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January 10, 2024 | Financial Predation is Major Throughline

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel ( Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog:

There are so many incredible developments in financial markets right now it isn’t easy to choose what to write about. And there are so many complex interconnections. Suffice it to say the throughlines are rampant financial fraud and unusually high capital risk, with very few people positioned to prosper in 2024.

Just one area of glaring danger for retail buyers is the cesspool cryptocurrency space.

In March 2021, Canadian regulators bowed to pressure from sell-side companies and approved the first Bitcoin Exchange-Traded Funds (ETFs) for trade on Canada’s TSX. As of late 2023, 11 Canadian cryptocurrency ETFs were trading, and all had lost heavily since inception.

Since October, however, prices of everything crypto rebounded on rumours that the US Securities and Exchange Commission (SEC) will also succumb to sell-side lobbying and soon approve Crypto-based ETFs. Over ten crypto ETFs are awaiting approval despite high-profile fraud and a lack of regulatory framework governing crypto exchanges.

Ironically, yesterday, as a lawyer and Better Markets CEO Dennis Kelleher appeared on Bloomberg explaining the madness of crypto ETFs for retail consumption, the SEC’s  ‘X’ account was hacked to issue a false BTC ETF approval notice.

Crypto-related prices surged on the fake news, and perpetrators no doubt sold into the strength they’d fabricated. You can watch these developments in real-time in the clip below. Here is a direct video link. Overnight, news hit that the SEC had not approved the BTC ETF. Yet, at least.

Crypto-grandaddy Bitcoin is leading the space lower this morning but remains +65% since October 8 and 30% below its cycle peak in November 2021.

As would-be-investors repeatedly discover, packaging speculative, illiquid securities inside opaque retail wrappers does not make them any less speculative, illiquid or dangerous for buyers. But the salesforce has enormous incentives to convince us otherwise so that we will hand them our cash. Customer accounts/portfolios are seen as distribution channels for the risk assets that capital-raisers seek to offload. Buy and holders, beware.

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January 10th, 2024

Posted In: Juggling Dynamite

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