The Safello Show #0 – Coinmarketcap acquired by Binance and influence of COVID-19 on crypto

welcome everybody to so Safello TV
the very first pilot episode I'm your host, Frank Schuil co-founder and CEO of
Safello. I'm here joined by Niklas Lunback our head of product development.
Hi Niklas! Hey Frank. Are you ready for this first
pilot episode? I think I'm ready it's good to be here. All right shall we have
a look at what we're gonna talk about today? yeah let's have a look.

Okay so for
today we are going to talk about a market updates then we're gonna talk
some latest news and we'll do a Q&A to whoever is on the stream so you can ask
your questions and let's start with the market update. It's been a good week for
crypto, we have seen every crypto currency go up this week except for a
couple of alt coins that you can see here on the right top corner
Niklas any thoughts? Yeah I guess it looks like it's a highly correlated
market right now either everything is red or everything is clean and it kind
of so far is hanging in there.

Yes so if we're looking at Bitcoin we can see that
it went above $7,000 again obviously that's still far far from $20,000 peak
that we saw but it's also pretty far removed from the from the bottom that we
saw around $3,000 so all in all that's looking pretty pretty solid and if you
look at the dominance of Bitcoin you can see that like a week ago it was 64% and
this week we're seeing a slight climb to 65% and interestingly enough we see
the same trend for Ethereum the runner-up after Bitcoin so that was 8.23% and now 8.32% and if you look at all the other altcoins you
can see that it went from 12% to around 10.96% which shows that the
biggest losers here in the last week have been the alt coins. What what are
your thoughts on that Niklas? Yeah to me it's not very surprising that there's
gonna be some leaders of the cryptocurrencies and some of the other cryptocurrencies can
tend to go down right so we'll see whoever can keep up with Bitcoin and Ethereum, but for now it looks like that's the two big ones that people are
talking about.

Yeah and if we look back all the way to 2017 we saw this moment
that's referred to as the the potential flipping which is the theoretical flip
between Bitcoin and whichever runner-up would be taken over bitcoins first
position and the closest we got was in 2017 at the peak of the of the ICO craze
and you see since then actually all of the the cryptocurrencies have lost their
dominance related to Bitcoin. So we'll have to see however the coming coming months
how that develops and of course there's one particularly event that might play
into this which is the Bitcoin block reward halving. Niklas could you comment
on on what that means? Yeah sure so like we said earlier most of the
cryptocurrencies tend to follow the go together and a lot of it at Bitcoin is
the biggest so most likely the other if the big price on Bitcoin goes up the
others gonna follow and right now the inflation rate of Bitcoin is about to go
in half in about three what does it say 36 days so what it means is that right
now every ten minutes a block gets mined and you get 12 and a half bitcoins per
block and that's gonna get cut in half so it's 6.25 Bitcoin per block so
there's gonna be a lot less Bitcoin coming in from miners on the market and
people speculate that of course gonna drive the price up and that's
happened twice in the past so we'll see if it holds true again.

Yeah it's of
course the beauty of the protocol that it has this supply that actually to the
market that actually is getting less and less so every four year and as Niklas
says it's in the past we've seen that as the supply to the market
gets halved that it builds up some kind of pressure in the market and it goes up so
the last time it happened it was gradually going up in 2016 the price and
in 2017 in q4 we suddenly saw this meteoric rise
to the all-time high of twenty thousand dollars so this is an interesting event
to see if well likely it's got to be pretty similar to the last time in a
sense that we won't see an instant rise of the price but maybe a slow and steady
pressure that builds up in the market to to this new all-time high that would be
the best outcome of course and we'll have to see what happens.

So if we look
at the Ethereum just like we saw in the bitcoin dominance chart you saw Ethereum's
dominance increase as well but relatively to Bitcoin you can also see
that it is lost or gained in a relative price to the Bitcoin price so
again an interesting chart to follow because it's the only
cryptocurrency that is ever challenged the Bitcoin market cap in in 2017 and if
we look at then the Ethereum price itself we saw in December 2018 which is
about the lowest point that we hit at that time that the price was around $85
and when we look now in the recent price drop we still we see there was a
significant drop right like half of the value of Ethereum went down but it only
dropped to 110 so the lowest low is still the price that was set in 2018
which could be an indicator that you know we're gonna see a price rise from
here on out as the it hasn't set a new lower low but of course the jury's still
out of that but there's interesting stuff happening in Ethereum as well.
Ethereum is preparing for its phase 0 multi-client test nets that will likely
go out in April and of course there's a long wait for many years for Ethereum to
go to its next version of its protocol and if this is the the start then we'll
go into the staking model.

