Blow To Bitcoin As Binance CEO Makes ‘Safe Haven’ Stock ...

Bitcoin is worth more than $ 15,600, Why Suddenly The Price Is Increasing?

Bitcoin is worth more than $ 15,600, Why Suddenly The Price Is Increasing?
Bitcoin is worth more than $ 15,600, the highest level since January 2018.

https://preview.redd.it/ix9k84b46lx51.png?width=398&format=png&auto=webp&s=863080fefca01dbd91023c14b7f052910aa69a5e
The price of cryptocurrency bitcoin has skyrocketed in recent days to the highest level since January 2018. The absence of the US presidential election result may play a role, but that is not the only reason.
In recent days, the price of the BTC rose from roughly $ 13,350 on November 3 to $ 15,700 today, according to data from CoinMarketCap. That is more than 12 percent increase.
The price increase was more or less synchronized with the vote count in the United States and the ever-increasing tension in the country. "Uncertainty always encourages people to buy gold, for example. But I don't know if that is positive for bitcoin," analyzes Durk Veenstra, RTL Z stock market commentator.
"Everything is going up," he adds another comment on the price increase. Investors are thus responding to the Bank of England's decision to pump 166 billion euros extra into financial markets and expect the US Fed to take additional measures to support the economy.
Another reason for bitcoin's price revival is the US Public Prosecutor's plan to seize more than $ 1 billion in bitcoin. It concerns bitcoin that has been earned through the criminal online marketplace Silk Road, Bloomberg news agency reports.
Highest price since January 2018
The price of bitcoin was last this high in January 2018, after the highest ever price of 19,783 dollars was reached in December 2017. On Sunday, January 7, the price peaked again to more than $ 17,500, after which the price dropped sharply.
This year, the exchange rate recovered somewhat, peaking at $ 12,600 in October. This was due to the decision of the payment service Paypal to make payments in cryptocurrency possible. This Paypal move is also a reason in the upward price movement of Bitcoin. And now the price is stablizing between 15k to 16k.
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Crypto-Powered - The Most Promising Use-Cases of Decentralized Finance (DeFi)

Crypto-Powered - The Most Promising Use-Cases of Decentralized Finance (DeFi)
A whirlwind tour of Defi, paying close attention to protocols that we’re leveraging at Genesis Block.
https://reddit.com/link/hrrt21/video/cvjh5rrh12b51/player
This is the third post of Crypto-Powered — a new series that examines what it means for Genesis Block to be a digital bank that’s powered by crypto, blockchain, and decentralized protocols.
Last week we explored how building on legacy finance is a fool’s errand. The future of money belongs to those who build with crypto and blockchain at their core. We also started down the crypto rabbit hole, introducing Bitcoin, Ethereum, and DeFi (decentralized finance). That post is required reading if you hope to glean any value from the rest of this series.
97% of all activity on Ethereum in the last quarter has been DeFi-related. The total value sitting inside DeFi protocols is roughly $2B — double what it was a month ago. The explosive growth cannot be ignored. All signs suggest that Ethereum & DeFi are a Match Made in Heaven, and both on their way to finding strong product/market fit.
So in this post, we’re doing a whirlwind tour of DeFi. We look at specific examples and use-cases already in the wild and seeing strong growth. And we pay close attention to protocols that Genesis Block is integrating with. Alright, let’s dive in.

Stablecoins

Stablecoins are exactly what they sound like: cryptocurrencies that are stable. They are not meant to be volatile (like Bitcoin). These assets attempt to peg their price to some external reference (eg. USD or Gold). A non-volatile crypto asset can be incredibly useful for things like merchant payments, cross-border transfers, or storing wealth — becoming your own bank but without the stress of constant price volatility.
There are major governments and central banks that are experimenting with or soon launching their own stablecoins like China with their digital yuan and the US Federal Reserve with their digital dollar. There are also major corporations working in this area like JP Morgan with their JPM Coin, and of course Facebook with their Libra Project.
Stablecoin activity has grown 800% in the last year, with $290B of transaction volume (funds moving on-chain).
The most popular USD-pegged stablecoins include:
  1. Tether ($10B): It’s especially popular in Asia. It’s backed by USD in a bank account. But given their lack of transparency and past controversies, they generally aren’t trusted as much in the West.
  2. USDC ($1B): This is the most reputable USD-backed stablecoin, at least in the West. It was created by Coinbase & Circle, both well-regarded crypto companies. They’ve been very open and transparent with their audits and bank records.
  3. DAI ($189M): This is backed by other crypto assets — not USD in a bank account. This was arguably the first true DeFi protocol. The big benefit is that it’s more decentralized — it’s not controlled by any single organization. The downside is that the assets backing it can be volatile crypto assets (though it has mechanisms in place to mitigate that risk).
Other notable USD-backed stablecoins include PAX, TrueUSD, Binance USD, and Gemini Dollar.
tablecoins are playing an increasingly important role in the world of DeFi. In a way, they serve as common pipes & bridges between the various protocols.
https://preview.redd.it/v9ki2qro12b51.png?width=700&format=png&auto=webp&s=dbf591b122fc4b3d83b381389145b88e2505b51d

Lending & Borrowing

Three of the top five DeFi protocols relate to lending & borrowing. These popular lending protocols look very similar to traditional money markets. Users who want to earn interest/yield can deposit (lend) their funds into a pool of liquidity. Because it behaves similarly to traditional money markets, their funds are not locked, they can withdraw at any time. It’s highly liquid.
Borrowers can tap into this pool of liquidity and take out loans. Interest rates depend on the utilization rate of the pool — how much of the deposits in the pool have already been borrowed. Supply & demand. Thus, interest rates are variable and borrowers can pay their loans back at any time.
So, who decides how much a borrower can take? What’s the process like? Are there credit checks? How is credit-worthiness determined?
These protocols are decentralized, borderless, permissionless. The people participating in these markets are from all over the world. There is no simple way to verify identity or check credit history. So none of that happens.
Credit-worthiness is determined simply by how much crypto collateral the borrower puts into the protocol. For example, if a user wants to borrow $5k of USDC, then they’ll need to deposit $10k of BTC or ETH. The exact amount of collateral depends on the rules of the protocol — usually the more liquid the collateral asset, the more borrowing power the user can receive.
The most prominent lending protocols include Compound, Aave, Maker, and Atomic Loans. Recently, Compound has seen meteoric growth with the introduction of their COMP token — a token used to incentivize and reward participants of the protocol. There’s almost $1B in outstanding debt in the Compound protocol. Mainframe is also working on an exciting protocol in this area and the latest iteration of their white paper should be coming out soon.
There is very little economic risk to these protocols because all loans are overcollateralized.
I repeat, all loans are overcollateralized. If the value of the collateral depreciates significantly due to price volatility, there are sophisticated liquidation systems to ensure the loan always gets paid back.
https://preview.redd.it/rru5fykv12b51.png?width=700&format=png&auto=webp&s=620679dd84fca098a042051c7e7e1697be8dd259

Investments

Buying, selling, and trading crypto assets is certainly one form of investing (though not for the faint of heart). But there are now DeFi protocols to facilitate making and managing traditional-style investments.
Through DeFi, you can invest in Gold. You can invest in stocks like Amazon and Apple. You can short Tesla. You can access the S&P 500. This is done through crypto-based synthetics — which gives users exposure to assets without needing to hold or own the underlying asset. This is all possible with protocols like UMA, Synthetix, or Market protocol.
Maybe your style of investing is more passive. With PoolTogether , you can participate in a no-loss lottery.
Maybe you’re an advanced trader and want to trade options or futures. You can do that with DeFi protocols like Convexity, Futureswap, and dYdX. Maybe you live on the wild side and trade on margin or leverage, you can do that with protocols like Fulcrum, Nuo, and DDEX. Or maybe you’re a degenerate gambler and want to bet against Trump in the upcoming election, you can do that on Augur.
And there are plenty of DeFi protocols to help with crypto investing. You could use Set Protocol if you need automated trading strategies. You could use Melonport if you’re an asset manager. You could use Balancer to automatically rebalance your portfolio.
With as little as $1, people all over the world can have access to the same investment opportunities and tools that used to be reserved for only the wealthy, or those lucky enough to be born in the right country.
You can start to imagine how services like Etrade, TD Ameritrade, Schwab, and even Robinhood could be massively disrupted by a crypto-native company that builds with these types of protocols at their foundation.
https://preview.redd.it/agco8msx12b51.png?width=700&format=png&auto=webp&s=3bbb595f9ecc84758d276dbf82bc5ddd9e329ff8

Insurance

As mentioned in our previous post, there are near-infinite applications one can build on Ethereum. As a result, sometimes the code doesn’t work as expected. Bugs get through, it breaks. We’re still early in our industry. The tools, frameworks, and best practices are all still being established. Things can go wrong.
Sometimes the application just gets in a weird or bad state where funds can’t be recovered — like with what happened with Parity where $280M got frozen (yes, I lost some money in that). Sometimes, there are hackers who discover a vulnerability in the code and maliciously steal funds — like how dForce lost $25M a few months ago, or how The DAO lost $50M a few years ago. And sometimes the system works as designed, but the economic model behind it is flawed, so a clever user takes advantage of the system— like what recently happened with Balancer where they lost $500k.
There are a lot of risks when interacting with smart contracts and decentralized applications — especially for ones that haven’t stood the test of time. This is why insurance is such an important development in DeFi.
Insurance will be an essential component in helping this technology reach the masses.
Two protocols that are leading the way on DeFi insurance are Nexus Mutual and Opyn. Though they are both still just getting started, many people are already using them. And we’re excited to start working with them at Genesis Block.
https://preview.redd.it/wf1xvq3z12b51.png?width=700&format=png&auto=webp&s=70db1e9587f57d0c470a4f9f4523c216929e1876

Exchanges & Liquidity

Decentralized Exchanges (DEX) were one of the first and most developed categories in DeFi. A DEX allows a user to easily exchange one crypto asset for another crypto asset — but without needing to sign up for an account, verify identity, etc. It’s all via decentralized protocols.
Within the first 5 months of 2020, the top 7 DEX already achieved the 2019 trading volume. That was $2.5B. DeFi is fueling a lot of this growth.
https://preview.redd.it/1dwvq4e022b51.png?width=700&format=png&auto=webp&s=97a3d756f60239cd147031eb95fc2a981db55943
There are many different flavors of DEX. Some of the early ones included 0x, IDEX, and EtherDelta — all of which had a traditional order book model where buyers are matched with sellers.
Another flavor is the pooled liquidity approach where the price is determined algorithmically based on how much liquidity there is and how much the user wants to buy. This is known as an AMM (Automated Market Maker) — Uniswap and Bancor were early leaders here. Though lately, Balancer has seen incredible growth due mostly to their strong incentives for participation — similar to Compound.
There are some DEXs that are more specialized — for example, Curve and mStable focus mostly only stablecoins. Because of the proliferation of these decentralized exchanges, there are now aggregators that combine and connect the liquidity of many sources. Those include Kyber, Totle, 1Inch, and Dex.ag.
These decentralized exchanges are becoming more and more connected to DeFi because they provide an opportunity for yield and earning interest.
Users can earn passive income by supplying liquidity to these markets. It usually comes in the form of sharing transaction fee revenue (Uniswap) or token rewards (Balancer).
https://preview.redd.it/wrug6lg222b51.png?width=700&format=png&auto=webp&s=9c47a3f2e01426ca87d84b92c1e914db39ff773f

Payments

As it relates to making payments, much of the world is still stuck on plastic cards. We’re grateful to partner with Visa and launch the Genesis Block debit card… but we still don’t believe that's the future of payments. We see that as an important bridge between the past (legacy finance) and the future (crypto).
Our first post in this series shared more on why legacy finance is broken. We talked about the countless unnecessary middle-men on every card swipe (merchant, acquiring bank, processor, card network, issuing bank). We talked about the slow settlement times.
The future of payments will be much better. Yes, it’ll be from a mobile phone and the user experience will be similar to ApplePay (NFC) or WePay (QR Code).
But more importantly, the underlying assets being moved/exchanged will all be crypto — digital, permissionless, and open source.
Someone making a payment at the grocery store check-out line will be able to open up Genesis Block, use contactless tech or scan a QR code, and instantly pay for their goods. All using crypto. Likely a stablecoin. Settlement will be instant. All the middlemen getting their pound of flesh will be disintermediated. The merchant can make more and the user can spend less. Blockchain FTW!
Now let’s talk about a few projects working in this area. The xDai Burner Wallet experience was incredible at the ETHDenver event a few years ago, but that speed came at the expense of full decentralization (can it be censored or shut down?). Of course, Facebook’s Libra wants to become the new standard for global payments, but many are afraid to give Facebook that much control (newsflash: it isn’t very decentralized).
Bitcoin is decentralized… but it’s slow and volatile. There are strong projects like Lightning Network (Zap example) that are still trying to make it happen. Projects like Connext and OmiseGo are trying to help bring payments to Ethereum. The Flexa project is leveraging the gift card rails, which is a nice hack to leverage existing pipes. And if ETH 2.0 is as fast as they say it will be, then the future of payments could just be a stablecoin like DAI (a token on Ethereum).
In a way, being able to spend crypto on daily expenses is the holy grail of use-cases. It’s still early. It hasn’t yet been solved. But once we achieve this, then we can ultimately and finally say goodbye to the legacy banking & finance world. Employees can be paid in crypto. Employees can spend in crypto. It changes everything.
Legacy finance is hanging on by a thread, and it’s this use-case that they are still clinging to. Once solved, DeFi domination will be complete.
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Impact on Genesis Block

At Genesis Block, we’re excited to leverage these protocols and take this incredible technology to the world. Many of these protocols are already deeply integrated with our product. In fact, many are essential. The masses won’t know (or care about) what Tether, USDC, or DAI is. They think in dollars, euros, pounds and pesos. So while the user sees their local currency in the app, the underlying technology is all leveraging stablecoins. It’s all on “crypto rails.”
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When users deposit assets into their Genesis Block account, they expect to earn interest. They expect that money to grow. We leverage many of these low-risk lending/exchange DeFi protocols. We lend into decentralized money markets like Compound — where all loans are overcollateralized. Or we supply liquidity to AMM exchanges like Balancer. This allows us to earn interest and generate yield for our depositors. We’re the experts so our users don’t need to be.
We haven’t yet integrated with any of the insurance or investment protocols — but we certainly plan on it. Our infrastructure is built with blockchain technology at the heart and our system is extensible — we’re ready to add assets and protocols when we feel they are ready, safe, secure, and stable. Many of these protocols are still in the experimental phase. It’s still early.
At Genesis Block we’re excited to continue to be at the frontlines of this incredible, innovative, technological revolution called DeFi.
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None of these powerful DeFi protocols will be replacing Robinhood, SoFi, or Venmo anytime soon. They never will. They aren’t meant to! We’ve discussed this before, these are low-level protocols that need killer applications, like Genesis Block.
So now that we’ve gone a little deeper down the rabbit hole and we’ve done this whirlwind tour of DeFi, the natural next question is: why?
Why does any of it matter?
Most of these financial services that DeFi offers already exist in the real world. So why does it need to be on a blockchain? Why does it need to be decentralized? What new value is unlocked? Next post, we answer these important questions.
To look at more projects in DeFi, check out DeFi Prime, DeFi Pulse, or Consensys.
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Cryptocurrency technical analysis: neutral market dynamics before a powerful movement

Cryptocurrency technical analysis: neutral market dynamics before a powerful movement

Cryptocurrency technical analysis: neutral market dynamics before a powerful movement
This week, most stock market assets showed a neutral movement, which did not give investors clear signals about the need to take bull or bear positions. This trend was reflected in the cryptocurrency market. So, bitcoin continues to move below the key level of $10,000 and is unlikely to overcome it in the coming days. At the same time, it is worth noting a number of positive factors for the development of the price dynamics of crypto assets. Experts from one of the largest US banks, JPMorgan, presented a review according to which in March, bitcoin successfully passed its first stress test “mostly positive”. It also became known that the Binance crypto exchange launches quarterly BTC / USD futures contracts with leverage up to 125x, which will be available to users of the Binance Futures platform. This positive news can return to the market bulls that are waiting for signals for a successful entry.

