Total Market Cap $345 BN (-4.67%)
24 Hour Volume $111.6 BN (+21.97%)
BTC Dominance 57.5% (-0.35%)
$BTC is heading to its 65th consecutive day above 10k levels, surpassing its 2017-18 bull run
$BTC moved closer to $11k hitting resistance before being rejected at $10,950 levels in America’s trading session. Since the start of the Asian trading session, the market broke $10,730 support and wiped out all the overnight gains as it dropped back down to $10,700 levels on oversold RSI levels. This morning drop currently liquidated 17M long positions.
Digital asset market movements were seen coupling the equity market with US benchmarks up around 1.5% during the American session. Interesting observation coming out of Coindesk views $TSLA as more volatile than $BTC in reference to the past 30 days realised volatility data:
Bitcoin witnessed a below 1.25% daily move in 14 out of the last 27 days, almost 52% of the time
Tesla only achieved sub 1.25% moves 6% of the time over the same period (data source Skew tweeted early Monday)
CENTURION & CO PARTNERS WITH SATOSHILTD.COM
Centurion is a very dynamic and active Management and Investment Firm Headquartered in Dubai, operating through several investments and entities in Singapore, Cyprus, France, Tunisia and Lebanon.
Centurion is recognized as an active VC Boutique, Incubator and Technology Enabler leading transformation by disruption either through the successful investments realized in Software, Cloud, Telecom, Payment and Blockchain industries or through the success of its own incubations and platforms.
Over the past 4 years, the group has leveraged both human capital expertise and high-tech know-how to become an effective operator and leader in the fintech and digital era.
The group is growing its portfolio in the fintech industry with a tapping eye on digital banking, ecommerce acceleration and payment service processing.
Centurion & Co is launching the private CENTURION-OTC Regulated Desk in partnership with Satoshiltd.com. The desk will be offering to customers access to its digital assets investment portfolio. This includes Access to the largest combined liquidity pool in the world. Buy or Sell Bitcoin, ETH, Bitcoin Cash, Litecoin, XRP or USDT with USD fiat settlement, in trust and confidence! The desk is also offering limited access to DeFi tokens with a $100K min.
Rocky Mountain Blockchain Intelligence LLC, (DBA Satoshiltd.com) has access to the largest liquidity pools in the world. Making the CENTURION/Satoshi OTC platform one of the largest liquidity providers in the world. The partnership's over-the-counter (OTC) trading combines access to unparalleled market liquidity with complete privacy and guaranteed price quotes in real time.
Each trade is conducted and executed directly against the counterpart and with no on-exchange price slippage or order book discovery. This ensures instant, seamless, secure transactions with near instant settlement. We offer up to $1B USD in daily liquidity on BTC alone.
Built for Sophisticated and discriminating clients who require access to a real time personalized trading desk.
The CENTURION/Satoshi OTC Desk offers:
*Fiat settlement up to $10M USD per day.
*Extremely competitive and incentivized trading structure.
*Rapid onboarding and straightforward compliance process.
*Settle with ACH or Wire anywhere in the world.
*Same Day US settlement by Wire or ACH if orders close by 2pm EST (usually within 45 minutes).
*12-48 Hour settlement by Swift Wire on international orders.
*Competitive Trade Fees and Incentivized Trading for volume traders.
*Licensed Regulated and Insured Entity in Business since 2018.
Alts & DeFi
The Saturday hack of Kucoin (including a loss of $150m worth of crypto), has led to multiple projects stepping in to assist in freezing, reissuing and blacklisting a handful of tokens and addresses. $USDT, $SNTR, $COV, $NOIA to name a few. Kucoin promised that all lost funds will be fully covered by their insurance pool. An important reminder to ensure safekeeping of your digital assets are with insured and audited custodians. Satoshiltd.com prides itself on its storage solution and in providing our counterparts industry leading insured custody for digital assets - including comprehensive protection of assets for both hot and cold wallets and insurance for loss, damage, destruction, or theft of digital assets.
$ETH fees are still in double digits, seen as low as 50 gwei yesterday morning with $ETH inching slowly up for the fourth consecutive day to 355 levels. Over these past four days, its value has increased by 10% from 312 lows (on Sept 23rd), while trading on neutral RSI and Bollinger band levels;
DeFi TVL increased 11M to 11.11B overnight as the Asian session opened to some profit-taking action with UNISWAP the first AMM (automated market maker) to reach 2B TVL (1/4 of the current overall TVL) and interestingly, larger than the entire DeFi sector just two months ago.
