GSG Market Update – July 19, 2019 INTERNAL USE ONLY (copy 01)

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GSG Market Update

 

MarketWatch

July 19, 2019
 
Name Current Price 24h % 30d Vol 90d Vol 21d EMA 50d EMA
Bitcoin  $10,676.74 8.37% 132.34% 96.98% $10,828.108 $10,024.208
Ethereum  $225.04 3.59% 121.84% 99.78% $261.570 $262.095
XRP  $0.322 2.44% 93.96% 98.09% $0.358 $0.380
Litecoin  $99.88 7.72% 122.20% 106.08% $107.228 $111.196
Bitcoin Cash $313.89 5.13% 133.39% 111.90% $361.152 $380.412
Binance Coin $29.75 5.79% 99.38% 96.70% $30.844 $31.160
EOS  $4.11 4.66% 121.93% 113.23% $5.100 $5.710
Bitcoin SV $141.680 8.85% 136.63% 191.29% $166.688 $170.782
Stellar  $0.091 10.78% 107.26% 101.21% $0.097 $0.107
TRON  $0.026 8.62% 138.43% 116.08% $0.029 $0.031

Notable Moves
Name Current Price Change (24h)
Bitcoin $10,676.74 8.37%
Bitcoin and rest of market benefits from a $1000+ pump from $9400 level.

News

  • A court in Hangzhou, China upheld Bitcoin’s status as virtual property. The ruling reaffirms that Bitcoin is legal to own in China and indicates to holders that they will be protected by the country’s legal system in disputes. Ruling stated “Bitcoin holds the attributes of property. It’s valuable, scarce, and disposable. Therefore, we should recognize it as virtual property according to the “General Civil Law.”
  • Researchers at crypto analytics firm LongHash have found 1:00 UTC to be the hour of greatest volatility for Bitcoin over the past two years. 1:00 UTC had more daily highs and lows than any other hour of the day over a period from 2017 to 2019.
  • ErisX has become a member of the Chamber of Digital Commerce, an advocacy group that promotes the digital asset and blockchain industry. ErisX joins other heavyweights of the industry such as Fidelity Investments, Overstock.com’s Medici Ventures, enterprise blockchain software firm R3, stablecoin platform TrustToken and Accenture.
  • Binance announced it had unknowingly earned 9.5 million XLM (approx. $775,000) tokens through staking rewards, and it is going to give all of it away to all Binance users who maintain XLM balances between July 20 and September 1.
  • U.S. Treasury Secretary Steven Mnuchin said that the department will police Bitcoin and other cryptocurrencies with very strong regulations so that they don't become like anonymous Swiss bank accounts. "We're going to make sure that Bitcoin doesn't become the equivalent of Swiss-numbered bank accounts, which were obviously a risk to the financial system." 
  • NEO and Ontology announced partnership, making efforts to build an open, cross-chain platform and forge a next-generation Internet infrastructure. The white paper of this protocol will be released in Q3 2019, while the platform is going to be launched in Q4 2019. 

Upcoming Events

  • Jul 26 - CME Bitcoin Futures Jul 2019 contract (BTCN19) last trade date; settlement July 29
  • Jul 29 - Tether Case "Order to Show Cause" deadline for NY AG's office
  • Aug 6 - Litecoin Block Reward Halving (Coin reward decreases from 25 to 12.5 coins)
  • Aug 14 - SEC decision on Bitwise ETF
  • Aug 20 - Blockchain Summit Singapore 2019 (forthcoming)
  • Aug 30 - CME Bitcoin Futures Aug 2019 contract (BTCQ19) last trade date; settlement Sept 3
  • Sept 17 - Ethereum Classic Atlantis hard fork
  • Sept 27 - CME Bitcoin Futures Sep 2019 contract (BTCU19) last trade date; settlement Sept 30
  • Jan 3, 2020 - Ethereum 2.0 Launch (Phase Zero)
  • Nov 2020 - ZCash Halvening / Founders’ Reward set to expire

Charts

BTC Longs-Shorts


ETH Longs-Shorts


Market Cap Return


Sector Return

Twitter Daily

Mati Greenspan@MatiGreenspan

Following all this excellent BTC coverage in financial media and considering the lean yield environment in traditional markets.... The BTC backed futures debut on the @Nasdaq is going to be simply glorious!!!
 


