Weekly Investor Letter
June 6 — Crypto assets fell 12.5% this week ($35 billion), bringing the total market cap back to $245 billion. The Crescent Crypto Market Index (CCMIX) lost 13.2% while BTC dropped 11.8% over the same period.
The crypto market had a sizable pullback this week, though the recent weakness is not entirely unwarranted. Bitcoin (and other crypto assets) are still among the best performing assets globally year-to-date as the total value of the crypto market has grown more than 95% this year alone. Bitcoin outperformed many of its large peers this week, but still saw a double digit loss. It is currently trading around $7,775.
On Monday this week, mega-cap technology companies were shook as Federal regulatory bodies divied up antitrust oversight action of companies like Google, Amazon, Facebook. This is a familiar narrative to Microsoft in the late 1990s and a theme we have seen recently in Europe — where regulators have already began to demand their pound of flesh from anti-competitive tech companies. Similar to Banks and Pharmaceutical companies during the last two cycles, investors are wary of the potential political climate bringing big-tech regulation into focus in anticipation of the exit election cycle.
Bitcoin vs. CCMIX
May 30th — June 6th, 2019
Crescent Crypto Market Index (CCMIX)
May 30th — June 6th, 2019
- Volatility continues to remain relatively elevated compared to earlier this year. The week-over-week price fluctuations have been substantial over the last several weeks, though the crypto market has continued to grind higher.
- The CCMIX gained two components at the turn of the month — smart contract platform Ontology (ONT) and interoperability blockchain Cosmos (ATOM)
- Every constituent outside of ATOM saw losses this week. A vast majority were down at least 10%, though it is not entirely surprising given the recent strength exhibited by the crypto market.
- BTC outperformed its peers, on average, but still lost over 11% compared to this time last week. However, bitcoin’s price has more than doubled since the beginning of 2019, so it’s far too early to speculate whether this week’s weakness is anything more than a healthy pullback.
- EOS and ONT both fell more than 20% this week. NEO, BCH, and DASH lost at least 15% of their value as well.
- BTC dominance rose from 55.2% of the total crypto market cap this time last week to 55.7% today.
Apple has plans to roll out Cryptokit, a framework to perform cryptographic operation securely and efficiently. Apple announced this feature at WWDC 2019 and will be available for future download in iOS13. Through this framework, developers can perform common cryptographic operations, such as hashing, key generation, and encryption. As outlined by Apple, the three core functionalities are: 1) Compute and compare cryptographically secure digests, 2) Use public-key cryptography to create and evaluate digital signatures, and perform key exchange, and 3) Generate symmetric keys, and use them in operations like message authentication and encryption.
Why Does This Matter?
As Alejandro Machado, co-founder at Open Money Initiative, puts it: “For the first time, developers can leverage the secure enclave to manage a user’s keys in an iPhone, achieving a similar level of security to hardware wallets.” In the current Apple operating system, users can store encrypted keys in system accessible storage. With the introduction of Cryptokit, users are now able to store keys in the secure enclave allowing for significantly greater levels of security. Seamlessly incorporating this functionality into mobile applications/wallets is a huge step towards mainstream adoption.
Justin Sun, the founder of Tron and CEO of BitTorrent, won the annual eBay charity auction to have lunch with Warren Buffett with a winning bid totaling $4.6 million. Justin Sun has the opportunity to bring up to 7 friends to this steakhouse lunch, many of which Sun plans to be crypto industry leaders. Warren Buffet, on many occasions, has discredited Bitcoin as having ‘no unique value’, but Sun is clearly avid to convince Buffet otherwise. That said, Buffet has acknowledged the underlying potential of the blockchain technology behind cryptocurrency. Sun recently stated that he is looking forward to the “upcoming lunch with Buffett as an opportunity to seek mutual understanding and growth.” Tron saw a significant price rally of 20% since the announcement, which Justin Sun probably sees as an acceptable trade for just $4.6 million.
Why Does This Matter?
It remains to be seen how impactful this lunch date will be on Warren Buffet’s view on Bitcoin and cryptocurrency. However, it is clear that the cryptocurrency space is growing out of its nascent roots. If Justin Sun assembles a group of crypto’s top industry and thought leaders this may be the best avenue to convince Warren Buffet of Bitcoin’s unique value as a global, non-sovereign, store-of-value asset and the potential of the greater cryptocurrency ecosystem. If nothing else, this event is indicative of Justin Sun’s relentless marketing strategy for the Tron project.
Retail giant Walmart is set to join MediLedger, a consortium developing a blockchain solution for tracking the provenance of pharmaceuticals. Walmart joins existing member Pfizer, as well as the three largest pharmaceutical wholesalers, McKesson, Amerisource, and Cardinal Health. This announcement coincides with MediLedger’s plans to start a pilot project with the U.S Food and Drug Administration in early June. The FDA aims to develop an interoperable and digitized system for tracking and verifying prescription drugs. Maria Palombini, the director of communities and initiatives development for emerging technology at the IEEE Standards Association, said that for this goal “blockchain is the perfect solution.”
Why Does This Matter?
This move represents a stronger involvement of Walmart in the blockchain space, having participated in IBM’s Food Trust, a Hyperledger Fabric platform that tracks the supply chain of fresh produce. MediLedger utilizes an enterprise version of the Ethereum blockchain, unlike IBM’s Food Trust. Walmart reported that Health and Wellness, which includes pharmaceutical sales, accounts for a tenth of their sales resulting in $35 billion in revenue. Walmart clearly recognizes the importance of integrating blockchain solutions for supply-chain management in healthcare. The U.S privatized healthcare system results in fragmented siloed databases. Mediledger consortium aims to build the network that connects these silos over a decentralized blockchain. Ultimately, this would improve transparency and efficiency when verifying and tracking pharmaceutical supply-chain data.