Richard Nixon Is the Father of Cryptocurrency, Says BTIG

“Crypto turns 50.” Say what? That’s what BTIG researchers contend, saying digital currency can trace its origins back to 1971. Or, at least, that’s when the seeds were planted. And, it says, this insight may help us understand where crypto could end up in the current era.

See, 1971 was when President Richard Nixon ended the convertibility of US dollars into gold. The bad inflation that went on to mar the 1970s was mounting at the time, and Nixon calculated that severing the greenback-bullion link would thwart rising prices. He also imposed wage-price controls. Neither strategy did much to curb inflation, but the newly free-floating dollar, its price no longer tethered to gold at $35 per ounce, had a more profound effect on the financial field.

As other nations’ denominations followed the US lead, today’s busy foreign exchange (forex) system took shape. While electronic currency trading didn’t come along until the late 1980s, forex took place over the telephone and telex (telegraph-connected printers), according to a study from the University of California Berkeley’s Haas School of Business.

True, the mysterious Satoshi Nakamoto’s Bitcoin “white paper” appeared in 2008, leading to the development of Bitcoin that same year. “Factually, digital assets are 13 years old, but somewhere a futurist/hard money enthusiast started to dream of a technological alternative” on August 15, 1971, the day Nixon acted, BTIG said in a research note.

Want the latest institutional investment industry news and insights? Sign up for CIO newsletters. 

“The seeds for digital assets,” including inflation, blockchain technology, and easy electronic trading, BTIG said, were “planted in the distant past and watered more recently” through increasingly widespread adoption.

Institutions, notably Yale and other university endowments, have taken positions in crypto, although most pension funds and other asset allocators have been more circumspect about crypto holdings. Grayscale Investments has told Bloomberg that institutions have invested in its $25 billion trove of digital assets (but the firm wasn’t more specific).

Bitcoin and its brethren have a long way to go before they are fully accepted in the financial world. And the Securities and Exchange Commission (SEC) has expressed skepticism toward crypto. That’s why BTIG expects Bitcoin to stay in a band between $28,000 and $65,000 (it now changes hands at about $48,000). BTIG speculates that, if crypto were to overcome these impediments, it would have a market cap of around $2 trillion, and “ultimately approach that of gold’s, at $11 trillion, implying a Bitcoin price of $250,000 to $300,000.”

Nixon strove for a world based on order and rules, with the US predominant. Crypto, if it really catches on, may have the opposite effect. “The rationale for digital assets,” the BTIG paper read, “50 golden years after the world entered a new, less certain monetary regime, intensifies with each passing day.”

A Crypto Crackdown? Yardeni Sees One Coming

Investing in Bitcoin Is Like a Venture Capital Play, Virginia Pension Chiefs Say

Tags: Bitcoin, BTIG, Cryptocurrency, foreign exchange, free-floating dollar, gold, Haas School of Business, Inflation, institutions, Richard Nixon, Satoshi Nakamoto, Yale

Burt White

Burt White, LPL Financial’s chief investment officer and managing director of investor and investment solutions, has announced he will retire in March 2022. The firm said it will conduct a comprehensive search to identify a new wealth management leader to oversee its $1.13 trillion in assets under management (AUM).

White joined LPL in 2007. He’s served since 2017 in his current role, in which he is responsible for the strategic direction and continued growth of LPL’s research, marketing, products, and investment platforms. He served as managing director, research, and chief investment officer from 2009 to December 2016.

“Burt has played an integral role in LPL’s journey to enhance the adviser experience, elevating the firm’s research, wealth management, product, and platform capabilities. He will be missed by advisers and employees alike,” Dan Arnold, LPL president and CEO, said in a statement. “Burt will be with us through the end of next March to ensure a seamless transition. We are grateful for Burt’s steady leadership over the last 14 years and wish him the best in his future endeavors.”

White joined LPL from Wachovia Securities in Richmond, Virginia, where he worked for nine years and was director of research/managing director. Prior to Wachovia, White was an analyst at Mercer Investments for three years, and before that was an analyst at Richmond-based investment management firm Thompson, Siegel & Walmsley.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

“LPL has been far more than a place of work. It has been the inspiration for my career journey, a big piece of who I have become, and a place where I have been privileged to work with some of the most talented people in the industry,” White said in a statement. “I couldn’t be prouder of what the firm has accomplished and remain humbled by the dramatic impact its advisers continue to have on helping millions of American families achieve their life’s aspirations.”

As of July, LPL Financial managed $588.4 billion in advisory assets and $541.4 billion in brokerage assets.