Frank Holmes
Crypto SWOT: Fidelity will reportedly allow 401(k) savings accounts to invest in Bitcoin
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Strengths
- Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was yOUcash, rising 2,907.83%.
- Wall Street firms are making a crypto push to "keep up with the cool kids," reports Bloomberg. Jefferies Financial Group is expanding its banking services for cryptocurrency clients, Blackrock is backing a stablecoin firm, and Goldman Sachs Group Inc is ramping up crypto trading, the article explains. The moves by financial heavyweights underscore how far Wall Street firms have come in accepting cryptocurrencies.
- Riot Blockchain has announced the development of a 1-gigawatt facility in Navarro County, Texas, reports Bitcoin Magazine, for bitcoin mining and hosting. The development's initial phase will see the facility with 400 MW of capacity and is expected to create 270 jobs in the local economy. The facility will be immersion-cooled and is expected to be operational by July 2023, the article explains.
Weaknesses
- Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was BiggerMINDS, down 100%.
- Bitcoin extended this month's losses in Monday trading as investors got away from risk assets amid a more hawkish outlook for Federal Reserve policy tightening. The largest cryptocurrency slid as much as 3.3% to $38,223, the lowest since March 15, and down more than 20% from last month's high, according to Bloomberg. Ethereum slipped as much as 4.8% to $2,799, a level not seen since March 18.
- For months now, El Salvador President Nayib Bukele has been trying to hawk a Bitcoin-backed bond to international investors and it's not working. The devout believer in cryptocurrencies has yet to receive a single penny of the $1 billion he's seeking, writes Bloomberg. The talks have stalled with the IMF and his creditors are getting concerned that the country will fail to pay back an $800 million bond at the start of the next year.
Opportunities
- Retirement plan provider Fidelity will reportedly allow 401(k) retirement saving accounts to invest in Bitcoin, writes CoinTelegraph. If approved, retirement savers can allocate 20% of their savings portfolio to Bitcoin without the need to open a crypto exchange account. The move will allow over 23,000 companies associated with Fidelity to administrate their retirement accounts to offer Bitcoin investment options to customers.
- Ondo Finance, a protocol aiming to accelerate the adoption of decentralized finance among mainstream investors by mitigating risk, has raised $20 million in a Series A round, writes Bloomberg. The funding is co-led by Peter Thiel's Founder Fund and crypto firm Pantera Capital.
- Dubai-based luxury real estate developer DAMAC will soon accept payments in crypto, joining the chorus of firms betting that the United Arab Emirates (UAE) will become a global crypto hub, writes Bloomberg. DAMAC will accept payments in both Bitcoin and Ethereum. The move aims to "accelerate the new economy for newer generations and for the future of our industry."
Threats
- As the cryptocurrency boom has swollen the ranks of everyday investors chasing a life of mansions and yachts, mental health experts say it is sparking a rise in addiction, explains an article from The Washington Post. The highly unstable nature of cryptocurrencies can reduce profits to zero in a flash, leaving investors with mountains of debt, fractured relationships and thought of suicide, addiction experts said.
- According to the team at WuBlockchain, the popular crypto exchange Binance has suspended the lending function of Apecoin due to excess demand, writes EthereumWorldNews.com. The amount left on Binance is currently insufficient to satisfy the need for Apecoin by its users. Additionally, some traders have observed that withdrawals of Apecoin are currently not available on Binance.
- Labor Department officials believe Fidelity Investments' plan to allow investors to put Bitcoin in their 401(k) accounts risks the retirement security of Americans, writes the Wall Street Journal. Ali Khawar, the assistant secretary of the Employee Benefits security Administrations, said "We have grave concerns with what Fidelity has done." He also said that he views cryptocurrency as speculative with a lot of "hype."
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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