Bitcoin

From the point of view of technical analysis, on a four-hour chart, BTC quotes are preparing for the development of a powerful movement. This is facilitated by going beyond the current consolidation between support at $9150 and resistance at $9500, in the area of which the line of the 200-day simple moving average (SMA) runs. In the future, due to reduced liquidity, traders may begin to open bearish positions provided that bitcoin drops below $9150. In this scenario, BTC can go to targets at $8760 (38.2% Fibonacci retracement) and $8330.
A deeper decline is still unlikely, because in case of growth of capitalization of the stock market, part of the funds will be directed to the cryptocurrency market. But in the future months, we can expect quotes to go above the key level of $9500, which will allow Bitcoin to rush up to the target clusters of $9900– $10,000 and further to $10,400– $10,500.

https://preview.redd.it/zk56mog26h751.png?width=700&format=png&auto=webp&s=adf137775c35da072775c21acff5ccac26c73fbd
BTC / USD chart, daily timeframe.

Ethereum

Ethereum at the moment broke support at around $233, where the 11.4% Fibonacci retracement line runs, which allowed the altcoin to reach the important mark of $220. The next target for sellers will be the consolidation of $195– $200, below which is the line of the 200-day SMA. From this area, the ether will be ready to resume the upward movement to the first target of $251, overcoming of which will be a key condition for the continued development of the upward impulse. In this case, the goals for Ethereum will be the levels of $280, $300 and $320.

https://preview.redd.it/fd3at9986h751.png?width=700&format=png&auto=webp&s=2cb20e04b3cd82649cc762f48b6760ba38d59f7e
Chart ETH / USD, daily timeframe.

Litecoin

Litecoin confidently reached the goal in the form of the upper boundary of the cluster $40– $42. However, further growth attempts are hampered by the 200-day SMA line, which is located at around $45. A strong impulse to sell can send LTC quotes down to the levels of $36 and $30.60.
However, it should be borne in mind that these marks are excellent opportunities for a set of positions for the purchase in the long term. In this case, the first target will be the level of $47.45. By the end of the year, traders will potentially be able to take profits at $52 (38.2% correctional level on the Fibonacci lines), $56.80, $60.80, $65 and $70.

https://preview.redd.it/31jo7rmf6h751.png?width=700&format=png&auto=webp&s=cf1d4fef4b8f68c97ba22bd84a56f392a030bd4f
LTC / USD chart, four hour timeframe.

Bitcoin cash

A bitcoin fork moves within the framework of the “Horizontal Channel” with borders of $200– $272. The asset is trying to gain a foothold above the level of $250 and the 200-day SMA line, which has become an important resistance for him. Going below $200 will cause BCH to drop to $170, and a break above $272 will provide an opportunity to take profits at $305, $356 and $400. Now trading Bitcoin Cash in the range of $200– $272 may bring more risk than profit, so the best strategy for conservative investors is to wait for going beyond this consolidation.

https://preview.redd.it/pjwco4ej6h751.png?width=700&format=png&auto=webp&s=8a2742d0e16e368335b485c9d135c618bc271d6d
BCH / USDT chart, four hour timeframe.

XRP

XRP further reduced volatility and went down beyond the boundaries of consolidation of $0.2050– $0.2360, which allowed to reach the target of $0.18 in the moment. Closing the daily candle below this mark will allow the bears to send the asset to $0.16 and $0.1470. However, a breakthrough of the $0.2360 level and the 200-day SMA line will allow XRP quotes to rush further to the target levels of $0.2540, $0.27, $0.2860 and $0.30.

https://preview.redd.it/0qainjxl6h751.png?width=700&format=png&auto=webp&s=057858229649d84b63611c8fdc78d67b8cb76f17
XRP / USD chart, daily timeframe.

Binance coin

Binance Coin quotes realized the forecast for the development of the downward movement in the region of the lower boundary of the region of $15.30– $16. But bears will need a lot of strength to overcome it, and if successful, they will be able to take profits at $13.80 and $11.50.
But in the long run, from these levels, the restoration of BNB quotes to the first
goals in the form of levels of $17 and $18.14 may begin. This scenario will be realized provided that an important mark of $16 is broken where the 200-day MA line passes. In the perspective of this year, whales may raise the value of the crypto asset of the Binance exchange to the goals of $19.36, $21.30 and $23.50.

https://preview.redd.it/l2devrqo6h751.png?width=700&format=png&auto=webp&s=6cff5b3c4d87de03fdd3f27074df500ac761bbb3
BNB / USDT chart, daily timeframe.
Top cryptocurrencies have recently shown a neutral trend, but it will not last long. Indeed, usually this is followed by a powerful movement of the crypto market, so traders should “fasten their seat belts” and prepare for active trading in the coming months.
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The world economy is on the verge of crisis again, cryptocurrencies will be strong

Vulnerability refers to the property that things are vulnerable to damage when faced with fluctuations.
-Nassim Nicholas Taleb
In the face of economic fluctuations, it is disadvantageous to hold such a negative view. Every capital market has its own life cycle, which inevitably goes through a process from growth, to peak, and then to recession. Now is no exception. As we emerge from the longest bull market in history, we suddenly find ourselves in a highly vulnerable global economy facing the panicked and perplexed planet unprepared. However, the turmoil has just begun.
Newton's first law, also known as "the law of inertia", means that any object must maintain a constant linear motion or standstill until an external force forces it to change its state of motion. Although this analogy does not perfectly correspond to the capital market (because the market is always changing and developing in different directions), at least one thing is certain that under the action of the market mechanism, the market cycle always appears Trend from peak to valley.
The music box winds up, and the performance of the song sounds, and then it stops after a while. When this happens, the market structure collapses, eventually leading to huge chaos, and then falling into silence. Once external forces force the entire economy into trouble, people will realize the long-standing hidden structural defects in the economy.
Now, the world economy is on the verge of crisis again. All human beings have to face a sudden outbreak of a global epidemic and the resulting shocks in supply and demand in the market. The economies of some countries have stalled. Ironically, the effects of inertia may be prevalent in market fluctuations.
While witnessing the development of the global economy, we still find two simultaneous macro trends:
--1-- USD strong We believe that the strong US dollar is driven by three factors: Investors turn to safe assets: Despite the Fed ’s interest rate cuts and monetary stimulus policies, the market ’s increasing demand for the US dollar has pushed up the US dollar index and hit a new high in 18 years.
US Dollar Financing Issues: Cross-currency basis swaps measure that investors are more inclined to hold the US dollar than the euro or the yen.
On March 17, the euro-dollar basis swap swap premium expanded from -60 basis points to -120 basis points, the highest level since 2011. As of press time, the Euro-US dollar basis swap has rapidly dropped to about -27 basis points, while the US dollar-Japanese yen basis swap has expanded to -70 basis points. Negative basis points indicate greater pressure on the dollar and higher hedging costs for European and Japanese investors.
The reality is that U.S. banks, which are the main source of funding for the U.S. dollar, are storing large amounts of cash instead of actively issuing short-term U.S. dollar loans to foreign banks. Due to recent pressure from the balance sheet, more and more U.S. banks are beginning to reduce credit lines to retain cash. In addition, many foreign banks that lack direct access to the US dollar market can only rely on central bank liquidity swaps for financing. This week, the Fed and several other central banks opened new liquidity swap tools, providing USD 30 billion to USD 60 billion of liquidity, respectively, to ease pressure on USD financing.
Central banks in emerging market countries are taking urgent steps and lowering their benchmark interest rates: Emerging market investors are very worried about the stability of their currencies and are pouring into the dollar market. According to Bloomberg, all major emerging market currencies weakened against the US dollar on January 20, just as the new crown virus began to spread in Asia.
——2—— Treasury liquidity tightening Abnormally performing credit markets: In general, price fluctuations will prompt investors to switch from risky assets (such as stocks) to safe-haven assets (such as bonds). This was indeed the case when the new coronavirus was causing panic. However, the current despair of liquidity (especially cash) by market investors has led to a large-scale sell-off in the global bond market, falling bond prices and rising interest rates.
Repurchase market: The Federal Reserve's rescue measures have not brought the expected results. In the past week, the Federal Reserve announced three repurchases and other measures to release liquidity, hoping to ease the current state of the US Treasury market and reduce the inventory of primary dealers. However, market demand for government bonds remains sluggish.
Let's turn our eyes from the home of the macro economy to the cryptocurrency market. Although they are not necessarily related, we find that the two are closely related.
In the face of volatility, it is particularly important to develop a price action strategy. The CBOE-VIX index, an indicator that predicts the trend of the S & P 500 in the next 30 days, has surged to its highest level since the last global financial crisis. At the same time, we also saw that the 90-day implied volatility of Bitcoin options rose to 6.8% (annualized 130%), which is about 5.9% (annualized 113%) this weekend. As the "Black Thursday" on March 12th, BTC was down 40% and ETH was down 50%, some leveraged positions were forced to close. According to reports, BitMEX alone closed USD 700 million worth of long and short positions. At the same time, the sell-off of ETH dropped the value of the DeFi ecosystem by 40%. The total amount of collateral liquidation of Compound, dYdX and Maker and other lending platforms reached US $ 10 million. But in this turbulent market, not all assets perform so badly.
Although the price of BTC, like the stock market at the beginning, plummeted, falling by 60% from the high price in mid-February, it rebounded by about 50% from the price low on March 12. Over the past period, we have found a large amount of funds flowing from altcoins to BTC. With the spot premium (the spot price is higher than the futures price), the demand for bitcoin lending has increased. The effective fund interest rate also gradually returned to normal as the curve was inverted. In contrast, when futures are at a premium (the futures price is higher than the spot price), there is almost no demand for BTC's lending transactions. At present, the BTC funding rate on various lending platforms has increased from 3-5% to 8%, and the ETH funding rate has increased from 2-4% to 6%.
——3—— Floating profit stablecoin market Since February 14, the entire cryptocurrency market has experienced a large-scale sell-off, with a market value of $ 45 billion evaporated. At the same time, the market value of USDT has risen to nearly $ 5 billion. USDT has emerged from this market volatility and has become a safe-haven asset. This week, the premium rate of USDT prices in China and South Korea is as high as 7%, which is caused by the demand of payment service providers and arbitrage traders. The current over-the-counter USDT supply exceeds supply. At the same time, the market value of USDC climbed to US $ 630 million, a record high. The market value of BUSD is exceeding the US $ 150 million mark, mainly due to the surge in demand for Binance's borrowing and margin trading.
——4—— Near-term outlook We pay close attention to the changing macroeconomic trends and the successive monetary and fiscal policies implemented by governments around the world. Although we cannot predict the specific trend of the market, we still believe that cryptocurrency as an asset class will be strong. In a nutshell, we think:
● Due to the recent sell-off in the market, the value of positions has shrunk sharply, making the distribution of positions in the market clearer.
● With the exit of market makers, the spread between major exchanges has brought more market arbitrage opportunities for retail traders. In particular, the derivatives market (futures and perpetual swaps) has seen a significant discount compared to the spot market, which has pushed up BTC's lending rate.
● By hedging the spot and long futures, market participants can carry out arbitrage trading, which is completely contrary to the market situation we saw last year (the futures price is significantly higher than the spot).
● Over the past six months, trading activities in the options market have grown rapidly. We expect that trading activities in the options market will continue to grow.
● At present, on our platform, institutional clients such as hedge funds, arbitrage traders, crypto companies, etc. have all bought a lot of BTC and USDT.
Market volatility is part of investment. We believe that after a period of time, the economy will re-enter the upward trajectory, please let us work together for it.
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After the Bitcoin crash: do others fear me for greed?