$UNI trading down to 4.5 levels after climbing back up to $5 yesterday;
$MKR surges and corrects back down to 520 levels as $DAI trades at a 1% premium as one of the stablecoins of choice for DeFi protocols; currently holding governance poll to implement “adjustments” to the base rate (between -3.75% to 4.25%) and PAXUSD debt ceiling (increase to 100m DAI);
$LINK range bound between 10-11 for the past three days, trading on neutral Bollinger bands
Experimental DeFi platform Yearn Finance cultists were hit with losses this morning after an unidentified hacker exploited a smart contract vulnerability in Eminence, an upcoming gaming project built by Yearn founder Andre Cronje. The exploit allowed them to mint unlimited new tokens and steal over $15 million in the process. And yet, strangely, they would later return half the stolen crypto.
Top non-custodial exchange Uniswap has become the first decentralized finance (DeFi) protocol to cross $2 billion in total value locked (TVL). Uniswap's TVL, or the total value of all assets deposited in the protocol, stands at $2.03 billion at the time of writing, according to tracker DeFi Pulse. Ether (ETH), Tether (USDT), and Wrapped Bitcoin (WBTC) are Uniswap's top three tokens by liquidity.
Eth2, an upgrade to the decentralized Ethereum blockchain, has been in development for over four years. A lot of people are helping it get ready for primetime. According to data from testnet block explorer beaconcha.in, more than 60,000 validator nodes have been activated on the Eth2 Medalla testnet, where they have collectively staked nearly 2 million testnet ETH, known as Görli ETH.
Throughout 2019, the decentralized finance (DeFi) market was relatively stagnant until the concept of yield farming and governance tokens became more popular. Yield farming is a process where investors utilize various DeFi protocols that generate high yield in exchange for providing liquidity. In most cases, the yield comes from the value of the governance token and in addition to staking the DeFi-token, users also deposit cryptocurrencies like Ether (ETH).
Avalanche, the Latest Staking Network to Launch, Already Has More Than $1 Billion Staked
Avalanche (AVAX) is the latest proof-of-stake network to come to the marketplace, officially launching last Monday. The network's C-Chain was made EVM-compatible in order to attract Ethereum developers, allowing them to switch over with little friction. The recently launched PoS blockchain has roughly 234 million AVAX or slightly more than $1 billion staked across 491 validators.
The Ongoing Debt Spiral
The ongoing debt spiral at both the government and corporate level has been top of mind for investors in all asset classes. Both central bank and corporate balance sheets are on a seemingly endless march upwards, and Covid-19 has simply accelerated a trend that was already in place.
While none of this is new news, let’s contextualize the rise in global debt for a minute before getting to our broader point (and I promise the end point is NOT going to be another argument for “Bitcoin protects against inflation”).
Record corporate bond issuance in the U.S., with over $1.6 trillion investment grade debt and over $300 billion in high yield debt issued already this year.
Leading to over $10.5 trillion of non-financial U.S. corporate debt
The US now carries over $26 trillion in government debt.
Global Debt to GDP is now at record highs, with possibly unsustainable debt levels held at each major Central Bank as money printing continues unabated.
At record low interest rates, debt issuance makes sense, in theory. But with declining corporate profits and shrinking global GDP, the ability to service this debt is obviously being called into question. Corporate leverage is rising, and interest coverage is falling, with estimates that 18% of companies cannot cover interest expense. This doesn’t even include mortgage-backed securities, for which a wave of delinquencies and defaults are likely coming. Warren Buffett once said, "Only when the tide goes out do you discover who has been swimming naked".
One of the arguments for owning Bitcoin has always been that unsustainable government debt levels will inevitably lead to either inflating our way out of debt, or default… both of which lead to loss of purchasing power for those stuck holding fiat currencies. This chorus is getting louder, and louder, and louder, and louder. When companies and governments simply issue more and more debt to paper over a debt problem, there is no end game.
But let’s not forget that much of the government’s increased debt load over the past 10+ years is simply a transfer of debt from private to public. The 2008 financial crisis started this bailout culture, and recent handouts to both corporations and private citizens to combat Covid-19 have worsened the trend.
What if the solution isn’t Bitcoin, but rather, less debt?
Where do Tokens Fit into the Corporate Capital Structure?
For years, we’ve argued that token issuance is now the 3rd part of the corporate capital structure.
