Deutsche Bank is attacking 18,000 jobs and gradually reducing its investment banking business painting a dark picture of traditional finance at a time of strong growth for crypto.
As announced by Reuters on July 7, the decisive decision of Deutsche Bank will lead the bank to abandon its activities of sale and trading of shares, which would have reported 1.96 billion euros in revenue in 2018.
While maintaining a small-scale activity in the equity markets, DB also plans to limit its fixed income business, including its interest rate trading tables, in Reuters notes.
This operation is expected to generate around 18,000 jobs and reduce by 40% the risk-weighted assets currently allocated to DB's trading activities, which represents 74 billion euros ($ 83.06 billion) and 288 billion euros. euros ($ 323.5 billion) leverage. 31, 2018, according to Reuters.
In a tweet published On July 7, Anthony "Pomp" Pompliano, co-founder of Morgan Creek Digital Assets, interpreted the news as a strong endorsement of the adoption of Bitcoin (BTC), noting:
"Deutsche Bank plans to lay off nearly 20,000 employees. Bitcoin has no employees to shoot. DB is built for the old world. And Bitcoin is built for the new world. "
In his own analysis of the troubled banking sector, eToro analyst Mati Greenspan said the DB initiative was a more general political failure by global monetary policy makers. noting:
"This is the effect of the protracted zero interest rate policy. Central banks are preventing investment banks from making profits. Even the most risky bonds in the world yield less than 2%. How can they expect to make money with this? "
Greenspan's view has echoed today in the slippery news of the British newspaper The Guardian, which also highlights the clutter of the DB with billions of euros in derivative contracts. A large number of them would be entrusted to the "bad bank", the "new bank", created recently, namely a unit of capital release, responsible for managing the gradual liquidation of the assets of the investment bank of DB .
Jim Reid, head of DB 's global core credit strategy, noted that central bank dovish policies are having a positive impact on "alternative" currencies such as bitcoin, while hurting banks in the past. investment. He said:
"If central banks are to be so aggressive, alternative currencies start to become a bit more attractive."
In addition, the fact that DB's decision was broken on a Sunday suggests another Achilles heel for traditional finance, according to VanECK's Digital Asset Strategist and MVIS Director Gabor Gurbacs. tweeted:
"The crypto markets are at least open 24/7 to act on the news. In traditional markets, some simply have to wait until the market is open for hammering public information. For me, this seems to be a serious problem of market structure! It's time to plan! "
As a former stock broker today told BBC radio, the revelation of Deutsche Bank is considered by many as a fatal and late Wake up in the aftermath of the 2008 crash – the cataclysm Satoshi ironically referred to within the bitcoin genesis block more than a decade ago.