I now don't see much point in things like Tagomi. Why pay fees on a pre-funded prime brokerage-like execution solution when you can trade post-margin with top OTC trading firms bilaterally? To take a lesson from FX market structure, clients tend to prefer single bank D2C.

Crypto prime brokerage has no natural user b/c the point of aggregating brokers + exchanges would be if you're either trying to do arbitrage (a fee-sensitive game in 2019) or you're trying to execute occasional large size (in which case bilateral discretion is more important).

Traditional mkt prime brokerage is totally different b/c institutions have a natural need to trade equity swaps, FX derivatives, FI swaps with multiple counterparties as a course of daily business. In crypto, who truly needs or can pay for credit intermediation?

When I'm referring to discretion, is it's not clear to me that anyone can get a better price on 10K $BTC by twapping it across liquidity sources on something like Tagomi vs just asking voice brokers for a large block. The information leakage from lit execution is absurd.

The other point is that large swatches of traditional market prime brokerage itself are unprofitable / loss-leading exercises that support the principal trading desk of the bank. Take FX Prime Brokerage: literally every bank has now exited this business b/c of unprofitability.
 

WOW  BITCOIN IS LEGALLY PROTECTED IN CHINA Today the first property dispute case on Bitcoin finalized trial in a local Chinese court. The court confirmed the "virtual property" attribute of Bitcoin, recognized it as a virtual property with value m.caijing.com.cn/api/show?conte…

I was browsing Weibo and Wechat on sentiment around the sharp Bitcoin rally, instead of Libra, folks attributed the rally to the case above then I realized it’s indeed a big milestone

bjnews.com.cn/finance/2019/0… this links has more details on the case Basically someone bought 2.6 bitcoin in 2013 and was in the custody of the seller, and the seller closed out the business without any notice nor delivering Bitcoin to the buyer, hence the buyer sued it

This case is a major milestone that manifested BITCOIN IS ACTUALLY LEGAL in China so please STFUDup on Bitcoin is illegal in China from now on

The defining statement in court’s doc as “Bitcoin holds the attributes as property - valuable, scarce and disposable. We should recognize it as a virtual property. According to “The General Civil Law”, virtual property is legally protected by laws of People’s Republic of China”

this is like unreal to me actually, has been under years of “holding Bitcoin is illegal you mother fucking criminal” cloud in mainland China and now it’s all clear Thank you Bitcoin 

to be clear here, holding Bitcoin as a private property is legal does not mean “trading Bitcoin in a systematic way” is legal, yet So don’t equate this as crypto exchange is legal in China there is still long way to go One step a time


 

A thread on serious attack vectors in Bitcoin and how Bitcoin can overcome them. Ideas and constructive critiques welcome.

2/ first an easy one. The “hashpower death spiral.” If price falls below marginal cost of mining, block times could increase and threaten a death spiral of ever longer block times. This is easily remedied,

3/ many stakeholders are incentivized to mine as “white knights” at a temporary loss to reach the next difficulty adjustment. The incentives are already there and probably no preparation necessary. To ensure a smooth remedy,

4/ we’d want major stakeholders like exchanges and service providers to have a plan to quickly put sufficient hashpower to work.

5/ now for a hard one - reorganization attacks like the one successfully done on ETC, or as threatened by BSV leadership against BCH. Solution - a more aggressive and coordinated white knight mining coalition that can react in real-time to 51%/reorg attacks.

6/ it’s far easier to accumulate and coordinate hashpower out in the open as “good actors” than to acquire equal hashpower in secret. This asymmetrically favors defenders because of the easier coordination.

