Weekly Roundup

Retail Rage Selling: After analysis of Nasdaq single stocks, Goldman Sachs concluded that since February 2022, retail investors have sold more than twice what they acquired during the pandemic. A Goldman Sachs analyst said these investors have “rage sold out of the stock market.”

Crypto Across Generations: In a survey by crypto exchange Bitget, 46% of millennial respondents owned cryptocurrencies, compared with 25% of Gen X, 21% of Gen Z, and 8% of baby boomers. The survey included about 255,000 adults across 26 countries.

Crypto Partnerships: According to Mastercard’s Head of Crypto Raj Dhamodharan, the company is looking for additional crypto partnerships. Mastercard has existing relationships with Binance, Nexo, and Gemini, and Dhamodharan is “really quite enthusiastic” about the blockchain technology that powers crypto.

First Republic Delisted: The NYSE has suspended trading of First Republic Bank’s shares and started the process of delisting the eight securities tied to the bank.

Coinbase International Exchange: Coinbase Global Inc. is launching an international derivatives exchange for institutional crypto traders. Coinbase International Exchange will list Bitcoin and Ether perpetual futures starting this week amidst the ongoing regulatory battle with the SEC. Coinbase said it is still committed to the US, but disappointed by the country’s regulation by enforcement approach.

Government Stock Trading: Following an investigation by The Wall Street Journal showing that 2,600+ government officials across 50 federal agencies had reported investments in companies that stood to rise or fall with the decisions made by their agencies, Congress is pressing federal officials to better police their agencies’ stock trading. Rep. Nick Langworthy (R., N.Y.) has also said that he plans to propose legislation that would require agencies to place limits on stock holdings and share disclosures in a searchable online database.

New Disclosure Rules: The SEC has adopted new disclosure rules for hedge fund and private equity advisors aimed to increase transparency, competition, and efficiency. The SEC also adopted a rule to enhance disclosures surrounding stock buybacks.

In the Mix: This Week’s Top FinTech Thought Leader

  • Dave Lauer, Co-Founder of We the Investors, spoke with The Wall Street Journal about recent SEC market structure proposals. He advocated for the SEC to take further action to ban payment for order flow, stating, “The system uses individual investors as products… It doesn’t support them.”

  • Hester M. Peirce, SEC Commissioner, voiced criticism over the SEC’s accelerated rule-making pace and the lack of regulatory clarity for digital assets. “We’re sort of on this crash course of trying to get as many rules done as quickly as possible, and so it’s difficult to figure out what the effects of all of those rule changes will be,” said Peirce.

  • Meaghan Dugan, Head of Options at NYSE, spoke at the Options Industry Conference in Nashville, emphasizing that the SEC needs to consider that the options market is very healthy as is. “We should always help to modernize markets and provide more transparency where we should, but we don’t want to back away from markets. We have to be careful in how we modernize markets.”

  • Nick LaMaina, Global Head of Broker Dealer Solutions at eToro, spoke at the Options Industry Conference in Nashville, stating that eToro CEO Yoni Assia is a strong proponent of AI and how it can revolutionize financial services. LaMaina also said that Assia challenges employees to incorporate AI into workflows and to utilize it to better predict and analyze customer needs.

  • Gillian Tett, Financial Times Editor, wrote an opinion piece on the dangers of AI in finance. She analyzed research showing that the generative AI tool ChatGPT could better dissect Fed statements than existing methods, but not without risk. She also discussed the stability risks that come with generative AI.