How much do you know about the code that controls your money? This week, we are sharing an article that highlights the enduring significance of the COBOL programming language in various critical sectors of the U.S. economy. Over 80% of in-person transactions at U.S. financial institutions and 95% of bank card swipes involve COBOL in the background. Large financial institutions, like the Bank of New York Mellon, rely on COBOL extensively, with millions of lines of code. COBOL is also integral to processes such as payroll calculations, stock trading, health care adjudication engines, retail inventory systems, and airline booking agents' tools. Estimates suggest that there could be as many as 240 billion lines of COBOL code underpinning essential everyday functions, making it one of the most valuable assets in the United States, following oil. This continued reliance on COBOL in major industries presents challenges for innovation, as the language is considered outdated, and young coders prefer newer programming languages like Python and JavaScript. This raises questions about why COBOL remains in use and why it's difficult to replace it in these critical sectors. Context is everything...
In this podcast with Nik Bhatia, the discussion centers on the impact of persistently low interest rates, which, though initially seen as an opportunity, concealed significant risks and irrational investments. Central banks play a crucial role in influencing interest rates, but their adjustments often lag behind market movements, creating an interplay between their actions and market forces. Central banks use interest rates to manage inflation, but this can inadvertently lead to economic recessions, as exemplified by contracting Purchasing Managers' Indexes (PMIs), which can affect global economies like China. The interview highlights concerns about traditional financial instruments within the fiat economy, as financial institutions accumulate potentially limitless liabilities. Notably, when central banks implement easing measures, Bitcoin tends to gain value, reflecting growing anticipation of a shift away from the fiat system. The interview leaves us pondering the proximity of such a transition and Bitcoin's potential role in reshaping the financial landscape.
It's an interesting time to move into the US given the regulatory uncertainty. CoinShares is launching a new US operation called CoinShares Hedge Fund Solutions to serve crypto investors. Eligible investors will gain access to private investment products, expanding the company's reach beyond Europe. CoinShares Capital LLC, the parent company, will conduct marketing activities to attract potential institutional investors. The move is driven by increasing interest rates in financial markets, with a focus on offering well-managed access to digital assets. The crypto hedge fund aims to mitigate counterparty risk for investors. However, specific crypto products and services available were not disclosed. CoinShares enters the US market amid intensified regulatory scrutiny and legal battles involving major crypto players like Coinbase and Binance.US. Glad to hear someone is coming to the US rather than leaving to another jurisdiction.
In this article, Jeff Dorman, the Chief Investment Officer at Arca, shares insights from his experience managing a crypto fund for five years. He acknowledges the unique challenges of investing in the crypto space, where extreme volatility and rapidly changing market conditions demand constant adjustments to risk models and assumptions. He also emphasizes the need for careful interpretation of information over rapid reactions, as initial market responses are often inaccurate. Other highlights include the significance of meticulous documentation, essential in an industry where markets operate 24/7, and that natural reset periods are rare. He also discusses the evolving nature of the crypto investor base, noting how they have become more knowledgeable and specific in their demands, leading to the creation of specialized funds. It's always great getting a manager's opinion on various pieces of their existing business. It doesn't hurt that it is a quick, fun read.
The content and information aggregated in this newsletter is publicly available and shared by us to keep our clients and professional network up to date with digital asset / crypto industry news, exhibitions and events. We do not use, repurpose or represent authority over any licensed images or content and have no conflicts of interest with regards to the production of this bulletin or the shared content herein. This is provided as an optional newsletter that you may unsubscribe from. We do not share any of your contact details with any other company or institution without prior consent.
Standard Custody & Trust Co.
PolySign, Inc., 650 5th Ave, 14th Floor, New York, NY, 10019