Niklas could you briefly explain what the staking is
and why it's relevant? Well I think that's been the big promise of Ethereum that they're gonna start out with proof of work in the same
way that Bitcoin has but that there is a way where we don't
I have all these miners but people rather stake their ethers and and we
will get an Ethereum would have the same security or similar at least
security as Bitcoin or proof of stake blockchain
so right now there's a couple of there's a couple of staking protocols out there
they all seems to have some kind of flaw somewhere and everybody's waiting right
to see if this big big problem is possible to solve and if so who's gonna be first?
Ethereum seems to be the closest to solving it
but it's still a it's still a lot less right? Yeah it's sort of from a pricing
point of view the idea would be that since you would earn new ethers as you
stake your ethers to the protocol that actually a lot of the existing supply is
going to be locked up which is then potentially also creating market demand
that could impact the price positively so from an investment point of view that
part is interesting and of course we haven't seen a protocol the size of
Ethereum actually launch anything like this so it's in a way a huge
experiment to see what's going to happen in economic reality when I plays
out.

And that concludes our news section so it's a short update for today but we
go now into the latest news and the biggest news by far has been the
acquisition by Binance of coin market cap for a whooping four hundred million
dollars. The last acquisition by heart that I remember was Poloniex
acquired by Circle and that was also a pretty large deal and otherwise we
haven't seen that many acquisitions of these size coin market gap for those who
don't know is a comparison website for crypto. The crypto currency market the
the graphs that you saw in our slide deck were from coin
market cap even though there have been competitors you have crypto compare you
have coincap.IO none of them have actually
been able to take over the number one spot of coin market cap just like
bitcoins first mover advantage we seen something similar with the comparison
market so it's not a big surprise that Binance is actually acquired coin market
cap but it's a huge sum and and definitely one that makes some people's
eyes rolls but in the end everybody uses this data and everybody uses this website
to trust that the underlying data and you only have to look at companies like
Bloomberg that shows in the traditional financial market how much that can be
worth so it might seem like a pricey acquisition but it might actually play
out really well for Binance in the long run.

And if we look at the the quote
from the founder Brandon Chess we he says I believe that all of the teams in
the space that could acquire Coin market cap, Binance is one of the very
best options they are a team that have shown time and again that they care
about their users and will do the best for them even in the most challenging of
times this spirit will continue to be echoed in our user out philosophy at
Coinmarket cap and I'm thrilled to be passing the baton to Carolyn and the
Coinmarket cap team to continue fulfilling my original vision of
showcasing the crypto revolution and what Brendon here is referring to is of
course when Binance got hacked they actually went through pretty great
lengths to recover the funds and make everybody who lost money whole so that's
that's a great great great quote from Brendan what are your thoughts on that
Niklas? Yeah I think I mean the big for me the big question is it's a quite big
price tag how are they gonna monetize how are they gonna get their 400 million
back so I think like you said a lot of people go in there and there's
definitely some kind of trust with coin market cap or are they gonna be able to
keep that or are they gonna start with some integration with Binance that's
gonna be weird, we'll just have to see right I mean you're anyone's guess is as
good as mine at this point.

Yeah I guess the monetization of crypto I was the
Coinmarket gap has been fairly limited so of course the
nature of that website might change as well as the you know the level of trust that it
might have in the market when there's a different owner
so of course Coin market through its independence has been relatively you
know an independent source and people rely on it if then Binance is the new
owners we'll have to see how the market received that from a truss point of view
Binance says the one who's taken over to baton
Carolyn Chan the interim CEO of Coin market cap I am optimistic about this
new phase of growth next slide it's sorry I'm optimistic about this new
phase of growth for Coinmarket cap ever since our humble beginnings in 2013 we
have been public about a commitment to remaining neutral by avoiding censorship
and judgment of projects or exchanges that we list
we're preferring to let users make their own decisions based on the data we are
delighted that the Binance team has been unequivocal in ensuring that we can
continue to adhere to our methodology without prejudice.

