Never a Dull Moment in Crypto
It is being reported that CBA has announced it is suspending the launch of its crypto trading service, with no firm timeframe to resume the project.
First announced in Nov 21, the service would enable some 6.5 million CommBank App users to buy and sell up to ten cryptocurrencies, including Bitcoin, Ethereum, and Litecoin.
However, as the market plunged into chaos during the Terra/Luna algorithmic stablecoin collapse last week, CBA is now pausing the project, with no time set on when it will resume.
It is interesting to look at the different crypto strategies from the big Australian banks:
Westpac, via Reinventure, made a savvy early stage investment in digital currency exchange, Coinbase. The investment made Westpac a reported $500M when it IPO’ed. Hope they sold then as Coinbase is down more than 70% from its heady IPO valuation.
CBA went to retail investors via its App strategy.
ANZ played it safe and stayed with wholesale investors, minting a $30M stablecoin for its long-term customer, the Victor Smorgon Group, the investment company of Melbourne’s Smorgon family
Safe to say there is never a dull moment in crypto. Lots of media saying the Terra/Luna collapse spells the end for crypto. I don’t agree. Algorithmic stablecoins are seriously risky. Some elegant maths but invalid market assumptions caused Terra’s demise. This is just an experiment that the community will learn from (hopefully) and come back stronger. The stats are telling. Year to date:
Bitcoin down 25%, the same as the NASDAQ 100 but less than: Meta/Facebook, Netflix, Peleton, Atlassian & more.
Of course not to say Bitcoin couldn’t drop more – it can. But volatility has been a hallmark of the digital asset space – it has only been around 13 years, so it is still an unpredictable teenager. I am betting it will mature into a splendid adult – but there may be some difficult years before that happens.