Coinscrum_institutional :: Feb 11th, 2020 :: London

Invitation Only Institutional Focus event - Sponsored by Trustology, CryptoCompare and OKEx

Hi Everyone,

Paul, founder of Coinscrum, and myself would like to invite you to Coinscrum_institutional :: Feb 11th, 2020 :: London

The event is a curated seminar connecting the leading digital assets market participants. Our aim is to foster discussions and to strengthen the European ecosystem.

If you want to attend. Please apply below.

If you want to sponsor. Email me back or apply here

Best regards,

Etienne Twitter, etienne@blockwyre.com)


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InTrade, the first prediction market with 50m+ users and $200m+ wagers

Tardis (historical crypto data), Options, BTC Minings, Deribit, Binance, Bitcoin Suisse IPO, FunFair, Ubisoft, EURO AML Law and much more!

Hi Everyone,

Thank you for supporting the European crypto ecosystem 🇪🇺.

This week I look into InTrade (prediction market), Tardis (historical crypto data) and the usual curated EU news.

Don’t hesitate to contact us regarding new products launch or partnership.

Etienne Twitter, etienne@blockwyre.com)

ps: don’t hesitate to send me an email if you enjoy this newsletter, Always great to have feedback :)


🕵️ InTrade, the first prediction market with 50m users and $200m+ wagers.

  • While reading the book by Blockhead called, Seat Open - A memoir of Poker, degeneracy, and Friendship, It reminded me of InTrade

    Background

  • InTrade was founded in 1999 and later acquired in 2003 by Tradesports who operated the websites Intrade.com, Tradesports.com, WallStreetSports.com, Prediction-X.com

  • Intrade's system was one of the first prediction market trading exchange. Members could take positions (trade 'contracts') on whether future events will or will not occur. This could include a political election, climate change, current events or entertainment etc…

  • Because events took place over a well-defined time span and have a well defined outcome, traders can trade both before and during an event. The political elections were really the main blockbusters

Regulatory uncertainties and product market fit

  • InTrade was operated from the Republic of Ireland and in 2005 applied to the U.S. CFTC for permission to open a regulated futures exchange in the United States. But the CFTC did not give much insight and in 2008 the company decided to send a letter:

"While Intrade serves a global community and has registered members from 162 countries, our 82,000 plus membership are predominantly resident in the United States ... it is perversely unclear as to whether Intrade, and indeed myself, are considered persona gratis by the United States”

  • The 2012 US presidential election was a bellwether media event for Intrade with web traffic of 50m+ monthly page views in October and November and 100+ of media mentions related to the accuracy of the Intrade markets. During the 2012 election, related contracts represented over $200 million worth of wagers

  • On 26 November 2012, the CFTC filed a civil suit in federal district court in Washington, D.C. for unregulated trading in traditional commodities seeking an injunction against Intrade allowing U.S. citizens to trade on their site

  • The US CFTC claimed that Intrade's operation interfered with the CFTC's role "to police market activity and protect market integrity". The CFTC shared that it was illegal to sell futures contracts in the US without being a US registered exchange or with a special exemption

  • On 23 December 2012, Intrade closed all US-based member accounts. Trading volumes suffered a dramatic decrease without participation from US customers. On 10 March 2013, Intrade suspended all trading

  • In addition to regulatory challenges, the company faced other problems including the death of its CEO, John Delaney, and potential market manipulations due to outsize bets on presidential-election contracts that may have distorted the market in 2012

  • Unlike other platforms, the monetary incentives brought people into a market ensuring liquidity and making the market efficient

What’s next?

  • The ‘new InTrade’ is called PredicIT and was started in 2014. Unlike InTrade, it is setup as a nonprofit educational project by the Victoria University of Wellington, New Zealand. The company also secured a no-action letter from the CFTC

  • Though this has come with some restrictions including max 5k traders per questions and a cap of $850 per user per question. These limitations seems to affect the market efficiency of the system and create some 'arbs’. Nevertheless, PredicIT is often described as the most robust prediction markets

  • Also started in 2014, August is a decentralized oracle and peer to peer protocol for prediction markets. Its protocol based on Ethereum is free, public, open source software. In many ways, Augur seems the logical next step for prediction markets leveraging an open platform and features such as arbitration market and automatic betting. The latter is less discussed (at least on my knowledge) but seems important. Bots could automatically give predictions based on models increasing the liquidity and volume and thus the veracity of predictions. More on this on a great post by ConsenSys. Some great companies like Guesser are building on top of Augur.

