Daniel Masters, a former JP Morgan banker and leader of their global energy trading desk, claims cryptocurrencies are fueling a financial revolution. After leaving JP Morgan, Masters joined Coinshares as their chairman. He is also the chief investment officer at Global Advisors. In an interview with Bloomberg, he explained how distributed ledger technology is fueling a financial revolution through the democratization of peer to peer transactions.
The Crypto Market Will Be Much Bigger
Masters believes there is not a fight between USD/GBP legacy and cryptocurrency. Instead, he claims it’s about what portion of the financial ecosystem accrues to cryptocurrencies.
“I think even if it’s only five percent, at the end of the day, that market will be much bigger than it is today”
Masters currently manages over $800mm in crypto assets from ICOs to the lending of Bitcoin, Ethereum, and other large coins. He currently believes the investment “play” of 2018 is Bitcoin as well as ICOs that offer non-forkable blockchains.
Bloomberg asked Masters about the potential for “leakage” in the fractional reserve monetary system. In the case of traditional finance, this is when only some of a bank’s deposits are backed by assets. In regards to crypto, Masters believes they are not creating leakage in that leverage. He also described the cryptocurrency market to be residing in a regulatory sandbox.
“An ecosystem that’s one billion to ten billion dollars in size is almost experimental in the scope of the main financial system,”
Once the market boomed nearing the trillion dollar mark, the digital currency market suddenly became something regulators, banks, and central bankers could no longer ignore. Furthermore, the cryptocurrency news headlines that took over the media forced regulators’ hands. Although there isn’t much concern from the regulatory community around leakage now, Masters also agreed they are beginning to realize there is potential for issues in the future.
The chief of the International Monetary Fund said in a blog post:
“cryptocurrencies pose no immediate danger to the economy”