The largest bank in the United States, with total assets of $2.5 trillion, sees cryptocurrencies as a competitor to their services according to a new annual report filing. Under a heading “Competition,” JP Morgan says:
“The financial services industry is highly competitive, and JPMorgan Chase’s results of operations will suffer if it is not a strong and effective competitor…
Financial institutions and their non-banking competitors face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies, that require no intermediation…
Ongoing or increased competition may put downward pressure on prices and fees for JPMorgan Chase’s products and services or may cause JPMorgan Chase to lose market share.
This competition may be on the basis of, among other factors, quality and variety of products and services offered, transaction execution, innovation, reputation and price.”
This is the only mention of cryptocurrencies in the report and it took them nearly a decade to acknowledge this innovation may be more competitive than the products they provide.
They make no mention of blockchain technology as far as we can see, but their revelation that they see cryptos as a competitive threat might give a different light to comments by JP Morgan’s CEO, Jamie Dimon, who called bitcoin a fraud.
The bank, however, is a member of the Ethereum Enterprise Alliance (EEA) and has a private and permissioned ethereum based blockchain, but it seems they see cryptos themselves, rather than the wider blockchain tech, as a competitive threat.
They are not the only bank to do so. Bank of America also recently admitted cryptocurrencies themselves could be a competitor to their service, stating in an annual filing:
“The widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products.”
With the bank further saying customers could go to other providers which supply crypto services or that they might be unable to adapt to changing times.
They too do not mention blockchain technology, with the acknowledgment so suggesting they might be unable to compete, perhaps because crypto’s lack of a need for an intermediary might simply have no space for a third party in payment services to the same extent current fiat digital dollars do.
But a third bank, Goldman Sachs, takes a more holistic view of this space, suggesting they might be more active in trying to adapt. In their annual filing, they state:
“We may be, or may become, exposed to risks related to distributed ledger technology through our facilitation of clients’ activities involving financial products linked to distributed ledger technology, such as blockchain or cryptocurrencies, our investments in companies that seek to develop platforms based on distributed ledger technology, and the use of distributed ledger technology by third-party vendors, clients, counterparties, clearing houses and other financial intermediaries.”
A risk they do not acknowledge, however, might be competition in their lending practices. The growing popularity of ICOs, where innovative companies can be directly funded by the people, might make their printed out of nothing loan interest charges unappealing when compared to a token economy.
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BitMEX is a professional bitcoin derivatives exchange with many advanced features for traders. They currently rank #1 as the top bitcoin exchange for USD volume, yet instead of actually trading USD you’re trading contracts pegged to its value.
If you’re looking for a good exchange to trade bitcoin and altcoin futures contracts then here are seven reasons you may want to give BitMEX a try.
THE BEST TRADE ENGINE IN THE INDUSTRY
BitMEX has one of the best trade engines in the industry, orders are executed quickly and there’s no lag in their system. Some exchanges have glitchy websites that can freeze while trying to execute trades. Other exchanges can get overloaded and crash during high volume.
If you’re trading during volatile market conditions you can’t afford to take the risk and have things freeze on you. There have been some major disasters with other exchanges having their trade engines crap out during big moves. Trading can be stressful enough as it is, so you need to make sure your tools work properly when pulling the trigger. BitMEX has a banking grade trade engine that can handle high frequency execution.
SECURITY
Counterparty risk is a huge problem amongst crypto exchanges and BitMEX has never been hacked. BitMEX uses multi-signature addresses and processes withdrawals once a day manually for maximum security. Even if their system becomes compromised there is no way that a hacker can automatically steal funds.
MINIMAL RED TAPE
BitMEX only allows traders to deposit, hold and withdraw bitcoin and there are no options for using fiat. For this reason there is very little red tape required for using their platform.
Identity theft is a huge problem and having to send your documents to many exchanges creates multiple points of failure. Most companies can’t even guarantee the security of their own data, let alone other people’s sensitive information. You can register an account in under five minutes, no photos, documents, blood samples, DNA or ten generations of your family history needed.
LOW FEES
BitMEX has one of the best fee structures in the industry. Sure you can always trade on a Chinese zero fee exchange but they’ll charge you an arm and a leg to withdraw your money.
Market takers only pay 0.075% fees per trade, which is ideal for scalpers. Market makers will actually get paid fees for providing liquidity, which is much better than most other bitcoin exchanges.
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HIGH LEVERAGE
BitMEX offers 100x leverage on bitcoin contracts, which is higher than any other crypto trading platform. Obviously using high leverage irresponsibly can be very dangerous but used responsibly you can actually reduce your risk exposure.
High leverage means you need to keep less coins on the exchange which reduces counterparty risk. If you’re using modest position sizing with low leverage then your liquidation price will be much lower than if you were trading on a typical 3x exchange.
MORE STRATEGIES
There are a variety of unique strategies that can be deployed on BitMEX.
Market makers can run an algorithm and earn passive income by collecting fees.
You can execute orders based on swap rates and collect swap fees while trading at the same time.
You can take advantage of the arbitrage opportunities when quarterly contracts have exaggerated prices.
The low fees and high leverage makes BitMEX conducive for scalping.
You can swing trade using quarterly contracts and pay zero maintenance fees.
You can hedge the dollar value of your bitcoin portfolio by shorting with leverage.
You can trade multiple bitcoin markets priced in USD, Yen or Yuan, as well as various altcoins.
THE ONLY EXCHANGE TO TRADE ALTCOIN FUTURES
BitMEX also has futures contracts to trade multiple altcoins, such as ETH, ETC, XRP, XMR, REP, LTC, FCT. No other crypto exchange offers high leverage futures contracts for so many altcoins. The variety gives traders more options to find opportunities in the markets.
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