Deutsche Bank Carrying an axe to 18,000 jobs and winding down its investment banking arm paints a bleak picture of traditional finance at a time of booming growth for crypto.
Moreover, the very fact that DB’s decision broke on a Sunday points to yet another Achilles Heel for traditional fund, based on VanECK digital asset strategist and MVIS director Gabor Gurbacs, who tweeted: While keeping a small-scale equity capital markets industry, DB also intends to rein in its fixed-income business — specifically, its prices trading desks — Reuters notes. “Crypto markets are at least open 24/7 to behave on news. In traditional markets a few just have to wait till market open to get hammered on news which are public information. To me this is apparently a market structure problem that is severe! It’s time for plan B!” “Deutsche Bank intends to fire almost 20,000 workers. Bitcoin has no employees to fire. DB is constructed for the old world. And Bitcoin is constructed for the new world” Greenspan’s opinion has been surrendered in rolling information from important U.K. broadsheet The Guardian, which additionally points to DB’s encumbrance with billions of euros of derivatives contracts. Many of these will purportedly be turned over to its newly-created”lousy banking,” — a so-called Capital Release Unit, tasked with handling the wind-down of all DB’s investment banking assets. In a tweet printed July 7, Morgan Creek Digital Assets co-founder Anthony”Pomp” Pompliano interpreted the news as a strong endorsement for bitcoin (BTC) adoption, remarking: “if central banks are gonna be so aggressive, then alternative currencies do start to become a bit more attractive.” The move carries an expected cost of approximately 18,000 jobs along with a 40% shrinkage of all risk-weighted assets now allocated to DB’s trading operations — representing $74 billion ($83.06 billion), and $288 billion ($323.5 billion) of leverage vulnerability as of Dec. 31, 2018, according to Reuters. In his own analysis of the ailing banking industry, eToro analyst Mati Greenspan proposed that DB’s move represents a broader policy failure by the stewards of global monetary policy, noting: “This is the effect of protracted zero interest rate policy. Central Banks are making it impossible for investment monies to turn a profit. Even the riskiest bonds around are yielding approximate 2 percent. How can they be expected to make money from this?” Notably, Jim Reid — mind of global fundamental credit strategy at DB — had remarked that central banks’ dovish policies were favorably impacting”alternative” monies such as bitcoin whilst damaging investment banks.
Cointelegraph reported the news and quoted Jim Reid:
“He said if central banks are gonna be this aggressive, then alternative currencies do start to become a bit more attractive.” Moreover, the fact that DB’s decision broke on a Sunday points to yet another Achilles Heel for traditional finance, according to VanECK digital asset strategist and MVIS director Gabor Gurbacs, who tweeted: “Crypto markets are at least open 24/7 to act on news. In traditional markets some just have to wait until market open to get hammered on news that are public information. To me this appears to be a serious market structure problem! It’s time for plan B!” As one former equities broker today told BBC radio, the Deutsche Bank revelation is viewed by many as an inevitable and belated wake-up to the aftermath of the 2008 crash — the very cataclysm that Satoshi wryly alluded to within the bitcoin genesis block over a decade ago.”