This week, we cover these ideas:
Crypto prices show increasing correlation in market swings, which hides the large substantive differences between projects
The core narrative of Bitcoin, and its fundamental indicators
The core narrative of Ethereum and Web3, and its fundamental indicators
A sanity check on potential market caps relative to gold, equities, and other assets
This week, we look at:
The Bitcoin money supply being worth as much as the M1 of several countries
The Visa/Plaid deal DOJ anti-trust filing and the PayPal integration of Bitcoin
Understanding Central Bank Digital Currencies in the context of card networks, payment processors, and digital economies
Chinese CBDC and how it could relate to stopping the $34B Ant Financial IPO
How a CBDC ecosystem is like an operating system, rather than a payment rail
This week, we look at:
Chime, eToro, and Wise targeting the public markets through IPO and SPACs, and their operating performance
The overall growth in fintech mobile apps, their install rates and market penetration (from 2.5 to 3.5 per person), and whether that growth is sustainable
The implications for incumbents from this competition, and in particular the impact on money in motion vs. money at rest
Broader financial product penetration and an anchoring in how the technology industry was able to get more attention that we had to give
I look at how the news about the spread of the coronovirus are cracking the global economic machine. Some may argue that the number of people effected is still low -- but that misses the entire point. The shock of a global pandemic has revealed weakness in the financial machine, sending the stock markets falling 10% year-to-date. Gross domestic product growth is expected to slow by billions of dollars, governments and central banks are unable to implement policy to compensate with rates at historic lows and borrowing at historic highs, public market valuations will tumble arithmetically, and private Fintech companies will lose a path to exit. At least that's what the conspiracy theorists want you to think!
If you are in finance and only looking at banks, you are missing out on the real change agents. Here's some cross-industry action that we will unpack this week.
Amazon selected Goldman Sachs to be the lender of choice for small business loans. TikTok maker ByteDance is working with a Singaporean business family to get a financial license. And small business bank Starling is integrating Slack, energy switching service Bionic, and health insurance provider Equipsme into their marketplace. And we might as well talk about the Plaid Exchange launch, and end on the computational economy of Ethereum.
The macro and crypto economic thesis for 2021, building out the linkages between “Risk-On” assets, flows into and valuation of Bitcoin and Ethereum, and the interplay between value locked, the growth of decentralized application revenue, and the volumes around digital objects. We bring it all together.
This week, we look at cash -- blockchain cash. The war for money is just starting to ramp up, as Facebook Libra explains its new regulated plan, the Chinese national Blockchain Service network goes live, Ethereum stablecoins reach historic market caps in the billions, and the Financial Stability Board recommends to go heavy on global stablecoin arrangements. In 2008, Bitcoin threw a rock through the window of the financial skyscraper, and today we are starting to see the cracks. As the US government runs out of $350 billion in small business bail-out money and gets ready to print more, where do you stand?
This week, we look at:
The spectacular price increase in crypto assets, hitting new records for Bitcoin, as well as the comparable statistical situation around Covid cases
An explanation of the $1.5 trilion income effect in 2020, and how it has led to both capital acumulation and inequity (thanks NY Times!)
A discussion of all-time-highs and all-time-lows, why we need them, and their connections to the macro-economy, computer code, music, and the universe itself
One wonderful takeaway from Watts, which of course is not his, but beautifully plagiarized into the English language, is the duality of experience. The need for polar opposites, in a clock-like cycle. To have black, you must have white. To have the top of the wave, you need the bottom of the wave. To have a melody, you need equally the presence of the notes, and their absence in silence. To breathe in, you need to breath out. It is meaningless to have a data point without the context in which it exists.
I've seen a whole bunch of headlines this past week about how Facebook is launching its version of the "Supreme Court", as if that were an app feature. The oversight board is meant to police controversial content decisions, and have the power to overrule Zuck's judgment on political matters. Its charter is drafted as if Facebook's 3 billion users were citizens of an Internet nation. Add to this the insanity over WeWork's failing IPO plans, where the CEO has been personally named in the amended filing documents with clear checks on demonstrated abuses of power. We are drifting into a Twilight Zone episode where modern corporations act as if they were feudal states run by divine kings negotiating with their nobility over a Magna Carta. Which is actually sort of where we are.
