admin Posted March 22, 2019 Report Share Posted March 22, 2019 style="margin: 0;color: black;"> View this email in a browser BitMEX Crypto Trader Digest Mar 22, 2019 From the desk of Arthur Hayes Co-founder & CEO, BitMEX From The BitMEX Research Desk Atomic Swaps and Distributed Exchanges: The Inadvertent Call Option Abstract: In this piece, we look at a common problem facing both distributed exchanges and cross-chain atomic swaps: what we call the “inadvertent call option.” Non-custodial fully-distributed trading systems often inadvertently create an American-style call option, rather than the more simple desired operation of exchanging one asset for another. We review how this same issue applies to some specific distributed trading platforms like Bisq and particular cross-chain atomic swaps constructions. We then look at how IDEX solves this problem, but then requires users to trust the platform operator, to some extent, by removing some benefits of distributed exchanges. We conclude that despite the added complexity, in some circumstances it may be better to embrace the call option feature as a viable product, rather than ignoring or fighting it. Tracking US$24 billion Of Tokens ICO Makers Allocated To Themselves Abstract: This is our third major piece on ICOs. In our first piece in September 2017 we focused on the interrelationships between ICO team members. In our second piece, in October 2018, we tracked the Ethereum balances in the ICO treasury accounts. In collaboration with TokenAnalyst, this piece focuses on the treasury balances of the ICO tokens themselves, on the Ethereum network. This report is based on tokens where the team controlled holding’s were worth an astonishing US$24.2 billion on issuance (in reality liquidity was too low for this value to be realized). Today this figure has fallen to around US$5 billion, with the difference primarily being caused by a fall in the market value of the tokens, alongside US$1.5 billion of transfers away from team address clusters (possibly disposals). Anatomy Of The Next Global Financial Crisis Abstract: We examine a question which many in the crypto-currency community frequently ask: “When is the next global financial crisis going to happen?” We attempt to answer this by first explaining how that since 2008, the epicentre of financial risk seems to have shifted from the banks to the asset management industry. We therefore argue that a repeat of 2008, where retail banking deposits and payment systems are under threat, is unlikely. In particular, we assert that corporate debt investment funds and unconventional debt investment vehicles, encouraged by the deceptively low volatility and low return environment, could be the area where the fragility in the financial system is most significant. BitMEX Research Launches Ethereum Node Metrics Website – Nodestats.org Abstract: BitMEX Research is delighted to announce the launch of a new website to monitor the Ethereum network, Nodestats.org. The website connects to five different Ethereum nodes and collects data every five seconds. The main focus of the website is providing metrics related to the computational resources each Ethereum node requires. While analysing some of the metrics, we may have identified issues with respect to the integrity of the data reported by the nodes, which may be of concern to some Ethereum users. Nodestats.org was produced in collaboration with TokenAnalyst, who are BitMEX Research’s Ethereum network data and analysis partner. The Road to $10K Did you take your losses like a champ, or bottom tick the market with your market close order? The first quarter of 2019 witnessed depressed volumes, volatility, and price. The local lows of late 2018 have not been retested; however the market chop makes me feel like I’m at the Saudi embassy. The repair of crypto investors balance sheets is not done yet. Losses must be digested, and the unlucky masses must wage cuck a bit longer to get back in the game. All is not lost; nothing goes up or down in a straight line. 2019 will be boring, but green shoots will appear towards year end. The mighty central bank printing presses paused for a while, but economic sophists could not resist the siren call of free money. They are busy inventing the academic crutches (here’s looking at your MMT), to justify the next global money printing orgy. Do not despair. CRipple is still worth more than zero. And Justin Sun’s new age religion TRON, paired with the Pope CZ, tells us there are those still willing to eat shitcoins with a smile. Electric Cars and Sand Suckers While Bitcoin is an innovative technology, the technical merits of the protocol do not exist in a vacuum. The world’s monetary situation is very important. It determines