January 27, 2020 | Issue #153

MUST READS

Deep Breaths

BTC is currently trading around $30k and is down roughly 25% from its all-time high of ~$41k two weeks ago. Time to panic? Not quite.

Times like these are when we like to reduce any anxieties for you investors out there. For now, it's important we look at the bigger picture and zoom out a little (just barely).

1.) Take a look at the one-month performance of the top 10 crypto assets for a quick sanity check: (we excluded USDT, LTC, and BCH for this exercise.)

BTC: 15%
ETH: 74%
DOT: 136%
XRP: 2%
ADA: 80%
LINK: 69%
BNB: 14%

2.) Next, take a peek at this chart signaling that institutional investors have continued to buy BTC over the last week – y'know, the narrative that essentially triggered this bull run in the first place.

Perhaps this little dip is nothing more than a buying opportunity for newcomers and institutional investors alike. Microstrategy (MSTR) and Marathon (MARA; see below) just bought the dip, who's next?

Nasdaq-listed Marathon Patent Group Buys $150 Million Worth of Bitcoin

Marathon Patent Group (MARA), a Nasdaq-listed Bitcoin mining company, announced that they converted a little under a third of their corporate treasury to BTC. The purchase totaled about $150 million.

Key Points:

MARA share prices are up ~900% since the beginning of 2020. ⚠️
The CEO's comments suggest part of the motivation for the move was to turn MARA stock into more of 'pure-play' spot-BTC alternative.
The purchase price was around $31,135, suggesting this is another example of a company using Bitcoin's recent price dip as a buying opportunity.
Marathon was already involved in the BTC industry, so this announcement is less surprising than MicroStrategy's original BTC treasury purchase last year.
Sidenote: So you buy miners with USD, mine BTC, sell the BTC for USD then you raise 250mm of USD to buy BTC? Props to MARA for taking the plunge, but we're skeptical this is nothing but a stock exposure play.

Ivy League Colleges Reportedly Buying BTC for Endowments

According to Coindesk, Harvard, Yale, Brown, and the University of Michigan as well as several other colleges have been buying crypto directly on exchanges for the past year or so.

DEEP DIVE

A Double-Spend Broke Bitcoin?

As BTC prices have reached new all-time highs, renewed rounds of fear, uncertainty, and doubt (aka FUD) have come with it.

On January 20th, articles began to circulate claiming there had been a Bitcoin double-spend, a type of malicious attack in which a user spends the same BTC twice, defrauding the recipients.

What happened was a totally normal occurrence, but with all the hype and eyeballs on crypto, news outlets began reporting misinformation.

Here are a few explanations of what actually happened courtesy of Lucas Nuzzi and Andreas Antonopoulos.

DeFi Will Eat Corporate Debt

Credit markets are essential fuel for innovation. But so far, they don’t exist in DeFi – at least not yet.

Today protocols like Compound and Aave are more like interest rate protocols. They provide rates on capital (aka collateral) for borrowers and suppliers. They don’t rely on the promise of future payments, trust, or reputation. They remain solvent by requiring borrowers to always over-collateralize their positions.

But they’re also capital inefficient. A large portion of the global market for loans can’t operate under this architecture – they need actual credit lines.

That’s where decentralized credit markets come into play. If successful, these markets could make their way into the traditional world someday, just as BTC has crept into corporate treasuries.

Here’s how.

More DeFi Reads:

DeFi Tokens Outperform Amid Crypto Bull Market
Fixed Income Protocols : The Next Wave of DeFi Innovation
Anybody Can Now Become A Fund Manager

What's in Your Portfolio?

Since August, all Messari research team members have been required to disclose crypto holdings that represent >5% of their portfolios, and have done so in this document that’s updated monthly.

Messari's research team covers market trends inside the crypto asset industry and does a ton of on-chain data analysis. Team members provide deep-dive research on a day-to-day basis. It's their job.

That said, they probably know a whole lot more than the folks ranting about crypto on Twitter and Reddit. If you're looking to gain more exposure to crypto assets apart from BTC and ETH, this list may be a good starting point.

The Revolution Will Not Be Reported Quarterly

It’s rapidly becoming clear that financial products built on open blockchains will change finance forever.

The most obvious changes are the emergence of a new asset class, how you store those assets and how people and companies financially interact. Beyond that, a whole range of less obvious but profound second order effects will follow.

In this post, Dune Analytics explores the future of financial data; all the way from the data sources, to the data plumbers, quarterly reports, and Wall Street analysts.

REGULATORY FRONT

Don't Hate The Player, Hate The Game

As we are all aware, GameStop (GME) is having an interesting time. The stock is up an incredible 8,500% over the last six months and most of those gains have come in the last week as degenerates (their words not ours) are squeezing overly-shorted stocks.

Now, short squeezes aren't anything new, but what is new is that this squeeze isn't elite vs elite, but retail vs elite. And retail is winning, as billions of dollars are changing hands, hedge funds are bleeding, and the financial media is tripping over itself.

Good thing the establishment is taking it on the chin, taking their losses, licking their wounds, and looking for ways to outsmart these retail investors fair and square. Just kidding, they are banding together to stop it all.

The CEO of NASDAQ suggests halting trading to allow big investors to ‘recalibrate their positions’
TD Ameritrade and Schwab are restricting trading
Former SEC counsel: "This is one of those times that SEC, FINRA, and Exchanges all come together”

Will regulators look for a way to stop this "attack" by deplatforming and banning users from companies like Robinhood, NASDAQ, Discord, and Reddit? We'll see.

But if this is how they respond to a few funds with potential 'systemic risk,' just wait until they see what Bitcoin does to the system. Buckle up.

📌 Buying the Dip, Another Public Company Adds BTC to Treasury, and Surging DeFi Tokens

MUST READS

Deep Breaths

Nasdaq-listed Marathon Patent Group Buys $150 Million Worth of Bitcoin

Ivy League Colleges Reportedly Buying BTC for Endowments

SPONSORED

STOP Competing with Wall Street

DEEP DIVE

A Double-Spend Broke Bitcoin?

DeFi Will Eat Corporate Debt

What's in Your Portfolio?

The Revolution Will Not Be Reported Quarterly

SPONSORED

The Biggest Digital Revolution of Your Lifetime

REGULATORY FRONT

Don't Hate The Player, Hate The Game

TWEET OF THE WEEK

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