May 6, 2020 | Issue #116

MUST READS

The Halving

We're just under 5 days away from the epic, highly-anticipated BTC halving event. While there's still plenty of news, this week we're going to hone in on arguably the biggest economic event for crypto this year. Continue reading for predictions, bull and bear analysis, and helpful resources...

What's Halvening? As part of Bitcoin’s issuance, Bitcoin miners are rewarded a number of Bitcoins per block produced. In 5 days, that number will be cut in half from 12.5 to 6.25. This only happens every 4 years and ensures its monetary policy.

The Significance: Unlike fiat currencies that are issued by government, Bitcoin's supply cannot be inflated at will. Each time a halving event occurs, Bitcoin's supply becomes more and more scarce.

Predictions: The whole world is waiting to see how this will effect prices. Here are some valid opinions and research from both sides of the table:

🚀 Bull cases:

Bitcoin Stock-to-Flow Cross Asset Model: The underlying idea is that scarcity drives Bitcoin's price
CZ on positive psychological factors
Cycle Low Multiple: Probably the clearest representation of Bitcoin exchange rate cycles relative to halving events

🐻 Bear cases:

Efficient Markets Theory: Holds that if we all know it’s going to happen, then it has to be priced in.
A Bitcoin Halving Black Swan: Hash rate crash
Bitcoin's price usually falls during the halving

Resources: There's plenty of resources out for those willing to learn more, attend watch parties, and bet their savings - you name it. Here's a few to get started:

The most important timer across the economy
Bitcoin mining basics
Messari's in-depth free report with investment theses and implications
Attend Bitcoin Magazine’s 21-hour live stream/watch party

Conclusion: While the event could certainly spark another bull run, it could just as easily turn into a bust (just another overhyped price "catalyst" that doesn't meet short-term expectations). It's all part of the game.

In the end, we suggest to not worry about prices and look at the bigger picture: Bitcoin's supply is cutting in half while USD's supply is essentially doubling. Perfect timing, Satoshi.

Crypto Lending Passes the Stress Test

The staggering growth in crypto lending continues with another record quarter for Genesis Capital, one of the largest institutional crypto lending businesses. They just released their quarterly insights report which outlined sustained growth during an incredibly turbulent quarter.

The “$500 Crypto Retirement Plan”?

Teeka Tewari is releasing a new “$500 crypto retirement plan” TONIGHT, May 6th. His last top 5 picks (open and closed) averaged triple-digit returns in less than two years. These are his next five…

DEEP DIVE

32 Findings From Manually Auditing Ethereum's Top 10k Wallets

Adam Cochran manually audited the top 10,000 Ethereum addresses to learn about liquidity, profitability, market manipulation and what Whales are doing with their money.

Spoiler: It's Bullish.

Market Efficiency of Gold and Bitcoin

We've all heard the quip that "Bitcoin is digital gold," but the recent market crash has highlighted one important distinction between the two assets...

In recent days, global gold prices have been continuously disconnected as a result of broken supply chains. Dealers have literally run out of gold to deliver. These challenges reveal Bitcoin’s distinct advantage over gold: Bitcoin does not rely on fragile physical supply chains and is truly globally accessible.

Ouch: 87% Drop in XRP sales for Ripple in Q1

Ripple has historically distributed the XRP in its treasury through two channels: (1) programmatic and (2) institutional direct.

Programmatic refers to XRP sales done through exchanges like Coinbase...
Institutional Direct refers to XRP sales done over-the-counter (OTC) to strategic partners (here's a fresh example).

Until Q3 2019, Ripple performed programmatic sales according to a set percentage of trading volume. But due to concerns over volume inflation, Ripple decided to halt programmatic sales to focus solely on its OTC sales with a few strategic partners. Their goal is to strengthen XRP utility and liquidity in strategic regions.

As a result, Ripple hasn't sold any XRP through its programmatic channels so far this year... and in Q2 2020 Ripple sold just $1.75 million worth of XRP OTC. This marks the lowest amount of XRP they’ve sold in a quarter ever.

While the new XRP selling strategy may be good for Ripple in the long-run, the influx of changes haven't resonated well with it's price (see here for chart).

Furthermore, the fact that Ripple is the subject of a pair of ongoing lawsuits, we can't imagine things getting better anytime soon. The latest lawsuit alleges that Ripple created the XRP cryptocurrency for the sole purpose of making its founders and a few other people rich.

REGULATORY FRONT

Zooko Wilcox Aims To Bring Zcash To the Law-Abiding Masses

After CoinCheck exchange was hacked in 2018 for $500 million of XEM, rumors began circulating that the hackers would have to launder the funds using Zcash (ZEC). By June, citing regulatory pressure, CoinCheck delisted Zcash and other privacy coins, prompting other large exchanges to do the same.

Unable to shake the rumors that Zcash was used for illicit reasons, the founder, Zooko Wilcox, last year hired the Rand Corporation, the storied non-profit consulting firm that last year did $374 million of work for agencies like the Department of Defense. Wilcox asked Rand to investigate how widely cryptocurrencies generally, and Zcash specifically, were being used for criminal activities.

The deal stipulated that Rand’s full report would be made public, no matter what it turned up. Today, Rand published all 65 pages of its unredacted findings, concluding that Zcash was accepted less than 1% of the time on the dark web. Bitcoin though?... 59%.

Telegram Caves to US Regulators: Delays Blockchain Launch, Offers to Return $1.2B to Investors

In a letter to investors, Telegram said U.S. investors must cut ties with the project (and it's $1.7B raise) and accept a 72% refund on their initial investment.

The decision comes less than a week after Telegram delayed the launch of its blockchain until 2021 as it grapples with the SEC.