Kiffmeister’s #Fintech Daily Digest (04/15/2021)

First Inverse Bitcoin ETF to Debut for Betting on Crypto Plunge

Horizons ETFs Management (Canada) launched an exchange-traded fund (ETF) fund that will allow investors to take short positions on bitcoin futures. The BetaPro Inverse Bitcoin ETF started trading on April 15, 2021 on the Toronto Stock Exchange. It will charge a 1.45% management fee, while a sister product called BetaPro Bitcoin ETF, launched simultaneously, will cost 1.00% and track Bitcoin futures.  

AXA Switzerland Allows Customers to Pay in Bitcoin

French insurer AXA’s Swiss arm announced that its customers are now able to pay their non-life policy premiums in bitcoin. Life insurance products do not carry this option for “regulatory reasons.” AXA will not be holding any bitcoin on its balance sheet. Bitcoin paid goes to broker Bitcoin Suisse, which will convert them into Swiss francs minus a 1.75% fee. 

China’s digital currency is NOT a threat to dollar dominance

Michael Pettis pushes back on widely-held opinions that the introduction of a digital yuan “could be the key that accelerates the decline of the dollar’s dominance as the world’s leading reserve currency… [and] hasten the acceptance of the renminbi as the main rival to the US currency.” According to Pettis, such opinions wrongly assume that what makes a currency a dominant reserve and international trading currency is its low frictional trading costs. But while a low frictional trading cost is a necessary condition, it is not nearly sufficient. 

Is bitcoin now the 5th biggest currency in the world?

Bitcoiners are claiming that bitcoin is now the 5th biggest currency in the world, based on the total monetary base. However, According to Bloomberg’s Joe Weisenthal, if Bitcoiners are going to insist on actually comparing the currency to the big fiats, then they should use proper measures. What is the Bitcoin share of international payments? What is the Bitcoin share of central bank reserves? How much Bitcoin-denominated debt is there? These are the logical type of ways to rank and compare money. By these rankings, Bitcoin is still incredibly tiny.