  • For many InTrade users, the 2012 election was a challenging experience as many US users were not able to retrieve their funds due to the CFTC enforcement. Not your key not your coin! I let you read Seat Open if you want to learn how the author was able to retrieve his winning bet ;)

  • / la fin

🐦 Tweets of the week

  • This week many exchanges have launched option such as FTX, OkEX and CME. The latter is the one to watch as it should attract regulated institutions

  • Meanwhile, the mining difficulty fell from 13.7 trillion in November to 13 trillion in December – the first downward adjustment in 12 months.

  • Hence, we may have hit the bottom.

  • A monthly mining difficulty decrease is essentially the result of a slide in the hash rate caused by small and marginal miners shutting down operations during sustained market sell-offs and dwindling mining profitability [Source]

🔮 Product of the week: Tardis (Historical tick-level data for cryptocurrency markets)

  • Problem: Where can I find tick-level market data replay and real-time streaming support for crypto exchanges delivered in API or CSV exports?

  • Solution: Tardis

  • For who?: Researchers, investors, quant funds, OTC desks etc…

  • Why?: Ask anyone who had done any sort of crypto trading and they will tell you that connecting to any crypto exchanges is a nightmare. The docs are wrong, outdated etc… On the other hand, crypto is a data-driven market and you need to have access to full order book for backtest and research. Even though, I would recommend anyone to run their own tick level data, it could be helpful to use Tardis as a benchmark

  • Yeah but there are a bunch of others like Kaiko, Nomics etc..? Tardis has one of the most flexible pricing from $749 /month unlimited to $69/month. They also have a strong breadth of exchanges 20+, and are developers focus. Some of the top quant traders I know are using them. So yeah, at the end data is data. But most providers like Kaiko and Nomics are moving upstream and focus on enterprises

  • Don’t hesitate if you have feedback!

🤹 Startups News

  • Deribit is moving to a "warmer" area, citing regulatory concerns. The Amsterdam-based crypto derivatives exchange will operate out of Panama as DRB Panama, a subsidiary of the current Deribit platform beginning Feb. 10th [Source]

  • Binance Europe’s head of operations has left the exchange and is joining Hong Kong-headquartered cryptocurrency exchange Crypto.com as a general manager for Europe [Source]

  • Bitcoin Suisse, a crypto-broker, plans expansion by going public. Before going public it must obtain a Swiss banking license (they expect to receive it later this year.) Also, they must increase the company’s capital, the company seeks to raise ~$40m USD from its investors. Swiss regulators demand a company to have a large amount of capital as a backup for its business [Source]

  • A Russian state-owned atomic energy corporation opened a mining farm 200 miles NW of Moscow, near the Kalinin nuclear plant. The company spent more than $4.8m building the 30-megawatt facility. It won’t be mining itself, but only selling the electricity to miners. The head of ‘Data centers thesis is about "Both data centers and miners are large energy consumers with a stable demand. For us, it's a way to diversify." [Source]

🎁 Startups Product & Partnership

  • FunFair ramps up commercial ambitions for 2020: Started a B2C in-house casino, CasinoFair. Its first, FunFair Group-run white label casino was soon joined by externally operated Crypto Casino and just before the holidays, KingTiger. It’s likely that more ‘crypto casino operators’ launch applications based on FunFair technology. Since its launched, the platform had about 19m of FUN token profit equivalent to about $54k at today price [source]

  • Malta-based cryptocurrency exchange Binance has added a flurry of new fiat funding options since the first of the year including faster payments for U.K. pounds-bearing customers [Source]

🏭Corporates

  • Starting in May 2020, the next season of the Ubisoft Entrepreneurs Lab will last until November 2020 and will focus on two main fields: Blockchain and Social Entertainment. This program is free for the selected ventures, and it will be held both in Paris and Singapore [More info]

