Now, I have no idea how old you are, nor do I want to make any assumptions. I will assume, though, that since you are reading this, you have an interest in markets and/or crypto assets. And since this is a newsletter aimed at professional investors, I will assume that you care about a bit more than prices going up/down/sideways. That should put us on more or less the same page as to what we explore here.
However, this week I want us all to question the lens through which we judge the evolution of markets. Not just crypto markets – all markets, because it is becoming increasingly clear that sooner or later the distinction will be irrelevant.
You’re reading Crypto Long & Short, a newsletter that looks closely at the forces driving cryptocurrency markets. Authored by CoinDesk’s head of research, Noelle Acheson, it goes out every Sunday and offers a recap of the week – with insights and analysis – from a professional investor’s point of view. You can subscribe here.
What those markets look like is relevant, though, and I am increasingly aware that my view on that may be influenced by my age. So might yours. It could be useful, then – perhaps even fun if not slightly discomforting – to try to see the evolution of markets from the point of view of a different generational label.
Here’s an example: Many market observers, myself included, have been celebrating the emergence of prime brokerage services that have clout and experience. The latest to join the growing list of big names is London-based B2C2, which started providing OTC liquidity to crypto markets in 2015, and this week announced a partnership with and investment from Japanese financial conglomerate SBI Holdings which will enable it to move towards adding prime services to its already active distribution.
We’re excited about this because it represents a maturation of the crypto markets and removes one of the significant barriers standing between institutions and crypto investment: the structural inefficiency of capital. Given a choice of crypto prime brokers with strong balance sheets, the reasoning goes, more institutions will be willing to participate, and the influx of demand and liquidity will push up asset prices. A new crypto market era could be dawning.
But what if the real dawning is coming from a totally different direction? What if a cultural shift is emerging that could end up reshaping traditional markets to look more like the crypto markets?
Generation Z is now the largest generation in the world, accounting for almost 30% of the U.S. population. They’re teenagers and in their early 20s, and most won’t be actively investing due to a lack of income and savings – but, according to surveys, they’re well-educated and politically active, and have been given a loud wake-up call when it comes to the need to protect whatever wealth they may accumulate.
They are also digital natives and, when they are old enough, will see nothing…