7/ the caveat here is that to react in real-time, such a coalition would need to be very well prepared ahead of time. They would need to be able to identify the attack and deploy hashpower, probably within a few blocks at most. Would be good for work on this to start.

8/ another option that @LukeDashjr worked on is a client with some form of reorganization protection, such as with checkpointing. I think there needs to be more thought/debate/research on this to explore pros and cons and possible implementations.

9/ an important idea that’s a foundational argument here: Bitcoin’s game theory as described in the whitepaper breaks because of the ability to profit from shortselling. Getting it back in balance requires an adversarial mindset and active fighting against attacks.

10/ **some people responded that the free market or PoW game theory works fine. This thread is *part* of that game theory. PoW is secures by miners acting rationally self-interested. I’m arguing this coordination is an example of such.

11/ as an analogy, Andreas Antonopolous has long argued that the bitcoin community could fork malicious miners off the network in various ways. That would be circumventing PoW. A white knight coalition is still entirely within Nakamoto consensus.

12/ we’re nearing the point in time where hypothetical defenses by bitcoin stakeholders to attacks should be constructively prepared. claims about how bitcoin can survive anything might be right, but they’ll be right because stakeholders are prepared to enact the defenses.



Justin Sun@justinsuntron

NEWSFLASH: In addition to the #WarrenBuffett lunch, something HUGE will also be happening next week! Are you ready? 1:35am · 19 Jul 2019


 

0/ The Libra hearings were a huge milestone in the development of US political thought re: the financial system & digital assets. Both chambers of Congress brutalized Facebook, but true cryptocurrencies came out looking pretty good. My takeaways from this week below. Thread 


2/ Congress held two hearings on Libra this week, one by the Senate Banking Committee & one by the House Financial Services Committee. @davidmarcus was in the hot seat answering questions. He did a good job considering Facebook doesn't have a great reputation in DC these days.

3/ It's actually hard to overstate how much these Members of Congress seem to dislike Facebook. Many spent their time recounting the company's failings instead of asking about Libra. Most were openly suspicious of its motivations. Some could even be accused of grandstanding.

4/ It can be frustrating when Members ask questions just to make a point or give speeches without letting the witness respond. For better or worse, that's just the political theater of DC. Some Members are there to be heard, not to listen. It's a chance to generate sound bites.

6/ Crypto remains a largely non-partisan issue -- one of a handful where you can't tell if someone is a Democrat or a Republican by their questions alone. That's great. It means we have time to be thoughtful & develop consensus across the aisle. I hope we make the most of it.

7/ It seems like Members are starting to understand the tech better, too. Many questions were a lot more sophisticated than we've heard in the past. Most importantly, they appreciated the distinction between Libra & true cryptocurrencies like Bitcoin. That's a big victory.

8/ The main critique of Libra was directed at Facebook, which the Members repeatedly described as "untrustworthy." Would Facebook infringe on users' privacy? Lose all their money? Exclude the competition? After all, why hide in Switzerland unless something sketchy is going on?

9/ Marcus gave the best answers he could, often falling back on the promise that Libra won't launch until every regulator is satisfied. No one could say *which* regulators, though. Marcus was asked who should regulate Libra, but he didn't have an answer. Neither did the Members.

10/ That's partly because nobody's quite sure what Libra even is, exactly. Could it be a bank? If so, what kind & where? Are its reserves a commodity pool? Are its tokens securities? Does that make it an investment company? Or maybe an ETF issuer? And on, and on.

11/ These are hard questions for Libra, but they're really not for crypto. In Bitcoin, we don't have to trust a central entity to safeguard private transaction data, manage a fiat currency reserve, or promote healthy competition. These things largely take care of themselves.

12/ In a way, we couldn't have asked for a better company to get Congress thinking about these issues. We now have a perfect opening to say: "Interested in improving payments infrastructure, but don't trust Facebook? Let us show you the far superior, trust-minimized edition."

13/ That said, the hearings did foreshadow some issues we'll have to tackle. For one, the tired refrain that "crypto is for criminals" came up early & often. In particular, the Members wanted to know how Libra would prevent illegal activity & comply with AML/KYC requirements.

