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Long Reads Sunday - Issue #17

This week saw the latest rumbles of the thunderous whisper of crypto institutionalization. Big enterp
Long Reads Sunday - Issue #17
By Nathaniel Whittemore • Issue #17 • View online
This week saw the latest rumbles of the thunderous whisper of crypto institutionalization. Big enterprises and endowments are coming to the industry not with a symbol crash like last year’s ICO boom, but with the slow, steady beat of a drum. 
Over the past 7 days, Goldman Sachs and Galaxy announced an investment in BitGo, and in what some called the biggest news the news of the year, Fidelity announced it would launch Fidelity Digital Assets in 2019, even referencing the cypherpunk roots of the movement in its Medium launch series.
And then, there was Tether. Many folks spent a good part of this week trying to understand what the loss of the peg last week meant, as well as to understand the implications of the some $600m of USDT that has been retired. 
If that wasn’t enough to keep us occupied, Monero became bulletproof; the trade war came home to American mining; a new indicator called Bitcoin Network Momentum was proposed; and some madmen proposed a decentralized autonomous game experimenting furiously with the unique properties of digital native assets and communities. Happy Long Reads. 
-NLW
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Tune In Mondays at 7pm EST for Long Reads Live
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1/ Long Reads Sunday 17. I don’t if it was excitement around the big institutional announcements, the battle for interpretation around stablecoin instability, or something else, but crypto brains popped off this week. Cancel your plans, it’s long reads time. 
2/ The week kicked off with what some called the biggest news of the year - the announcement of Fidelity Digital Assets by the 3rd largest asset manager in the world. @MessariCrypto breaks down the details. https://twitter.com/MessariCrypto/status/1051940748726288384
3/ It’s only one small detail, but it’s telling that on the day of the announcement, the new Fidelity group published a medium post surveying the pre-Bitcoin history of digital cash. Although we should expect it, contextual awareness of crypto history is novel for a big firm https://twitter.com/nic__carter/status/1051884180920041473
4/ Fidelity wasn’t the only big institutional news of the week. On Thursday, news broke that Goldman Sachs and @novogratz Galaxy had invested in competing crypto custodian @BitGo https://twitter.com/novogratz/status/1052906076142632962
5/ Following these two major custody announcements, @brucefenton dug in with this 10 minute video conversation about the topic, including how institutional custody and “not your keys, not your coins” co-exist. Key point: many holders do not *want* to control their keys. https://twitter.com/novogratz/status/1052906076142632962 
6/ For a little more in-depth analysis of the Wall St-Crypto relationship that goes beyond these banner headlines, there’s no one like @caitlinglong_ This thread focuses on, among other things, the emergent choice of self-custody or holding with a broker/dealer https://twitter.com/CaitlinLong_/status/1052178551930261504
7/ The other big conversation that kicked off the week was Tether. After a couple weeks of heightened FUD, USDT started losing its peg last weekend, leading to a whole bunch of chaotic price action and speculation. I tried to sum it up on Monday AM https://twitter.com/nlw/status/1051816709328437248
8/ A couple days later, the USDT price had started to stabilize, but the questions of what the movement means for crypto remained. @CarpeNoctom TL;DR’d that on the one hand, stablecoin comp is good for consumers, but on the other, USDT remains a single point of failure https://twitter.com/CarpeNoctom/status/1052674720502558721
9/ @zhusu and @hasufl pointed out that it appears that $600m worth of Tether has been retired in the last (at the time of their writing) 9 days, and that perhaps rather than a chaotic dismantling of crypto, this is a graceful unwinding of an asset that has served its purpose https://medium.com/@hasufly/tether-is-exiting-and-nobody-noticed-a7ce6dc30c56
10/ A few weeks ago, @Travis_Kling predicted “weaponized FUD” as those with interests in other competing stablecoins (or simply those who profit from volatility) could exploit USDT worries for their own gain. @CryptoMacro points out that that is exactly what happened https://twitter.com/Crypto_Macro/status/1053688089221054464
11/ For those who want a deeper dive conversation on Fidelity, Tether FUD & more, check out last week’s Long Reads Live, featuring @Obstropolos @crypto_bobby @amandapfrankel @lawmaster @fintechfrank https://youtu.be/pTJMULo7aJs?t=3119
12/ Another theme this past week was the global macro context of crypto, specifically China. @Melt_Dem highlights the simmering conversation about RMB as a global reserve currency & what a central bank crypto from China would mean. https://twitter.com/Melt_Dem/status/1052175920335851520
13/ What would (will?) happen when Facebook launches a cryptocurrency of its own? @real_vijay explores that notion in this thread. Honestly, the scale of FB makes this conversation best suited to sit next to the idea of a central bank issued crypto https://twitter.com/real_vijay/status/1052401634028871681