At 6:30 pm on March 12, Bitcoin dropped from $ 7211 to $ 5555.55. The bitcoin price dived again this morning, slumping nearly $ 2,000 again in half an hour, the lowest fell to $ 3,782.13, a drop of more than 40% in 24 hours. According to the data of the contract emperor, only Huobi, OKEx, Binance, and BitMEX exchanges had a daily short position of 3.133 billion US dollars, which reached the highest in a single day in history. The number of liquidated positions exceeded 110,000, which was also the highest in a single day.
Also on March 12, the S & P index fell 260.74 points, triggering the fusing mechanism for the second time this week. The Dow hit its largest decline in history, at 2352.6 points. The Nasdaq fell 750.25 points to 7201.8 points. This is the third time in the history of US stocks. This fuse has been 33 years since the first fuse, but only 4 days have passed since the last fuse. Buffett shouted, "I only lived this way in 89 years." It is reported that Buffett lost $ 6.8 billion last night.
According to incomplete statistics, with the exception of the United States, the stock markets of 11 countries including Canada, Mexico, Japan, South Korea, Thailand, India, the Philippines, Indonesia, Brazil, and Pakistan plummeted. The five largest US technology companies, Apple, Amazon, Google, Facebook, and Microsoft, had a cumulative market value of $ 416.63 billion. The Bloomberg Billionaires Index shows that the top 15 richest people in the world lost a total of $ 46.4 billion.
Market panic or pullback demand? Regarding the meltdown of U.S. stocks this week, Yang Delong, chief economist of Qianhai Open Source Fund, believes that the spread of the epidemic is not the main reason. It is more a decade of bull market for U.S. stocks. Some factors driving the rise of U.S. stocks are quietly changing, such as the Federal Reserve ’s interest rate There is not much space. Regarding this crazy drop in Bitcoin, Apocalypse Capital told InfoQ that there are two main reasons for this drop in Bitcoin: on the one hand, the bearish demand caused by the expected global economic downturn, and on the other hand, Bitcoin Callback requirements themselves.
As we all know, Bitcoin will be halved in the second half of the year, but the trading market pays attention to speculation expectations. This round of rise has essentially halved the market. After hitting a high of 10500, Bitcoin is facing a callback demand. Of course, this round of downtrends is so rapid and there are only a handful of recurrences in the history of Bitcoin, which are inextricably linked to the decline in global stock markets, both of which are the result of expectations of a bearish global economy.
However, Johnson Xu, chief analyst of TokenInsight, told InfoQ that the Bitcoin dip was mainly due to market panic, because some market participants bought bitcoins by buying mining machines, borrowing, etc., and expected to reduce their expectations by half. A linkage effect caused by everyone being too optimistic about the market.
The market is overhyped because Bitcoin is halved, and some market participants are afraid to miss the opportunity to enter the market irrationally. The current market slump is driven by strong irrational behavior, which translates into a rapid downside response and quickly depletes market buyers' liquidity (flattening down). When the overall financial market panic or other unexpected events are caused by the New Crown virus and the global economic slowdown, market participants often seek to withdraw assets such as stocks and bitcoins and convert these assets into cash (cash is king). So has the recent gold sell-off.
When the market panics, people ask for cash in the beginning instead of investing in safe-haven assets such as gold. At the same time, because gold is considered a high-quality asset, investors usually start with liquidity crunch and market panic. Cash in on good assets (because inferior assets are more difficult to sell in panic times). The Bitcoin crash this time has a certain connection with the decline in global stock markets, because the entire financial market is a globalized market, and there is more or less linkage between each asset.
In addition, Forbes speculated that it may be because PlusToken scammers transferred bitcoins worth more than 100 million US dollars to the mixer, and then sold bitcoins, resulting in rising market supply.

Other people are greedy, I am afraid, others are afraid of me, greedy? In this case, should investors still expect "halving the market"? Johnson Xu believes that there is no such thing as a "half quotation", and most market participants are too optimistic about the halving of Bitcoin. Price fluctuations are not necessarily caused by halving, but may be caused by the sum of other factors. When everyone is saying that they are optimistic about the market, the existence of risk is ignored in the subconscious. At this time, the risk will be actually reflected, and the upside will gradually shrink. Bitcoin halving was written into the code, and it was not an accident. Bitcoin should be halved in a rational way. It is worth looking forward to, but not overly interpreting and speculation.
However, Tianqi Capital believes that this plunge is a callback period for bitcoin's halving of the market, and each round of sharp decline also indicates the opportunity of the market outlook: cheap chips will be hoarded, waiting for the next wave of hype and explosion. Therefore, Tianqi Capital still believes that the market outlook of Bitcoin is worth looking forward to, provided that it is not frightened by the current fierce washing of the chips, after all, when the bear market is the worst, it is also when gold is everywhere.
Regarding the future trend of Bitcoin, Apocalypse Capital stated that it should judge according to the current trend.
In this round of market, Apocalypse Capital initially chose to follow the downward trend of May 18, and Bitcoin has gradually dropped from a high of 10,000 to 3150 points, so the big support level predicted by this round happens to be 3700 today. Near the point. Data monitoring shows that some funds are involved in this price range. But whether it can hold on to this support remains to be tested. If the 3700 support cannot be maintained, it is very likely that it will hit the US $ 2000 level. Tianqi Capital believes that this is the market's last line of defense. Long-term investment is recommended to buy some relatively stable targets, such as BTC, ETH, etc. The bear market will eliminate many currencies, but if it survives, it will shine in the next round.
Johnson Xu believes that the plunge is also a test to promote the healthy development of the industry. Extreme market is a test for the entire industry, especially for infrastructure, risk management, etc., so it is still optimistic and supports the development of the industry for a long time.
For current investors, Johnson Xu offers the following suggestions:
  1. Other people are greedy, I am afraid, others are afraid of me, greedy.
  2. Global financial markets have also undergone major changes. From the data point of view, I don't think Bitcoin has the attributes of a safe-haven asset, but this market can test whether Bitcoin has a certain risk-avoidance capability. This is a global world. We need to analyze various markets, not just the digital asset market.
  3. In the long run, we are still optimistic about the digital asset industry.
Does Bitcoin have a fusing mechanism? On March 9, after the U.S. stock market crash triggered the fusing mechanism, the market began a discussion of "whether Bitcoin should set up a fusing mechanism". But at present, most people are not optimistic about the Bitcoin fusing mechanism. OKEx CEO Jay Hao said that the fusing mechanism is difficult to implement in the digital currency market. In the face of a highly volatile market, setting the fuse point is a difficult problem. At the same time, for a 7 * 24h market, when a certain exchange breaks down, the price difference between the digital currencies between the platforms will increase, leading to arbitrage, and the fuse mechanism will eventually become a decoration.
Du Wan, the co-founder of Contract Emperor, also said that it is unrealistic to use a fuse mechanism in the currency circle. The fusing mechanism first violates the original intention of the decentralization of the blockchain, and at the same time, it will touch the interests of the top of the currency circle ecological chain. For example, large trading teams can no longer use pins to obtain large profits. When the market is panic, exchanges with a fuse mechanism may lose traffic to exchanges without a fuse mechanism because of the run effect of traders.
It can be seen that the current risk aversion measures in the traditional stock market are difficult to transfer to the fickle currency market in a short time, and the regulation of this market still has a long way to go. Investors should still be cautious when investing.
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Which Place Is Safe To Buy Bitcoins

Which Place Is Safe To Buy Bitcoins
Bitcoins
Bitcoins (BTC) the most valuable and talked about cryptocurrency is a digital floating exchange that is most used actively on trades of exchanges.


https://preview.redd.it/mtmqalo4fzm41.png?width=1200&format=png&auto=webp&s=bae8e53adb94963b83e9b8137ae6504e576f50a2
Launched in 2009, it is considered to be a digital firm which has grown wildly over the past years, used mostly for online purchases and an investment There are numerous trading platforms and online exchanges that let you trade bitcoin and other cryptocurrencies.
But the main thing you have to beware of is trading costs, platform security, and reputation/trust of the bitcoins suppliers.
Which place is safe to buy this Bitcoins?
Bitcoins, not sponsored by any government. Instead of, you can buy bitcoins from bitcoins mining community or else you can also buy them with dollars or nearly any other currency.
As noted, there are few places where you can safely buy this bitcoins
CoinBase
Coinbase is the largest and most reputed Bitcoin platform functioning in the United States. It is one of the easiest places to start with Bitcoin which offers both an exchange and wallet in one choice. It supports Bitcoin Cash, Ethereum and Litecoin.
Once you sign up and connect your bank account, you can easily transfer funds in and out of your account and convert them to Bitcoin and back to dollars at will. You can access it through both the Web app or mobile app. It utilizes two-factor authentication and keeps redundant digital and paper backups of data “in safe deposit boxes and vaults around the world.
Coinmama
Coinmama has more than one million customers in 188 countries and it functions as a all-in-one exchange and digital wallet that makes it easy to buy Bitcoin and a limited list of additional currencies in the U.S. Dollars or Euros. It has no mobile app, but the website is very high quality \
Robinhood
Robinhood initially started as a fee-free stock brokerage and recently expanded into the world of digital currencies. From February 2018, you can buy and sell Bitcoin and other digital currencies completely fee-free on this platform. It supports Bitcoin and Ethereum trades and market data for another 15 currencies. Started its operation in mobile first and recently it added a Web version, so it is best for people comfortable managing money from their phone or tablet.
Binance
Binance supports a wide range of digital currencies including Bitcoin, Ethereum and its own Binance Coin (BNB). It offers a wide option to trade coins into multiple currencies and supports digital currencies, including EOS, Skycoin, TRON, ICON, Ethereum Classic, Litecoin, Ripple, Stellar Lumens, Bitcoin Cash, plus a bunch of cryptocurrencies. But noted, there are also some bugs reported with this Android mobile app and some users have reported delays withdrawing certain currencies
CoinExchange
CoinExchange is another low-cost exchange platform as it offers a huge number of coins on its platform, perhaps the biggest lists of coins supported by any platform on this list. On this platform the website looks simple, it comes to the point of security, it is robust and has long-term support for currencies on this platform.
Coinbase Pro
Coinbase Pro (formerly known as GDAX) looks familiar to those who use Bloomberg terminals or active stock, commodity and option trading platforms. Because GDAX is now part of Coinbase, funds are safe and insured, and the majority of coins are stored in physical form offline to prevent theft.
Square Cash
Square cash is another mobile app, here you can buy and sell Bitcoin with no fees. Buying and selling free puts this Cash app near the top of the places to buy Bitcoin list. Unlike some digital wallets, you don’t hold your Bitcoin outside of Square, it is held in your Square Cash account on your behalf to sell or withdraw. But if you do want to send your coins to another wallet, Square does offer that feature.
Local Bitcoins
LocalBitcoins was founded in june 2012 and has set its marketplace from Helsinki, Finland. The site uses an escrow system, and the transfer of bitcoin is made after funds are received in the sellers account. The site is suggested for casual traders seeking more privacy.
Paxful Bitcoins
Paxful is very popular in the cryptocurrency space. In this platform, you can start immediately with a digital wallet and also you are allowed to buy or sell hassle-free bitcoins. It has both the functions of a website and the mobile apps.
Which Is The Correct Time To Buy Bitcoins?
To Find out the right time to purchase bitcoins, make use of tools like Bitcoin Wisdom or Cryptowatch.
It has a metrics chart which analyse with the other Bitcoin trading sites. These charts will help you understand Bitcoin’s price history across the many global Bitcoin exchanges.
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End of day summary - 03/07

The Dow fell 200.23, or 0.78%, to 25,473.23 , the Nasdaq lost 84.46, or 1.13%, to 7,421.46 , and the S&P 500 declined 22.52, or 0.81%, to 2,748.93.
The S&P 500 lost 0.8% on Thursday, as a negative economic outlook from the European Central Bank (ECB) helped fuel growth concerns and profit-taking interest. Thursday's risk-off mindset was made apparent by the underperformance of cyclical sectors and the flight-to-safety trade in the U.S. Treasury market where the 10-yr yield dropped six basis points to 2.64%.
There was little in the way of a catalyst, so stocks continued to endure their worst weekly performance of the year. The Dow and S&P finished lower for the seventh time in the past eight days. Investors may have been looking forward to tomorrow’s monthly jobs data, but they are also growing weary waiting for news on the trade talks with China despite the next scheduled meeting not occurring until the end of the month. A technical violation of the S&P 500's and Nasdaq Composite's 200-day moving averages also contributed to some selling interest; both closed below that key technical level.
10 of the 11 S&P 500 sectors finished lower with consumer discretionary (-1.4%), financials (-1.1%), and information technology (-0.9%) leading the retreat. Conversely, the utilities sector (+0.3%) was the lone group to finish higher.
In the U.S., initial jobless claims fell 3,000 to 223,000 in the week ended March 2. Q4 productivity grew at a 1.9% pace, which was a little firmer than expected.
In Trump news, CNBC reported that Michael Cohen, former lawyer and fixer for U.S. President Donald Trump, has filed a lawsuit against the Trump Organization, alleging his former company has filed to pay "fees and costs" owed to him.
TSLA was in focus following two separate reports, including one from CNBC saying that securities lawyers are claiming that CEO Elon Musk could face large fines and potential suspension as CEO for recent activity on Twitter that federal authorities said violated his September 29 agreement with the U.S. Securities and Exchange Commission. In addition, Bloomberg reported that the Pentagon is reviewing Musk's federal security clearance after he smoked marijuana on Joe Rogan's podcast in September. TSLA shares gained AH after a new filing showed a loan worth around $500M for use in China.
AGN said a new experimental treatment for major depression failed in three late-stage studies, and the drugmaker added that it was "deeply disappointed" in the results. David Tepper's Appaloosa hedge fund, which has been pressuring the board of Allergan for changes, said "this latest fiasco" should "make apparent to all that the company's 'Open Science' business model is broken." Shares of Allergan closed 4% higher.
Meanwhile, Reuters reported that the SEC is investigating whether the multi-tiered pricing system used by stock exchanges, including Intercontinental Exchange (ICE) and Nasdaq (NDAQ), favors big brokers at the expense of smaller ones.
In Europe, the ECB held its key interest rates unchanged and said it now expects the key rates to remain at their present levels at least through the end of 2019, which is later than its prior guidance for no change until at least this summer. The ECB also said a new series of quarterly targeted longer-term refinancing operations, or "TLTRO-III," will be launched, starting in September 2019 and ending in March 2021, that "will help to preserve favorable bank lending conditions and the smooth transmission of monetary policy." The timing served as a reinforcement of the concern that the global economy is weakening and that the U.S. market has gotten ahead of itself pricing in a more upbeat growth outlook that isn't being corroborated with falling earnings estimates.
Among the noteworthy gainers was YEXT, which rose 10% after it reported quarterly results and said it plans to hire over 200 employees in Germany over the next five years. Also higher after reporting quarterly results was GWRE, which gained 4%.
Among the notable losers was WBA which fell 2.1% on concerns over potential increased regulatory pressures after the Food and Drug Administration called the company the top violator among pharmacies illegally selling tobacco products to minors. Among the notable losers after reporting quarterly results were TWI and BURL, which fell 22% and 12%, respectively. Also lower was KR, which fell 10% after the grocery store operator reported worse than expected sales and profits for the fourth quarter and gave lower than expected fiscal year guidance.
Shares in Asia were mixed on Thursday following a third consecutive day of losses on Wall Street as investors sought developments on the state of U.S.-China trade negotiations. Meanwhile, U.S. tensions with China reached new heights as Chinese tech giant Huawei filed a lawsuit against the U.S. on Thursday. European stocks retreated, with the Stoxx Europe 600 down 0.4%.

