Max Keiser Warns of the Financialization of Bitcoin by Wall Street
Bitcoin has had a horrific 30 days, falling from above US$6,000 to US$3,371 Monday morning. In Max’s latest interview he remains bullish as ever on Bitcoin. Granted, he was among the first to begin touting the digital currency, long before its headline smashing record highs. Now as the digital currency falls to multi-year lows, he is warning Wall Street may soon be manipulating its value.
Volatility Soars as Bitcoin Holders Panic
Bitcoin was nothing more than speculation for most; but, “According to the Bitcoin (BTC) Volatility Index as of yesterday, Dec. 9, volatility levels on the BTC-USD market have risen threefold on the month.”
For an asset that was volatile, to begin with, the current collapse is crushing.
Few assets are as well known. But to decline roughly 50% in such a short period is shocking. Even on Wall Street it is rare for any very well known stocks to fall by 50% in a month. What isn’t making headlines is just how damaging a downward move like this is to the long-term perception of an asset. Aside from the financial crisis of 2008, there are limited instances of such downward volatility. And I’m not talking about junior miners, that move up and down 50% all the time, I’m talking about well known assets across multiple classes. Bitcoin’s disastrous crash landing will likely scare off the majority of would-be investors for years, if not forever.
Stacey on the Fed and ECB vs. Bitcoin Collapse
Stacey, Max’s longtime partner, defends a statement made towards Bitcoin’s collapse:
“The bubble took from the large number of bubble buyers, this is bitcoin, and money was given to a small number of bubble sellers.”
She responds with a comparison to the financial crisis of 2008, stating,
“There was trillions of dollars created by the US Fed. Trillions of dollars created by the ECB; and it was given to a very, very, very small group of elite bankers around the world.
That was permissionless in a different way. They didn’t ask our permission to print this money and give it to those people. We were the helpless sellers to the banks of our income, our wealth basically. They destroyed it through the inflation that they created in order to bail out the likes of UBS.”
Max Warns of A Wall Street Invasion
As the financialization of Bitcoin continues, bankers are surely scheming up ways to profit from it. Max Keiser continues to believe bitcoin has “no counterparty risk” and that it is “hard money,” “sound money.” However, he argues Wall Street is bringing in its financial products or in Max’s words “bag of tricks.” And that, these products, will allow them to rehypothecate Bitcoin. In other words, lend the same asset multiple times, by means to control the price.
Max and Caitlin Long discuss fake bitcoin claims and what will happen if the ‘big’ Wall Street money comes into the market.
“The Financial Regulators have no clue.”
– Caitlin Long
Finally, Long predicts,
“Wall Street will be left with ‘CorpoCoin’ which will be a version of Bitcoin which fits into their categories.”
While the Bitcoin saga is far from over, how the SEC and major banks like UBS and Fidelity deal with the digital currency, could very well predicate its future value.