Kiffmeister’s #Fintech Daily Digest (08/05/2020)

JP Morgan analysts see a divergence between the behaviour of the older cohorts of the US retail investors’ universe, and millennials in their preference for “alternative” currencies. The older cohorts prefer Gold while the younger cohorts prefer Bitcoin. Both Gold and Bitcoin ETFs have been experiencing strong inflows over the past five months, as both cohorts see the case for an “alternative” currency. This simultaneous flow support has caused a change in the correlation pattern between Bitcoin and other asset classes, with a more positive correlation between Bitcoin and Gold but also between Bitcoin and the Dollar as US millennials see Bitcoin as an “alternative” to the dollar. In addition, the simultaneous buying of US equities and Bitcoin by millennials since March has increased the correlation between Bitcoin and S&P 500 since March. 
The bitcoin derivatives market is fragmented and contract terms differ dramatically across exchanges. The quality of documentation in the space varies. Perpetual swaps approximate the price of its underlying asset in close to real time. They are shifting away from bitcoin-margined inverse contracts, which have traditionally been dominant, toward USDT-margined linear contracts. Exchanges also vary in how they calculate indexes and funding payments. Perpetual swap volumes have decreased since the start of the year, but have recently surged in line with bitcoin’s price activity. The lack of standardization in the derivatives market makes it difficult for traders to assess the degree of risk taken on indirectly via a position’s index. Poorly constructed indexes can negatively impact users, especially during market dislocations and periods of volatility. 
Most of the civilized world years ago shifted to requiring computer chips in payment cards that make it far more expensive and difficult for thieves to clone and use them for fraud. One notable exception is the United States, which is still lurching toward this goal. Here’s a look at the havoc that lag has wrought, as seen through the purchasing patterns at one of the underground’s biggest stolen card shops that was hacked last year. 
70% of U.S. consumers say that COVID-19 concerns have not caused them to avoid carrying or storing cash, according to a recent Fed survey. indicates that survey participants more than doubled the amount of cash they store at home and also increased the amount of cash they carry in their wallets.