Messari's Weekend Reads 😎 - Unqualified Opinions

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Messari’s Weekend Reads

It’s Friday, which means we’re keeping things light and teeing up our weekend reads and listens.

This week, Katherine sits down with Messari’s own Dan McArdle to talk about the recent downturn in crypto markets. Dan shared his thoughts on what is now the fourth "crypto recession" for him, and where he thinks things might head in the short to medium term. (11 min for your commute home)

Listen and subscribe to all of our podcasts— on Apple Podcasts here, Spotify here, and Google play here.

📚 Messari’s weekend reads:

  • Things Fall Apart - Markets - Ben Hunt

  • Jeff Bezos, Jack Ma, and The Quest to Kill eBay - Steve Yegge

  • On the User Base of Decentralized Exchanges - Danning Sui

  • Trust Minimized Governance Tokens - Aragon

  • Debt: The First 5,000 Years - David Graeber

  • An Honest Explanation of Price, Hashrate & Bitcoin Mining Network Dynamics - Christopher Bendiksen

  • Behind MimbleWimble - The head scratching tech that has the crypto industry abuzz - Jordan Clifford

  • Framework For Understanding Blockchain's Next Chapter: Hybrid Financial Instruments - Caitlin Long

Have a good weekend, y’all.

- The Messari Team

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News & Analyses

Messari Compression Algorithm

Content and thoughts from around the web as summarized by the Messari team.

🎢 [Analysis] Corrections and recoveries - Boris Hristov

While there is a good chance Bitcoin recovers from its current low it will be harder than in previous cycles according to Boris Hristov. The bear market between 2013 and 2015 saw markets fall 84% and a new high reached only once trading volumes rebounded. In this market, it may take a 4x growth in volumes to reach previous highs, compared to around 1.4x for the smaller previous drops. It could require $50 billion of net cash inflows to reach $20,000 once again, something that would almost certainly require meaningful institutional capital participation. Worth noting Bitcoin is the only cryptoasset that has historically recovered from multiple winters. (Messari | Source)

🔻[Analysis] Why 90% of Crypto Funds will fail - David Nage

Even traditional hedge funds have short life spans and are prone to failure. According to Nage, crypto funds are no different. The majority of funds in the space are small, with $50 million or less in assets, meaning losses impact the fees of those funds much more than larger alternatives. Managing risk can be difficult as professional tools are only starting to reach the space, and many managers may have not yet adapted to markets that do not behave like traditional ones. Combine all that with the more aggressive capital allocation strategies of crypto funds, and a relatively small number of liquid investments, and you’ve got serious portfolio concentration risks as well. While 90% of funds may fail, good managers will survive, and Nage recommends managers focus on transparency and communication with LPs to help create a lasting fund. (Messari | Source)

Quick Bits (Don't read that, I read it for you)

Choke Points (Exchange News)

  • 📈 Huobi Group, a Singapore-based crypto exchange, launched the Huobi Derivative Market exchange Tuesday. Named the Huobi DM, the new offering allows users will now be able to buy or sell cryptocurrencies at fixed prices on a set date. (Messari | Source)

  • Fidelity Investments is looking to expand its institutional crypto asset platform to include trading services for the top five to seven cryptocurrencies by market capitalization.

Startup Signals (ICOs, Cryptos, and Startups)

  • 💰 Flipside Crypto received $4.5 million from investors including Coinbase Ventures, DCG, True Ventures, and Castle Island Ventures. The company tracks network and other metrics to determine how various crypto assets are evolving and being used. (Messari | Source)

  • 👛 The Gnosis Safe is now live on the Ethereum mainnet. The Gnosis Safe is a multi-signature wallet that allows users to control who has access and from where, removing the single point of failure that results from a traditional wallet that is an externally owned account. (Messari | Source)

The Powers That Be (Legal/Reg/Policy)

  • ❌ A federal judge has denied a preliminary injunction filed by the U.S. Securities and Exchange Commission (SEC) which alleged violation of securities law by crypto startup Blockvest. The judge ruled that the SEC had not proven that Blockvest violated federal securities laws. (Messari | Source)

  • 🤬 Pro boxer Floyd Mayweather and music producer DJ Khaled have agreed to pay fines as part of a settlement with the U.S. Securities and Exchange Commission (SEC). The settlement stems from the promotion of the Centra ICO in 2017. (Messari | Source)

  • 🇲🇾 Malaysian finance minister Lim Guan Eng has revealed that a new set of comprehensive regulations guiding the activities of crypto exchanges and ICOs will come into effect in Q1 2019. (Messari | Source)

Did I miss something?

Send me the link, your twitter handle and your best imitation compression algorithm write up. If I like it, I’ll include your bit next issue (with attribution).


Podcast Recap

🎧 ICYMI on the Messari podcast, Katherine sits down with MyCrypto’s Taylor Monahan to talk product design. Taylor highlights the vast difference between intentions and outcome in product design vs. user experience and shares some of her experiences in building tools for crypto users. (19 min for your lunch break)

BONUS: Qiao swung by Jeffrey Tong’s “Smartest Contract” podcast to chat all things crypto, and provide some updates on what we’re working on at Messari.

Listen and subscribe to all of our podcasts— on Apple Podcasts here, Spotify here, and Google play here.

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