FTX markets guru explains why macro uncertainty strengthens crypto's 'supercycle thesis'

Episode 38 of Season 4 of The Scoop was recorded remotely with The Block’s Frank Chaparro and Jon Cheesman, Global Head of FTX Access.

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Before Jon Cheesman became the global head of FTX Access — a new division of the crypto exchange founded by billionaire Sam Bankman-Fried which caters to institutional clients – the seasoned market-veteran served as head of forex sales to banks and hedge funds in London at HSBC, spent time as a partner at crypto venture firm Distributed Global and was a VP at Goldman Sachs.

Despite having over a decade of professional experience with global financial markets, Cheesman thinks we are currently living through “the most uncertain macro period” he’s ever seen.

In this episode of The Scoop, Cheesman discusses the various macro headwinds which have hit the crypto market so far in 2022, and explains why he believes “a good tailwind is often an end of a headwind.”

Cheesman contended that tightening monetary policy hurts crypto in the short-term, but it doesn’t affect the value proposition behind crypto:

“There's no question that inflation and what that means for central bank policy is a significant headwind for crypto assets in the near term. But, I think people are comfortable to separate temporary cyclicality with longer term structural tailwinds.”

Some of the “structural tailwinds” Cheesman thinks are gaining traction include the idea of “the death of fiat currencies” because of central bank activity, and also the recent focus amongst “high net-worth individuals” on being able to lay claim to one’s assets in light of the removal of some Russian banks from the SWIFT payment messaging network. 

As data from The Block shows, total daily volume rose for BTC/RUB pairs in March.

In addition to, “the more structural tailwinds of the supercycle thesis,” Cheesman also believes both extremely high, and low inflation bode well for crypto.

As Cheesman explained:

“In deflation where central banks just have to print like we haven't seen anything yet, then of course something like bitcoin which has a fixed supply will be attractive.” On the other hand, Cheesman added, “if inflation goes so high and central banks just kind of give up and you end up with something like the Weimar Republic, where people were wheelbarrowing money around to go out to dinner, an asset that has a fixed supply will again, be very attractive.”

 During this episode, Chaparro and Cheesman also discuss:

  • What sidelined institutional capital is waiting for
  • Why a strong dollar is bad for the global economy
  • How VCs harvesting gains is unavoidable

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

This episode is brought to you by our sponsors FireblocksCoinbase Prime & Cross River
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