March has been a crazy month for almost every market in the world, crypto has been no different. Whereas traditional exchanges have halted trading during normal hours and Future’s hitting 5% limits on both sides, crypto trades 24/7 globally with no down time. Bitcoin’s store of value and digital gold proposition is under serious scrutiny as the price dropped more than 50% in just a couple weeks. COVID-19 has already been felt in economies all over the world while investors stockpile cash to prepare for worsening circumstances. As of mid-March most businesses have employees working from home with most states and cities forcing the closures of bars/restaurants excluding take-out and delivery.
Bitcoin’s narrative is shifting from a macro hedge of global uncertainty to a non-seizable asset. That is only if you hold your private keys using non-custodial wallet solutions. It isn’t very comforting to hear the narratives shift but during times like these I always refer back to the data. Over the past 5 years Bitcoin and the S&P500 have shown very little correlation. There have been spans of multiple days with correlation above .5 and below -.5. Where if you were to look at the correlation between the Dow Jones and the S&P500 that chart would tell a completely different story, over 95% correlation above 0.
Ethereum’s DeFi has gone through a serious stress test with the recent price action. Collateralization ratios at MakerDAO fell dramatically causing huge liquidations totaling upwards of $10 million. Someone was even able to sneak away with $4M in Ether without paying a gas fee and bidding 0 Dai through a liquidation contract. Now MakerDAO has a serious Dai surplus on their hands and will need to mint MKR to bring the system back to normal. MKR voters also elected to lower the Dai stability rate to 4% with a 0% DSR spread.
New Products
Saint Fame has tokenized a long sleeve shirt using Ethereum. The token is tradable on uniswap.exchange, a permissionless exchange protocol on Ethereum, where the token can be traded for any number of ERC-20 tokens and Ether. The shirt can be redeemed for shipment anywhere in the world for free as long as you have the $FAME token. $FAME has traded for as high as $500!
tBTC, a trustless representation of Bitcoin on Ethereum. Creating a truly decentralized and noncustodial representation of Bitcoin on Ethereum is no easy task. A few groups have created BTC pegged ERC-20’s like WBTC but all fall short of a something really special. tBTC is slated to launch sometime this year.
Baseline Protocol is a joint project between Microsoft, EY, and Consensys to bring privacy to the Ethereum blockchain. Baseline is a package of blockchain tools that will allow businesses of all shapes and sizes to do business in a safe and private environment.
Industry Opinion’s
“Bitcoin is not a hedge against a recession… Instead, Bitcoin is a hedge against fiat currency.” - Ryan Watkins
“Today is 1997 in DeFi, everything is shitty and slow and ugly and unusable. But we're still through the inflection point, all those objections will fall away soon enough, some already are. We will look back and say how was this not obvious. Well, yesterday it became obvious.” - Kain.eth
Saint Fame:
https://www.saintfame.com/
tBTC:
https://docs.keep.network/tbtc/index.html
Baseline Protocol:
https://www.ey.com/en_gl/news/2020/03/ey-launches-baseline-protocol-an-open-source-initiative-for-the-public-etherum-blockchain
Messari Bitcoin Hedge:
https://messari.io/article/what-kind-of-safe-haven-asset-is-bitcoin
