State of the Market #66

9/13/2020 - 9/20/2020

Keith Asmussen, Joshua Ebedes, Preston Sledge


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Market Summary

Dotted lines represent non-trading days (weekends, holidays, etc.)

Top Stories

Coronavirus Is Shaping Up To Be Very Bad For Banks—But Not For Bitcoin


As central banks around the world cut interest rates and increase quantitative easing, the profitability of major lenders has been significantly reduced while simultaneously requiring billions of dollars for potential loan losses to be set aside. Following Buffett’s decision to reduce Berkshire Hathaway’s position in US Banks by $9.5B, many are seeking less exposure to the USD as speculations of an imminent major banking crisis are growing. “This year is shaping up to be a landmark in the history of digital finance,” according to DBS Bank's chief economist Taimur Baig, who expects to see a spectacular acceleration in the adoption of Bitcoin and cryptocurrencies. Baig accredits the boom in adoption to pandemic-led stimulus measures, in addition to, rapid advances in connectivity, mobility, and data storage.

VeChain offers services to 130 firms in China as food safety alliance member


Supply chain tracking project, VeChain, has joined the China Animal Health And Food Safety Alliance (CAFA) as a council member. As the “sole public blockchain technology provider in the alliance”, VeChain will provide technical and infrastructure support to more than 130 companies in the alliance. Using a Proof-of-Authority protocol, VeChain’s “ToolChain Platform” will be able to help CAFA in “building a from-farm-to-table traceability system” throughout China by building upon the existing Food Trust system. 

MicroStrategy Buys $175M More in Bitcoin, Upping BTC Holdings to $425M 


Following their $250M purchase of Bitcoin in August, business intelligence company MicroStrategy announced an additional acquisition of $175M in Bitcoin. A continuation of their strategy to protect against inflation and pending economic uncertainty, the company now has bitcoin holdings up to 38,250. The alternative investment strategy is backed by the founder and CEO of MicroStrategy, Michael Saylor, who classifies Bitcoin as a “dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”

Chart of the Week

This chart was retrieved from @_JustinMoon on twitter. It depicts the time countries have held reserve currency status. Within our lifetimes the US dollar has been the reserve currency for the world. This incentivizes foreign investors to save their money in the US economy and drives up demand for the dollar. Higher demand for the dollar means that americans get foreign goods at a relatively lower price. Losing reserve status would lead to a noticeable drop in standard of living across the US. 

Top Tweets

Thanks @giacomozucco. Very interesting thread about the creation and adoption of technologies as a result of (driven by) hard times.

Good DeFi summary by @_kinjalbshah. Very clear cut and informative.

@cryptochrisw. After a high level summer DeFi summary heres a low level one.

@guydbennett. Watch out for Trojan Horses.

Video of the Week

But how does Bitcoin actually work?: 3Blue1Brown

 This video by 3Blue1Brown gives a great animated explanation of how the blockchain system and bitcoin work. This video is a great resource for visual learners and math lovers. The video goes over ledgers, signatures, hash functions, and other building blocks of the blockchain. Whether new to Crypto or a veteran, it is easy to appreciate the beauty behind 3Blue1Browns explanation of the blockchain.

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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.