Due to several requests, we’re testing out an English version of our Newsletter this week. Let us know what you think by hitting reply!

⛺ Woodstock for Capitalists

Last week Berkshire Hathaway’s held their annual shareholder meeting, often called “Woodstock for Capitalists". It's a yearly event where usually more than 40k people attend to hear what one of the most successful investors in the world, Warren Buffet, has to say. This year it was held remotely, and you can read a transcript of everything here. Here are 3 key takeaways:

• One good thing: "Never bet against America." Buffet is optimistic that the U.S. economy can bounce back and overcome the coronavirus.

• One challenge: "The airline business has changed in a major way and the future of airlines is much less clear." Berkshire Hathaway sold off more than $6,5B of airline stock in April.

• Looking ahead: Buffet predicted that the insurance industry will be the next battleground. We’ll see a flood of litigations in the coming months from companies that go to war with their insurance companies over lost business due to the pandemic.

Morgan Housel, a partner at Collaborative Fund, is also reflecting on what we've learned from the last three months, and whatever our view of the future is, it's probably wrong:

📉 Interesting interest rates

We don't have negative interest rates in Norway (yet?), but last week the Norwegian Bank lowered their key interest rate to zero. The chief economist in Eika has forecasted this happening in Norway for several years (🇳🇴). He also believes that Norway will need a weak Norwegian Krone in the future as it helps to make Norwegian labor more competitive abroad.

🤥 Digital identity

Norwegian consumers are early adopters of digital banking services compared to their European counterparts, and the number of cash-based transactions are amongst the lowest in the world. One of the main reasons for this is cross-collaboration between banks and especially the BankID solution which makes it possible to sign documents digitally. During the last week there has been large discussions about BankID and its implications because the government has proposed changes that give banks more responsibility in fraud cases. CDO in Sbanken, Christoffer Hernæs, makes a good point in this regard: We mustn't create regulations that create a step backward for digitization. (🇳🇴)

⏳ Biometric cards and fintech sandbox

The Norwegian startup Zwipe is reporting that they can launch mass production of their debit cards with fingerprint readers in early 2021. They believe "hygiene can become an accelerator and game-changer for biometric payment". That might be, but as we've stated before: why do we need a plastic thing to pay with when we always carry our phone? Apple Pay and Google Pay (and similar) also have biometric payment without carrying a card around. This is like continuing to bet on regular SIM-cards when eSims exists.

In February we mentioned that the Norwegian Financial Services Agency announced who had applied to participate in the first pool of the regulatory sandbox. Out of the ten applicants two companies have now been chosen: Quesnay and Sparebank1 SR-Bank. Quesnay's project will develop AML solutions, while Sparebank 1 SR-Bank's project will develop a solution for digital customer counseling.

✂️ Bitcoin halving

Today, May 11, Bitcoin will experience its third halving. The halving is a 50% decrease in the production of new bitcoins scheduled to happen roughly every 4 years (210 000 blocks). This is in contrast to how central banks react at the moment. Bitcoin is tightening its money supply at the same time central banks are loosening it. Grayscale, the largest digital currency asset manager, has written a report about the timing of this halving.

A lot of people are a bit skeptical about crypto-currencies, and especially how they can be based on open source code and still capture value. Jesse Walden in Andreessen Horowitz has written a good explanation of how the crypto business model is familiar, but not who benefits from it. Both Bitcoin and PayPal takes a fee per transaction, but while PayPal takes all the fees, Bitcoin distributes it to the miners.

⛓ Things happen

• 💳 Revolut plans to use some of its recent funding to buy struggling fintechs hit by the coronavirus

• 🪓 Banking consultancy 11:FS are seeing the effect of the coronavirus with banking clients canceling projects and reigning in their spending on consulting. The response so far is a 15% salary cut for all, reduction of expenditure and furloughing staff (mostly their Media team, Marketing, Operations, and Recruitment.)

• 💰 Robinhood closed 2,8B NOK in their Series F round. That means that they are now one of the most valuable fintechs in the world with an estimated value of ~ 84,7B NOK. They are using the money to invest in scaling their platform, which is desperately needed after having three outages in a week.

• 💵 N26 has extended their Series D round for the third time. They have raised 5,8B NOK for a total valuation of 35,7B NOK. The news comes after the German digital bank has retreated from the UK market due to Brexit.

📖 Monday reading

One of the most interesting posts I've read this week was about signaling: that we think and say we do something for a specific reason, but in reality, there’s a hidden, selfish motive: to show off and increase our social status. This is also related to banks as Julian Lehr writes:

Signaling as a Service

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Marius Hauken, Partner Stacc X