🏦Regulations / Universities

  • European crypto firms brace for higher costs as new Euro AML law is officially enforced. The new rules require Euro crypto exchanges and custodial service providers to register with their local regulator and demonstrate compliance with thorough KYC and AML procedures. These regulations are likely to increase costs to exchanges, possibly forcing some to shut down or move to other jurisdictions [Source]

  • 1/ U.S.-based exchanges that also operate in Europe, have already done their homework

  • 2/ Some Euro-centric businesses still show cause for concern. As some businesses may not be prepared to ensure they are compliant in every single country where they may operate across the EU. Exchange businesses operating in multiple EU member states need to ensure they are covered by applying for the appropriate licences in every jurisdiction

  • A recent news related to this regulation is the cryptocurrency derivatives exchange platform Deribit.com no longer operating by the Dutch company Deribit B.V., but by DRB Panama Inc., a 100% subsidiary of the Dutch entity [Source]

  • SEC Produces Evidence That Telegram Kept Selling Tokens After $1.7B ICO. These documents undermine Telegram’s claimed affirmative defense that the Offering was exempt under Regulation D. [Source]

According to the invoices presented by the SEC, Da Vinci Capital sold over $2 million worth of grams to a fund managed by its portfolio company, ITI Funds, on June 20, 2018. Gem Limited sold 7.8 million euros ($8.6 million) worth of grams to a firm named Goliat Solutions and $4.5 million to Space Investments Limited on July 2, 2018.

  • The UK’s Financial Conduct Authority (FCA) is poised to take a larger role in crypto matters, having assumed new supervisory roles with regards to crypto assets. The FCA will require all crypto asset businesses to adhere to several new preventative measures and policies aimed at curbing abuse [Source]

  • Qatar is cracking down on "alternative value transfer channels" (Crypto.) Bitcoin nodes are still operational there despite Middle East tensions [Source]

💰Fundings & M&A

  • Millennials-focused trading app provider BUX acquired bankrupt crypto exchange Blockport for undisclosed sum. Blockport will be rebranded to BUX Crypto and launch operations in Q1 of this year, according to an announcement shared with The Block on Thursday. One operational, BUX users will be able to trade cryptocurrencies, including bitcoin (BTC), ether (ETH) and XRP [Link]

  • A New York investment firm, Argo Partners, wants to buy claims from former QuadrigaCX users – provided there's enough interest from creditors entitled to assets held by the infamous exchange [Source]


About the author: Etienne used to head principal strategic investment (Companies, Funds and token investment) at Elwood, One of the largest European digital assets investment firm spun off of Brevan Howard, billion-dollar Macro Hedge fund. Previously, he was part of the founding team at the largest Capital Markets Venture Fund in London, Illuminate Financial.

How should Central Bank launch their digital currencies?

ECB Research paper, Deribit Insights, Binance launching 180+ fiat pairs,

Hi Everyone,

Thank you for supporting the European crypto ecosystem 🇪🇺. Happy New Year!

Some housekeepings:

  • We want to publish more product review this year. Please contact us!

  • We are also interested in data and new companies. Please contact us!

  • Finally, we are launching a new subscription format, you can support the awesome Common Markets for $5 / month. It’s basically a great way to buy an expensive coffee to the team. Subscribe below!

    Subscribe now

Don’t hesitate to contact us regarding sponsorship or partnership.

Etienne Twitter, etienne@blockwyre.com)

ps: don’t hesitate to send me an email if you enjoy this newsletter, Always great to have feedback :)


🕵️ How should Central Bank launch their digital currencies?

The European Central Bank (ECB) recently published a working paper called (Tiered Central Bank Digital Currencies) CBDC and the financial system [Link]. Below a short summary

  • CBDC could be considered a third form of base money next to (i) overnight deposits with the central bank (available only to banks, specific non FIs) and (ii) banknotes, universally accessible.

  • The paper assume that the CBDC is for general purpose and offered in the form of deposit accounts with the central bank to all household and corporates

  • Central bankers have warned against the structural (ie disintermediation of the banking system) or cyclical disintermediation of deposit collecting institution. In other words,

  • The goal of the CBDC is to be served as means of retail payment, without putting into question the monetary order by making CBDC a major form of store of value

  • The answer to such paradigm lies into the well-tested tool of tiered remuneration seems to be an effective and simple to control the volume of CBDC.

