By Bill Taylor/Contributor
Every day there are spirited discussions going on around the globe (no, NOT about the new Starbucks policy) on the validity and value of bitcoin and cryptocurrencies. Well, while those discussions continue, let’s check what’s actually happening involving cryptos and get a dose of reality. Y’all (deep South talk) ever hear of Fidelity? Charles Schwab? Of course you have. How about Coinbase? Not as many hands go up. Well while the bitcoin doubters discuss the new horseless carriages, Coinbase, which is a leading cryptocurrency exchange, now has just about as many customer accounts as Fidelity AND nearly twice as many accounts as Charles Schwab. And that comes from the Washington Post which certainly doesn’t deal in fake news. Additionally, this super fast growth has come in a fraction of the time it has taken “established” firms (like Fidelity & Charles Schwab) MANY more years to achieve.
Now, before you chalk that growth up to the new “crypto geeks”, silly small speculators, your idiot brother-in-law, etc., maybe you should peek under your old Quotron stock monitor and look at what types of clients are flocking to firms like Coinbase. Those include large hedge funds, family offices, high net worth sophisticated investors and folks like that. Also, when a better regulatory picture develops, look for pension funds and other institutions to foster additional growth. Keep in mind, all this spectacular growth is happening while constantly navigating the hodge-podge of regulations, or non-regulations worldwide.
So, again, while many totally write off the the very concept of bitcoin, cryptocurrencies, tokenization and new ways to raise capital (ICOs/TGEs) they are ignoring that the genie is out of the bottle and fast dwarfing the old establishment. But there is hope for those poor “old” firms. Fidelity, under Abigail Johnson, actually does some bitcoin mining (she’s a big bitcoin believer), Goldman Sachs is adapting and opening a crypto trading desk and even Jamie “Bitcoin is a fraud” Dimon has pivoted from his “famous position”. Maybe the biggest critic Warren Buffet is getting tired of innovation? Or, perhaps even Coinbase should watch out for the likes of Fidelity (or others) to get a second wind.
Bill Taylor is Managing Partner at Fintek Capital & a frequent contributor to FintekNews