📌 The Looming Threat of China & Bitcoin, Yale Invests in Crypto, and Coinbase’s $12 Billion Valuation?

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Coinbase Gets $8 Billion Valuation Following Possible Hedge Fund Investment

Another week, another Coinbase story…

Coinbase is reportedly brining on another round of funding that would more than quadruple its valuation from just 14 months ago. The company is looking to raise up to $500 million, valuing it at around $8 billion. Longtime readers will remember that this is the same valuation that Coinbase used during the acquisition of Earn.com.

At first glance, this sounds like impressive news for the growing company… except for a report from Pro Rata that shows that Coinbase actually had an offer on the table from Vy Capital at a $12 billion valuation in early 2018. The offer was reportedly withdrawn after the massive crypto price drop between January and February.

As an early Coinbase investor explains: “Their performance right now is pretty tightly correlated to the price of bitcoin.”

 

Yale Reportedly Invests in Crypto

Before we get into the details of the recent news surrounding Yale investing in crypto focused funds, we just want to point out that:

  1. Yale has not confirmed their investments
  2. If they did invest, the size of the investments remains unknown

With that being said though, Yale is well known for investing in alternative asset classes such as real estate and venture capital.

Given that ALL endowments follow what the head of Yale’s endowment fund David Swenson is up to, this announcement is pretty significant. Could this be the tipping point for the endowment (and pension) world to enter the crypto market?

 

‘Blockchain’ Is a Semantic Wasteland

Blockchain this, blockchain that.

In Nic Carter’s latest post, he takes aim at the over-generalized term, imploring marketers, regulators, and scientists to take care in using it or to find another term. Right now, the term is convenient, but it doesn’t need to stay that way.

“I believe that in five or 10 years, we will look back at the popularity of “blockchain” and be slightly embarrassed. The term will seem as archaic as “surfing the world wide web” or using the “information superhighway.” Consider this an open solicitation for replacements to the term. Let’s move on.”

 

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DEEP DIVE


Pantera Digital Asset Fund Apparently Down 72% in 2018, Bitcoin Only Down 50%

There’s been a lot of reports (and memes) over the past few days about Pantera Capital, one of the largest digital asset hedge funds, apparently being down 72% year to date. Compare this to Bitcoin’s 50% decline over the same period and the news seems quite alarming. If true, it is. But first, we want to clear up a few things.

  • Pantera did not release this data. It was supposedly leaked.
  • This is a lot of hoopla from one leaked screenshot. 👇
  • Yes, the screenshot appears to show a negative performance, but as far as we know, they have not recognized these losses. We also have no clear indication of how much of their fund was actually deployed into digital assets.

Obviously we don’t know very much, but that’s the point…

People are quick to jump on the bandwagon, but forget that we are talking about the same firm that reported over 10,000% returns for one of it’s funds in July, 2018.

“We have long tried to caution investors that we’re investing in very early stage venture-like projects. We should all be focusing on a 3–5-year horizon. That it’s very difficult to time the markets. And, that once you’ve determined what is a tolerable amount of money to risk, don’t get scared out when it has these downdrafts that it has every few years.”

– Dan Morehead, CEO Pantera Capital

 

Going Back to the Fundamentals: Consensus

Consensus. It’s a word we hear thrown around a lot in crypto, but what does it mean and how is it achieved? Jordan Clifford of Scalar Capital’s latest article provides us with a useful introduction and comparison of different consensus mechanisms.

 

Wise Words From Two Powerhouse Venture Capital Firms

Up first, we have a quick but thought-provoking read by AVC explaining how important dilution is when looking at the underlying, actual value of a project… a concept so few people in crypto seem to grasp.

Many tokens have a relatively small amount of total supply outstanding and market value numbers on many of the sites that track this are a bit misleading. Don’t believe us? Take a look for yourself.

Then, in another eye-opening essayUSV takes a strong jab against all the “infrastructure” hype we’ve heard so much about in 2018.

As they put it, apps usually come first and inspire us to build tools. For example:

💡 Lightbulbs ➡️ the grid
✈️ Planes ➡️ airports
🌐 Webites ➡️ javascript

…Not the other way around.

 

The Looming Threat of China: An Analysis of Chinese Influence on Bitcoin

One broadly understood security property of Bitcoin is that no single party can control more than 50% of the hash rate.

Yet, as of June 2018, over 74% of the hash power on the Bitcoin network is in Chinese-managed mining pools. This well researched paper explores China’s potential motivation to undermine Bitcoin and how it could go about doing it.

 

🔭 What Would Happen If We Literally Sent Bitcoin to the Moon?

Some articles we come across just feel worth sharing for the idea itself, even if it’s a bit “out of this world.” 😉

We hear it all the time… “to the Moon!” But have you ever considered what would happen if we literally sent bitcoin to the Moon? This article attempts to show exactly what that might look like.

 

REGULATORY FRONT


U.S. Senate Committee Hearing On Crypto Goes Live Tomorrow

Tomorrow, the The Senate Committee on Banking, Housing, and Urban Affairs is bringing in two witnesses to help educate the committee on the topic of cryptocurrencies and the blockchain ecosystem… A matchup (debate) we’ve been looking forward to for a while now.

In one corner we have heavyweight “Dr. Doom” Nouriel Roubini, the Professor of Economics and International Business at NYU who is most known for predicting the 2008 financial crisis. Over the years, Roubini has been a harsh critic of Bitcoin and other cryptocurrencies. Lots of haymakers are expected, folks. 🥊

In the opposite corner, we have “The Defense” Peter Van Valkenburgh, also known for his role as the Director of Research at Coin Center – a cryptocurrency advocate group that educates policymakers on the potential of the technology.

If you want to tune in, you can watch the live-stream here. The bell rings at 10:00AM EST. We’ve got our money on Peter.

 

CHART OF THE WEEK


Today, we take a closer look at Time New Bank (TNB). As shown above, you have extended consolidation, a strengthening RSI (relative strength index) and a bullish 200 SMA cross approaching.

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