“any nascent increase in the demand for CBDC can be eliminated by a drop in the interest rate on CBDC. But there are potential limits if this requires a highly negative interest rate, and if further reductions of the interest rate below this level become politically difficult... Assume therefore a CBDC price rule where the central bank fixes the interest rate on CBDC at the lowest politically acceptable level, and assume that even at this penalty rate group A wants to convert deposits to CBDC at (almost) any price, perhaps because it is concerned about the solvency of banks…”

  • It is proposed to solve the problem of political acceptance of (temporarily) very low interest rates on CBDC by differentiating remuneration according to the amount of deposits

“in bad times, depositors could switch rapidly and at no cost from their bank account to the CBDC. The central bank could limit such risks – for example by setting a ceiling on the amount of CBDC that each individual investor can hold, or by bringing the remuneration to zero for holdings of CBDCs above a certain threshold

  • This would allow controlling the quantity of CBDC at a level such that the central bank balance sheet size could be kept broadly stable and significantly reduce the political constraints on controlling the quantity of CBDC through low or negative interest rate

  • The paper proposes a system of financial accounts calibrated towards the euro area illustrates the mechanics and implications of CBDC and allows presenting flow of funds implications

  • It is important to note that beyond the interest rate of the CBDC, account services of CBDC must include the same level of services that deposit accounts with commercial banks typically offer ie internet access, mobile app, etc… In short Central Banks will need to launch or use their own neo-banks

  • The CBDC would eat the market share of banknote circulation rather than financial accounts of banks

Carstens (2019, 10), central banks are not there to “put a brake on innovations just for the sake of it”, but to ensure that implications of major changes are well understood so “that innovations set the right course for the economy, for businesses, for citizens, for society as a whole”.

🐦 Tweets of the week

Data is a big challenge for anyone in crypto. It’s great to see CryptoCompare, a London based company being recognised as the leader!

Meanwhile the awesome Deribit Insights team published a new article on crypto exchanges

🤹 Startups News

  • Bitcoin miner Argo installs 3,600 new Bitmain machines, increasing its capacity by 75% The firm recently said that it aims to become “the world's largest publicly-listed crypto miner by 2020.” To that end, it also increased its electricity from 14 megawatts to 64 megawatts. [Link]

  • Telegram Refusing to Tell SEC How It Spent $1.7 Billion of ICO Cash [Link]

“The requested bank records are highly relevant to the issues in dispute in this case, including how much money Telegram has spent, and in what manner, in developing the TON Blockchain, the Telegram Messenger application to be integrated with the TON Blockchain, and related applications.”

  • Team Gnosis based in Berlin are working hard on their next chapter!

🎁 Startups Product & Partnership

  • Former head of Barclays Technology launching crypto/fiat banking w/mastercard, for UK only called Ziglu. [Link]

  • Cryptocurrency exchange Binance has confirmed it will offer euro (EUR) trading against six cryptocurrencies in the platform’s latest fiat expansion. Binance is leading the spot market and is looking to have 180+ fiat currencies supported by the end of the year. This is huge

Supported fiat currency pairs on Binance as of Jan. 2, 2020

🏭Corporates

  • Turkish Takasbank launched BiGA Digital Gold to provide banks with a blockchain-based system for the issuance, repayment and transfer of digitized gold. Each asset represents a gram of gold that is physically stored in vaults of the Borsa Istanbul (BIST) Turkish stock exchange. [Link]

Takasbank launched the BiGA Digital Gold platform with the participation of several Turkish financial institutions, including state lenders Ziraat and Vakif, private lender Garanti BBVA, and private and state participation banks Albaraka Turk, Kuveyt Turk, and Ziraat Participation.

🏦Regulations / Universities

  • UK Regulator Exposes Crypto and Binary Options HYIP Scheme - a company called Pro-Options is an unlicensed trading provider, cautioning all retail investors about the risks of dealing with it. The company claims to offer Bitcoin and binaries investment plans, with returns ranging from 50 percent to 100 percent after 24 to 48 hours. Obviously, such type of returns sound very dodgy. Stay safe! [Link]


About the author: Etienne used to head principal strategic investment (Companies, Funds and token investment) at Elwood, One of the largest European digital assets investment firm spun off of Brevan Howard, billion-dollar Macro Hedge fund. Previously, he was part of the founding team at the largest Capital Markets Venture Fund in London, Illuminate Financial.

