The Crypto Elites Are Plotting a Wall Street Merger
Wall Street, the Federal Reserve, and the financial arm of Silicon Valley, perhaps the most dominant power structures of the monetary madness era, can’t believe their luck. The crypto movement, the very rebellion that set out to defeat their hegemony, has provided them with the necessary new-age tech to enhance their existing order. It’s open-source, free for the taking, and just a “copy and paste” away: Blockchain, the anti-middleman, anti-monopoly technology, which the anti-corporatist, anti-institution Cypherpunks themselves created, has become the core of the financial elite’s new monetary system.
Behind the scenes, they’re going all-in on crypto, creating new blockchain platforms, and building crypto replicas of the legacy monetary paradigm. Using its very own cryptocurrency, JPMCoin, the world’s largest megabank JPMorgan has completed its first interbank “crypto” trade with fellow Wall Street titan Goldman Sachs. They completed the transaction on JPMorgan’s new Onyx system, a blockchain platform that runs a digital version of the repo market, an essential cog of Wall Street’s underworld. With more than a dozen institutions on board, exchanging more than $1 billion daily, a digital financial revolution is now in the making.
Ordinary citizens, however, won’t be part of it. Instead, they’ve been stuck with the mainstream crypto movement. Its leading advocates insist that we’ve entered a new era of financial freedom, claiming those who’ve armed themselves with only a Bitcoin wallet and an internet connection have begun to supplant the existing power structures and defeat crony capitalism.
But in reality, the crypto rebellion has failed to liberate the people from the elite’s repressive regime, or achieve anything else its founder Satoshi Nakamoto had envisioned. Rather than producing a more open, more liberating, more financially free society, the crypto paradigm has only empowered a new set of elites. Not just another cabal of corrupt financiers, but a group of corporate ex-cons, Wall Street rejects, and, what U.S Senator Liz Warren described as, “shadowy super-coders”.
By exploiting the Wild West of crypto, they have established a hidden cartel in no time at all. Its prominent members continue to run rampant around the globe, circumventing laws, regulations, and ethics to accumulate multi-billion dollar fortunes. Not a single country or bank wants to host crypto-billionaire “CZ” and his company Binance, the biggest crypto exchange on the planet by far. Billionaire co-creator of stablecoin Tether, Brock Pierce, meanwhile, has engaged in some casual “crypto colonialism” in Puerto Rico. He plans to build his “cryptopia” on a 250,000-acre plot of land, despite backlash from locals.
Sensing this rising elite is getting a free pass, the financial power structures of the world have replied with a global regulatory hailstorm. As it’s intensified, the more “controversial” outlets have tried to meet regulator’s demands while remaining operational.
BlockFi, a cryptocurrency lender that matches all the Securities and Exchange Commission’s (S.E.C) criteria for a Ponzi scheme, has had to obey securities laws to continue operating, with five states — New Jersey, Alabama, Texas, Vermont, and Kentucky — striking the fintech company with either cease and desists (requests to stop alleged illegal activity) or show-cause notices (you must prove you’re not a scam).
As for the executives of ill-famed stablecoin Tether, they have appeared on CNBC, trying to convince everyone that their currency has a 1-to-1 backing. They still won’t perform an audit of their reserves, removing all doubt and suspicion. “CZ” and Binance, after achieving a world-first of being exiled from almost every country they’ve tried to operate in, have tried to appear more credible by “looking at the potential IPO route” and appealing to regulators.
Since the Feds have come down hard on any entity not playing ball, this has made some of the crypto elite consider that true decentralization, complete detachment from the legacy system, might be a delusion. They are slowly coming to realize that it’s a lot easier to build a fortune — and keep it — when they participate in the “official” system and follow the rules.
It’s the same realization Peter Theil had in 1999. Back then, his original vision for PayPal was to create a truly anonymous money-transfer system, free from state influence and control. “It will be nearly impossible for corrupt governments to steal wealth from their people through their old means,” he declared, before quickly backtracking his words and selling out to Silicon Valley.
