BitDigest April 24 · Issue #644

• Crypto prices jump overnight with the total market capitalization of all digital currencies gaining 5.6%.
• Portugal has announced its development of Technology Free Zones to promote innovative technologies like blockchain.
• Coinbase introduces a pricing oracle for DeFi applications

The End of Crypto as We Know It

For years we have been saying institutional traders will come to crypto. News last weekend that Renaissance Technologies’ Medallion Fund is now able to start trading bitcoin futures has both positive and negative connotations. Positive in that it shows further acceptance of bitcoin as an asset class, and negative in that the market that was developed by retail traders may have officially come to an end as we know it. As Fundstrat Global Advisor’s Tom Lee advised yesterday, do not attempt to trade against machines.

Several years ago I joked that even I could arb bitcoin across international exchanges and time delays did not really matter. That time is over. Joining Renaissance and other quant funds will be more professional algorithmic and high-frequency traders. The market built by Japanese and Korean housewives is over as we know it.

Fortunately I have always just considered myself a hodler and I am still long bitcoin.

Crypto Applications Showing Wave of the Future

Last week Bank of Finland Governor Olli Rehn responded to questions about digital currencies by saying we need to be “more practically focused and … support real time mobile payments.” Several announcements this week show how this suggestion is already coming to fruition. Dharma’s announcement that it can send USD to any Twitter handle, 2Key’s paywall for Zoom, and Draper Horen Holm’s crypto plugin for WordPress are examples of the ongoing evolution of digital payments. The future is already here.

Is Something Going On with Telegram?

Telegram has always been one of my primary portals into the digital currency ecosystem, and I am suddenly concerned about news out of Russia and the future of the social messaging app. Telegram was developed by Russian brothers and blocked by the Russian government for failing to disclose encryption keys. Against the orders of the Russian government, people continued to use the platform and it is believed that several of the larger investors in the SEC blocked Telegram token offering were Russian oligarchs and politically connected individuals.

Now there has been a sudden change of heart and Russia’s parliament is reviewing a bill to overturn the ban. Russian authorities are looking to use the messaging app to share information about coronavirus. My fear is that there is more to this story than we are being told and the next news will be US agency warnings that the Russian government is using Telegram to spy on us. I really hope I am wrong.

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