(Not another) Crypto 2020 Predictions

Privacy, Fortress and Mt Gox, Coinfloor ditched Ethereum, Cindicator Capital, Hodl Hodl, Blockchain.com, SBI and Boerse Stuttgart Group

Hi Everyone,

Thank you for supporting the European crypto ecosystem 🇪🇺.

This is the last newsletter of the year. We will resume the first week of January.

If you enjoy the newsletter, don’t hesitate to become a paid subscriber using the link below.

Don’t hesitate to contact us regarding sponsorship, partnership or interview.

Etienne Twitter, etienne@blockwyre.com)

ps: don’t hesitate to send me an email if you enjoy this newsletter, Always great to have feedback :)


🕵️ (Not another) Crypto 2020 Predictions

It feels like everyone shared their predictions regarding the crypto ecosystem for next year. One of the most thoughtful is from Messari. It’s pretty long but a good read. The team at Token Daily had also a good list, have a look, it’s basically the who’s who of crypto. I guess I am not (yet) a who’s who so I thought you may enjoy my views below. Note, these are all thoughts. Don’t take it seriously.

  • 2020 will be a year (again) focus on Bitcoin and its ecosystem including gift cards (see Paxful), passive income (see Lolli) and Mining (see Crusoe). We will be mostly disappointed by the price action since most people are expecting a new high (no idea by how much but not greater than $20,000)

  • Meanwhile, Derivative and option exchanges will be the main revenue drivers for most centralised exchanges and this will drive acquisitions and partnerships to win liquidity (See Paradigm and GlobeDX)

  • Most centralised exchanges will struggle with depreciating fee and will look to expand to other areas such as custody, staking but lending will become really their main bread and butter.

  • There will be at least three new crypto SF venture funds with $150m+ AuM launching in Q2 ‘20 but the most exciting companies will continue to come from Europe (see Nexus Mutual, B2C2, Copper, Lacero, Argent, GlobeDX, Guesser etc..)

  • The institutional investors will continue to educate themselves and be pretty active around custody. They may even partner with a few but no major splash.

  • France will lead in crypto regulation followed by Switzerland. Singapore will be the centre of Asia. The US election will be challenging for digital assets.

  • There will be more crypto scams but most of them will not be revenue generative for the hackers. Or in other terms, on-chain analysis will continue to become better at tracking on/off ramp.

  • Ethereum will be in production mode and no real ETH Killers will have any luck with their launch. DeFi will try to expand beyond lending and stablecoin but will fail. Telegram will launch. Maybe. Or at least the token will be liquid.

  • Square will integrate with a gift card provider and expand aggressively in Africa.

  • The most exciting new projects will come from places such as gaming (Just), decentralised privacy enabled exchange (Too much AML/KYC and Chainalysis will drive growth), bonding curve + uniswap (unisocks) and banking (No one really seem to understand how good the business of Silvergate is.)

Have a great Christmas break and thank you for following us!


🐦 Tweets of the week

See below a very good list of privacy first applications ranging from messaging to trading.

🤹 Startups News

  • According to reports, the New York-based private equity firm Fortress is offering Mt Gox creditor claims at $778 per coin. The offer is 13.5% lower than what Fortress offered in July and Mt Gox claimants have until December 31 to accept the offer. [Link]

  • Coinfloor, the U.K.’s longest-running cryptocurrency exchange, plans to delist ethereum next month, citing an unclear future of hard forks and the need for onerous technical support for the second-biggest coin by market capitalization. [Link]

  • The plan comes ahead of the launch of ethereum 2.0, tentatively planned for early 2020, which will begin the process of shifting the network away from the energy-consuming proof-of-work (PoW) consensus mechanism to proof-of-stake (PoS). 

  • Coinfloor’s decision suggests that nurturing a team with the specific expertise to follow the technical trials and tribulations of coins like ethereum may be too expensive for smaller crypto players, particularly if this constitutes only a small part of their trading volume.

