Max Bibeau, Preston Sledge, Matthew Kimmell
Unfortunately, due to UT’s suspension of in-person classes, we have been forced to cancel all of our planned events for the remainder of the semester. However, you can still stay in the loop by reading SOTM emails like these, or joining our future Discord server which is currently in the works! Stay safe!
Market Summary
Dotted lines represent non-trading days and are extrapolated to the next close price.
Top Stories
Are You Ready For The New Crypto Tax Season?
With April 15th quickly approaching, CoinTelegraph has published this handy article to help crypto investors and users determine how to best handle taxes this year. If you were considering not paying taxes on your crypto, you might want to reconsider. The IRS announced last year that “the Virtual Currency Compliance campaign will address noncompliance related to the use of virtual currency through multiple treatment streams, including outreach and examinations. Taxpayers with unreported virtual currency transactions are urged to correct their returns as soon as practicable.” As a note, due to the COVID-19 outbreak, the IRS has functionally moved tax day to July 15th, giving individuals an extra 90 days to properly file their taxes.
If Bitcoin’s mining difficulty drops by 13%, what’s in store for miners?
While Bitcoin’s price has seen consistent growth in recent days, the hash rate and mining difficulty are still displaced, creating many potential issues for the Bitcoin network. So far in March, Bitcoin’s hash rate has dropped over 40%, demonstrating that a large number of miners have opted out of the network due to Bitcoin’s drop in price. Since the price dropped, many smaller mining operations were no longer profitable, causing them to stop mining Bitcoin and transition to either a different network or ceasing operations altogether. CoinMetrics warns that this large drop in the number of miners will cause a drop in Bitcoin’s mining difficulty by as much as 13%, which would further drive smaller mining setups out of business.
Coinbase Chief Legal Officer Leaves To Take Senior Role as US Bank Regulator
Secretary of the US Treasury Steve Mnuchin has appointed Brian Brooks, CLO of Coinbase, to serve as second-in-command at the Office of the Comptroller of Currency. Brooks is an outspoken proponent of central bank digital currencies (CBDCs) and a digital US Dollar. These CBDCs can give governments and central banks more control over a currency by using a permissioned blockchain, integrating auditable transactions with centralized validation. This differs from cryptocurrencies like Bitcoin that use cryptographic addresses and decentralized validation.
In other news, while Coinbase has offered a Visa card to millions of users outside the US, local regulations and limitations have made it difficult for them to expand inside the US. Now, CoinZoom, a Utah-based digital exchange company, is finally offering US customers a way to spend their cryptocurrency with a card. Learn more on Coinzoom’s website.
Chinese Journalist Uses Ethereum Blockchain To Bypass Censorship Amid Coronavirus Pandemic
China’s efforts to censor journalists and early whistleblowers warning of the dangers of COVID-19 are now widely known around the world. However, the country continues to attempt to silence the Chinese citizenry through various methods, including widespread internet limitations and the censorship of Chinese social media. Sarah Zheng, a journalist at the South China Morning Post, has utilized the Ethereum blockchain to permanently bypass government censorship. Zheng posted an interview that was conducted with Dr. Ai Fen on December 30th, where Fen warned heavily about the dangers of COVID-19. The interview has been so heavily censored by the Chinese government that it is impossible to find it on nearly any social media platforms or Chinese websites, but now it is on the Ethereum blockchain forever. Read an English translation of the heavily sought-after interview here.
Chart of the Week
This week’s chart analysis will actually be an analysis of 6 charts, all demonstrating the age gap between crypto believers and skeptics. All charts are sourced from the Blockchain Capital Blog, with data collected by The Harris Poll, who surveyed 2,029 American adults in both October 2017 and April of 2019.
First, when observing the type of people who have heard of Bitcoin, an age gap cannot really be seen at all. Across the board, as of the Spring 2019 survey, approximately 89% of those surveyed have heard of Bitcoin in some fashion, with little to no discrepancy between age groups.
However, when we move beyond Bitcoin awareness into Bitcoin familiarity, an age gap starts to make itself increasingly clear. While 60% of individuals 18-34 and 50% of individuals 35-44 consider themselves at least “somewhat familiar” with Bitcoin, only 20% of the 65+ group responded in the same fashion. While a comparable number of older people have heard of Bitcoin, it seems many fewer took enough interest in the technology to become familiar with it when compared to younger generations.
Now, moving into the more subjective aspects of Bitcoin, we can see that younger generations are significantly more likely to believe that Bitcoin is a positive innovation in financial technology. A majority of individuals 18-44 believe the technology is positive, whereas a significant minority of those 45-65+ feel the same way.
We can now take a look at how people across age groups feel about the likelihood of Bitcoin achieving large scale adoption in the next decade. While even individuals 18-34 do not have a majority that agree that Bitcoin will be widely used by most people in 10 years, the number drops drastically when looking at the older crowd. Only 16% of people 65+ believe Bitcoin will achieve such adoption in 10 years.
When asked about their individual likelihood to purchase Bitcoin in the next 5 years, the respondents saying that they are likely to do so tend to be significantly younger. An impressive 42% of respondents 18-34 say they are likely to purchase Bitcoin, but that number drops off significantly as the respondents get older. Even in the age group of 45-54 year olds, while 43% said they are familiar with Bitcoin and 39% said they believe Bitcoin is a positive innovation, only a quarter of respondents were willing to invest their own money into the cryptocurrency.
This final chart is by far the most eye-opening. Across the board, the vast majority of individuals do not own Bitcoin. Even in the 18-34 age group, where 42% said they were likely to purchase Bitcoin in the next 5 years, only 18% already hold Bitcoin. And, when looking at the 45-65+ crowd, where most capital in the US is located, very few already invest in Bitcoin, between 1 and 4%. It seems like Bitcoin enthusiasts have a lot of work to do in convincing older generations if they want the cryptocurrency to see universal adoption by all.
Tweet of the Week
Pretty much.
Thread by @CaitlinLong_ on WHAT’S GOING ON IN FINANCIAL MARKETS.
In a letter to the Board, Nikki Haley, former US ambassador to the United Nations, resigned from Boeing out of principle. Haley’s resignation comes in response to Boeing, along with the CEOs of all major American airline companies, requesting a bailout from the government (taxpayers) after spending all their cash on stock buybacks, which increase shareholder value for top executives. “I cannot support a move to lean on the federal government for a stimulus or bailout that prioritizes our company over others and relies on taxpayers to guarantee our financial position.”
Lots going on here regarding the Fed’s proper response to a debt crisis.
A group of US Senators dumped their bags right before the bleeding started. Damn, how did they know??? Such oracles, much insightful, very market awareness. I guess that’s why they’re in charge.
A morbid rendition of Edward Hopper’s “Nighthawks” painting, which originally portrayed people hanging out in a diner.
@JuliaTCreek is an Austin native who founded the health & wellness startup Everlywell, featured on Shark Tank (S9 E12). The startup is taking initiative and rolling out an at-home Coronavirus test kit. We salute you, Julia!
Video of the Week
Regulatory misunderstanding is commonly cited as one of the biggest roadblocks to mass adoption of Bitcoin and blockchain by many in the crypto space. In 2019, President Trump finally addressed cryptocurrencies on Twitter, including Bitcoin and Libra. Watch a brief analysis of President Trump’s statements by Yahoo News, including the cryptocurrency world’s response.
Follow us on social media!
Texas Blockchain’s ‘State of the Market’ is a student-led editorial. None of the views expressed by the authors should be taken as the view of the University of Texas at Austin or the Texas Blockchain organization. Furthermore, none of the views expressed should be taken as financial advice in any circumstance.