Currency

The euro fell sharply against the dollar Thursday after the European Central Bank (ECB) unveiled a series of market-friendly policies amid a slew of rising risks.

Treasury

U.S. Treasuries saw a continuation of their recent strength on Thursday, registering solid gains across the curve. Treasuries started the cash session on a modestly higher note and accelerated their advance after the European Central Bank released a dovish statement, which served as an acknowledgement of slowing growth in the eurozone. It was not a surprise that the ECB made no changes to its interest rate corridor, but the central bank also said that it intends to keep rates at their current levels throughout 2019, which is about three months longer than what was stated in its previous guidance.

Commodity

Oil prices rose in choppy trade on Thursday, as the market continues to draw support from ongoing OPEC-led supply cuts and U.S. sanctions against exporters Venezuela and Iran.

Crypto

Cryptocurrency markets have recorded moderate gains and losses on the day, with Binance Coin (BNB) being the major gainer on the day. The leading cryptocurrency Bitcoin (BTC) started the day around $3,901, subsequently reaching its intraday high of $3,938.

YTD

  • Russell +13.0% YTD
  • Nasdaq +11.9% YTD
  • Spoos +9.7% YTD
  • Dow +9.2% YTD

AH news

  • COST Q2 Rev $35.40Bln Est 35.68Bln, Q2 EPS $2.01 vs $1.69 exp. Up 4%
  • EB Q4 EPS $(0.17) Misses $(0.13) Estimate. Down 20%

What's tomorrow?

investors will receive the Employment Situation Report for February and the Housing Starts and Building Permits Report for January on Friday.
Summary scraped from the interweb. Took 0.18 seconds.
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Current State & The Future Of Digital Assets From Ariel Ling, BitMax COO.

Current State & The Future Of Digital Assets From Ariel Ling, BitMax COO.
Ariel Ling, co-founder and COO of BitMax, has shared her thoughts on the current state of digital assets and what to expect in the next years, what retail investor should take into account when buying any cryptocurrencie and the key factors that drive the value of the token/coin.
Ariel Ling, BitMax COO
Why, when and how have you started your crypto journey?
I started my crypto journey at the beginning of 2018 when my long-time friend, the co-founder and CEO of BitMax.io, Dr. George Cao “pulled” me out of the traditional Wall Street and asked me to join him in launching this exciting venture. Three main drivers are 1) to learn more about blockchain technology and its transformational applications in different industries; 2) to leverage in-depth traditional finance expertise to improve overall crypto trading and exchange market structure for better efficiency and transparency; 3) to have a chance to work with a talented and driven team who share similar vision, passion and conviction to build a top global digital asset trading platform as well as a wonderful organization from good to great!
If your friend will ask you: should I consider cryptocurrencies as investment opportunity? What will be your answer? Will you recommend any specific digital asset?
Coming from traditional finance perspective, I would explain my thoughts process from three angles — 1) types of crypto or digital assets as the foundation for understanding; 2) whether they, are more for short-term trading or mid-term investment 2) what are elements for investment valuation and decision-making so our friends can assess and make decision for themselves.
First, in general there are three types of digital assets:
  • Major currency / coin-type like Bitcoin, ETH, XRP, Litecoin, etc. and stable coins;
  • Security-type tokens representing some equity or debt rights of underlying projects;
  • Utility tokens for usage on specific blockchain platform or network.
Each type represents different type of opportunity and risk.
Second: is digital asset good for trading or investment? due to the nascent nature and very short history of market development with most of retail investors’ participation and lack of proper regulatory framework globally, there are quite some market manipulation, speculation and fraud activities in the current market, causing significant volatility and investors loss across all types within very short period of time. This made it very hard for any investors to assess the real valuation and momentum drivers behind those large swings. So at this point, I would think with its high volatility and risk, digital asset in general is more of very short-term trading product than investment vehicle. From liquidity perspective, major currency/coin-type will have more market depth across exchanges, hence more suitable for short-term trading-focused strategies.
Third, from traditional investment perspective, it is critical to assess digital asset investing from valuation and fundamental perspectives, such as business model, future growth, economic return vs. person’s risk tolerance and investment objectives. For major coins, especially Bitcoin itself with its longest history among all the digital assets, have started to provide certain payment function similar to fiat currencies in certain countries. Hence, there are more interesting dynamics to the Bitcoin investing based on one’s view of Bitcoin usage over mid-term horizon and the relative valuation vs its production (mining cost) especially with the price down to 3,500–3,650 USD. For security-type or utility tokens, the performance over short-to-medium term really comes down to combination of intrinsic value of underlying blockchain projects and token economics. Similar to Internet in 1990s, blockchain technology projects are still at the early stage of development and looking for meaningful and applicable use cases to bring real economic benefit from the economics and business model perspective, so it becomes very difficult to apply traditional finance valuation and assess the real intrinsic value of those projects. Recent market crash has brought many of those tokens down to near zero value. So the investment in those tokens are extremely high risk and everyone should be really careful and prudent in the evaluation of any specific projects for the decision-making and risk protection.
What is the story behind BitMax? Who are the foundefounders? When it was founded?
Q1 2018, Dr. George Cao and I founded Global Digital Mercantile (GDM), global operator of digital asset platforms, including BitMax.io based on Singapore for overseas markets and North America’s trading platform aiming for the first half of 2019. BitMax.io started public beta testing mid July, 2018, and was officially launched later mid August. On November 18th , we launched our mining mechanism, the industry very first transaction-mining & reverse-mining mechanism, which has made us the industry leading third-generation cryptocurrency exchange — after first generation of traditional exchanges like Binance, Gemini, Coinbase, etc. and 2nd generation of transaction-mining ones like FCoin, Bitthumb, etc.
Just a quick introduction of my partner. Dr. Cao studied Computer Science in the University of Science and Technology of China, and earned his PhD degree from the University of Chicago. Dr. Cao was the Founder and the Chief Investment Officer of Delpha Capital Management, LLC., New York, specializing in trading equity, ETFs and commodity future products in all major exchanges across the globe. He is also the founder and managing partner of Whitestone Investment Group, a New York based venture fund that invests in a large variety of startup companies that are in the high tech, fintech, big data and medical area. Before founding Delpha Capital, Mr. Cao worked at the Equity Division of Barclays Capital in both the New York and London offices. During that period, he oversaw equity electronic trading in the U.S., European and Asian markets. Prior to Barclays, he researched and traded U.S. equity as a Portfolio Manager at Knight Capital Group.
For me, I have built more than 18-year extensive experience in strategic planning, business development, financial risk management and regulatory implementation across major trading asset classes (Equity, FX, and Fixed Income) at several top global banks. Previous to jumping into digital asset trading, I ran USD liquidity and investment product for top financial institutions and corporate clients at tier-one global investment bank. Before that, I ran US Broker Dealer as COO and head of Business Development for Germany 2nd largest bank. Earlier from 2007 to 2012, I was global equity trading COO across Lehman Brothers and Barclays Capital, building out trading franchise and market making businesses globally. I have four degrees — graduated top of class from Nankai University with two Bachelor degrees in Finance and English Literature and got my MBA from NYU and Master of Mass Communication from University of Georgia.
Where is Bitmax located? Are you a distributed team or do you have an office to work together? How many people work for Bitmax?
Our global team of 50 members are based off two main location — New York with 20 members, including all the founding members, and Beijing with 30 members.
Would you be so kind to introduce briefly the core team members?
Both George and I are very proud of our 10-member founding team. Similar to us, they are all from Wall Street top firms like Morgan Stanley, Deutsche Bank, Goldman Sachs, Bloomberg, and top high-frequency hedge funds with deep experience in the fields of financial engineering research and development of large-scale quant trading infrastructure. Our educational background span across multiple prestigious institutions including Columbia University, University of Chicago, Carnegie Mellon University, and New York University in the United States, as well as Peking University and Tsinghua University in China. So one special thing about BitMax.io is that very few exchanges in the crypto trading space are built by solid team like ours with strong traditional finance mindset and trading background.
You’ve started BitMax during market downtrend in pretty competitive environment. What is your value proposition? Why traders should switch to BitMax?
I think BitMax.io is actually very special in this market, and our team is very proud of what we have built in the short period of six months. There are at least three reasons I think traders should chooseBitMax.io:
  • It’s our real-word professional trading experience and expertise;
  • It’s is our platform, resilient, high volume quantitative-trading platform;
  • It’s is our top-quality customer-centric strategy.
First of all, as I mentioned in the last question, architected by a group of Wall Street veterans, BitMax.io builds upon the core value of blockchain, transparency and reliability, and delivers high-quality client services and trading experience through its innovative trading platform.
Second, our quant-driven tech platform. Our development members were all from high frequency and quantitative systematic trading shops. They definitely make sure the platform was resilient and it can actually handle billions of volume during the design and build. The platform resilience and scalability were fully being tested when we launched the transaction mining and reverse-mining. The first day, we actually had, within the first 24 hours, the trading volume of 1.6 billion in notional; and our system didn’t flinch, didn’t slow down, and didn’t shut down. This is very rare in any of today’s exchanges where you can frequently see the slowdown, the crash, and very slow user responses, especially with transaction mining exchanges.
Third, what we are extremely proud of and all the users can see, is our 24/7 customer services built upon the core Wall Street client-centric concept. Besides our customer support team who never sleep, George actually stands behind the platform almost 24/7 answering questions from the customers, seeking solutions for their issues, and providing the most responsive customer service for the entire crypto trading space.
BitMax CEO, George Cao, is often seen in official Telegram group answering different questions.
We constantly remind our team: customer first. When we design a product, when we launch a system, and when we look at user needs, we all look from customers’ perspective, from how we can protect the users. When we look at primary listing, we only select the high-quality projects because we want our users to have the best investment and trading experience on BitMax.io.
Are you satisfied with the current results of BitMax? Is transaction mining model giving expected volume? What is the % of traders using this model?
We are very pleased with current business development and delivery results from client acquisition and trading perspectives.
On the business development side, we completed the global setup for both 50-member team organization and comprehensive legal entity structure from Asia to North Americas in 2018, which laid down foundation and paved way for 2019 business expansion especially with US.
Since our platform launch in mid Aug, we successfully started Industry FIRST transaction mining and reverse-mining exchange and built out the most active global communities and users within four months in the bear market, with registered users more than 95k; average daily active traders more than quadrupled since the start of transaction mining; average daily trading volume of $465mm through the month of January and February in 2019. Those are extremely promising under this tough market condition.
From the composition of trading volumes, there are two parts — transaction mining which grows exponentially; second is organic, the regular trading which has experienced healthy increase as well because of all the listing activities and all the incentives we have. The regular trading takes about 5% of total trading volume, which is very good for an exchange which was launched in August and running right into the bear market.
What are the key factors that drive the value of the token/coin?
From traditional finance /investment view token economics is really a balance act between business / economic model and exchange market force, driven by three factors: intrinsic value and sustainability, supply and demand, and liquidity and depth.
First, from a traditional finance perspective, we need to look at the intrinsic value, the economic valuation behind a project. How does this project make money? Do they really have fundamentals? Do they really have a viable business model? Do they really have a solid user base for future growth? For example, our exchange business model is very simple. We are exchange; People trade on our platform. The more they trade, the more transaction fee the exchange collect — the revenue source. The exchange will last when people keep trading on the platform and the transaction revenue generated covers the operating cost of running an exchange.
Second, it is the supply and demand of token on the market — who will buy and for what purpose; who will sell and under what scenarios. For major currency coins like Bitcoin, people might buy and sell for potential investment or use in actual payment processing. For other types of token, it is more driven by short-term trading pattern and profit taking. So it is extremely important to set up certain token mechanism to support the equilibrium of supply and demand like how Central Banks manage the supply of currency in circulation through monetary policies.
Third, when the market force comes in, it comes down to the liquidity and depth. Exchange is about liquidity and market depth. That means there has to be enough of trading volumes at each pricing level for each token. For BitMax.io, we have very sophisticated market making model that is similar to Designated Market Maker model of New York Stock Exchange. We focus on providing liquidity and maintaining a fair and orderly market for those token listings who agree to engage our market making services.
Every exchange is looking for good projects in order to become a premiere market for this new asset. Can you name some projects that impressed you recently (even if you are not discussing possible listing with them)?
BitMax.io has strict listing requirements in order to identify high-quality projects for our users. Very proud that we have listed five industry star projects in the last several weeks, with more in the pipeline. All of them have the following attributes that made them successful — viable and profitable business model, growing user bases, strong community support, and comprehensive funding sources.
One of the shining examples is European project named LTO Network listed mid Jan. Its price has been steadily rising since then, as more and more people get to know their business model and more project support comes into the market place to buy the tokens — It uses blockchain technology to streamline a lot of legal processing for one of EU governments, which is very easy to understand its economic value from a revenue perspective. This is simply what people need to see eventually, clean and clear from business economic model perspective.
Let’s imagine a crypto market in 5 or 10 years. Can you make any prediction what the market will look like? What customers will expect from exchange in 5–10 years?
Based off my long-time experience in traditional trading, especially how equity market evolved last twenty years, I would imagine maturing market structure and entrance of institutional investors are key mandatory and healthy development of digital asset market.
First, As the market develops and expands globally, traditional institution participation is a must, in order to upgrade and strengthen the overall market structure and maturity, making it more transparent and resilient, and most importantly enabling the real broad-base adoption of digital assets. Most institutional investors, such as mutual fund, pension fund and other financial institutions, hold the majority of world investment assets, not individual retail investors. Only when those big guys join the market, will there be real revolutionary improvement and expansion of the digital asset just like any other financial markets.
Second, I would expect the market to become more structured with major building blocks for transparent trade life cycle processing and separate risk analytics supporting services. Current crypto trading market is very fragmented with exchanges taking on different roles of trading, wallet management, custodian, etc. Also the lack of clear and consistence regulation on market structure has led to many aspects of market inefficiency — inconsistent liquidity and depth, wide spread, high transaction cost, high volatility, speculation, etc. This definitely hampers the broader adoption of digital assets from institutional investors.
Forward looking, multi-tier structure under some level of regulatory framework with clear guidance is required for future maturing market. Similar to security market, there should be at least three layers of different and independent roles: the role of broker dealer to handle the client relationship with good KYC/ AML processes, retail clients, other financial institutions, blockchain players and to take client order as agent or dealer; the role of exchange to focus on listing and trading — liquidity provision and order matching; the role of clearing house to provide clearing and settlement and custodian on custody of assets with proper control and independence. It is very clean and clear with good check and balance in place.
What are the key challenges for 2019?
During our 2018 business planning, we clearly view 2019 to continue being full of challenges with market uncertainty from both asset price and valuation as well as regulatory development globally. In prep for that and further growth of our platform, we have laid out the following four main strategic objectives and they are all well underway:
  • To launch North America trading platform for high networth and institutional clients. With North America being heavily regulated market, there are two aspects of our plan — First is to leverage a trust structure to facilitate the major coin trading with fiat, and the second is broker-dealer license application with potential for securitized tokens pending regulatory guidance in place.
  • To enhance BitMax.io platform and reach global top-tier exchange. We will continue listening to our users and working hard to enhance user interface and experience by upgrading website vs. other competitors for better client retention.We will continue leading product innovation among the competitors with margin trading (successfully launched in mid Feb) and then derivative to attract new clients.
  • Relent focus on implementation and expansion of current business lines — listing, Market Making, marketing advisory services to grow current revenue base; and further seek new revenue opportunity through North America platform while maintaining cost discipline.
  • we are always on the lookout in terms of exchange alignments, acquisition target, and any business partnership from different aspects of the value chain.
When do you expect a market recovery or next bull run? What are the factors that will influence the start of the market recovery?
With current market crash or correction, there are two possibilities from trading perspective — recovery depending on whether this is a V down or U curve. The U curve occurs when the market collapses, it takes a longer time for market to find the bottom and struggle to rise up. The V down is like a quick collapse — dropping down very fast and reaching the bottom, and then, with some catalyst event, either catalyst from market structure, or catalyst from the market expansion itself, suddenly it gives a boost and bounces right back up.
For market recovery, besides all the investment and economics elements I’ve discussed above, I believe one critical factor is the regulatory development especially clear guidance from key regulatory bodies of those major financial markets such as US, UK, EU, etc. on those key building blocks I mentioned in the maturing market structure. Once those in place, more traditional institutional investors will be ready to get in and hence boost the liquidity and valuation of the digital assets. That is the new beginning of digital assets being accepted as part of Main Street investment globally.