  • Chainalysis: PlusToken Is Dumping on Huobi OTCs, May Be Eating Into BTC Price. The trades happen at a handful of independent over-the-counter (OTC) desks that operate on the Huobi exchange. If Chainalysis’s findings are to be believed, the scammers have sold some 25,000 BTC for just shy of $200 million in profit — and they’ve got at least another 20,000 that’s been untouched since September 2019.

  • Cindicator, a tokenised fintech developing predictive analytics, launched Cindicator Capital, a digital assets quant hedge fund. The fund will use Hybrid Intelligence (collective and artificial intelligence) developed by Cindicator since 2015. [Link]

🎁 Startups Product & Partnership

  • Hodl Hodl has launched the first part of the exchange’s API, best known for its peer-to-peer (P2P) structure that allows it to operate without holding user funds. [Link]

“The API was developed due to the high demand from OTC [over-the-counter] brokerage desks. It will allow other services such as wallets and different types of aggregators to include Hodl Hodl in their offering. Obviously, this will increase our popularity,” Hodl Hodl CEO Max Keidun 

  • Thomson Reuters Taps Verady for Cryptocurrency Tax Tool. TR provides different crypto-focused products including a price data feed for virtual currencies, ‎dubbed “Cryptocurrency Real Time Rates.” It also launched a new version of its MarketPsych Indices (TRMI) to include market sentiment data for the top 100 cryptocurrencies. [Link]

  • Blockchain.com is adding a British pound (GBP) gateway to its cryptocurrency exchange, The PIT, as it prepares for Britain’s coming separation from the European Union, or Brexit [Link]

  • The Crypto Banking Apocalypse: Will Crypto Businesses have banking once the next financial crisis hits? This article will aim to highlight the inherent issues in the current banking climate as they relate to Crypto Businesses [Link] + [Video]

🏭Corporates

  • Fidelity opens a Bitcoin OTC trading business in London. [Link]

🏦Regulations / Universities

  • On December 17, the European Central Bank (ECB) published a report that showcased its blockchain technology proof-of-concept. One particular feature the central bank digital chain holds is the ability to issue “anonymity vouchers.” [Link]

  • Reginald Fowler, one of the co-founders of Crypto Capital, is expected to change his plea in front of the court to “guilty” for the charges brought against him. [Link]

  • French regulator grants its first approval for an initial coin offering [Link]

"The PACTE law has indeed introduced in France an optional visa regime for fundraising in crypto-assets. Only public offerings of so-called utility tokens, which are not considered as financial instruments, are eligible for this optional visa."

💰Fundings & M&A

  • Japanese financial giant SBI Holdings announced its plans to invest in two digital asset-focused subsidiaries of Boerse Stuttgart Group – Boerse Stuttgart Digital Exchange GmbH and Boerse Stuttgart Digital Ventures GmbH. [Link]


About the author: Etienne used to head principal strategic investment (Companies, Funds and token investment) at Elwood, One of the largest European digital assets investment firm spun off of Brevan Howard, billion-dollar Macro Hedge fund. Previously, he was part of the founding team at the largest Capital Markets Venture Fund in London, Illuminate Financial.

What’s the Product/market fit for crypto? Crypto Trading.

Guesser, Bitfinex, Hydra ICO, Coinshares mining, BottlePay, Seba Bank, ING & Solaris custody, Amun ETP, Georgia Mining and Upvest raising

Hi Everyone,

Thank you for supporting the European crypto ecosystem 🇪🇺. If you’d like to sign up, you can do so here.

If you enjoy this newsletter you can (i) share it with friends, (ii) subscribe for the paid version (So I can get a new logo and buy matcha). Until the end of this year, I shall offer a 20% discount. What do you get beyond supporting my matcha addiction? My gratitude and also direct access to me by slack.

Get 20% off forever

We are looking for new projects for 2020. If you are looking to advertise, be interviewed or showcase your product, just email me!

Etienne Twitter, etienne@blockwyre.com)


🕵️ What’s the Product/market fit for crypto?

