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The post US Regulators Talk Bitcoin’s Generational Impact appeared first on CCN

As cryptocurrency evolves, so does its relationship with government. While lawmakers in some countries seek to suppress a financial force they don’t understand, in the U.S., the reverse appears to have started to take hold, indicating an opportunity is at hand for a dialog between the industry and lawmakers. In a Senate Banking Committee hearing

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• Banks are closing retail branches at a record pace, shuttering 1,700 in the 12 months that ended in June.
• But JPMorgan last month announced plans to expand its branch network, adding 400 locations in 15 to 20 new markets.
• The company recently promoted Pam Codispoti, the creator of the Chase Sapphire Reserve, to run its retail branch network.
• Seeking to make branches more appealing to millennials, she'll draw on her playbook that made the Sapphire Reserve such a success.
• That includes the launch of a new type of branch — smaller and more digitally connected — on Monday.

Across the US, banks are closing branches at a heightened pace.

The 1,700 branches shuttered in the 12 months that ended in June marked the largest decline on record, according to data from the Federal Deposit Insurance Corporation analyzed by The Wall Street Journal.

This news stands in stark contrast to the announcement by JPMorgan Chase in January that it would be expanding its network with 400 new branches in 15 to 20 new markets over five years — an investment spurred in part by the savings from the recently enacted tax law.

JPMorgan has, of course, culled some branches over the years, but far fewer than its peers — just 484, or 8.6%, since 2012, compared with more than 30% cut by its competitors Citigroup and Capital One over the same period.

The aspiration for branch expansion isn't entirely new, either. It has been on CEO Jamie Dimon's wish list for more than a decade, but, like so many other well-laid plans, the financial crisis derailed that.

"Back before the crisis he had made it clear that he wanted to be in some new markets," said Nancy Bush, an independent bank analyst who has been covering the sector since the 1980s. "That kind of all got put aside as we recovered from the crisis."

The bank has long zigged when others have zagged under Dimon's leadership, but the firm nonetheless expects the investment in branches to help its bottom line — a belief seemingly divergent from conventional wisdom in the banking industry, which is largely preoccupied with handling the customer migration to digital and mobile platforms, especially by millennials.

"He's always an opportunist,” Bush said. “That's just the way he's been. When everybody is retreating, he's going to be expanding.”

But though he holds the final word, Dimon won't be the one captaining the new initiative on the day-to-day basis.

JPMorgan has tapped its millennial-whisperer for the task of managing branches, including the expansion. Pam Codispoti was named the head of branches at JPMorgan back in October, departing from her post as the president of Chase Branded Cards.

Codispoti, who spent nearly 12 years in credit cards at American Express before joining JPMorgan in 2014, made a splash by masterminding the now-legendary Chase Sapphire Reserve credit card and, in the process, dispelling the myth that millennials weren't interested in premium cards that carried a fee.

According to Bush, Codispoti faces an elemental challenge in overhauling the bank feature that used to be ground zero for selling product: How do you make these things work?

"You're trying to establish this middle ground between digital and human," Bush said. "How do you establish that middle ground where you do things in a branch and make it profitable?"

Codispoti is game for the challenge: "There is a myth out there that branch banking is dead, that branches are going away,” she recently told Business Insider. “I just don't believe that to be true."

She'll be pulling moves from her Sapphire Reserve playbook in hopes of proving the naysayers wrong once again. One of the most important things she learned from that experience was the value of getting in front of your target customers early and designing a product with their input from the get-go.

"We took some calculated risks to do things differently than we'd ever done before,” Codispoti said. “We launched Sapphire Reserve without any initial marketing. And we allowed our design target — which were savvy millennial travelers who rely on social — we kind of brought our product to them and allowed them to market our product. Those principles of design-led thinking, customer first, getting into the homes of people, doing ethnographic research approach, and that agile methodology are things we will use as we try new things in our banking environment."

Making branches appealing to that Sapphire Reserve demographic — savvy millennials — will be crucial to JPMorgan's branch success.

As Bush notes, young earners in their 20s and 30s just don't need a physical branch for most of their routine banking anymore — mobile and digital options and ATMs suffice for moving money around, paying bills, and opening accounts.

"The generation of mine and the generation before me, we still have a need for branches," Bush said. "Our kids and grandkids do not."

Codispoti allows that millennials want something different out of branches than their forebears, but she doesn't think they want out of the proposition altogether, noting that the demographic still visits a Chase branch three times a quarter.

