"Crypto crash survivors could become tomorrow's Amazons" - Bank of England

[tecate]

@Duke of Marmalade : Take a break from your read of the communist manifesto there for a second comrade marmalade - and have a quick scan of this Bloomberg article:

Deputy High Priest of BoE says next Amazon to be found in crypto startup survivors

Well I never. Surely creates a conundrum? For all that is sacred in the eye of providence (that'd be the eye that appears above the pyramid on the US dollar), there are rules. I'd go route one on this one - and just commence the character assassination and cut him off. Thoughts?

 

[Duke of Marmalade]

@Duke of Marmalade : Take a break from your read of the communist manifesto there for a second comrade marmalade - and have a quick scan of this Bloomberg article:

Deputy High Priest of BoE says next Amazon to be found in crypto startup survivors

Well I never. Surely creates a conundrum? For all that is sacred in the eye of providence (that'd be the eye that appears above the pyramid on the US dollar), there are rules. I'd go route one on this one - and just commence the character assassination and cut him off. Thoughts?

Interesting. Maybe worth a new topic. But hold your horses on the “gotcha” and “I told you so” and “put that in your pipe and smoke it”
He is not saying the currencies will become the new Amazon. That is impossible as they have no income generating power whatsoever.
He sees uses for the technology and to that extent I concede that he supports your views. I got a smattering of the technology from Antonopolous‘ Bible. Clever but really very mundane compared to TV, Air Travel, the Internet itself. True I would never have predicted that Facebook would be a mega revenue earner. I find it very hard to see this rather mundane technology spawning a mega earner, but I could be wrong. Where I am not wrong is that I am certain that Bitcoin will never be such, I presume you agree. Bitcoin is utterly worthless.
Of course CBDC is not at all to be compared with Bitcoin - again I presume you agree, and we can avoid that rabbit hole.
I expect Sir Jon will issue a clarification in the coming days that he did not at all mean that out of the ruins of the current crash some currencies will rise like a Phoenix or Facebook. In the context of the current topic Sir Jon’s comments could be misinterpreted by those under 35s who see bitcoin as the asset of choice, a tad irresponsible IMHO.

 

[Brendan Burgess]

The survivors of the rout in cryptoassets could become the technology companies of the future rivaling Amazon.com Inc. and eBay Inc., Bank of England Deputy Governor Jon Cunliffe said.

“Whatever happens over the next few months to crypto assets, I expect crypto technology and finance to continue.” Cunliffe said. “It has the possibility of huge efficiencies and changes in market structure.”

 

[Brendan Burgess]

I googled to see how others are reporting it and it's quite funny.

El Salvador President & Bank of England predict bright future for Bitcoin; China says BTC heading to zero

Bitcoin has attracted mixed reactions from authorities across the world. While the El Salvador President Nayib Bukele remains bullish on Bitcoin, the Bank of England (BoE) is also beginning to see the benefits of accumulating Bitcoin through the tumultuous crypto winter. However, China believes...

www.cnbctv18.com

El Salvador President & Bank of England predict bright future for Bitcoin; China says BTC heading to zero

Did the BoE guy mention Bitcoin?

Apparently not, although the reports are assuming that he was referring to BTC

The Bank of England (BoE) is also beginning to see the benefits of accumulating Bitcoin through the tumultuous crypto winter. Last week, Sir Jon Cunliffe, Deputy Governor of the BoE, told Bloomberg that the crypto firms surviving the ongoing meltdown would emerge victorious as the "dominant players" who would lead the next wave of change.

"Whatever happens over the next few months to crypto assets, I expect crypto technology and finance to continue. It has the possibility of huge efficiencies and changes in market structure," said Cunliffe to Bloomberg.

However, this is in stark contrast with its December 2021 stance on cryptocurrencies. At the time, the BoE Deputy Governor had called the digital asset class a threat to existing traditional financial systems. "The point, I think, at which one worries is when it becomes integrated into the financial system when a big price correction could really affect other markets and affect established financial market players," Cunliffe told the BBC. "It's not there yet, but it takes time to design standards and regulations," he had added.

 

[Duke of Marmalade]

@Brendan Burgess
Sir Jon is clearly making a distinction between crypto assets and crypto technology in the same way that he would distinguish between bananas.com and internet commerce.
But his comments are in huge danger of being misconstrued: wishfully by the cult, nigh eve-ly by the under 35s for whom bitcoin is the asset of choice and inadvertently by the likes of cnbctv18.
Expect some clarification from the BoE; no way have they done a U-turn on last December. I expect @tecate will keep us posted.

 

[tecate]

But hold your horses on the “gotcha” and “I told you so” and “put that in your pipe and smoke it”
He is not saying the currencies will become the new Amazon. That is impossible as they have no income generating power whatsoever.
He sees uses for the technology and to that extent I concede that he supports your views. I got a smattering of the technology from Antonopolous‘ Bible. Clever but really very mundane compared to TV, Air Travel, the Internet itself. True I would never have predicted that Facebook would be a mega revenue earner. I find it very hard to see this rather mundane technology spawning a mega earner, but I could be wrong.

Well yes Duke - but remember, you're pointing out a problem that (at least in the alternate headline and OP I provided), I never claimed. I have never heard anyone in these parts (who is otherwise less than enthusiastic about crypto) suggest that there are certain startups that are engaging positively and adding value. I've only heard that the space is full of scammers.
The little we do know from his comments is that he has not in any way restricted his thinking to a Central Bank Digital Currency for example.
On your suggestion back then that you couldn't see how Facebook could have turned into what it became, isn't that a very relevant point? These applications of tech in their early innings don't seem all that transformative. There's no doubt that blockchain-based solutions are often suggested as solutions to things where in reality there is no value add - but the very same happened with the application of web 1.0 tech back in the day.