  • Most generalist VCs and institutional investors are still pondering the question: what will be the real product/market fit (PMF) for crypto? What’s the killer app beyond speculation for crypto? Is crypto / blockchain still a technology looking for a problem to solve?

  • I am always a bit confused when someone asks these questions. Crypto does not mean anything specific. It includes a wide range of ‘digital assets’ ranging from Bitcoin, Ethereum, Privacy Coins, Protocol layer (e.g. Dfinity, Nervos etc…) and other utility tokens offering new ways to exchange data over the internet as well as stablecoins.

  • So the question could be rephrased to - what’s the product market fit for each of these assets?

  • Currently, Bitcoin is the most advanced digital asset in terms of its PMF. It has a large user base (at least 20m+ users), a strong ecosystem of market participants including miners and exchanges and real-world use cases.

  • Unlike most tokens, Bitcoin has grown out of the simple use case of ‘speculating on magic beans on unregulated exchanges’. There are still volatility and a long path to price discovery but the real world use cases have evolved. People use orange coins.

  • Bitcoin is used as a Store of value: see the AuM of Grayscale, Coinshare or the AuM of Coinbase custody, Means of payment: see the transaction volume on Paxful, LocaBitcoins or growth of BitPay and BTCpay and Unit of account: Ask any ‘crypto traders’ in what unit they trade and they will say in BTC, Sat is slowly becoming the unit for internet money thanks to lightning.

  • The mining industry has created a real need for financial products ranging from derivatives futures and options (BitMEX and Deribit) and Lending/borrowing (see Genesis). The miners landscape is also evolving with new entrants like Crusoe and Layer1 among others.

  • While everyone is asking ‘What will be the blockbuster game for crypto?’ I think we already have it: Crypto trading. The ease of use and access of crypto exchanges has created an entire new industry combining trading, betting and gaming.

    • If you have ever used a brokerage account you will then appreciate the difference between legacy brokers like TD Ameritrade and crypto exchange like BitMEX. You can onboard on the latter in few minutes, have access to derivatives, almost institutional level tools for free, deep liquidity and strong volume.

    • This goes beyond the classic day trader or former traders. Quant traders are moving en force, ‘This market has almost no fundamental and is generating tremendous amount of data.’

    • Ask your friend at top quant funds what they do before and after work, the chances are that they are making market or running stat arb strategies. Why? It’s because crypto trading is the biggest trading market since the ‘00

    • The industry is professionalising super fast and in few years, most of these small trading shops will be outcompeted by large funds. In the meantime, a generation is learning about trading and financial markets. Capital Markets is the coolest thing is SF. Sorry they call it DeFi but it’s really Capital Markets.

    • Crypto trading is one of the biggest games in the world in terms of dollar value and user number.

  • Moving on to other assets, Ethereum killer app was ICO, allowing anyone to raise funding from everyone in few clicks. The regulators have now stepped in and STO is becoming a new thing (see Blockstack). Meanwhile, Binance has created IEO with some positive results.

  • Beyond fundraising, Ethereum is seeing few killer apps around DeFi from Maker DAO to Compound. However, all of these apps remain very complicated for most users and answer the questions ‘What do I do with all these ETH tokens that I don’t want to sell yet?’ The applications will broaden with the integration of stablecoins like USDC and improvement around latency and collateral level (ie. 150% collateral level is nuts) but it’s early, really early.

  • Protocols, utility tokens and companies are facing technology and regulatory hurdles impeding their go-to-market for mainstream use cases. e.g. Custodial wallets are money transmitters. How does it impact unregulated central exchanges? or Lightning wallet/node?

  • So what’s beyond crypto trading? Well, we need more usable protocols, more developer infrastructure tools to build crypto products more easily, more on-boarding solutions and more education.

  • Education in the crypto ecosystem is one of the most underrated items. Crypto folks love using lingos. The level of opacity makes new entrants reluctant to move into the space as they think it will require them a long time before being able to build anything. Or they just think it’s a scammy industry...

  • On the other hand, some products without tokens are taking off. I am pretty astonished by the growth of Brave browser (I’m not talking about their BAT Tokens) with their 10m+ monthly active users.

  • Maybe we just need more application that just does a 10x better job than current offerings and with a privacy first element. Maybe this is the next killer app for crypto. Building great products that people want rather than using complicated and unproven technologies that people don’t understand or have little to no use of.

