TLDR: Waiting for Godot on Cryptotime

WAITING FOR GODOT // 25.Oct.2017 // NYC

*Market Snapshot
*ICO Land: choppy waters (much needed)
*Tezos: ‘mo money ‘mo problems > ICO market gets smarter
*Fund Inflows: Money Always Finds a Way
*Crypto Missives: Don’t Sleep on China, Inherent Conflicts, Dodgy USDT
*Govt’s Controlling Crypto: a Visual
*Valuing Cryptos, Blockchain Investment Landscape, Balaji’s Keynote
*Buy Fear, Eschew Greed, Stay Loose

Week on Week Mkt Snapshot
Total Crypto Market: $168 bil (-4.9%)
Bitcoin: $5,670 (-1.6%)
Ether: $298 (-12.7%)

Waiting for Godot… After a blistering run a week ago, crypto has traded sideways for much of the past week, an eternity in cryptotime. Bitcoin continues to be the fulcrum, making up roughly two-thirds of total crypto trading volumes. Despite several surges, ETH has remained weak, however the upcoming Ethereum’s annual developers conference (Devcon) on Nov 1–4 should bring some positive news and hopefully some price direction. Notable too, is that Bitcoin OTC blocks still trade at a premium to spot even when the latter declines — suggesting strong longer term buying support.

Meanwhile in ICO land…sentiment has certainly changed. Tezos, an Ethereum competitor and the industry poster child that raised $232mil during the mid-summer frenzy, is beset with infighting troubles. The founding couple (the Breitmans) have accused Tezos Foundation President Johann Gevers of “self-dealing, self-promotion and conflicts of interest.” Gevers alleges that the Breitmans have been bypassing the foundation’s legal structure and trying to control the foundation (which holds the ICO funds) like it was their own private entity.

The irony of Tezos’ mission to solve the governance problems that beset many decentralized communities cannot be lost here. The lesson here is not a new one: egregious (and unnecessary) amounts of money tend to precede fights. Tezos’ troubles here bring to light the importance to establish ICO best practices. For now, that means that the worst ICOs (outright scams, weak applications, teams) will likely die out. Good teams and use cases are now no longer guaranteed success — best practices in community transparency, hard caps on their raise, audit/legal, etc will all start to be minimum standards for any project worth their salt. Ultimately healthy and a necessary good for the long term viability of the industry.

Despite CNBC saying the opposite (read here), TLDR also sees new fund flows into the space as further support for the market (and especially Bitcoin). What cannot be denied is the significant rise in serious inquiries, involvement and general activity from the likes of family offices and capital in more traditional money management. Any mainstream headlines like “Big Money Stays Away from Booming Bitcoin” don’t really illustrate the real story. As mentioned previously, there just isn’t the custodial infrastructure or regulatory clarity just yet for “big money” to meaningfully get involved. So it isn’t that institutional money is staying away, it’s that there isn’t the apparatus for it to join the dance. Yet.


“Under Xi Jinping, there has been an attempt to impose control not only over the economy, but over the markets, so any sense of allowing Chinese citizens to have the ability to export currency, just runs counter to what Xi has been doing… I think we’ll see more intensification of that general trend after the Congress. So I don’t think the signs are good for liberalization in the coming months.” Gordon Chang, The Daily Beast (watchhere)

TLDR: Despite the relative calm and lack of news flow surrounding the 19th People’s Congress and cryptocurrency, the Xi power move should not be ignored. In being the only Chinese leader besides Mao to etch his name into the PRC Constitution, Xi has formally elevated and made himself the ideological leader of the country — all but quashing any chance of succession so long as he is alive. Coupled with rumours of a foiled coup, this is yet another sign of Xi’s unending quest for control. The read-through for crypto is clearly an increased likelihood of a sovereign Chinese coin (similar to Russia’s CryptoRuble announced last week).

“At this point, I’d like to introduce the biggest problem here: the inherent conflict of wanting to develop an open source project in a decentralized fashion while also becoming stupidly rich. This is a hard one to solve for.” Stefano Bernardi & Yannick Roux (read here)

“It’s easy to believe cryptocurrencies have no inherent value. Or that governments will crush them. It’s also becoming fashionable to believe the opposite: that they will disrupt banks, governments, and Silicon Valley giants once and for all. Neither extreme is true. The reality is nuanced and important.” Adam Ludwin, CEO Chain read here

“Central to my claim is the fact that tethers are completely non-redeemable. I have repeatedly said, even if they have the money, it doesn’t matter. They never have to pay you.” -by BitCrypto’ed (read here — a must for anyone trading crypto and using USDTether)

Valuing CryptoAssets: Chris Burninske on Unchained by Laura Shin
While the methodology will surely change and adapt over time, Chris is brilliant and this will be a foundation for crypto valuation (listen here). A fellow surfer, Chris also has recently released a book on the subject.

Blockchain Investments: Industry Overview
TLDR: Top down look from CB Insights with main facts, figures, trends, etc (see here)

Balaji Srinivasan’s Keynote at Credit Suisse
For those who missed it two weeks ago, the industry thought leader and Andreesen Board Member gives a must watch talk here)

Crypto 101
Blockchain (watch)
Bitcoin (read / watch)
Ethereum (read /watch)
Deeper Dive: this guide and this video demystify well
Rabbit Hole:

Buy Fear. Eschew Greed. Stay Loose.