14/ Marcus had a quick answer: the Libra Association would register with FinCEN as a regulated money services business & Calibra would require identity authentication for all users. Problem solved. (Well, not really, since other wallets might not comply, but never mind that....)

15/ The AML/KYC question is tougher for crypto, since it's permissionless by definition & thus pseudonymous. I'd say our answer starts with @jerrybrito's "The Case for Electronic Cash: Why Private Peer-to-Peer Payments are Essential to an Open Society." coincenter.org/entry/the-case…

16/ From there, we'll need to grapple with the amorality of technology, law enforcement's reliance on financial surveillance, & the optimal degree of social tolerance for criminal activity in the name of the greater good. It's a nuanced & practical argument, but not an easy one.

17/ Another tough question: would Libra compete with the dollar? Marcus could say no, since Libra's just a fiat-backed payment system. What do we say for crypto? Different people have different hopes & dreams for Bitcoin, but no doubt "global reserve status" is high on the list.

18/ By now some of you are thinking, "who cares about the government, crypto is unstoppable." Okay, but it's not that simple. Like it or not, the government commands a lot of power & resources. It would be quite bad if crypto ownership was criminalized or networks were attacked.

19/ So, what's next? As the meme goes, good luck to Congress getting the CEO of Bitcoin to come testify. In my view, Satoshi's absence is a feature, not a bug. But it also means *we* have to stand up and speak for ourselves. Luckily, we have some people who are awesome at that.

20/ People like @Melt_Dem, the real champion of Libra week. Notice how she focused on (1) the *economic* value of an open protocol & (2) the inevitability of *some* country realizing that value, just maybe not America. That's how you make the non-ideological case to politicians.

21/ Finally, is Libra dead on arrival? Maybe, maybe not. Facebook must've expected a couple tough hearings. It's part of the process in DC: first you pay your pound of flesh, then you get to work whipping up support. But is it coming in 2020 as planned? I doubt that too. [end]

skew@skew_markets

Call sellers have been the most active on ETH options today by a wide margin - with a flurry of selling on the Aug19 340 C and the Sep19 680 C. Time for a surprise melt-up?


 

Bitcoin volatility is back to levels not seen since the end of the great 2017 bull market


 

With the recent pull back in price - options market sees BTC > $20k by year end below 10% probability again


 

Not unusual to see a softer Q3 for bitcoin price


 
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This update is provided for information purposes only and does not bind GSG Asset Management or any of its affiliates in any way. It is not, and is not intended to be, a/an: (1) “research report”, “investment research” or “independent research” as may be defined in applicable laws and regulations worldwide; (2) offer to sell, a solicitation of an offer to buy, or a recommendation for any digital asset by GSG Asset Management or any third party; or (3) official confirmation or official valuation of any transaction or asset mentioned herein. To the extent that any of the content published in this update may be deemed to be investment advice or recommendation in connection with a particular digital asset, such information is impersonal and not tailored to the investment needs of any specific person. Any pricing information is indicative only, and does not reflect a level where GSG Asset Management is prepared to execute a trade. You understand that an investment in any digital asset is subject to a number of risks, and that discussions of any digital assets in this update will not contain an exhaustive list or description of the relevant risk factors. GSG Asset Management is not an advisor, and nothing in this update should be construed as investment, tax, legal, accounting, regulatory or other advice, or as creating a fiduciary relationship. You alone are solely responsible for determining whether any investment, security or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult an attorney or tax professional regarding your specific legal or tax situation. All market prices, data, and other information (including that which may be derived from third party sources believed to be reliable) are not warranted as to completeness or accuracy, and are subject to change without notice. All content in the update is presented only as of the date published or indicated, and may be superseded by subsequent market events or for other reasons. GSG Asset Management disclaims any responsibility or liability to the fullest extent permitted by applicable law, whether in contract, tort (without limitation, negligence), equity, or otherwise, for any loss or damage arising from any reliance on or use of this update in any way.






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