how willing investors are able to suspend disbelief and believe crypto fan boys and girls. Throughout 2018 the omnipotent Fed began reducing the size of its balance sheet and raising short term interest rates. The world still beats to the tune of the USD. Financial institutions and governments require cheap dollars, and the Fed happily obliged since the 2008 GFC. Tech VC funds won’t admit it, but cheap dollars are key to their business. How else can you convince LPs to continually fund negative gross margin businesses, until they “scale” and achieve profitability? Everyone wants to become the next Facebook. When investing in government bonds yields zero or negative, desperate investors will do whatever it takes to obtain yield. Tesla is a perfect example. Lord Elon is a master at creating open-faced pits, and torching his investors’ money in them. Tesla does not belong on the Nasdaq, but rather as a speciality flavour at the New York Bagel Co. The market disagrees with my Tesla melancholy, investors continue to line up to eat Elon’s sexy Tesla hot shit cakes. Can you blame them, after you are fully invested in the S&P500 where else will you be able to show alpha to your investors? Another example of this free money folly is the Vision Fund. Top tick the “Value” your investments while still on the Softbank’s books. Find a group of suckers from the sand (That’s where the former Deutsche credit boys come in, “Be Bold”) Sell your mark-to-fantasy private Unicorns into the vehicle populated by your sand schmucks Take your cash and payout to your Japanese investors as dividends. These entities thrived while the Fed held rates and 0% and reinvested their treasury and MBS roll off. TSLA hit its all-time high in mid-2017. Since then Elon has struggled to generate enough buzz to keep his stock elevated. I’m sure he isn’t thrilled that bondholders are due close to $1 billion in cash because the stock price failed to scale $360. The Vision Fund’s sand suckers also got cold feet. They baulked when the fund proposed to invest an additional $20 billion into the We-Broke company. The check size got sliced down to $2 billion. When dollars get scarce suddenly investors discover value investing all over again. The height of crypto silliness in December 2017 occurred just before the Fed embarked on its quantitative tightening. The 2018 pain train spared no crypto asset or shitcoin. But things are a changin’. The Fed couldn’t stomach a 20% correction in the SPX. In the recent Fed minutes, the dot plot now shows now rate increases for the rest of 2019. The Fed will start reinvesting its runoff in the third quarter. We are only a hop, skip, and a jump away from an expanding Fed balance sheet. Beijing knows China must rebalance its economy away from credit-fueled fixed asset investment. However, Xi must not have the political cojones to push this sort of painful change through. Therefore, the PBOC said “fuck it” to any attempt to reign in credit growth. The two most important central banks are creepin’ back into a super easy credit regime. Easy money will manifest itself in other higher profile and more liquid dogshit before crypto. 2019 will feature an IPO beauty pageant of some of the best cash destroying businesses. Uber, Lyft, AirBnB, and possibly the We company all are rumoured to IPO this year. Lyft is apparently oversubscribed for its upcoming IPO. Oh baby, this is going to be a fun year. If these beauties can price at the top of the range, and trade above the IPO price, we know that party time is back. Crypto will be the last asset class to feel the love. Too many people lost too much money, in too short a time period, to immediately Fomo back into the markets. Get Excited Green shoots will begin to appear in early Q4. Free money and collective amnesia are powerful drugs. Also after two years of wage cucking, punters should have a few sheckles to rub together. The 2019 chop will be intense, but the markets will claw back to $10,000. That is a very significant psychological barrier. It’s a nice round sexy number. $20,000 is the ultimate recovery. However, it took 11 months from $1,000 to $10,000, but less than one month from $10,000 to $20,000 back to $10,000. Melissa Lee peep this. $10,000 is my number, and I’m stickin’ to it. Risk Disclaimer BitMEX is not a licensed financial advisor. The information presented in this newsletter is an opinion, and is not purported to be fact. Bitcoin is a volatile instrument and can move quickly in any direction. BitMEX is not responsible for any trading loss incurred by following this advice. Contact Us | Subscribe | Unsubscribe vamp111 1 Quote Link to comment Share on other sites More sharing options...
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.