Fundamentals Report for 12/6/2019 - #66

12/06/19 | Issue #66 | Block 606,957 | Disclaimer
~160 Days Until Halvening
.794 on the Mayer Multiple

TOP STORIES

US Stablecoin Punt

Secretary of the Treasury, Steve Mnuchin, in testimony in front of Congress, gave his blessing to Libra (thank you master). The most interesting part of this comments was what he had to say about the possibility of the Fed getting into the stablecoin business, “Chair Powell and I have discussed this — we both agree that in the near future, in the next five years, we see no need for the Fed to issue a digital currency.” Like I’ve said before, the US is not surprisingly taking the most sober approach to this fad.

Millennials are hodling GBTC

Charles Schwab released a report on their customers’ self-directed brokerage accounts broken down by generation and allocation. It showed GBTC in the top 5 for Millennials. Of course, part of the story could be these numbers are skewed by a few customers who started with a small allocation to GBTC but it grew massively in the last rally to become a large percentage in aggregate. Whatever the case, this is huge news.

Spot Volume News

New spot exchange players are coming. LMAX is a well-established traditional player in FX and has offered bitcoin spot trading for a while now. In a recent announcement LMAX opened up their volumes to Tradeblock showing their daily volume is just under Coinbase and ahead of Kraken and BitStamp. This is huge news IMO because these other sources of quality spot volume are very opaque, this gives us a glimpse into that demand. You can see their live stats here.

PRICE

Weekly BMI – 2 : Bullish

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Crazy wild ride this week. Lots of small price volatility but nothing significant overall. There is a distinctive feeling retail traders have almost completely disappeared and whales are fighting with each other. At the time of writing, we are starting to see a break out of the diagonal resistance line (red line). There have been many false break outs this week, with long candle wicks, so be cautious. $7900 is a key level , we break that, the top of the channel is likely.

MINING / DEVELOPMENT

The mining difficulty adjusted down approximately .2% yesterday. Mining profitability is near all time lows in the 13 cent range per day per 1TH/s.

Mining Pools

A new mining pool protocol has been released by one of the largest bitcoin mining pools in the world, Braiins. The code release is called Stratum V2 and promises to be a huge improvement on the way mining pools function. New features include: individual miners pick which transactions to include, 50% reduction in bandwidth usage, 70% less CPU load, no latency pool switching, and more.

“If this protocol does everything it promises, ‘mining centralization’ as an argument will be completely dead,” Bitcoin developer and educator Jimmy Song said.

Development

I’m very excited about this new development from Easypaysy Layer 2 bitcoin accounts (explainer video). It is a protocol to replace bitcoin address with easy to remember bitcoin accounts. They are similar to PayNyms by Samourai but more flexible. Yet another great Layer 2 tech that we might never think of as powerful, but if it simplifies the user experience by a significant margin, it could be a big breakthrough.

ALTCOINS

Have your popcorn ready for the Istanbul fork on Sunday. On twitter I’ve been giving the node update progress careful attention. As of now, only 43% of nodes have upgraded. This is a hard fork, so those that don’t update will be forced off the network.

Some Eth folks have tried to explain the 1500 upgraded nodes are the ones with popular services and are hosted at Infura. Hobbyist nodes are supposed to “trickle in” after the fork. It’s extremely worrying all major service nodes are on Infura, which is owned by a co-founder.

I don’t expect major fireworks, because surely the Ethereum Foundation has coordinated with exchanges and other important nodes, but I wouldn’t rule out a last minute bug or some significant disruption to individuals and smaller projects that simply haven’t paid attention.

1500 nodes on one host to change the world?

MISCELLANEOUS

Here is are a couple interesting charts from tokenanalyst.io/analytics showing the BTC and ETH balances on exchanges over time. The amount of BTC on exchanges is approximately 7.5% of the total supply and growing. Is this because the liquidity is growing or because people rather not be responsible for their own keys? This will be a fun chart to watch when the Proof of Keys day occurs on Jan 3rd.

Have a good one,