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Bitcoin possibly crossing 20k in 2020

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Satoshi&Co Daily Crypto Newsletter

January 10 · Issue #257 · View online
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Check out past issues of the newsletter along with more interesting crypto content as well as short (but great) conversations with leading crypto industry participants at our newly-launched website www.satoshiand.co

“I have often wondered how it is that every man loves himself more than all the rest of men, but yet sets less value on his own opinions of himself than on the opinions of others.” - Marcus Aurelius
John Authers, formerly of the FT and currently with Bloomberg talks about the ideas of the influential economist Hyman Minsky, as they relate to economic cycles. The essential argument here is that while recessions until 1985 could be predicted by looking at unemployment rates and hourly wages, recessions after 1985, such as the Asian crisis, the post-dotcom hangover, or the real estate bubble leading up to 2007 are all explained more easily by looking at the capital markets and banking flows. All recessions since 1985 have followed a cycle of increasing liquidity, asset price run-ups and the inevitable implosion. Authers believes that PBOC, the People’s Bank of China, after a bout of liquidity tightening to clean up errant local governments will let the liquidity spigots flow again this year. This could therefore herald the beginning of another liquidity fueled super cycle that will run a few years, perhaps into the early years of the next decade, if we are lucky.
Source: John Authers, Bloomberg Opinion
Source: John Authers, Bloomberg Opinion
What does this mean? For one, there will be more liquidity out of China. Chinese enterprises will invest at home and abroad, across sectors, including in areas such as cryptocurrencies. Whether it will directly lead to a spike in btc prices remains to be seen, but it would be safe to assume that things will mostly be ‘risk-on’ from a macro perspective, assuming the Iran kerfuffle doesn’t blow up and also from a micro-perspective, Governments should not go hammer-and-tongs at the regulatory grey area that most of crypto operates in currently. Assuming these conditions hold, it is fair to say that BTC might actually cross its late 2017 peak of the early 20ks, and even skirt with 50k by the end of the year. The dampener here of course is that most of the speculative activity in BTC is shifting to the derivatives market, so to get to 50k, there has to be a ton of new BTC adherents, both institutional as well as retail. 
On to our Friday metrics…
Ethereum Locked in DeFi
MakerDAO still accounts for a lion’s share of ETH locked up in collateral, with more than 1.79 million of ETH locked up. Augur declined w/w by 2%. Maker showed a strong w/w growth of 7%.
Lightning Network Growth:
Capacity per channel was flat w/w. The total number of nodes increased by 1%, and the total number of channels was flat w/w.
(For reference, some previous articles on LN, here).
DEX Tracker:
Trading volumes on DEXs have increased on a w/w basis, with the average daily trading volume averaging 35k ETH for this week. IDEX remains the biggest DEX in terms of trading volume and DAI is the highest traded cryptocurrency on DEXs.
Source: dex.watch
Source: dex.watch
(For reference, some previous articles on DEXs, here and here).
Crypto Loans Tracker:
Compound Loans:
Total loans issued on Compound for the last week stands at approx. $3.5 million for the week, a steep decrease from $5.2 million in the previous week. WETH is the most borrowed cryptocurrency on Compound followed by DAI and BAT.
dYdX Loans:
Total loans issued on dYdX for the last week stands at approx. $9.4M for the week, a 70% increase from $14M last week. DAI is the most borrowed cryptocurrency on Compound followed by WETH and USDC.
MakerDAO Loans:
DAI loans issued on MakerDAO for this week stand at ~$14.1M, a 50% decrease from $4.2M last week. The total outstanding DAI debt currently stands at ~$86 million.
(For reference, some previous articles on MakerDao, here and here).
You can also check out last week’s Metrics Watch here.
Meanwhile in Crypto Wonderland....
“Nervos Network Sets Up A $30 Million Grant Fund”
Nervos Network has set up a $30 million public grant fund to sponsor external developers building on its blockchain infrastructure. Announced Thursday, the fund will pay developers in the combination of cash and CKByte tokens, and all submitted projects will be made public to source feedback from the broader community. Individuals, teams and companies can begin submitting applications for improving the firm’s layer one blockchain Common Knowledge Base (CKB).
“Plasma Group Shuts Down”
The non-profit research organization Plasma Group announced in a Jan. 9 blog post that it would cease studying Ethereum scalability. Identifying funding of public goods as the next key challenge, it pledged to donate its remaining funds to Gitcoin. Plasma Group was founded in Jan. 2019 with the goal of pushing research toward Ethereum scalability solutions based on Plasma technology. It received funding from a variety of organizations including the Ethereum Foundation, ConsenSys, OmiseGo, Matic Network and Gitcoin. The non-profit used this money to conduct research into solving practical obstacles for layer-two scaling solutions.
“Nasdaq Lists AI-powered Crypto Index”
The world’s second-largest stock exchange, Nasdaq, has listed the AI-powered CIX100 index created by crypto data provider Cryptoindex. The news was revealed in a press release shared with Cointelegraph on Oct. 15. CIX100 is a crypto market benchmark that analyzes uses a neural network algorithm to analyze data for the top 100 cryptocurrencies, taking into account over 200 factors. Reportedly designed to exclude coins with fake volumes and rankings, the “human-free” tool targets both industry newcomers and professional investors. According to the press release, the data is derived from the nine largest cryptocurrency exchanges globally and factors in the results of millions of trades alongside news releases and social media data.
“eToro Launches A Crypto Portfolio Based On Social Sentiment”
eToro, the popular cryptocurrency trading website, is partnering with The TIE, a cryptocurrency information services firm, to implement a Twitter sentiments trading portfolio, which lists Dash as its largest position. The announcement discusses how the TIE-LongOnly CopyPortfolio leverages social Twitter sentiment, both positive and negative, as a significant indicator to compensate for the fact that most cryptocurrency fundamentals are still maturing and thus do not have revenue, dividends or debt.
Crypto Twitter Pick
What We Are Reading / Listening To
Overnight Performance of Top 10 Currencies
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