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Consensus Network EP36: Buy, Borrow and Die: Bitcoin Style

Catch the full episode: https://www.consensusnetwork.io/podcastepisodes/2019/10/5/ep36-buy-borrow-and-die-bitcoin-style-1
Buck: Welcome back to the show everyone. Today my guest on Wealth Formula Podcast is Zack Prince. He's Founder and CEO of BlockFi. BlockFi bridges the gap between blockchain and the basic financial products that you're used to including interest-bearing accounts and loans. Zack, welcome to Wealth Formula Podcast. I think you we might have had you on before as a Consensus Network replay but first time on Wealth Formula Podcast specifically, so welcome.
Zac: Yeah, excited to be here, Buck. Thanks for having me. And it's good to chat with you again
Buck: Yeah so remind me how you got into this you know Bitcoin stuff in the first place, I mean you were as I understand you were a traditional finance guy right so where did the blockchain part come in?
Zac: Sure so I was I was working at a company in the FinTech world that provided data and technology solutions to institutional investors that wanted to participate in some of the new online lending platforms, whether they were real estate platforms or consumer lending platforms, and I kind of became the FinTech guy amongst my friend group and people would ask me you know should I invest in these real estate deals on fund rise or buy loans from Lending Club and I started writing a blog to share the information more efficiently with my friends basically and I started expanding a little bit writing about Robo advisory and some other things that were going on in the FinTech space and that's what led me to Bitcoin, and this is back in early 2015. I didn't start BlockFi until 2017 because I started following the market in the background, still working in traditional financial services in FinTech and then in early 2017 it started to feel like mainstream adoption was starting to happen in the crypto ecosystem. I'm started going to some meetups in New York City because at a certain point my wife said Zac, you're talking about crypto all the time and you're talking to me about it and I don't want to talk about it so you should find some other people to talk about this with. And the meetup composition started to change and in 2016 when I started going to these meetups it was the early crypto adopters you know libertarians, computer scientists and then in early 2017 I started to see some venture capitalists, some guys who had just left their job at Wall Street still wearing a suit, some more entrepreneurs and it was a really exciting time in the ecosystem, things like the Enterprise Ethereum Alliance were getting announced which had participation microsoft and a lot of other you know fortune 500 companies and I had started to believe in it. I was drinking the kool-aid a little bit so I decided to find a way to get involved in the space full-time and that's what led me to start BlockFi.
Buck: So I have to imagine that the response you got from the traditional finance people around that time when you started talking about the blockchain space and when you started being more and more involved with that was probably not a very positive response initially or did you did you experience some of that sort of you know rejection initially to what you were doing?
Zac: Yeah absolutely. But you know throughout my career this is now kind of the third emerging technology industry that I've worked in. I was originally an advertising technology starting like you know 15 years ago and I was in FinTech specifically the online lending side of FinTech which in its early days was called peer-to-peer lending and now in crypto. So having to do a lot of education explain it you know why something isn't crazy and it might work and here's why and here's the value proposition and here's what it is, I've gotten very used to that and comfortable with it. But yeah there were a lot of people who are like you know I've heard Bitcoin is only used by drug dealers and money launderers. I've heard that I'm supposed to care about blockchain and not Bitcoin. And you know at BlockFi we’re providing financial products into the market so it's a heavily regulated business so we also had to communicate with regulators. We had to explain to state regulators, federal regulators why what we were doing with Bitcoin and other cryptos than when you're doing these same types of things with assets that they're more familiar with.
Buck: So when you were talking to people back in, I don't know I guess 2016/17 and it's not a long time ago, it's only two years ago, but I have to imagine that the response or the you know the approach that people take to you when you speak to investors is very different. Has it become more mainstream in that regard for you know for big money investors?
Zac: It's absolutely become more mainstream you know the end of 2017 Q3/Q4. Point was going on that parabolic run it started to get covered everywhere, I mean it was on CNBC every day it was in Bloomberg New York Times Wall Street Journal. If you were paying attention to the financial industry and markets you heard about Bitcoin at that time if you hadn't heard about it before. So from a baseline of awareness perspective it got a lot better and then in 2018 you had a number of positive developments for the sector including one that I think is probably the most noteworthy which is that Bitcoin futures were listed on the CME the institutional investor perspective that's massive. You now have a well regulated well known super trustworthy venue where you can get exposure to this asset class, you also had companies like Grayscale bringing products to the market which are accessible to certain types of investors and their low bridge accounts and you started to see some adoption from companies like FinTech companies like Robin Hood and Square making Bitcoin available on their platforms. So the conversation has absolutely changed a lot and it's become less about whether or not this is something that's going to continue to exist whether or not it's something that was just a bubble and is going to die and now it's more about ok how is it going to get used how big could it get what are the interesting applications of it and what could have potentially disrupt in the traditional financial ecosystem.
Buck: So you know we had obviously following this you know pop in 2017, you know I actually like you kind of really got into this early 2017 so timing was pretty good I guess now regards. Good or bad depending how you look at it but I was there before before the parabolic move. And then we have you know then we followed this up with a crypto winter and and you know who knows if we're done with it, I guess we certainly are much better off than we were. You know a unit buddy it's funny Zac I don’t know if you remember this but I was about to, we'll talk about BlockFi specifically in a minute but, I was about to use BlockFi for borrowing because I like this idea of borrowing you know collateralized debt and collateralized debt on assets and buying something else. So I was about to do it and then Bitcoin lost a clip and I was like literally and I remember I was just emailing with somebody somebody over there and I was like sorry dude I guess I just sold it, I just sold all that Bitcoin I had and you sent one email back to me and it said “capitulation” but it you know and so now we're looking back at these we go down from 3,000 back up you know been sort of flirting around this 10,000 and it seems like we're kind of maybe that we're stuck there, maybe we're kind of out of winter, maybe we're in a holding pattern but it seems like to me that since that two years not only is the awareness increase but the development of the ecosystem itself is so much further advanced than it was in 2017. Is this an unusual case where the technology and maybe even the infrastructure is actually outpacing the price?
Zac: You know it's really hard to say. I would argue that in some ways it's typical. In other industries that showed a lot of promise where investors could you know participate maybe a little bit ahead of the adoption curve you saw crazy price run ups with the tech bubble and you know ‘99-2000 being the one that's kind of top of mind in recent memory and then on the other side of things, are we behind where the price should be now? It's really hard to say because this is kind of like a commodity type asset built on a payment network and valuing that is challenging and there's not a perfect model for for doing it today. It's not as easy as something that's cashflow producing but I'm incredibly bullish. I'm on record as saying at the beginning of this year that Bitcoin has only had one year in its 10-year existence where it had a lower low than the year before and parted this year around the low price for 2018 and I predicted that we would in the year had a higher price than where we started the year pretty soon and now we're up and you know around 300 percent from where we started the year. As that happens in investing is people frequently look at things on a year-to-year performance basis and when people are looking at Bitcoin even if all we do is stay around 10 K from here when they're looking at how Bitcoin performed rather than other relative to other assets at the end of 2019 it's probably going to look fantastic. And you also have an event coming up and in the summer of next year called The Halvening where basically the supply that's produced by miners is going to get cut in half and so if you believe in the stock the flow type models of valuation for Bitcoin that is usually a very big driver of price appreciation.
Buck: I believe May of 2020, right?
Zac: That's right.
Buck: In May of 2020. Can you just talked a little bit about that just so people know because people hear about it, I've been talking about it but I don't think that it really explained it.
Zac: Yeah and you know I'm not I'm not a computer scientist so I can explain it in a you know in a very simple…
Buck: No one else here is either.
Zac: So basically the way that new Bitcoin is created is through this process called mining. And it's analogous to mining gold except instead of finding a place in the earth where gold exists and then getting your trucks and mining equipment and digging it out of the ground, the way bitcoin is mined is using this computer program and there is now specialized computer hardware that's built specifically and optimized for mining Bitcoin. And you have this network of machines around the world where the input is energy into the mining hardware and the output is new Bitcoin and those miners are what provides the power for the payment network a Bitcoin to run and when we say that there is this event called The Halvening, what that basically means is that the output that's built into the Bitcoin program that the miners are receiving as their payment for contributing energy to the network, is going to get cut in half. So the miners are going to have the same you know relative input but the amount that they're receiving is going to get cut in half for that input. This should, if the demand side for Bitcoin remains equal, it should drive up the price and historically Bitcoin has had three of these Halvening events in its lifetime so far I believe and around each Halvening you have seen you know six months before or six months after a pretty material run up in price.
Buck: Yeah so it also goes along with that sort of that the entire idea that Bitcoin unlike you know other assets including gold is it's a deflationary asset ultimately and and that's one of the things that makes that happening really significant. Apart from and I have one more question before we get to block five which is apart from the Halvening, you know thing that's happening, what is maybe the biggest development or upcoming thing that's coming up that makes you the most bullish on the future of Bitcoin or blockchain in general?
Zac: Sure so I think I wouldn't actually point to any one specific thing, I would point to two broad trends. So one is institutional adoption and participation in the asset class and the other is better ramps for retail participation into the asset class and just focusing here you know on the US market because it really is an international story but just in the US market. In September we should have Bakkt launching their futures platform. Bakkt is owned by ICE, the Intercontinental Exchange, and there's a big core difference between their futures and the current futures that are available on the CME in that futures on Bakkt platform are going to be physically settled so that means that actual Bitcoin is going to be needed to facilitate the trading on Bakkt’s platform which does not happen on CMEs exchange so that's that should be a very positive catalyst in terms of demand for physical Bitcoin that could have an impact on the price. Also on the institutional side this year I believe earlier this year, the first pension fund made an investment into an asset management vehicle that was focused on investing in Bitcoin and private equity opportunities in the Bitcoin and blockchain sector. So that will be a trend.
Buck: Which pension fund was it?
Zac: It was in North Carolina so I think it was like the North Carolina Firefighters and the group that raised the money from them was Morgan Creek Digital it’s actually invested in BlockFi by Anthony Pompliano Twitter and Mark Yusko so that's on the institutional side. And then on the retail side you've seen FinTech companies like Square and Robin Hood offer Bitcoin trading to their users. But soon you will also have companies like TD Ameritrade E-Trade and others offer Bitcoin to their users sometimes be a partnership sometimes because they've built it directly. You also at some point might see progress made in terms of an ETF getting approved that would give retail investors in the US market exposure to Bitcoin in a really easy and familiar way. All of those things are tremendously positive catalysts and the caliber of people working on them only continues to increase. Talent was attracted into the sector very, very rapidly these days.
Buck: You know one question that leads me to is that all of this is happening with Bitcoin for the most part. Are alt coins in your opinion is that market coming back or is that something that we're gonna see probably select you know group of tokens projects emerge and then the rest will kind of just get left in the dust, what do you think?