And that sort of ties
in actually that avoid censorship and of judgment of project or exchanges that we
list to our next news segment which is that there's now class action
ico lawsuit which actually includes Binance.
So 11 exchange have been actually have lawsuits pending against them
including Bitmex Binance Tron foundation and that other
cryptocurrencies companies and that goes to show that yes they have been really
open about the projects that they list on Binance but some of them
were actually securities or could be seen as securities and that's what this
action class-action lawsuit is about and the company that is actually helping
with the lawsuit or bringing lawsuit is the same company that is also doing the
lawsuit against Tether and I believe the correct white lawsuit which means is
that they are probably really serious and that they have the the deep pockets
to support this case and it will be very interesting to see how the lawsuits play
out and how they are going to play out between the different crypto
companies.

I'm sure that they have split this lawsuit up to to this many
companies where they obviously anticipate that some will be a hit and a
Miss and it will be interesting to see which one are going to lose the case and
which one is going to win and are based on what arguments any thoughts about
that Niklas? Yeah I know nothing more than that this is gonna be really
interesting to see if this is not where or what I know a lot about this this is
a ICO and SEC claims so we'll just have to see I mean yeah I don't know Frank.
Though who knows who knows how it will play out of course there have already
been quite a few cases that have come to conclusion and I think the lawsuit
against kick and and others were I think the the the ICO of telegram ton has also
been pursued by by different people that want to have a lawsuit against them so
it's gonna be super interesting to see which ones are going to succeed again
and about and what arguments are going to actually stick like if we look at
from a security argument we've seen that the effect the SEC said about Ethereum
that Ethereum is not a security and this line between what is the security
and what isn't a security is going to determine that and of course we have
seen some exchanges that have moved to to get them they're the right licenses
so they are ahead of this so that's why for instance don't see Coinbase in
this article and in this lawsuit because they have gotten the broker-dealer
licenses and they are allowed to to deal securities whereas all these others are
likely here now they don't have the the licenses yet and of course they didn't
have those licenses at a time either and of course I would also argue that
coinbase probably had a more stringent way of looking at what security they did
a great job but also listing a framework by which people could assess whether
it's something is a security or not I don't have to link by heart
but we'll put it in the comments so you can have a look at that.

And that brings us I
think to the end of our news which leaves us with a QA so I'll drop the
screen here and we'll go back to this view have there been any questions? Diogo Fouto- is there any possible or expected influence from Covid-19 on the
Bitcoin price variation? If you want to take first Niklas and then I'll add whatever thoughts I may still have after that. Yeah sure I mean I think from
Covid-19 pretty much it's gonna be really big on the entire world and
the financial markets so I would say probably right everybody was really when
all the markets crashed the the cryptocurrency market crashed with them
and the recovery seems to on the crypto market seems to be a little bit ahead of
the traditional finance markets so like they the really short answer is yes
right then how oh my god that's gonna be really difficult to see right what do
you think Frank? Yes I've mentioned this before I think on other places but I
think they're a yes we have already seen a crash of almost 50 percent when the
market tanked but then what was interesting we also saw a couple of days
where the cryptocurrency market had no correlation to the stock market so the
stock market was actually going down where crypto a certain cases was
going up and from here now we have sort of three scenarios one is the stock
market recovers and the cryptocurrency market in my opinion probably
disproportionately corrects upwards since it always has a higher volatility
or the stock market crashes further in light of additional Corona like Covid-19
News that is negative and impacts the regular stock market or the third case
scenario where the stock market crashes and actually the financial system starts
seeing some issues that then leads to cryptocurrency
coming to the forefront of as an asset class that you can invest in to
protect your purchasing power which obviously for a large degree you know a
good Bitcoin was a response to the 2008 financial crisis and this will be in
line with that so if crypto at that point can really prove to to stand up
against it and I think it could you know have be a asymmetrical asset against the
stock market which we'll see so those are the three scenarios that I see but
definitely there's there's already been some impact because most likely the
hedge funds dropped you know in their view risky assets when the first
drop in the stock market happened which is where we saw the 50% sell-off thanks
for your question Diogo, another question is there any expectation for Bitcoin to
reach the 19k level ever again all right Niklas here here come the
huddle believers from well I think to kind of follow up on your thought like I
think the Bitcoin and the cryptocurrency in general I would say has kind of been
built up from the last big crash right and and it's been holding and a really
big question or there's been a lot of tests for Bitcoin in in the past and so
far it is always survived and come up stronger from it and when we all saw the
Bitcoin market crash together with the rest of the financial markets it looked
pretty bad and everybody I guess it ever gonna stop
and it did stop and it feels now that I think there's an emotional feeling over
a lot of people that the bottom has been you know we have seen the bottom for now
what does that mean that we're gonna hit 19k level again I think at some point
we'll right if that is in in a couple of months a year or more than years like
that I don't know but for right now the feeling is that we're not gonna go down
at least it seems like we're gonna go kind of either a little bit up or a lot
up.