14/ The trade war has also made it to cryptoland. @APompliano pointed out that, due to two rounds of sanctions, crypto mining hardware is now costs 27.6% more in America than it did in the early part of the year, which could lead to American miner relocation & more https://offthechain.substack.com/p/crypto-is-caught-in-the-trade-war
15/ Speaking of the macro context, in this essay as part of @coindesk’s series on the 10th anniversary of the Satoshi white paper, @CharlieShrem reflects on the true disruption of making a non-state backed currency viable. https://www.coindesk.com/bitcoins-white-paper-gave-us-liberty-lets-not-give-it-back/
16/ One the absolutely most fascinating pieces of the week came from @hosseeb, who asked “Why isn’t Bitcoin banned everywhere?” Ultimately exploring whether Bitcoin is not, in fact, actually a threat to sovereigns. The definition of a Sunday Long Read. https://hackernoon.com/why-isnt-bitcoin-banned-everywhere-32a2caec90
17/ Like I mentioned above, this week was full of <fire> essays and threads. @pierre_rochard articulates the concept of and 6 groups who comprise the “buyers of last resort” who break the negative feedback loop at the bottom of a market. https://medium.com/@pierre_rochard/bitcoins-buyers-of-last-resort-920d0470a994
18/ Speaking of Bitcoin fundamentals @PositiveCrypto introduced the concept of “Bitcoin Network Momentum” which tracks the relationship between BTC price and Tx volume. Specifically, he argues that BTC daily tx volume is a leading indicator to BTC price https://blog.goodaudience.com/bitcoin-network-momentum-a42346b2f0ce
19/ And speaking of BTC price, @MustStopMurad shared why he believes that there is at least one more big flush to come in the market that will leave the price of BTC between $2800 on the low end and $4500 on the high. https://twitter.com/muststopmurad/status/1052611501813510145
20/ Of course, there is more to the crypto markets than price. @mattgcondon writes on @tokendaily about the implications of one of the most important concepts in the space: self-sovereign identity and true digital asset ownership https://www.tokendaily.co/blog/what-does-having-true-digital-ownership-mean
21/ From the exciting technical development files, this week Monero introduced Bulletproofs. @LucasNuzzi summed up why they’re so important, noting they can increase the privacy of tx while decreasing their size. https://twitter.com/LucasNuzzi/status/1053296868422238209
22/ There were a number of interesting threads around Ethereum and POS as well. @econoar wrote this thread explaining why he thinks we need more discussion around the economics of Ethereum’s Casper PoS https://twitter.com/econoar/status/1053311930885197825
23/ Speaking of economics, @cburniske highlighted research from @sebastianhrw on value accrual and the Fat Protocols thesis. The thread and related post have a ton of insight about the landscape, even if it remains hard to draw strong conclusions https://twitter.com/cburniske/status/1052201578256580608
24/ Fat Protocols was, for a time, a driving force behind many VC investment theses. To see how one firm’s thesis has evolved, check out @fabric_vc’s State of the Token Market report https://twitter.com/MerschMax_/status/1052207972842135552
25/ Checking in on another formerly hot idea, @ragnarly writes some observations about the state of security token offerings from companies who raised via STO over the past few years https://twitter.com/ragnarly/status/1053437519243530240
26/ At least all the fund managers who drove STOs and ICOs and other 3-letter acronyms are doing fine right? Maybe not. In this thread, Pomp argues that many funds are likely to be victims of their own success and unable to reach previous returns, shut down https://twitter.com/apompliano/status/1053286967402811394
27/ If those sober assessments hit you just right, and you want an even bigger break from the hype train, you can’t do better than Tim May’s 30-year perspective on crypto, quotes and summarized here by @patrissimo https://twitter.com/patrissimo/status/1053772353576947712
28/ If these assessments seem sort of bleak, I would just remind that destroying is a necessary part of creative destruction. The build is still strong, exemplified by: +@dydxprotocol new $10m raise https://twitter.com/dydxprotocol/status/1053326533643821056  +#DeFi member expansion https://twitter.com/DharmaProtocol/status/1051902894570696704 + “App mining” https://twitter.com/muneeb/status/1052994137425944577
29/ And then, of course, there’s the real exploratory ideas. Mad scientists @lwsnbaker @pjkershawnz are back with an idea for a decentralized autonomous gaming cooperative that is a full on experiment in new types of crypto incentives https://medium.com/@PJKershaw/babafa-88%E5%8F%91-565ebbb04920
30/ The point is not just that things are interesting, but that they’re evolving in ways too numerous to possibly track - even with a 30-deep thread. And with that, we close for the week. As always, let me know what was great and what I missed. Thanks for reading.  

 

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Nathaniel Whittemore

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