"They really would like to come to the branch for experiences and advice more so than everyday transactions, which I think they feel very comfortable doing on their own from mobile or digital tools," Codispoti said. "We have a long pipeline of innovations that are targeted to millennials, millennial-minded customers who really want to bank on their terms, wherever, whenever, and however they choose."

One of those innovations, the Everyday Express branch, launches in limited release this week. The locations are smaller than a typical branch and feature more digital tools, including the company's eATMs.

They'll also offer advice services in the style of Apple's Genius Bars to help bridge that human-digital divide that Bush mentioned.

The first six Everyday Express locations open Monday in Culver City, California, and in Queens, New York.

SEE ALSO: We spoke with the creator of the Chase Sapphire Reserve about millennials, myths, and the other challenges she'll confront in her next job at JPMorgan

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NOW WATCH: Ken Rogoff on the next financial crisis and the future of bitcoin

The post Can Blockchain Technology Survive Without Cryptocurrencies? appeared first on CCN

The recent fluctuations in Bitcoin and altcoin prices has resuscitated the debate on cryptocurrencies functioning as a true store of value. After rising about $20,000, this dip in price had seen the most popular cryptocurrency slump to almost $6,000 before rising again and then trading around the $8,400 region as at the time of writing.

The post Can Blockchain Technology Survive Without Cryptocurrencies? appeared first on CCN

The post Can Blockchain Technology Survive Without Cryptocurrencies? appeared first on CCN

The recent fluctuations in Bitcoin and altcoin prices has resuscitated the debate on cryptocurrencies functioning as a true store of value. After rising about $20,000, this dip in price had seen the most popular cryptocurrency slump to almost $6,000 before rising again and then trading around the $8,400 region as at the time of writing.

The post Can Blockchain Technology Survive Without Cryptocurrencies? appeared first on CCN

The post ShapeShift Gets Pulled Into BTC/BCH Debate Over Partnership With Bitcoin.com Wallet appeared first on CCN

ShapeShift, a cryptocurrency exchange, has been pulled into the Bitcoin Cash (BCH) versus bitcoin (BTC) debate by partnering with the @BitcoinCom wallet that exchanges BTC for BCH. ShapeShift has stated via a tweet there was a miscommunication in its latest announcement concerning its partnership with the @BitcoinCom Wallet. ShapeShift stands by its offering to provide

The post ShapeShift Gets Pulled Into BTC/BCH Debate Over Partnership With Bitcoin.com Wallet appeared first on CCN

Years after it was written off as a joke, dogecoin continues to prove useful, this time factoring into a major ethereum test.

• The Bank of England has aggressively signalled that it will raise interest rates in 2017.
• However, according to Andrew Goodwin, lead UK economist at Oxford Economics, the bank actually has little evidence in recent data to back up its hawkishness.
• Rising domestic inflationary pressures, cited as a major reason for any potential hikes, are not really materialising just yet.

LONDON — Last week, all eyes were on the Bank of England as it aggressively signalled that several rate hikes are most likely on their way in the next couple of years.

The markets bought it and are now pricing a hike in May, the next time the quarterly Inflation Report is released — with BNP Paribas suggesting at least a 75% chance of a hike.

By August, the probability is now seen as 100%, according to market expectations.

However, it seems as though the bank actually has little evidence in recent data to back up that aggressive hawkishness, at least when it comes to rising domestic inflationary pressures, one of the main reasons given by the BoE for its shift in tone.

That's the view of Andrew Goodwin, lead UK economist at Oxford Economics, who wrote to clients this week that "Data offer scant backing to MPC’s inflation concerns."

Earlier in the week, the Old Lady of Threadneedle Street released its latest agents' summary of business conditions, which polls the central bank's operatives in the UK's regions to create a holistic picture of what's going on in the economy.

The survey pointed to wages recovering strongly this year, with businesses expecting wage growth to increase to 3.1% in 2018, up from 2.6% last year.

"These results fit neatly alongside the narrative that the Committee has been using over the past six months," Goodwin wrote.

"But such evidence of escalating underlying inflationary pressures is largely survey-based and forward-looking. Indeed, the same survey has reported no pickup in the pace of unit labour cost growth in the dominant services sector since mid-2014."

Goodwin adds that "there was little in the remainder of the week’s data to suggest that inflation needs taming," pointing to Tuesday's release of official inflation data for January by the Office for National Statistics.

Inflation unexpectedly remained at 3% in January, having been expected to fall. Strangely, the cost of entry to attractions such as zoos and gardens was cited by the ONS as a key driver in the higher than expected reading.

"January’s inflation data betrayed little cause for concern" for the Bank of England, Goodwin wrote.

