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Fintech Is ‘Enormous Competitive’ Threat to Banks, Says JPMorgan Chase CEO Jamie Dimon

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Dimon advocated for a regulatory field for all active participants in the financial system to compete in order to thrive.

Jamie Dimon, the Chief Executive Officer of American investment bank and financial services holding company JPMorgan Chase & Co (NYSE: JPM), has identified the growth of Fintech (Financial Technology) as one of the “enormous competitive threats to traditional banks and related institutions. Dimon revealed this in his annual shareholder letter published on Wednesday, wherein he noted that banks are usually bound by their own bureaucracies in an attempt to welcome new innovations.

The advent of the coronavirus pandemic accelerated the push to embrace financial systems that offer more flexibility and a reduced need to interact physically with banks, and fintech companies were well-positioned for this. The provision of easy access to banking products such as loans, cheaper funds transfer amongst others by these new financial service providers makes banks less relevant per the role played in the broader ecosystem.

“Banks already compete against a large and powerful shadow banking system. And they are facing extensive competition from Silicon Valley, both in the form of fintechs and Big Tech companies (Amazon, Apple, Facebook, Google, and now Walmart), that is here to stay. As the importance of cloud, AI and digital platforms grows, this competition will become even more formidable. As a result, banks are playing an increasingly smaller role in the financial system,” Dimon explained.

The JPMorgan boss also highlighted the areas in which banks have their core strength which include the availability of regulatory measures that give some clients confidence to build business relationships as well as deep roots with the customers, however, he believed the rate of innovation amongst Fintech, due to the imbalance in regulations gives them an upper hand.

“We believe that many of these new competitors have done a terrific job in easing customers’ pain points and making digital platforms extremely simple to use. But growth in shadow banking has also partially been made possible because rules and regulations imposed upon banks are not necessarily imposed upon these nonbanks. While some of this may have been deliberate, sometimes the rules were accidentally calibrated to move risk in an unintended way. We should remember that the quantum of risk may not have changed – it just got moved to a less-regulated environment,” he said.

In all, Dimon advocated for a regulatory playing field for all active participants in the financial system to compete in order to thrive.

Fintech Threat to Banks Extends to Crypto, DeFi

While the obvious mainstream fintech companies are payment firms including Paypal Holdings Inc (NASDAQ: PYPL), and Square Inc (NYSE: SQ), the terrain is seeing the influx of blockchain-backed cryptocurrency outfits with some seeking to rollout decentralized finance (DeFi) products.

DeFi is a term used to define the broader scope of cryptocurrency players designing financial offerings that seek to compete with what traditional financial institutions have to offer in a decentralized manner. DeFi’s revolution is also a nemesis to Fintech, as it seeks to neutralize the powers of the middleman in rolling out the financial products to members of the public through Peer-2-Peer transaction models. This crypto niche has gained traction in the past years with the total value locked (TVL) on DeFi smart contracts topping $49 billion according to an analytics platform, DeFiPulse.

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Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.



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Gate.io Burned $40M Worth GT Tokens in 2021 First Quarter

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Besides the token burn, Gate.io has undertaken the initiative to buy back GT tokens from the secondary market.

In a bid to raise the value of the GateToken coin, the Gate.io platform burned GT tokens worth $40 million in the first quarter. By reducing the coins in circulating supply and developing the market to increase the demand, Gate.io expects the GT token value to rally further amid the ongoing bull market and in the future.

“According to Block.info, Gate.io burned 10237374.905268 GT in Q1 in 2021, worth about 40 million U.S. dollars, accounting for 7.5% of GT’s current circulation,” the platform noted in a press release.

Currently, there are 165,700,942 units of GT tokens in circulating supply out of the total 300,000,000. According to metrics provided by CoinGecko, the GT token has a market capitalization of $649,437,154 with its past 24-hour trading volume at $49,057,756. The asset was trading around $3.94 having jumped approximately 0.9% in the past 24 hours. Notably, GT tokens have added approximately 169% in the past month, and are up over 800% in the past 12 months.

GT Tokens Market Outlook

Ranked at position 131 by CoinGecko, GT tokens are poised to rally further thanks to the token burn.

Besides the token burn, Gate.io has undertaken the initiative to buy back GT tokens from the secondary market. This is a method that has also been tested and used by Binance in its native coin BNB that has rallied astronomically in the recent past.

“Starting from September 1, 2020, Gate.io will use 15% of the profit of platform currency spot trading/margin trading/contract trading (and later, some primary new trading products) to repurchase and circulate GT from the secondary market and publicly destroy it. In addition, 5% of the repurchase profits will be used for GT R&D, market, and the building of the Gate ecosystem, and will no longer flow to the market. The total repurchase ratio is as high as 20%,” the company noted in the press release.

The company will constantly monitor the GT tokens’ market every four years before initializing buybacks. The method goes hand in hand with Bitcoin’s halving that occurs after every four years and reduces the rate of asset supply.

GateToken supply has significantly diminished in the recent past thanks to the constant changes in the company. Notably, there were 1 billion GT tokens in circulating supply and the company destroyed 700 million of them, leaving 300 million in the market.

In a series of discounted sales, Gate.io managed to recover up to 512,000 USDT, which were all included in the GT burn. Forward, a total of 20 million GT tokens have been allocated to build the Gate.io ecosystem.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies.
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“You cannot enslave a mind that knows itself. That values itself. That understands itself.”



