Happy Sunday from the Hudson Valley,
What a goddamn week. It started normally enough; just the tectonic plates of the global economy shifting as we come to the end of a debt supercycle. In bitcoin world, we even had Goldman Sachs weird diss webinar to get up in arms about. Then it got crazy. Twitter vs. Trump. Hong Kong’s changing status. The explosion of the most visceral, destructive, widespread and as of this writing incomplete protests in more than a generation.
Let’s somehow make it quickly through the top crypto news and podcast links and then we’ll get in to all that.
This Week’s Top Bitcoin & Crypto News
Speaking of China, a new book from China’s Communist Party identifies Libra as a threat
Coinbase acquires Tagomi for estimated $70m-$100m in race for crypto prime brokerage
Calibra rebrands to Novi to avoid confusion and distance from Facebook
Polkadot has gone live to mainnet
India’s central bank has confirmed that banks can provide services to crypto companies
Coinbase Ventures and Polychain have invested $2.5m into Indian crypto exchange CoinDCX
The long arm of the SEC continues - BitClave agrees to pay back $25m in settlement
Led by former CFTC Chairman Christopher Giancarlo, the Digital Dollar Project releases a detailed white paper
A new NBA game has just launched on its own blockchain from the CryptoKitties crew
BlockTower more than doubles its returns this year, despite crisis
New crypto trading platform Floating Point Group has closed a $2m round including Naval Ravikant
Gemini becomes the first US exchange to integrate with Samsung’s blockchain wallet
This week on The Breakdown podcast
Our Main Themes
1. Goldman tries to cancel bitcoin
Goldman Sachs CIO of Wealth Management held a webinar to talk bitcoin (and gold) this week. Unlike the Paul Tudor Jones excitement, this would not be a major institutional conversion to the BTC space. Instead, it was a full throated endorsement of the status quote. There were a few thing bitcoin Twitter noticed.
First, the arguments presented against bitcoin felt…not convincing.
Second, there was a clear background context of GS being at the epicenter of the financial system that is increasingly in question.
Third, there was an interesting question of “why now,” with at least some positing that this might reflect a growing number of questions about bitcoin and gold from GS clients.
Finally, some evidence for that point of view…
2. The end of a debt supercycle
Of course, going back to Tuur’s point above, it’s impossible to divorce Goldman and the bitcoin question from the macro context. Lyn Alden updated a Dalio chart about monetary expansion at the end of debt supercycles
Raoul Pal published again about how the dollar complicates the global picture...
Although Brent Johnson, a guest on The Breakdown this week, still argues that other currency dominoes fall long before the USD.
Raoul Pal @RaoulGMIas money in hoarded. All other central banks print more to offset their own systemic strains. Dollar rises since $1 of QE from ECB is worth 4x in liquidity adjusted terms as $1 from the Fed. The Fed can't win. And that in turn slows global growth, making the dollar shortage
There is a growing tone of the conversation recognizing that these are structural issues, and that the prosperity we’ve experienced is more of a mirage than it seems.
Yonah Freemark @yfreemarkThis is the real stunner: Americans who are 25 to 54 are significantly less wealthy than 25 to 54 year olds 30 years ago. The only age group that is significantly more wealthy are those 65 and up. Those also happen to be the people who vote and the people who run the country... https://t.co/87YoOEV13n https://t.co/Owmbf5Ei3O
3. Twitter vs. Trump
I don’t want to spend too much time on this one, but when you have a sitting US president going to war with a private company over highly contentious questions of censorship, you have to pay attention at least a little. My read on the TL;DR on the intellectual sides (hold aside partisan mapping) is: 1) positing of social media as a public commons that needs free speech; 2) belief in the rights of private companies to set policies without governments interfering.
Cameron Winklevoss @winklevossSocial media companies are natural monopolies that have become public utilities. They are the the town square. The terms of service of the town square is the First Amendment.
Whatever the case, this battle is going to get nastier - with potentially big implications - before it gets resolved.
3. Sayonara Hong Kong?
In the wake of a new security law that would China more control over Hong Kong, the US is making moves to distance itself from both HK and the Mainland. I’ll have a number of upcoming episodes on this on The Breakdown, but by way of primer:
POLITICO @politicoTrump said he’s making good on his threat to leave WHO, which he says failed to raise the alarm over #Covid19. The U.S. has been the largest funder of the United Nations’ health body, which is organizing worldwide vaccine & drug trials to fight the virus https://t.co/vV7wGHVbE1
4. The protests
They deserve more space than I can possibly give them, but since Substack is telling me I’m running short on room - and since you might be overloaded at this point - I’ll just share a couple worthy notes.
ment @mentnelsonThe whole country needs to stop right now and listen to Killer Mike. He’s verbalizing what a lot of us don’t know how to express https://t.co/yiBEaicRGT
The market disconnect:
And if it feels really, really depressing, you’re not alone.
Stay safe out there and thanks for reading.