Zac: I mean I'll tell you exactly what I'm doing with my portfolio and then I'll provide a bit more color. So my asset allocation in the crypto side of my investing is I'm like 90% Bitcoin 5% Ethereum and 5% B&B; which is the Binance right. So I'm super bullish on Bitcoin. I think that you know there's a chance that Ether makes a comeback specifically I think that a lot of the stable coins that have been launched have been built on Ethereum if you're not familiar with stable coins it's basically the concept of a dollar but on a blockchain which could be really really powerful because it creates the opportunity for the delivery of US dollar denominated financial services at a global scale not using the traditional banking rails. And then B&B; I mean Binance is the biggest and most successful exchange they have a history of innovating, creating new products, going fast and so I'm taking a bit of a flyer with them but I'm 90% Bitcoin. I don't think that I'm not bullish on any of the other all coins frankly I struggle to see you know the big upside I have heard whispers in the community that there's kind of like a new wave of altcoins 3.0 might emerge, you know could see some some good returns similar to what some of the ICOs did in 2017 but it's not an area of focus for me. So that's my view.
Buck: Yeah let's talk about BlockFi. Remind us exactly what BlockFi is.
Zac: Sure so we're a wealth management platform for crypto investors. Today we have two products that we offer. One product is analogous to a savings account from a traditional bank where you're able to earn interest on your holdings except on BlockFi, the assets instead of being dollars are bitcoin and Ether and we don't have FDIC insurance so it's not exactly the same risk profile as a savings account at a bank, but conceptually you're able to hold Bitcoin and an account with BlockFi and earn interest on it paid in Bitcoin every month. That's one product that we have. The second product that we have which you are alluding to earlier offers our clients the ability to borrow dollars secured by the value of their cryptocurrency and it's analogous to a securities backed loan or a liquidity access line in the traditional world except instead of securities we're taking Bitcoin or other digital assets as collateral and lending it rates as low as four point five lending USD that rates as low as four point five percent a year.
Buck: I wanna pick these apart a little bit if you don't mind. In terms of this savings account first of all is it just bitcoin or is it bitcoin, Ethereum?
Zac: We actually support three assets in the interest account currently Bitcoin, Ether and GUSD which is the stable coin from Gemini.
Buck: Got it. And talk about the interest because it's not one flat interest rate right it's different depending on how much cryptocurrency actually is held?
Zac: Correct so there's a tiered interest rate structure. Currently on Bitcoin for balances up to ten Bitcoin, we offer a six point two percent annual yield and for balances above ten Bitcoin it's a 2.2 percent annual yield. On Ether, for balances up to two hundred Ether it's a 3.3 percent annual yield and balances above two hundred Ether is 0.5% annual yield and for GUSD the stable coin it's an eight point six percent interest rate with no tier so yeah those are the different rates.
Buck: Why did, I mean was it just a matter of like an issue with people dumping like a thousand Bitcoin and trying to get six you know 6% of that, was it just too hard to you know make that a long-term part of the business model or why did the higher levels end up changing to a lower rate?
Zac: Sure so I wanted to function of market conditions and to it's a function of supply and demand. So we launched the interest account in March of this year. We were just starting to come out of the bear market and one of the things that happened as we switched from being in a bear market to being in a bull market is the futures switched from being in backwardation to contango which basically means that our institutional borrowers the groups that we lend to that enable us to pay the rate to depositors had less of a need they had less demand to borrow and they were willing to pay lower rates to borrow crypto than they were when we were building and planning to launch this product. The second thing that happened is we were surprised to the upside in terms of the level of interest that we received from depositors and especially depositors with very large sums of cryptocurrency. So to give you an example you know within a day or two of making the product available publicly, we had a number of groups that were depositing 5, 10, 15, 20 million dollars worth of Bitcoin and so the supply-demand that we have to manage is, the amount that we have on deposit relative to the size of this market that will borrow Bitcoin size of the market that will borrow Bitcoin is partially a function of market sentiments partially a function of number of trading venues and the liquidity profile and it's partially a function of you know BlockFi’s efforts in terms of sales and client development relationship management. So the supply side got a little bit ahead of the demand side on deposit and how much there was available to borrow so we made a few tweaks. We want to keep the 6%, 6.2% rate on Bitcoin available to as many people as possible for as long as possible so that's why we went with the tiered structure where we made it available on balances up to 10 and reduced it for balances above that.
Buck: Got it and the interest on that, when you say 6.2 percent that six point like it's all denominated in Bitcoin, you're not paying cash out right?
Zac: Correct so to use round numbers to provide an easy example you start on January first with a hundred Bitcoin in an account, by the subsequent January first you will have 106 point 2 Bitcoin in your account.
Buck: Yeah and that that's kind of neat too because then you're you know you're also getting potentially the upside of that you know I mean they made 6% but if you if you're really bullish on the market you could be potentially looking at a lot more than 6% on your money. How about in terms of the, is there like a you know do you do it sort of a month-to-month or six month or month you know year-long contracts for these things?
Zac: It's month-to-month. So the rates are subject to change on a monthly basis. We provide notifications at least a week in advance before the end of one month on what the rates will be for the subsequent month and people are able to you know withdraw any time without penalty. We reserve up to 7 days to process withdrawals but we've never taken more than one business day to process a withdrawal so they're pretty quick but not instant for security reasons and yeah it's pretty flexible.
Buck: How about the lump in the lending side how does how does that work? So now I've got like 10 Bitcoin and so I would deposit that I guess and you guys I understand that maybe that that goes into like a Gemini account or something, is that still how it works?
Zac: Correct so we have a partnership with Gemini for custody. So when you log into a BlockFi account you'll have a deposit address. When you send Bitcoin to that deposit address it actually goes directly into storage with Gemini. Gemini was the first custodian in the crypto sector to receive insurance against cyber hacks on their platform. They were also the first custodian to get to complete a SOC 2 compliance audit and they have a really long track record of custody billions of dollars worth of crypto without ever having any issues. So it goes directly to Gemini and then you're able to interact with block-wise platform to take any actions that you might deem necessary. So you can view your interest payments you can withdraw you can deposit more you can also take out a loan. So in terms of taking out a loan, if you have ten Bitcoin that's worth roughly a hundred thousand US dollars at this point in time, you can borrow up to fifty percent of that value in a US dollar loan which can be funded be a wire or stable coin and then the structure of those loans is that you make interest-only payments on the amount that you borrowed throughout the duration and you can prepay at any time without penalty.
Buck: And what's the typical you said it was four point six.
Zac: We have interest rates as low as four point five. The interest rates on borrowing USD vary according to your initial loan to value ratio. So if you have a hundred thousand dollars worth of Bitcoin we actually have three loan-to-value ratio options. You can borrow at a 50 percent initial loan-to-value ratio which would mean you're borrowing 50k, the interest rate on that will be eleven point two five, if you borrow thirty five percent of the value so 35k the interest rate is seven point nine, and if you borrow twenty five percent of the value of the interest rate is four point five percent per year.
Buck: Got it. In terms of you know the technical, so you basically pay that on a month-to-month basis and then in terms of contracts, are those also month-to-month loans or how does that work?
Zac: Those are one-year term loans well now it's the ability to renew without repaying the principal at the end of the term at current rates and our rates for those loans have always come down so far. So it's a one-year term loan BlockFi committed for a year at that rate your payments stay the same but you can prepay at any time without penalty.
Buck: Right. When do you do when would you do an actual sort of I guess a cap will call like what loan-to-value because you can go up to say you're borrowing at you know you're borrowing at the lowest rate you know you're at 4.5% you're borrowing see you know just for round numbers 100 Bitcoin you borrowed or you said 10 Bitcoin hundred thousand dollars but you only borrowed twenty-five thousand dollars at four point five percent, what if Bitcoin you know loses 50 percent of its value then what happens?
Zac: Well you wouldn't have a margin call based on on that example. If your loan to value ratio hits 70 percent that's when we have a margin call and the way the margin call works is our clients have the option to either post more collateral, pay down the loan using USD or some of the collateral that's posted for the loan or take no action. If they take no action there's a 72-hour window where we'll wait to see if the price recovers, if it does then no action is required, if the price keeps going down further then we will initiate a partial collateral sale to rebalance that LTV to a healthy level at the end of that window.
Buck: So in terms of the clients that you see doing this kind of stuff, I mean who are you seeing borrowing because you don't have a cap I mean you can on the borrow side, I mean and the rates don't really change like if you're depositing a hundred Bitcoin you're getting the same rate differences as somebody who's depositing ten for borrowing right?
Zac: That's right.
Buck: So who are the people who are putting I mean what are these businesses that are putting are using these loans who are the typical clients?
Zac: Sure so it's a mix of retail and corporate. On the retail side we actually did a survey recently on use cases and the number one use case about a third of our borrowers expressed is that they were using the funds that they borrowed to start a business, which we were really excited about. So the other popular use cases were investing in real estate, investing in other types of traditional assets like stocks and bonds, home improvement, larger purchases, vacations were all used cases, paying down higher cost debt was another use case, and then on the corporate side the loans are used for operating capital. So we have some mining companies that borrow from BlockFi. Other types of companies who you know maybe have crypto denominated inventory like exchanges or crypto ATM businesses our frequent borrowers from BlockFi and our loan sizes rearranged from you know as low as five thousand dollars all the way up to seven figures. So it's a pretty diverse group of borrowers.
Buck: So recently it sounds like you guys partnered with another company called Casa. What is Casa and I guess how does that benefit both companies?
Zac: Sure. So Casa is a leader in fighting self sovereign storage solutions for cryptocurrency owners so if you're alone that owns Bitcoin and to use a gold analogy. If you want to own gold but you keep it in your vault or in your backyard you want to have physical possession of it yourself if you want to do that same type of custody with Bitcoin. Casa has a solution that makes that really easy. Our partnership with Casa provides mutual benefits to clients on either side. So Casa clients are able to receive some discounts in terms of accessing BlockFi products and vice-versa BlockFi clients are able to receive discounts in terms of accessing kasam products and over time we'll build some things in to the user experience specifically on Casa’s platform that will make it you know a bit more seamless to interact with BlockFi products while you're on their platform. In general that partnership strategy is something that you'll see more of we think there are in the ecosystem that are specializing in areas that BlockFi's not focused on and doing things where we can provide benefits to clients on both sides is a win-win for us then and our clients.
Buck: Last thing I want to ask you about, last time I spoke to you, you had talked about the idea of potentially Bitcoin backed credit cards meaning like you know getting Bitcoin back instead of miles or dollars back. You guys any closer to that, because I definitely want one of those cards.
Zac: I'm so glad you brought it up. We're definitely closer, but we're not you're not going to have the card until like Q3 of next year probably. It's getting worked on, these things you know for better or worse they take a long time launching a credit program is no small feat you know we're working on it. We've identified some of the key partners that we'll be working with to bring that product to market it is going to happen and I share your sentiment like I wish I had it now.
Buck: Yeah seriously that'd be great. Well listen it was great talking you. So it's BlockFi.com and it's spelled like block and then fi and tell us you know tell us the process of doing is pretty simple okay how long does it take to apply for these things…
Zac: Yeah I mean nothing takes any time really. So you could come in and start earning interest and get a loan from us all in under five minutes. And we also have a client service team that's super responsive in in terms of communication however you want to communicate with them, over email, over the phone, over text message so you know don't don't hesitate to reach out to us. We're also on twitter. My twitter handle is BlockFiZac and our company twitter handle is @therealBlockFi so we're very active on those platforms and happy to chat with you there as well.
Buck: Zac Prince, thank you very much for being on Wealth Formula Podcast today.
Zac: Thanks for having me, Buck, I appreciate it.
Buck: We’ll be right back.
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Wealth Formula Episode 179: Buy, Borrow and Die: Bitcoin Style