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Asset Management Firm Brevan Howard to Invest in Crypto Market

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Brevan Howard intends to diversify into various digital assets beyond Bitcoin and Ethereum. 

Brevan Howard, an asset management firm with approximately $10 billion in AUM, is reportedly eyeing the crypto market, according to a report by Bloomberg. Bloomberg reported that the firm hedge fund is ready to invest 1.5% of a $5.6 billion portfolio into cryptocurrencies.

Notably, the cryptocurrency investment dubbed ‘initial allocation’ will be headed by Johnny Steindorff and Tucker Waterman, co-founders of Distributed Global, a cryptocurrency investment firm. Distributed Global has made significant investments in various blockchain startups in the past.

Brevan Howard and the Crypto Industry

Alan Howard, the co-founder of Brevan Howard Asset Management and Elwood Asset Management, has in the past invested in blockchain and cryptocurrency-related startups. Earlier last month, digital asset custodian Komainu announced the closure of a $25 million Series A funding round led by the billionaire Alan Howard. “With over $3 billion in assets under custody, Komainu has become one of the leading digital assets custodians globally. I am pleased to support Komainu in its mission to bridge the gap between legacy finance and the digital assets class,” Howard noted.

The billionaire has made considerable progress in the cryptocurrency industry owing to the fact that he began investing years ago. Late last year, Alan backed One River Digital Asset Management’s $1 billion bets on crypto, particularly Bitcoin and Ethereum.

However, the Brevan Howard hedge fund has seen its assets under management declined from over $40 billion to around $10 billion as of last year.

Founded back in 2002, the firm has gone through several market ups and downs and in turn, gained experience over time. Choosing the cryptocurrency industry over the traditional stock market is an indication of the increasing digital assets’ demand by institutional investors.

Furthermore, digital asset investments have shown better resilience during the global coronavirus crisis than the traditional stock market or the precious metal industry.

Notably, Brevan Howard operates a number of funds, including two publicly available closed-end funds: BH Global (LSE: BHGG) and BH Macro (LSE: BHMG).

Brevan Howard intends to diversify into various digital assets beyond Bitcoin and Ethereum. The move is likely to attract more institutional investors amid the ongoing bull market that has attracted more retail traders.

A huge wave of retail investors have jumped into the cryptocurrency market through various means, but Dogecoin has surpassed other projects in the past few days. On the side of institutional investors, Bitcoin has been a better investment due to low volatility in the past few months.

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A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies.
Mythology is my mystery!
“You cannot enslave a mind that knows itself. That values itself. That understands itself.”



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Tether Transaction Volume on Tron Blockchain Usurps That of Ethereum Blockchain

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Justin Sun, the CEO and founder of Tron and BitTorrent, says that he expects the popularity of the USDT stablecoin to increase.

For the first time, the volume of Tether transactions on the Tron blockchain has surpassed that of Ethereum blockchain. This is according to available data on CoinMetrics.

According to the data, the total market cap of the Stablecoin on the Tron blockchain stood at $24 billion while that of Ethereum is at $23.4 billion. This spike in transaction volume was largely due to the record low fees of the Tron blockchains which differs greatly from that of Ethereum.

In recent times, the Ethereum blockchain has had to deal with high transaction fees which has pushed most traders away from its network. Developers of the second largest crypto asset by market cap have attempted to resolve this with the implementation of different EIPs in its forthcoming hard forks. However, the network is gradually losing its dominance to close competitors like Binance Smart Chain and the Tron blockchain.

Justin Sun, the CEO and founder of Tron and BitTorrent, says that he expects the popularity of the USDT stablecoin to increase with time, especially with the recent spike in the interest in cryptocurrencies. In his words “the popularity and adoption of cryptocurrency and blockchain continue to grow, we expect USDT to continue to explode in popularity.”

Per the press release, Sun also went on to express his optimism that Tron’s blockchain would be able to become the protocol of choice for market players. “By crossing this historic milestone, I can proudly say that Tron is well-positioned to become the global settlement layer and the blockchain protocol of the future,” he says.

Usually, most traders use the USDT stablecoin to lock their gains during tradings as it is less prone to the volatility of the market because it is pegged to the US Dollars. In previous times, traders had little to no option apart from the Ethereum blockchain, whose transaction fees, like we stated earlier were high.

But with the recent developments, the numbers of Tether transactions and the amount of the Stablecoin on the Tron Blockchain has been able to flip that of Ethereum.

Notably, USDT is also the most traded crypto asset in the world. The stablecoin beats its more illustrious counterparts like Bitcoin, Ethereum and even the recent darling of many crypto enthusiasts – Dogecoin. This is according to available data from CoinGecko.

Tether or USDT is a TRC-20 token designed to ease accessibility and trade within the decentralized market. Initially designed to maintain value with the dollar and bridge the crypto-fiat currency bridge, Tether suffered some minor setbacks after its launch.

A series of scandals rocked the company, dipping investors’ faith in the stable coin and dropping its value; after several court actions, Tether seems to be in the clear. Though it is still not exchangeable for real US dollars, the coin remains the premier trading currency against Bitcoin. With 57% of all BTC trading done in February in USDT, Tether represents a significant source of liquidity for the Blockchain market.

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Oluwapelumi is a believer in the transformative power Bitcoin and Blockchain industry holds. He is interested in sharing knowledge and ideas. When he is not writing, he is looking to meet new people and trying out new things.



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