State of the Market #54
6/14/2020 - 6/20/2020
|Joshua Ebedes||Jun 21|
Keith Asmussen, Joshua Ebedes, Preston Sledge, Max Bibeau
In these times of anxiety and discord people should be legally required to listen to a minimum of half an hour of Bob Marley every day.
Dotted lines represent non-trading days (weekends, holidays, etc.)
Hedge Funds, Retail Investors Bought the Dip — Kraken CEO Jesse Powell
When the Bitcoin price dropped below $4,000 on March 12th, Jesse Powell described that the exchange experiences a “massive influx” of both institutional and retail investors. Powell accounts for this influx by stating, “People are taking stimulus checks and rolling it into Bitcoin … I think people are very worried about the traditional markets, and what’s happening with the U.S. dollar and they’re looking for a safe haven asset.” You may question calling cryptocurrencies a “safe haven asset” based on its volatility, but many billionaire institutional investors like Paul Tudor Jones are increasing their Bitcoin positions as an inflation hedge.
Report: EOS Facing Potential Crisis After Developer Exodus
The world’s largest ICO project EOS is facing a potential crisis as Outlier Ventures reported an 86% decrease in “developer activity” over the past year. Additionally, EOS has experienced one of the largest declines in “weekly code updates.” This blockchain operating system has continually lagged behind Ethereum accounting for only 9% of all smart contracts and daily dapps users relative to Ethereum’s 80%.
$930M in Bitcoin Options Expire Next Friday — Time to Worry?
Open interest, the total number of contracts that have been traded but not yet liquidated by a trade or exercise, has reached its highest levels to date. With more than 100,000 Bitcoin option contracts totaling $930 million are set to expire on June 26, it will be interesting to see how next week plays out. The volume of open interest doesn’t allow for a direct prediction of market trends, but can be used for insight by looking at the call/put ratio. The future markets sentiment is slightly bullish as they are in contango as the contracts are trading at a premium to the current spot prices
Chart of the Week
This chart, taken from Rafael Shultz-Kraft’s article What Are Ethereum Users Payings Fees For, shows the distribution of fees by contract type as a percentage of all contracts. Most notable on the chart is the growth in fees for USDT (Tether) transactions and the shrink in fees for actual transfers of ETH. This suggests that “plain transfers of ETH between users are not Ethereum's main use case”. Read more about the fee distribution and its movement over time in Rafael's article hyperlinked above.
@Spenser Noon. Compound allows people to loan out their crypto currency for interest. Over the past week or so the supply of USDT (Tether) on Compound has risen at drastic rates.
@cmsholdings pokes fun at the investors who are now earning 0% interest on the ETH they are loaning.
@saifedean author of The Bitcoin Standard summarizes his books main points on the difference between bitcoin and Fiat.
@CryptoCharles__ Shows us how to bypass the ban in the US on un-regulated (by the US) exchanges.
Another solid meme from @CryptoCharles. Taxation is theft.
Video of the Week
In 30 minutes Ray Dalio, founder of Bridgewater Associates, gives an incredibly coherent and intelligent description of the macro economy. He pinpoints the importance and implications of basic economic concepts like credit and debit with great insight. This 30 minute video does a great job of setting even a beginner up to having a real and intuitive understanding of markets and the economy.
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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.