"CPI inflation was flat at 3.0%, despite some very powerful positive base effects arising from some unusual seasonal movements in clothing prices at the start of last year.

"These effects unwound the following month, meaning that these base effects will reverse in the February data. And there will be further negative base effects from last February’s sharp rise in petrol prices. So February looks set to mark the point at which inflation starts to decisively drop back."

Not only does official headline consumer inflation data point to inflation falling over the coming months, so too do other official inflation indicators.

"The producer prices data also pointed to a further weakening in consumer price inflation over the coming months," Goodwin wrote.

"Annual input cost inflation of 4.7% was the slowest since mid2016, while the 0.1% monthly increase in factory gate prices was the smallest for seven months."

The sharp fall in the value of the pound following the UK's vote to leave the EU in the summer of 2016 was the initial driver of inflation, which surged from close to zero to around 3% in the course of just over a year.

However, Goodwin argued, the impact of that depreciation "is clearly now fading and, with oil now trading some 12% below its late-January peak of $71 per barrel, the factors which have been so important in pushing up inflation over the past year are rapidly melting away."

Whether or not the Bank of England has overreached with its assertions about hikes in the future given current data is unclear, but the last few days have certainly given the bank some serious thinking to do.

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NOW WATCH: Ken Rogoff on the next financial crisis and the future of bitcoin

• Danny Masters ran JPMorgan's New York energy trading business in the 1990s before setting up his own commodities fund.
• His firm pivoted to bitcoin in 2014 and he has been embracing crypto over since.
• Masters believes executives from traditional financial firms are trying to fight off crypto by dismissing it as a Ponzi scheme or a scam.
• Crypto is "a true financial revolution", Masters says, and banks are "paying the price" for failing to innovate for decades.

LONDON — A former high-flying trader who has embraced the world of cryptocurrencies says there is a "trench warfare" going on between traditional financial services and digital upstarts.

Danny Masters told Business Insider: "There’s something of a trench warfare going on between what I call analogue financial services companies and digital financial services companies.

Masters began his career as an oil trader at Shell in the 1980s, rising to become head of JPMorgan's energy trading business in New York. He left in the late 1990s to set up his own commodities fund, Global Advisors.

Masters became interested in bitcoin and cryptocurrencies around five years ago and pivoted Global Advisors to focus on crypto in 2014. Shortly after, Global Advisors' bank HSBC ditched the business over fears that bitcoin could involve money laundering risks.

"We’ve gone from a renegade character to a more confusing animal for people to view," Masters told BI during an interview in London this week.

"The analogue financial services companies are not in this game at all. They don’t want to touch the core currency, which is bitcoin or ethereum, they’re suspicious about the industry itself. A lot of people think it’s a criminal enterprise and a Ponzi scheme and a scam."

ECB executive board member Yves Mersch compared cryptocurrencies to a Ponzi scheme last week and the president of the World Bank and the head of the Bank for International Settlements have both called bitcoin a scam.

Masters said: "In my mind, the cryptocurrency landscape is like the fog of war. You might be able to see the few people around you, you can see the hill over there, but very few people can see the whole landscape. We’re in a very fortunate position because we touch so many different parts of it. For us, it is abundantly clear that we are in the midst of a true financial revolution."

'It is no longer acceptable to dismiss it'

Masters thinks that bankers are dismissive of cryptocurrencies because of the threat they pose to traditional banking. The crypto community is built on the principles of decentralization, displacing middlemen, and doing away with legacy systems.

"At the other end of the spectrum, we saw Charlie Munger only yesterday call bitcoin asinine. We heard Jamie Dimon call bitcoin a fraud. There are some very, very high profile — but usually, deeply legacy entrenched — people who are just out-right dismissive."

"[Banks] have gone from dismissive, to unified in their resistance. Why? Why is something they ridiculed three months ago now something they feel the need to unite against and try and kill? There’s been a lot of aggressive things from banks."

Global Advisors owns a 75% interest in Coinshares, another crypto investment business, and Coinshares announced two new funds in January that have a combined $1 billion in assets under management. Masters argues that stats like this increasingly validate his position and pose problems for traditionalists.

"The clock has lapsed, it is no longer acceptable to dismiss it. One of the biggest dismissers was Jamie Dimon. JPMorgan recently issued one of the largest reports on cryptocurrency yet seen."Bitcoin rocketed over 1,500% against the dollar last year, leading to a surge in interest from professional investors. Exchange operators Cboe and CME both launched bitcoin futures contracts to tap into the demand, while Goldman Sachs is said to be considering setting up a bitcoin trading desks.