I googled to see how others are reporting it and it's quite funny.

True for you Brendan - and have a look who that's from? It's not crypto media. I've always said that all media has to be scrutinised.

Expect some clarification from the BoE; no way have they done a U-turn on last December.

What I think has happened is that we are continually seeing governments and regulators change position. More recently, the Europeans looked liked they were going to do to crypto/blockchain as they did to internet tech back in the day (shoot themselves in the foot by regulating it harshly and leaving it all for the Americans to hoover up). It still remains to be seen what way they'll go as at least some European policy makers softened their stance immediately afterwards. But almost immediately there was a change in tact from the Brits - they could see that there was an opportunity to benefit from this tech while the Europeans were looking to regulate it out of existence. That is what I believe is going on - and reflected in his comments.

 

[Duke of Marmalade]

In December, he said that the value of cryptocurrencies could fall sharply, stating: “Their price can vary quite considerably and they could theoretically or practically drop to zero.”

He hasn’t changed his mind.

 

[tecate]

He hasn’t changed his mind.

Hold up there a second, Duke. He said that the value of cryptocurrencies could fall sharply? I mean, so did I. I'm not too bothered as I'm not in the business of celebrating central bankers but lets be accurate here. What he said in December re. prices falling rapidly doesn't take away from what he said more recently re. crypto startups surviving this bear market could potentially end up being the next Amazon. There is no contradiction in the two statements.

And now that you've had another go at it, I'll add this. You were at pains to point out that he never talked in terms of cryptocurrencies and that he was talking about crypto startups. Well, here's one for you. Just what precisely do you think the work of a crypto startup will involve?

 

[Duke of Marmalade]

Whatever happens over the next few months to crypto assets, I expect crypto technology and finance to continue.” Cunliffe said. “It has the possibility of huge efficiencies and changes in market structure.”

@tecate if you want to interpret this as a sign that the BoE see the possibility of a big future for bitcoin as a currency, I shouldn’t spoil your fantasy.

 

[tecate]

@tecate if you want to interpret this as a sign that the BoE see the possibility of a big future for bitcoin as a currency, I shouldn’t spoil your fantasy.

He never mentioned Bitcoin Duke. However, had I said that the next Amazon would come from a crypto bear market survivor, I'm confident you wouldn't be half as accommodating. There has been no acknowledgement of anything positive that could possibly come from the crypto sector by anyone who has taken the 'crypto won't succeed' end of this debate here.
I don't think its much of a stretch to consider that if someone is saying a crypto startup could be the next Amazon, then one of the underlying media that they're working with ( a token or cryptocurrency) will have some form of utility in that situation.

 

[Duke of Marmalade]

Maybe the Alchemists are a better analogy than dot.com. The Alchemists aim was to make gold out of base metal. That was never on but I think they were the origins of modern chemistry and that has achieved a lot.
Whether out of the fantasy of making a currency of value out of a string of digital code will come spin off technological advances, I am sure there will be some. I see blockchain greatly reducing the use of Lever Arch files, for example.

 

[tecate]

Whether out of the fantasy of making a currency of value out of a string of digital code will come spin off technological advances, I am sure there will be some. I see blockchain greatly reducing the use of Lever Arch files, for example.

If your central bank buddy is talking about the next Amazon, he's talking about greater disruption than 'reducing the use of Lever Arch files'...

 

[newirishman]

I am curious what the chap means by the 'next Amazon'? Amazon is a conglomerate of businesses, some extremely profitable (AWS), some not so much at this point. In any case, all/most of Amazon's businesses generate value, provide services, build assets.
amazon also did not emerge from the dot.com crash, the company is quite a bit older.

In comparisons, 'crypto' whilst arguably generating some income (be it via cryptocurrency bubbles, or via consultancy work trying to identify some use cases for the technology beyond POCs) does not create much of value, or asset building.

 

[DazedInPontoon]

I am curious what the chap means by the 'next Amazon'?

The comparison is not as specific as you're imagining. It's in relation to something went through the bubble cycle, was declared dead in the crash part of the cycle (share price down 90%), but survived and went on to new heights afterwards.

amazon also did not emerge from the dot.com crash, the company is quite a bit older.

yes, that's the point.

A hype cycle causes a sector to get a lot of investment, a lot of investment leads to many bad ventures. The crash ends the bad ventures, the best ventures survive and may go on to realise the original promise that led to the hype cycle. It's pretty simple.

 

[tecate]

I am curious what the chap means by the 'next Amazon'?

I think its reasonable to assume he means a company that will add and build incredible value.

amazon also did not emerge from the dot.com crash, the company is quite a bit older.

I'm not sure why you would think that a nascent tech company can't be part of the whole dot com boom / bust based on some start date parameter? Proportionately, only a small fraction of its value as a company had been built by the time the dot com started to implode. It lost 90% of its value at the time.

In comparisons, 'crypto' whilst arguably generating some income (be it via cryptocurrency bubbles, or via consultancy work trying to identify some use cases for the technology beyond POCs) does not create much of value, or asset building.

I agree with the Duke (), he wasn't directly referring to cryptocurrencies - but emergent startups in the crypto space. You're unlikely to be able to provide a clear example - isn't that the whole point?...just in the same way as what seems obvious with Amazon in 2022 was far from obvious in 2000. How many Amazon investors do we have on AAM - that held stock from 2000 to 2010 - for that entire duration?