cryptocurrencies are “speculative assets that fluctuate greatly in value over time and represent currencies that they are not.”

You don’t have to be a big fan of cryptocurrencies to see Lagarde and Georgieva doing magical thinking. It’s good when the money is stable. But the Zimbabwean dollar is undeniably a currency (losing roughly half its value daily between 2007 and 2008), as is the Yugoslav dinar (313,000,000 percent monthly inflation rate in the early 1990s), as is the Deutsche Mark in the 1920s years (~$30,000). percentage of monthly inflation).

You don’t need to go back to the worst cases of hyperinflation to see that persistence over time is hardly a necessary condition for being a currency. Even the nearly 10 percent annual inflation that the US dollar is currently experiencing is a stark enough reminder that currencies, even the most established ones, fluctuate painfully in value. And like George Soros highlighted 30 years ago it is entirely possible to make money by speculating in conventional currencies.

The instability of bitcoin and other cryptocurrencies creates a real problem for those who will use them as a medium of exchange. But that doesn’t make them “not money.” – Konstantin Kakaes

When you are the richest man in the world You are used to making demands.

This does not mean that they always make sense: in response to Elon Musklooking for evidence that less than 5 percent of Twitter users are bots before it completes its purchase of the platform, scientists at Indiana University. Kai-Cheng Yang as well as Filippo Menzerwrote an article per Talk succinctly titled “How many bots are on Twitter? This question is difficult to answer and misses the point.”

Jan and Mentzer argue that while Twitter may have a tiny number of accounts that aren’t associated with individuals, it’s almost impossible to determine the true number – and that even if one did, deleting them would only deal a blow to such issues. like disinformation, scams and conflicts that people blame them for.

I called Ian to ask him about his research and Mentzer’s and how he thinks it fits into the overall effort to make our digital lives more authentic and less, well… crappy.

Good news? Twitter is much more convenient than most social networks. in sharing their account data with external researchers, which gives Jan and his colleagues a great set to work with. The bad news? All the data in the world may not be enough to fix what is wrong with us.

“I don’t believe there is one simple solution,” Yang said. “People think that just deleting all bots, deleting all spam, deleting all fake accounts is better. I don’t think so… You need to think bigger: why do people like to share misinformation and believe it? Why do people hate each other so much?

However, Yang does not believe that the research he and his colleagues have done is in vain: the more information we have about where, how and why the worst content is shared on a platform like Twitter, the better prepared politicians are to then undertake. about it.

“The first step is to understand that there is a problem,” Yang said. Now we are doing this research not only to track down bots, but also for other cases of inauthentic or bad behavior, and to study them in the first place … talking about how to find a solution. – Derek Robertson

Stay in touch with the entire team: Ben Schrekinger ([email protected]); Derek Robertson[email protected]); Konstantin Kakaes (ur.[email protected]); and Heidi Vogt ([email protected]).

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