Fast forward to now, and the crypto elite have mimicked Thiel’s backtrack. Rather than simply throwing in the towel and admitting the game is up, they have found a potential exit strategy: abandoning their cyberlibertarian roots and merging with their enemy, the legacy financial power structures of Wall Street, the Federal Reserve, and Silicon Valley.
The crypto elites who’ve done so have had a lot more success. Jeremy Allaire’s Circle, the company behind the notorious, unaudited stablecoin USDC may have declared it’s going public via a dubious merger, but they have also partnered with Silicon Valley payment giants, Mastercard and Visa. Meanwhile, Brian Armstrong, the CEO of crypto’s premier exchange, Coinbase, revealed in a tweet that he’d held meetings in D.C with high-ranking state officials, including Congresswoman Nancy Pelosi and Federal Reserve Chair Jay Powell.
Which makes you think: Why is the Federal Reserve’s head honcho, Bitcoin’s supposed arch-enemy, collaborating in undisclosed meetings with the CEO of crypto’s main cashier? In Bitcoin Gospel, that’s heresy. The answer lies with the crypto elite’s recent actions, which prove they were never really in it for the freedoms Bitcoin could offer, but more for the untold riches it could have provided them, had they managed to circumvent the legacy system long enough to build their fortunes.
Now they’ve succeeded, it’s all about wealth preservation, and in the age of bailout capitalism, becoming “too big to fail” is the ultimate protection. Growing their crypto empires is one thing, but getting in the good books of Wall Street and the Federal Reserve will be the top priority for any crypto elite. If a crisis emerges, and they threaten to bring down the existing power structure’s financial order, guess what? They’re first in line for a bailout, taxpayer-funded.
Right now, it’s inconceivable for most people that the financial elites will bail out the crypto market. But as the bubble gets bigger each day, and more bad actors enter the space, systemic risk and uncertainty will increase. Looking at the dubious Wall Street securities these bad actors have been investing in, we know the contagion risk between crypto markets and the legacy financial system continues to grow rapidly.
Tether is a prime example. On top of its $63 billion market cap, and how it makes up 50 to 60% of Bitcoin’s daily trading volume, half of its reserves are backed by “commercial paper”, short-term debt securities often issued by low-quality companies. Being a modern wildcat bank, one that issues its own currency, and having failed to provide any proof its assets exist, Tether will never tell us what company’s debt they own, as it’ll expose how shady assets (or lack thereof) have been the driving force behind the latest crypto boom.
As the cheap money boom prospers, tempting systemically important institutions into becoming too exposed to crypto, don’t be surprised if the Federal Reserve fires up the dollar cannon, coming to their rescue. We keep forgetting that Wall Street is the Federal Reserve, but we only realize this when crises emerge. The financial elites know that if something goes wrong — as it always does, Fed Chair Jay Powell will be there to step in and bail them out at whatever cost.
If the next crypto crash threatens to bring down their system, if wildcat banks like Tether become too big to fail, the financial power structures will happily combine the crypto ecosystem with their existing order to maintain the status quo. Two classes of elites, two power structures will become one, with the “less desirable” parts of crypto — and likely the taxpayer’s purse — becoming collateral damage.
From then on, every bubble will take on a new terrifying form. What usually happens is the elites fuel the mania, flee when the going gets tough, then punish the small guy when the bubble bursts. But this time, to make matters worse, the most nefarious, most corrupt institutions on the planet will have a sidekick. With the likes of Goldman Sachs combining forces with some of the characters in the crypto elite, you just know that together they’ll start wreaking havoc around the globe.
By the climax of the next post-merger bubble, they’ll be conning clients through charging obscene crypto fees, betting against their own Bitcoin products, and marketing crypto bonds yielding 100% to developing countries like El Salvador, placing them on the debt hamster wheel. The people, meanwhile, will watch on in anger, grief, and frustration, knowing that they’re powerless to stop or escape yet another era of financial repression.
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