Catch the full episode: https://www.wealthformula.com/podcast/179-buy-borrow-and-die-bitcoin-style/
Buck: Welcome back to the show everyone. Today my guest on Wealth Formula Podcast is Zack Prince. He's Founder and CEO of BlockFi. BlockFi bridges the gap between blockchain and the basic financial products that you're used to including interest-bearing accounts and loans. Zack, welcome to Wealth Formula Podcast. I think you we might have had you on before as a Consensus Network replay but first time on Wealth Formula Podcast specifically, so welcome.
Zac: Yeah, excited to be here, Buck. Thanks for having me. And it's good to chat with you again
Buck: Yeah so remind me how you got into this you know Bitcoin stuff in the first place, I mean you were as I understand you were a traditional finance guy right so where did the blockchain part come in?
Zac: Sure so I was I was working at a company in the FinTech world that provided data and technology solutions to institutional investors that wanted to participate in some of the new online lending platforms, whether they were real estate platforms or consumer lending platforms, and I kind of became the FinTech guy amongst my friend group and people would ask me you know should I invest in these real estate deals on fund rise or buy loans from Lending Club and I started writing a blog to share the information more efficiently with my friends basically and I started expanding a little bit writing about Robo advisory and some other things that were going on in the FinTech space and that's what led me to Bitcoin, and this is back in early 2015. I didn't start BlockFi until 2017 because I started following the market in the background, still working in traditional financial services in FinTech and then in early 2017 it started to feel like mainstream adoption was starting to happen in the crypto ecosystem. I'm started going to some meetups in New York City because at a certain point my wife said Zac, you're talking about crypto all the time and you're talking to me about it and I don't want to talk about it so you should find some other people to talk about this with. And the meetup composition started to change and in 2016 when I started going to these meetups it was the early crypto adopters you know libertarians, computer scientists and then in early 2017 I started to see some venture capitalists, some guys who had just left their job at Wall Street still wearing a suit, some more entrepreneurs and it was a really exciting time in the ecosystem, things like the Enterprise Ethereum Alliance were getting announced which had participation microsoft and a lot of other you know fortune 500 companies and I had started to believe in it. I was drinking the kool-aid a little bit so I decided to find a way to get involved in the space full-time and that's what led me to start BlockFi.
Buck: So I have to imagine that the response you got from the traditional finance people around that time when you started talking about the blockchain space and when you started being more and more involved with that was probably not a very positive response initially or did you did you experience some of that sort of you know rejection initially to what you were doing?
Zac: Yeah absolutely. But you know throughout my career this is now kind of the third emerging technology industry that I've worked in. I was originally an advertising technology starting like you know 15 years ago and I was in FinTech specifically the online lending side of FinTech which in its early days was called peer-to-peer lending and now in crypto. So having to do a lot of education explain it you know why something isn't crazy and it might work and here's why and here's the value proposition and here's what it is, I've gotten very used to that and comfortable with it. But yeah there were a lot of people who are like you know I've heard Bitcoin is only used by drug dealers and money launderers. I've heard that I'm supposed to care about blockchain and not Bitcoin. And you know at BlockFi we’re providing financial products into the market so it's a heavily regulated business so we also had to communicate with regulators. We had to explain to state regulators, federal regulators why what we were doing with Bitcoin and other cryptos than when you're doing these same types of things with assets that they're more familiar with.
Buck: So when you were talking to people back in, I don't know I guess 2016/17 and it's not a long time ago, it's only two years ago, but I have to imagine that the response or the you know the approach that people take to you when you speak to investors is very different. Has it become more mainstream in that regard for you know for big money investors?
Zac: It's absolutely become more mainstream you know the end of 2017 Q3/Q4. Point was going on that parabolic run it started to get covered everywhere, I mean it was on CNBC every day it was in Bloomberg New York Times Wall Street Journal. If you were paying attention to the financial industry and markets you heard about Bitcoin at that time if you hadn't heard about it before. So from a baseline of awareness perspective it got a lot better and then in 2018 you had a number of positive developments for the sector including one that I think is probably the most noteworthy which is that Bitcoin futures were listed on the CME the institutional investor perspective that's massive. You now have a well regulated well known super trustworthy venue where you can get exposure to this asset class, you also had companies like Grayscale bringing products to the market which are accessible to certain types of investors and their low bridge accounts and you started to see some adoption from companies like FinTech companies like Robin Hood and Square making Bitcoin available on their platforms. So the conversation has absolutely changed a lot and it's become less about whether or not this is something that's going to continue to exist whether or not it's something that was just a bubble and is going to die and now it's more about ok how is it going to get used how big could it get what are the interesting applications of it and what could have potentially disrupt in the traditional financial ecosystem.
Buck: So you know we had obviously following this you know pop in 2017, you know I actually like you kind of really got into this early 2017 so timing was pretty good I guess now regards. Good or bad depending how you look at it but I was there before before the parabolic move. And then we have you know then we followed this up with a crypto winter and and you know who knows if we're done with it, I guess we certainly are much better off than we were. You know a unit buddy it's funny Zac I don’t know if you remember this but I was about to, we'll talk about BlockFi specifically in a minute but, I was about to use BlockFi for borrowing because I like this idea of borrowing you know collateralized debt and collateralized debt on assets and buying something else. So I was about to do it and then Bitcoin lost a clip and I was like literally and I remember I was just emailing with somebody somebody over there and I was like sorry dude I guess I just sold it, I just sold all that Bitcoin I had and you sent one email back to me and it said “capitulation” but it you know and so now we're looking back at these we go down from 3,000 back up you know been sort of flirting around this 10,000 and it seems like we're kind of maybe that we're stuck there, maybe we're kind of out of winter, maybe we're in a holding pattern but it seems like to me that since that two years not only is the awareness increase but the development of the ecosystem itself is so much further advanced than it was in 2017. Is this an unusual case where the technology and maybe even the infrastructure is actually outpacing the price?
Zac: You know it's really hard to say. I would argue that in some ways it's typical. In other industries that showed a lot of promise where investors could you know participate maybe a little bit ahead of the adoption curve you saw crazy price run ups with the tech bubble and you know ‘99-2000 being the one that's kind of top of mind in recent memory and then on the other side of things, are we behind where the price should be now? It's really hard to say because this is kind of like a commodity type asset built on a payment network and valuing that is challenging and there's not a perfect model for for doing it today. It's not as easy as something that's cashflow producing but I'm incredibly bullish. I'm on record as saying at the beginning of this year that Bitcoin has only had one year in its 10-year existence where it had a lower low than the year before and parted this year around the low price for 2018 and I predicted that we would in the year had a higher price than where we started the year pretty soon and now we're up and you know around 300 percent from where we started the year. As that happens in investing is people frequently look at things on a year-to-year performance basis and when people are looking at Bitcoin even if all we do is stay around 10 K from here when they're looking at how Bitcoin performed rather than other relative to other assets at the end of 2019 it's probably going to look fantastic. And you also have an event coming up and in the summer of next year called The Halvening where basically the supply that's produced by miners is going to get cut in half and so if you believe in the stock the flow type models of valuation for Bitcoin that is usually a very big driver of price appreciation.
Buck: I believe May of 2020, right?
Zac: That's right.
Buck: In May of 2020. Can you just talked a little bit about that just so people know because people hear about it, I've been talking about it but I don't think that it really explained it.
Zac: Yeah and you know I'm not I'm not a computer scientist so I can explain it in a you know in a very simple…
Buck: No one else here is either.
Zac: So basically the way that new Bitcoin is created is through this process called mining. And it's analogous to mining gold except instead of finding a place in the earth where gold exists and then getting your trucks and mining equipment and digging it out of the ground, the way bitcoin is mined is using this computer program and there is now specialized computer hardware that's built specifically and optimized for mining Bitcoin. And you have this network of machines around the world where the input is energy into the mining hardware and the output is new Bitcoin and those miners are what provides the power for the payment network a Bitcoin to run and when we say that there is this event called The Halvening, what that basically means is that the output that's built into the Bitcoin program that the miners are receiving as their payment for contributing energy to the network, is going to get cut in half. So the miners are going to have the same you know relative input but the amount that they're receiving is going to get cut in half for that input. This should, if the demand side for Bitcoin remains equal, it should drive up the price and historically Bitcoin has had three of these Halvening events in its lifetime so far I believe and around each Halvening you have seen you know six months before or six months after a pretty material run up in price.
Buck: Yeah so it also goes along with that sort of that the entire idea that Bitcoin unlike you know other assets including gold is it's a deflationary asset ultimately and and that's one of the things that makes that happening really significant. Apart from and I have one more question before we get to block five which is apart from the Halvening, you know thing that's happening, what is maybe the biggest development or upcoming thing that's coming up that makes you the most bullish on the future of Bitcoin or blockchain in general?
Zac: Sure so I think I wouldn't actually point to any one specific thing, I would point to two broad trends. So one is institutional adoption and participation in the asset class and the other is better ramps for retail participation into the asset class and just focusing here you know on the US market because it really is an international story but just in the US market. In September we should have Bakkt launching their futures platform. Bakkt is owned by ICE, the Intercontinental Exchange, and there's a big core difference between their futures and the current futures that are available on the CME in that futures on Bakkt platform are going to be physically settled so that means that actual Bitcoin is going to be needed to facilitate the trading on Bakkt’s platform which does not happen on CMEs exchange so that's that should be a very positive catalyst in terms of demand for physical Bitcoin that could have an impact on the price. Also on the institutional side this year I believe earlier this year, the first pension fund made an investment into an asset management vehicle that was focused on investing in Bitcoin and private equity opportunities in the Bitcoin and blockchain sector. So that will be a trend.
Buck: Which pension fund was it?
Zac: It was in North Carolina so I think it was like the North Carolina Firefighters and the group that raised the money from them was Morgan Creek Digital it’s actually invested in BlockFi by Anthony Pompliano Twitter and Mark Yusko so that's on the institutional side. And then on the retail side you've seen FinTech companies like Square and Robin Hood offer Bitcoin trading to their users. But soon you will also have companies like TD Ameritrade E-Trade and others offer Bitcoin to their users sometimes be a partnership sometimes because they've built it directly. You also at some point might see progress made in terms of an ETF getting approved that would give retail investors in the US market exposure to Bitcoin in a really easy and familiar way. All of those things are tremendously positive catalysts and the caliber of people working on them only continues to increase. Talent was attracted into the sector very, very rapidly these days.
Buck: You know one question that leads me to is that all of this is happening with Bitcoin for the most part. Are alt coins in your opinion is that market coming back or is that something that we're gonna see probably select you know group of tokens projects emerge and then the rest will kind of just get left in the dust, what do you think?
Zac: I mean I'll tell you exactly what I'm doing with my portfolio and then I'll provide a bit more color. So my asset allocation in the crypto side of my investing is I'm like 90% Bitcoin 5% Ethereum and 5% B&B; which is the Binance right. So I'm super bullish on Bitcoin. I think that you know there's a chance that Ether makes a comeback specifically I think that a lot of the stable coins that have been launched have been built on Ethereum if you're not familiar with stable coins it's basically the concept of a dollar but on a blockchain which could be really really powerful because it creates the opportunity for the delivery of US dollar denominated financial services at a global scale not using the traditional banking rails. And then B&B; I mean Binance is the biggest and most successful exchange they have a history of innovating, creating new products, going fast and so I'm taking a bit of a flyer with them but I'm 90% Bitcoin. I don't think that I'm not bullish on any of the other all coins frankly I struggle to see you know the big upside I have heard whispers in the community that there's kind of like a new wave of altcoins 3.0 might emerge, you know could see some some good returns similar to what some of the ICOs did in 2017 but it's not an area of focus for me. So that's my view.
Buck: Yeah let's talk about BlockFi. Remind us exactly what BlockFi is.
Zac: Sure so we're a wealth management platform for crypto investors. Today we have two products that we offer. One product is analogous to a savings account from a traditional bank where you're able to earn interest on your holdings except on BlockFi, the assets instead of being dollars are bitcoin and Ether and we don't have FDIC insurance so it's not exactly the same risk profile as a savings account at a bank, but conceptually you're able to hold Bitcoin and an account with BlockFi and earn interest on it paid in Bitcoin every month. That's one product that we have. The second product that we have which you are alluding to earlier offers our clients the ability to borrow dollars secured by the value of their cryptocurrency and it's analogous to a securities backed loan or a liquidity access line in the traditional world except instead of securities we're taking Bitcoin or other digital assets as collateral and lending it rates as low as four point five lending USD that rates as low as four point five percent a year.
Buck: I wanna pick these apart a little bit if you don't mind. In terms of this savings account first of all is it just bitcoin or is it bitcoin, Ethereum?
Zac: We actually support three assets in the interest account currently Bitcoin, Ether and GUSD which is the stable coin from Gemini.
Buck: Got it. And talk about the interest because it's not one flat interest rate right it's different depending on how much cryptocurrency actually is held?
Zac: Correct so there's a tiered interest rate structure. Currently on Bitcoin for balances up to ten Bitcoin, we offer a six point two percent annual yield and for balances above ten Bitcoin it's a 2.2 percent annual yield. On Ether, for balances up to two hundred Ether it's a 3.3 percent annual yield and balances above two hundred Ether is 0.5% annual yield and for GUSD the stable coin it's an eight point six percent interest rate with no tier so yeah those are the different rates.
Buck: Why did, I mean was it just a matter of like an issue with people dumping like a thousand Bitcoin and trying to get six you know 6% of that, was it just too hard to you know make that a long-term part of the business model or why did the higher levels end up changing to a lower rate?
Zac: Sure so I wanted to function of market conditions and to it's a function of supply and demand. So we launched the interest account in March of this year. We were just starting to come out of the bear market and one of the things that happened as we switched from being in a bear market to being in a bull market is the futures switched from being in backwardation to contango which basically means that our institutional borrowers the groups that we lend to that enable us to pay the rate to depositors had less of a need they had less demand to borrow and they were willing to pay lower rates to borrow crypto than they were when we were building and planning to launch this product. The second thing that happened is we were surprised to the upside in terms of the level of interest that we received from depositors and especially depositors with very large sums of cryptocurrency. So to give you an example you know within a day or two of making the product available publicly, we had a number of groups that were depositing 5, 10, 15, 20 million dollars worth of Bitcoin and so the supply-demand that we have to manage is, the amount that we have on deposit relative to the size of this market that will borrow Bitcoin size of the market that will borrow Bitcoin is partially a function of market sentiments partially a function of number of trading venues and the liquidity profile and it's partially a function of you know BlockFi’s efforts in terms of sales and client development relationship management. So the supply side got a little bit ahead of the demand side on deposit and how much there was available to borrow so we made a few tweaks. We want to keep the 6%, 6.2% rate on Bitcoin available to as many people as possible for as long as possible so that's why we went with the tiered structure where we made it available on balances up to 10 and reduced it for balances above that.
Buck: Got it and the interest on that, when you say 6.2 percent that six point like it's all denominated in Bitcoin, you're not paying cash out right?
Zac: Correct so to use round numbers to provide an easy example you start on January first with a hundred Bitcoin in an account, by the subsequent January first you will have 106 point 2 Bitcoin in your account.
Buck: Yeah and that that's kind of neat too because then you're you know you're also getting potentially the upside of that you know I mean they made 6% but if you if you're really bullish on the market you could be potentially looking at a lot more than 6% on your money. How about in terms of the, is there like a you know do you do it sort of a month-to-month or six month or month you know year-long contracts for these things?
Zac: It's month-to-month. So the rates are subject to change on a monthly basis. We provide notifications at least a week in advance before the end of one month on what the rates will be for the subsequent month and people are able to you know withdraw any time without penalty. We reserve up to 7 days to process withdrawals but we've never taken more than one business day to process a withdrawal so they're pretty quick but not instant for security reasons and yeah it's pretty flexible.
Buck: How about the lump in the lending side how does how does that work? So now I've got like 10 Bitcoin and so I would deposit that I guess and you guys I understand that maybe that that goes into like a Gemini account or something, is that still how it works?
Zac: Correct so we have a partnership with Gemini for custody. So when you log into a BlockFi account you'll have a deposit address. When you send Bitcoin to that deposit address it actually goes directly into storage with Gemini. Gemini was the first custodian in the crypto sector to receive insurance against cyber hacks on their platform. They were also the first custodian to get to complete a SOC 2 compliance audit and they have a really long track record of custody billions of dollars worth of crypto without ever having any issues. So it goes directly to Gemini and then you're able to interact with block-wise platform to take any actions that you might deem necessary. So you can view your interest payments you can withdraw you can deposit more you can also take out a loan. So in terms of taking out a loan, if you have ten Bitcoin that's worth roughly a hundred thousand US dollars at this point in time, you can borrow up to fifty percent of that value in a US dollar loan which can be funded be a wire or stable coin and then the structure of those loans is that you make interest-only payments on the amount that you borrowed throughout the duration and you can prepay at any time without penalty.
Buck: And what's the typical you said it was four point six.
Zac: We have interest rates as low as four point five. The interest rates on borrowing USD vary according to your initial loan to value ratio. So if you have a hundred thousand dollars worth of Bitcoin we actually have three loan-to-value ratio options. You can borrow at a 50 percent initial loan-to-value ratio which would mean you're borrowing 50k, the interest rate on that will be eleven point two five, if you borrow thirty five percent of the value so 35k the interest rate is seven point nine, and if you borrow twenty five percent of the value of the interest rate is four point five percent per year.
Buck: Got it. In terms of you know the technical, so you basically pay that on a month-to-month basis and then in terms of contracts, are those also month-to-month loans or how does that work?
Zac: Those are one-year term loans well now it's the ability to renew without repaying the principal at the end of the term at current rates and our rates for those loans have always come down so far. So it's a one-year term loan BlockFi committed for a year at that rate your payments stay the same but you can prepay at any time without penalty.
Buck: Right. When do you do when would you do an actual sort of I guess a cap will call like what loan-to-value because you can go up to say you're borrowing at you know you're borrowing at the lowest rate you know you're at 4.5% you're borrowing see you know just for round numbers 100 Bitcoin you borrowed or you said 10 Bitcoin hundred thousand dollars but you only borrowed twenty-five thousand dollars at four point five percent, what if Bitcoin you know loses 50 percent of its value then what happens?
Zac: Well you wouldn't have a margin call based on on that example. If your loan to value ratio hits 70 percent that's when we have a margin call and the way the margin call works is our clients have the option to either post more collateral, pay down the loan using USD or some of the collateral that's posted for the loan or take no action. If they take no action there's a 72-hour window where we'll wait to see if the price recovers, if it does then no action is required, if the price keeps going down further then we will initiate a partial collateral sale to rebalance that LTV to a healthy level at the end of that window.
Buck: So in terms of the clients that you see doing this kind of stuff, I mean who are you seeing borrowing because you don't have a cap I mean you can on the borrow side, I mean and the rates don't really change like if you're depositing a hundred Bitcoin you're getting the same rate differences as somebody who's depositing ten for borrowing right?
Zac: That's right.
Buck: So who are the people who are putting I mean what are these businesses that are putting are using these loans who are the typical clients?
Zac: Sure so it's a mix of retail and corporate. On the retail side we actually did a survey recently on use cases and the number one use case about a third of our borrowers expressed is that they were using the funds that they borrowed to start a business, which we were really excited about. So the other popular use cases were investing in real estate, investing in other types of traditional assets like stocks and bonds, home improvement, larger purchases, vacations were all used cases, paying down higher cost debt was another use case, and then on the corporate side the loans are used for operating capital. So we have some mining companies that borrow from BlockFi. Other types of companies who you know maybe have crypto denominated inventory like exchanges or crypto ATM businesses our frequent borrowers from BlockFi and our loan sizes rearranged from you know as low as five thousand dollars all the way up to seven figures. So it's a pretty diverse group of borrowers.
Buck: So recently it sounds like you guys partnered with another company called Casa. What is Casa and I guess how does that benefit both companies?
Zac: Sure. So Casa is a leader in fighting self sovereign storage solutions for cryptocurrency owners so if you're alone that owns Bitcoin and to use a gold analogy. If you want to own gold but you keep it in your vault or in your backyard you want to have physical possession of it yourself if you want to do that same type of custody with Bitcoin. Casa has a solution that makes that really easy. Our partnership with Casa provides mutual benefits to clients on either side. So Casa clients are able to receive some discounts in terms of accessing BlockFi products and vice-versa BlockFi clients are able to receive discounts in terms of accessing kasam products and over time we'll build some things in to the user experience specifically on Casa’s platform that will make it you know a bit more seamless to interact with BlockFi products while you're on their platform. In general that partnership strategy is something that you'll see more of we think there are in the ecosystem that are specializing in areas that BlockFi's not focused on and doing things where we can provide benefits to clients on both sides is a win-win for us then and our clients.
Buck: Last thing I want to ask you about, last time I spoke to you, you had talked about the idea of potentially Bitcoin backed credit cards meaning like you know getting Bitcoin back instead of miles or dollars back. You guys any closer to that, because I definitely want one of those cards.
Zac: I'm so glad you brought it up. We're definitely closer, but we're not you're not going to have the card until like Q3 of next year probably. It's getting worked on, these things you know for better or worse they take a long time launching a credit program is no small feat you know we're working on it. We've identified some of the key partners that we'll be working with to bring that product to market it is going to happen and I share your sentiment like I wish I had it now.
Buck: Yeah seriously that'd be great. Well listen it was great talking you. So it's BlockFi.com and it's spelled like block and then fi and tell us you know tell us the process of doing is pretty simple okay how long does it take to apply for these things…
Zac: Yeah I mean nothing takes any time really. So you could come in and start earning interest and get a loan from us all in under five minutes. And we also have a client service team that's super responsive in in terms of communication however you want to communicate with them, over email, over the phone, over text message so you know don't don't hesitate to reach out to us. We're also on twitter. My twitter handle is BlockFiZac and our company twitter handle is @therealBlockFi so we're very active on those platforms and happy to chat with you there as well.
Buck: Zac Prince, thank you very much for being on Wealth Formula Podcast today.
Zac: Thanks for having me, Buck, I appreciate it.
Buck: We’ll be right back.
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People who made an impact on the Cryptoworld