  • Thank you for reading this far. I would love to hear your views.

  • /(la) fin


🐦 Tweets of the week

🤹 Startups News

  • Crypto exchange Bitfinex has once again questioned the New York Attorney General’s oversight authority in an official response to the ‘reply brief’ filed by the NYAG on December 4 to the Supreme Court of the State of New York. [Link]

  • Hydra Darknet Marketplace announced plans to launch a transnational decentralized venue for the sale of prohibited goods (e.g. narcotic etc..). 49% of the project will be put up for sale reportedly via a darknet ICO. [Link]

  • Coinshares released their Bitcoin Mining network December 2019 updates, have a look

🎁 Startups Product & Partnership

  • Cryptocurrency exchange OKEx is launching cash-settled Bitcoin options trading on Dec 27th. This is a pretty big news as options is one of the few products with a handful of entrants and large market potential. Currently, Deribit is one of the leader and institutional players such as CME and Bakkt are preparing the launch. [Link]

  • The Bottle Pay service, which allowed users to send Bitcoin (BTC) via social media accounts, announced it would be shutting down due to Anti-Money Laundering (AML) regulations coming into effect from Jan. 10, 2020. [Link]

  • Switzerland-based cryptocurrency bank SEBA has expanded its services to nine new countries. The bank is now fully operational for institutional clients and accredited investors in Singapore, Hong Kong, the United Kingdom, Italy, Germany, France, Austria, Portugal. [Link]

  • Luno Malaysia, one of the only three regulated cryptocurrency exchanges in the country, is set to list XRP on its platform [Link]

🏭Corporates

  • Amsterdam-based bank ING is reportedly developing cryptocurrency custody technology. ING reportedly said that it “sees increasing opportunities with regard to digital assets on both asset backed and native security tokens.” [Link]

  • Meanwhile, another bank is launching another custody initiative for digital assets: SolarisBank’s newly established subsidiary, Solaris Digital Assets GmbH, will provide clients with an application programming interface (API)-accessible platform, which gives access to the full range of solarisBank’s digital white-label banking services [Link]

  • Footwear giant Nike patented shoes that are tokenized as a non-fungible token (NFT) on the Ethereum blockchain, dubbed CryptoKicks. The token would be “unlocked” with the purchase of a corresponding physical shoe by linking a 10-digit shoe identification code with the owner identification code. [Link]

🏦Regulations / Universities

  • Sweden's Financial Authority Approves Swiss Crypto ETP Provider Amun. Currently Amun manages a handful of crypto ETPs traded on Switzerland’s principal stock exchange SIX. With this announcement, the company can market more freely to investor in all of Europe competing directly with Coinshares. [Link]

  • ​The IMF recommends Georgia to be more transparent when accounting for crypto mining. Georgia’s income from cryptocurrency production is officially unknown. Georgia is currently ranked 4th in digital currency production from crypto mining, and they are home to Bitfury, one of the biggest Bitcoin mining companies in the world. [Link]

  • The Riksbank, Sweden’s central bank, said that it would partner with professional services company Accenture to create a pilot platform for a digital currency dubbed the e-krona. [Link]

“The primary objective of the e-krona pilot project is to broaden the bank’s understanding of the technological possibilities for the e-krona.”

  • This in line with the view from Mrs. Christine Lagarde, president of the ECB [Link]

“My personal conviction on the issue of stable coins is that we better be ahead of the curve. There is clearly demand out there that we have to respond to.”

  • Meanwhile, the government of Switzerland is not keen on issuing a digital currency for retail use but sees some benefits of a wholesale digital currency. [Link]

💰Fundings & M&A

  • Germany-based startup Upvest, which helps companies tokenize financial assets on blockchain, has raised  €7 million (~$7.8 million) in Series A funding. The round was led by Notion Capital, with participation from Partech Ventures and Holtzbrinck Ventures. Upvest aims to help companies to tokenize “the €10 trillion” alternative investments asset class [Link]


Everyone is talking about San Francisco as the epicentre of everything in crypto. Well, I wanted to shed light on Europe and show how exciting the ecosystem is.

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