Fintech’s Big Day, Comex Gold Inventories Contract, Saudi Aramco cuts dividend, new trading position.
Fintech’s Big Day
This was a big week for fintech.
EToro’s IPO went well today. The company is the newest entry to the world of zero commission broking. It is attempting to outdo Robinhood by offering even more products.
The bi-partisan GENIUS Act and the STABLE Act are looking promising in Congress at present. The outlook for supportive legislation for the crypto sector is promising.
The wrinkle is President Trump and his family’s participation in the crypto sector. The Democrats want to ensure politicians do not enrich themselves through the crypto sector.
Since the President’s memecoin is currently worth around $2.5 billion and his family has been busy buying crypto mining companies and other ventures, this objection is not without grounds.
Nevertheless, it is quite likely the bills will gain the bi-partisan support necessary to pass the Senate.
Coinbase was inducted into the S&P500 today, at the expense of Discover. A new fintech company replacing a credit card company, that failed to gain critical mass, will be viewed as a harbinger of the future for finance.
There is a great deal of chatter at present about the crypto sector and the future of finance.
It is worth remembering that the primary use of a stablecoin is to park US Dollars and earn a return by using the stablecoin to invest in other more volatile assets.
That can take the form of using the stablecoin to make international transfers but mostly it is about yield farming where the funds are invested in higher yielding assets.
That means a stablecoin is like a money market fund, but with a higher degree of risk and leverage. This kind of business is very attractive for issuers because they collect outsized fees for managing the funds and do not have to pay dividends or interest to investors.