People who made an impact on the Cryptoworld

A little about the main thing

Nowadays, blockchain technology and cryptocurrency are innovative and in demand. Many experts believe them the wave of the future. These innovations are capable of generating qualitative changes in the economy on a global scale, leading to the emergence of a second-generation economy.
Of course, all the great discoveries and inventions are made due to the bright and brilliant minds of mankind. And the question arises, who created cryptocurrency? What personalities influenced the Cryptoworld and developed it to the level at which it is now? We think that any person who starts an acquaintance with the Cryptoworld has such questions. Well, if you are an advanced user, then you all the more need to understand this topic. Who knows, maybe someday your name will be included in the list of people who have made an integral contribution to the cryptocurrency world.
So, here is the top of the most famous people in the Cryptoworld today.

The ghost of the Cryptoworld — Satoshi Nakamoto

Satoshi Nakamoto is known to everyone. A large number of legends and secrets are associated with this person because of one reason – there is no picture, videotape or live interview with Satoshi Nakamoto. All that is known about this person is messages on forums and his emails. Until now, no one even knows whether it is one person or a group of people.
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But why is Satoshi Nakamoto so famous? The most important thing is that thanks to Satoshi, in 2008, the first cryptocurrency appeared. It was Bitcoin. Until now, Bitcoin is the most demanded cryptocurrency in the world.
Also, thanks to Satoshi Nakamoto the blockchain community began to develop further.
Satoshi wrote about his brainchild in one of the messages that the benefits had brought by Bitcoin to the exchanges far exceeded the cost of electricity consumed for its extraction. Therefore, the lack of Bitcoins will be a net loss.

A simple guy from Russia

Vitalik Buterin is a usual Russian name of an unusual person. He is the creator of the Ethereum network and with it the new cryptocurrency. In 2014, his project got the World Technology Award, for which Mark Zuckerberg also fought. Now ETH is the second largest cryptocurrency by market capitalization which is almost $33 and shows good growth rates.
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Vitalik may as well be called one of the main experts on the blockchain. He believes that blockchain is a social revolution wrapped in something speculative that can make people rich.
Unlike his colleague at number one, Vitalik Buterin has never been hidden from the public. He is a programmer, an innovator, one of the youngest in his field. He is only 25 years old now.

Changpheng Zhao — crypto-king of China

Changpheng Zhao is a billionaire who earned his crypto billions faster than anyone – less than six months. Today, his fortune is estimated at between $ 1 billion and $ 2 billion.
Changpheng is the founder of Binance – the most popular stock exchange that is based in China. Also Binance is a member of the top ten exchanges in terms of trading volumes. Before setting up his company, Zhao worked at OKCoin and at Bloomberg.
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Binance processes 1.4 million transactions from 6 million users per second, making it the world’s largest cryptoexchange. Members of the exchange use Binance to trade more than 120 different coins, thereby providing $200 million profit in the last three months.

Brian Armstrong — driving force of Сryptoworld

The head of the US cryptocurrency exchange Coinbase is one of the most influential and respected persons in the blockchain community and the crypto-business.
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In addition to the head’s chair, this man has other achievements. Having a bachelor’s degree in economics and a master’s degree in IT, he perfectly understands the essence of the modern market and is happy to share knowledge and forecasts. Brian regularly conducts lectures where he talks about prospects of the technology.
Prior to that, he managed to work in IBM, Airbnb and other well-known projects, and even starred in the movie “The Rise of Bitcoin”.

Olaf Carlson-Wee — from a woodman to a top manager

Olaf Carlson-Wee had been fond of cryptocurrency, even when it was not so popular. He became the first employee at Coinbase. Olaf came to the job interview in his only jeans, which were smeared with wood resin (before that, he had tried himself as a woodcutter).
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Then Carlson-Wee resigned to run one of the world’s first crypto funds in the flat he shared with seven neighbors.
This man created the hedge fund Polychain Capital — the first of its kind, aimed at financing crypto projects that issue protocol tokens.
Olaf Carlson-Wee called Bitcoin a “breakthrough” technology, which is perhaps more than the Internet.
The main dream of Olaf is to create a completely decentralized analogue of the modern Internet. He also predicted that Ethereum would be able to overtake Bitcoin at a price. Will the forecast comes true, we will see soon.

Of course, there are a lot of people who influenced the Cryptoworld, and it’s difficult to fit all ingenious minds in one article. But we can not leave you in ignorance, so to be continued.

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Binance cryptocurrency exchange - We operate the worlds biggest bitcoin exchange and altcoin crypto exchange in the world by volume Bitcoin staying above $8,000 is a sign of increasing momentum and detachment from the stock market beta-pull, according to Bloomberg senior analyst Mike McGlone.In a new bitcoin report published ... Changpeng Zhao, founder and chief executive officer at Binance Holdings Ltd., discusses the price of bitcoin, what it will take to get across the $10,000 threshold and why we’re seeing a rise in ... Bloomberg has forecast bitcoin to reach its record high of $20,000, and possibly $28,000, this year. According to the company’s June Crypto Outlook report, “something has to really go wrong ... The bitcoin price quickly recovered those March losses and is now up around 30% so far this year—with global stock markets also rallying even against an increasingly bleak economic backdrop. However, the influential chief executive of the world’s largest bitcoin and cryptocurrency exchange by volume, Binance, has warned bitcoin is still tied to the stock market and a future crash could ... Bitcoin Price Experiencing Strong Market Correction, Bloomberg: It Should Be Above $15,000 Sep 24 2020 · 10:44 UTC by Steve Muchoki · 3 min read Photo: Depositphotos Bitcoin's reputation as "digital gold" was knocked in March when the bitcoin price dropped more than half in under 24 hours, hard hit by panic sparked by the spreading coronavirus Covid-19. This morning the CEO of Binance, Changpeng Zhao, aka CZ, told Bloomberg about the price of Bitcoin and the novelties of the exchange. Speaking about BTC, CZ said that it is behaving almost like a stablecoin, namely that it is indeed very stable.. Aside from that, which is a fact visible to everyone, CZ talked about new developments concerning the Binance trading platform. BTC USD (Bitcoin / US Dollar) This is the most popular Bitcoin pair in the world. Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of Bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls this cryptocurrency and everyone can take part. Bitcoin price grew ... Bitcoin Rallies Above $14,000 With Traders in Election Limbo by Casey Wagner article Cryptocurrencies PBOC Governor Says 4 Million Transactions so Far in Digital Yuan by Bloomberg News 11/1/20, 10 ...

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Bitcoin Price Steady, Crypto Spring, BTC Vs Banks, Tezos In Store & Ripple Cross Border

BINANCE KYC EXTORTION, Hack explained 😳 Gold, Bitcoin, Stocks - Programmer explains Ivan on Tech. Loading... Unsubscribe from Ivan on Tech? Cancel Unsubscribe. Working... Subscribe Subscribed ... https://www.binance.com/en/register?ref=12327366 ref link or ref number 12327366 future 125x %10 kickback commission. bitcoin and 200+ altcoin. using bnb to ... KIK SEC Shut Down, Binance + Tezos, Crypto Stock Exchange & Bearish Bitcoin Price Prediction The Modern Investor. Loading... Unsubscribe from The Modern Investor? Cancel Unsubscribe. Working ... Amazon Affiliate Link - (If You Buy Something On Amazon, I Get A Small Commission As A Way To Support The Channel) - (There is NO extra cost for you) https://amzn.to/39MXp4q Computer I Use To ... Jan.10 -- Binance CEO Zhao Changpeng discusses the challenges exchanges face, possible rules and regulations, and talks about the future for crypto currencie... Bitcoin and gold also stand to be primary beneficiaries of the unprecedented monetary stimulus that’s accompanied by a mean-reverting stock market.” McGlone expects Bitcoin to outperform ... 2020 Stock Market Predictions Joseph Carlson Ep. 61 - Duration: 40 ... VeChain Hack, Binance Gateways & Bitcoins Wacky Price - Duration: 25:49. The Modern Investor 12,341 views. 25:49. Make a ... Bloomberg released a July 2020 Crypto outlook report named "A Resting Bitcoin Bull" outlining that they are bullish on Bitcoin and expect a $12,000 price target in the short term. I'll use technical analysis on the Bitcoin price to make a Bitcoin price prediction. Watch the video to learn more! Watch the video to learn more! Protect your privacy with a VPN: Bitcoin Price Steady, Crypto Spring, BTC Vs Banks, Tezos In Store & Ripple Cross Border The Modern Investor. Loading... Unsubscribe from The Modern Investor? Cancel Unsubscribe. Working ...

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