So Niklas is sticking to what you should do is never make any public price
predictions so and but I mean there is something called the Bitcoin obituaries
we can leave it leave that link in the comments because it's a very fun website
where you see these quotes of people who have declared bitcoin dead and you know
like a Phoenix it is always risen from the ashes and somehow find a way to to a
higher high and like if you look at Law on on crypto then the
estimate is every four year or so you know you see this after the halving you can
see this price pressure build up and you see a new high reached and you
would see it go to a hundred thousand dollars or a higher if we followed that
trajectory then it would be sort of 2021 q4 that we could see that run up but
more importantly I think that right now with Covid-19 is the real test for
whether bitcoin is actually able to do what it's supposed to do and so far okay
we saw a sell offs but that's not really anything bad like Bitcoin is functioning
just fine and cryptocurrencies in general are functioning just fine and if
it's it gets better worse and then it's got to be the real test and we'll have
to see but I think from my perspective we will see 19k again for sure of course
but don't put a time label of it do you foresee digital currency from Cecilia Skarp thanks by the Diogo for your your great questions
Cecilia do you foresee digital currency and D apps decentralized applications is
what that stands for we're playing a bigger part in people's day-to-day lives as a
result of the current global economic crisis Niklas you want to start here?
Well to me it seems like the government's are able to defend you know
defend their systems in a way that money is flowing through it so they got that
thing working the currencies are getting devaluated
the krona that's what is going really bad but I
think we'll just have to see what kind of asset classes are gonna win it win
against it so far I think it's a little bit I mean there's no timeline here so
in the short term I don't people to send Bitcoin and using Dapps
for any meaningful things but we already start to see these really interesting
places around the world where people are experimenting it just needs that killer
application where people really find it and use it and then I think it's gonna
blow up from there because the technology is getting hardened all the
time I think with Dapps we have the the really interesting I don't know if it
was a hack but on the on the die on the with the lending and in the end
it survived I think like it survived and it's now even stronger and now the
hackers have to think again and it didn't really really put put the die
back that far so all these attacks kind of makes the
ecosystem stronger so we'll see when it reaches that strength when it just can
bubble up and go free yeah I mean die it's definitely a great example of a Dapp
that has sort of real-life applications now a lot of people are lending die to
just leverage again crypto and and trade like trade more on the markets but in
general like if you can do an APR of 8% versus what you would get or your
regular bank account you put that in a great user interface like argent is
doing it's a great wallet where they have have a connection with the dye
where you could just earn the interest through their app then suddenly you have
a real life use case that I think people will embrace on a larger scale
if the usability of the wallet gets to the level where anyone can use it so I
think there's definitely going to be quite a few Dapps that are gonna
see some uptick but it's all about the UI UX and the interesting thing that
just stood out to me you said digital currency which to me is of course like
it we're talking about cryptocurrency from my perspective digital currency is
also something you were talking about Sweden about the E-Krona and there's
gonna be a lot of these central bank initiatives we're even talking about
there was a bill I think proposed to the United States where they wanted to
create a digital version of the dollar in amidst this Covid-19 crisis and those
initiatives will also come to light and they will force that upon the population
to a certain degree so yeah those are going to be adapted and
adopted whether people like it or not and and for some you know if you're
talking about the E-Krona there's a real reason why those will be adopted
because there's an elderly population that doesn't have their mobile phone
with Swish if we're talking Sweden again and mobile payments and they need
something else as an alternative that can may be a top-up card that they can
just get which is exactly what the E-Krona is trying to do so there's value in that
but I'm obviously mostly excited and I guess everybody here that's listening
and Niklas about cryptocurrency and that decentralised apps are going to do.
Are those all the questions that we got? Thank You Cecilia I think that was it for
today then that was our first episode Niklas how did we do? I don't know we'll
have to see in the comments right? Yeah well we did our best so if you have any
suggestions or you want to tell us how great or how horrible I started with
great but a great or horrible we are just let us know and what we can approve
what kind of subject you would like us to talk about and you know we'll do our
best to make that happen to the next shows so for this show thank you for
watching or listening and see or talk to you next time, bye everybody!

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