Debt = Claim on assets
Equity = Assets minus liabilities or a claim on excess profits/cash flows
Digital Assets = Claim on future services or customer growth (i.e. “network equity”)
Non “crypto-native” companies have yet to embrace tokens as a financing solution, for a variety of reasons including regulatory uncertainty, a lack of education, and no creative investment bankers. Worse, companies for which this is the most obvious solution, like airlines, are simply dipping further into the debt spiral playbook instead of using this more creative and customer-friendly solution. Numerous airlines, who have already received huge government loans and bailouts, recently made headlines for issuing debt backed by their loyalty rewards programs. The airline industry is already plagued with high rates of Chapter 11 bankruptcies due to unsustainable cost structures and low recoveries on unsecured debt and equities due to a lack of unencumbered assets (airlines already issue a lot of secured debt in the form of EETCs - debt backed by planes and equipment). Meanwhile, revenues and profits are plummeting as planes remain grounded.
In the case of the airlines, their equity value is declining due to lower profits, and their debt coverage is falling as they continue to layer on secured debt. But for the most part, airline customers are still around and are willing to fly as soon as it is safe and affordable. Thus, the airlines’ “network equity” and customer loyalty hasn’t decreased. Instead of searching the coffers for unencumbered assets and issuing debt against this loyalty program, they should be raising new, non-dilutive capital in the form of more loyalty programs. This is exactly how token issuance is being used in the small but evolving digital assets industry.
Unfortunately, this is complex. There are a rising number of companies and projects in the “crypto-native” world that are raising capital and bootstrapping growth by issuing “Pass-thru tokens” in an unregulated fashion, but only a handful of companies who have issued “network equity” in a fully regulated manner, which of course public companies would have to do. Both INX Global and Blockstack have issued registered securities in the form of tokens, but both of these companies are brand new startups with no existing customers or business lines. These are more like venture capital token offerings, giving investors a lottery ticket if the projects succeed. It would be much different for a mature public company or large private company to issue pass-thru or hybrid tokens, like one of the major airlines or any other business with a large customer focus (like small gym membership chains, coffee shops or local restaurants). There is something very bizarre about the S-1 filings that may influence the ability for existing companies to follow suit. Even though both INX and Blockstack filed S-1s, performed lengthy roadshows, and raised investor capital, from an accounting standpoint, these token sales are treated as revenue, not capital raises.
In the case of INX:
“The INX Token is a hybrid financial instrument. The host instrument is a financial liability due to the right of the INX Token holder to effectively redeem the INX Token in consideration as payment for services. The INX Token is considered a puttable instrument which is a financial liability in accordance with IAS 32, Financial Instruments. When the INX Token is used to pay for services provided by the Company, the respective portion of the INX Token liability is derecognized and revenue is recognized. The fair value of INX Tokens issued in consideration for services to be provided to the Company is recognized as compensation expense as the services are provided.”
“Blockstack characterizes portions of the proceeds of the private placements of Stacks Tokens as revenue. Specifically, Blockstack recognizes revenue from previous sales of Stacks Tokens over the estimated period in which Blockstack is performing development services under the contracts. Blockstack uses a cost to cost method of measuring progress toward complete satisfaction of these obligations, and based on this methodology, these sales yielded a total of $0.4 million of recognized revenue and $7.4 million of deferred revenue in 2017, and $34.5 million of recognized revenue and $2.5 million of deferred revenue in 2018. As a result, substantially all of the revenue Blockstack recognizes comes from our sales of Stacks Tokens. The remainder of the proceeds of Stacks Tokens sales is not recognized as revenue because these proceeds remain subject to the achievement of a future milestone. Proceeds from Stacks Tokens sales subject to milestones are recognized as restricted assets on the balance sheets included in Blockstack’s consolidated financial statements.”
As is always the case with new technologies, the waters are murky. We are arguing that tokens are part of the capital structure, but in order to fit a round peg through a square accounting hole, companies to date are issuing tokens as deferred revenue. We need more companies to act as pioneers, especially those with large enough legal and accounting teams to get greater clarity. While this is slowly happening completely under the radar with firms like INX and Blockstack, the market is now awaiting a more mature company to push the envelope further and establish repeatable legal and accounting frameworks that make more intuitive sense. As my friend Maartje Bus opined, recent market dynamics are begging for solutions like this to level the playing field and help companies grow again.
Unless of course you think more debt is the best solution to unsustainable bad debt.