"If you’re going to argue for it, fine, if you’re going to argue against it, you better have some good reasons to do so," Masters said. "People are struggling to come up with reasons to argue against it. They’re saying, it’s a load of crap and it’s worth nothing. It’s obviously not worth nothing."

'Banks have sat on their laurels for 30 years'

Masters believes that the crypto world has now reached "escape velocity" and the "analogue" rivals won't be able to catch up or compete. In Masters telling, the new crypto reality will replace our current system.

"The problem with the analogue financial world is it’s become hamstrung and mired in a billion regulations," he said. "Nobody enjoys working in it anymore, there’s just a tremendous amount of friction. I don’t think you can unpick that ball of knots, you have to start over again.

"Banks have sat on their laurels for 30 years. I just threw out my chequebook, it looks exactly the same as it did in 1985. Why should I still have it when I’m doing Uber instead of cabs, Airbnb instead of the Sheraton? They have absolutely failed to innovate in any way, shape, or form and now they’re paying the price."

Despite a rocky start to the year, Masters thinks that the run-up in value for bitcoin and cryptocurrency seen last year is a hard-fought victory for all those who have been involved since the beginning.

"I got to know the crypto-anarchists many years ago and I was one of the very few financial people involved in the early days. It was a little scary actually. I felt a little self-conscious in some circles," Masters said.

"I’m thrilled for everybody in the space that has stuck to it for the last five years. 2014, after Mt. Gox, was a really miserable year. A lot of people fell off the boat at that time. Guys like Mike Hearn rage quit bitcoin when it was $400. Stripe has now given up bitcoin. There have been people who have lost the nerve along the way.

"You needed to be a true believer and you needed to suck it up for 2014, ‘15, and ‘16. And then ‘17 was just off the charts good."

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NOW WATCH: Here’s a great explanation of what the blockchain is from the person tasked with explaining it to the world

• Property Partner's Gandesha says student blocks is attractive to investors because it is counter-cyclical, meaning it would be well-positioned to weather the storm of an economic downturn.
• Between 2012 and 2016, student accommodation returned a total of 11.8% per annum.

LONDON — What goes up when everything else comes down?

In the property market, investors think they've found an answer. Keen to hedge their bets, growing numbers of investors are turning to the property class which sees demand rise during a financial downturn — purpose-built student accommodation.

The logic is simple, according to Dan Gandesha, who has crowdfunded £9.6 million worth of PBSA blocks on Property Partner, the investment platform he founded.

"During tough economic cycles where it's harder to secure a job, people are more likely to go to university and extend their studies," he told Business Insider. "That increases demand and while the number of places doesn't spike, it does help underpin the demand for PBSA."

After the financial crisis of 2008, rental values in the wider commercial property market were in steep decline. Rental growth in PBSA, however, grew between 3% and 4% that year, according to data from Lasalle Investment Management.

"Having those countercyclical characteristics is quite unusual for an investment class. It's very different to commercial property.

"Residential property to some extent isn't affected in the same way, but it doesn't have the same attributes of PBSA, whereby the numbers and the demand go up [in a downturn]."

Does that mean Gandesha is worried about a downturn? "I don't think any of us can be complacent about the current environment. We don't know how the referendum or the Brexit deal will play out, we don't know what the impact will be on the economy," he said.

"I don't think people expect an economic crash, but equally we live in uncertain enough times that an asset class that gives you a defensive portion of your portfolio is attractive."

Everything you need to know about the hottest property sector in the UK

• PBSA describes the high-spec student digs popping up around the country.
• Rooms are typically more expensive than traditional student accommodation — some in London cost up to £650 a week — and they come fully-furnished, with utilities and catering covered by the up-front cost.
• Institutional investors are pouring money into the sector, drawn by the high returns, strong demand, and capital growth.
• Between 2012 and 2016, student accommodation returned a total of 11.8% per annum.
• By contrast, the wider commercial property sector returned 7.4%, and residential property returned 7.8%.
• Values in London are eye-watering: UBS last year paid £31 million for a 184-bedroom student accommodation block which valued each bedroom at £171,000.

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NOW WATCH: Ken Rogoff on the next financial crisis and the future of bitcoin

The post Bitcoin Eyes $12,000 in South Korea as Demand For Cryptocurrency Market Rises appeared first on CCN

Bitcoin has built significant momentum over the past 24 hours, surpassing the $11,000 mark. The majority of alternative cryptocurrencies in the market have performed poorly against bitcoin, as the most dominant cryptocurrency in the market continued to lead a strong rally. Against the US dollar, bitcoin has increased by nearly 8 percent since February 17,

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