W3J Weekly (10/11): SEC halts $1.7B Telegram ICO, CFTC says ETH is a commodity
Editor’s Commentary
A lot of friends ask me whether I think BTC is pivoting into a bull or bear market, and what number I see being the bottom or top. I believe it’s hard to predict these targets with accuracy. However, I am convinced that BTC will always continue to rise and fall in cycles, from feelings of where the price can only get worse forever, transitioning to where it feels the gains will go on forever and the future price prospects of BTC have unlimited rosy upside. These cycles will go on forever, and they can be especially dramatic for BTC as it is not backed by any intrinsic value, such as revenue or earnings. The sentiment and psychology of the market can change rapidly or be irrational for long periods of time.
The unique qualities of BTC are how it’s known as “digital gold” and most recently labeled as a “hedge against monetary and fiscal policy irresponsibility,” as my friends at Ikigai Fund put it very well. No matter how much BTC’s price goes down, there’s always a merit of truth in the asset in that it really does it what people say it does: it’s a decentralized store of value that can be moved in a hostile environment. Therefore, there’s always potential for a camp of bargain hunters who will buy the bottom and the markets start moving up, forcing the short positions that seemed like sure-bets in a downward market to cover their positions.
The problem with most altcoins is that they don’t have a story or widespread narrative or paint a clearly proven picture on a future with how they will be adopted in decentralized applications. Retail investors and crypto funds generously over-funded many dapp infrastructure protocols in 2017-18 when the market was doing well for pre-traction protocol tokens, but the sentiment has gone from over-euphoric to one of difficulty and lack of product-market-fit.
My opinion is BTC and ETH have successfully added unique value that wouldn’t be possible without blockchain. With BTC, it’s a censorship-resistant movement of value, with ETH, it’s applications like ICOs and DeFi that clearly showcased it’s value to the world, and I’m optimistic for the widespread adoption of decentralized stablecoins. $DAI is clearly a unique product of Ethereum that wouldn’t be possible without the traction ETH has in terms of liquidity as well as smart contract functions of the protocol. I am also optimistic about the impact that DAOs can have by creating decentralized governed bodies of people regarding the flows of money, value, data, decisions and more. The signing of a private key is a way to guarantee consent and authority, which is a fundamental quality to forming decentralized financial organizations. I believe ETH already has killer applications are in plain sight today with DeFi and capital deployment via DAOs and (formerly) ICOs; UX improvements and discovery of specific use cases will spread both into broader adoption in the months to come. In light of this, the major news on how the CFTC said ETH is a commodity reminds of the news event in 2014 when the IRS ruled BTC as property, which was great news at the time yet the market reacting irrationally to it in the short-term, in my opinion.
- Andrew
W3J Weekly Editor
www.web3journal.com
Top News Of The Week
SEC files emergency restraining order against $1.7B Telegram ICO to prevent the distribution of Telegram TON tokens which was expected to happen on Oct. 30. Telegram filed its sale under Reg-D and had 39 U.S. purchasers. - Link
Commodity Futures Trading Commission (CFTC) Chairman says ETH is a commodity. - Link
PayPal, eBay, Stripe, Visa, Bloomberg And MasterCard quit Facebook’s Libra project. - Link
The same lawyers who successfully sued Craig Wright file a lawsuit against Bitfinex, alleging it overs $1.4 trillion in damages involving a “sophisticated scheme that coopted a disruptive innovation — cryptocurrency — and used it to defraud investors, manipulate markets, and conceal illicit proceeds.” - Link
Bitfinex responds to the lawsuit by saying it never used Tether tokens or issuances to manipulate the cryptocurrency market. - Link
Alipay and WeChat deny support for fiat-to-crypto onramp on Binance after CZ said it would support Alipay and WeChat purchases. - Link
SEC denies Bitwise ETH proposal due to not meeting the requirements for preventing market manipulation or other illicit activities. - Link
MakerDAO CEO Run Christensens says multi-collateral DAI will launch on Nov 18, which will allow staking collateral with GNT, REP, BAT, ZRX, OMG and DGD. - Link
UNICEF announces it will accept cryptocurrency donations for its UNICEF Cryptocurrency Fund, which aims to fund open source technology that benefits children. - Link
IRS will ask tax payers if they own crypto currencies in 1040 tax form - Link
Coinflex launches derivatives market to bet on Libra delays. - Link
ConsenSys acquires Infura, which creates APIs for working with Ethereum & IPFS. Acquisition terms undisclosed. - Link
Brave announces VPN⁰, a dVPN (distributed virtual private networks) with no central authority using ZKP. - Link
ConsenSys alum Harrison Hines raised $3.7M for Terminal, a dev tools hub for decentralized apps, including infrastructure and indexing APIs. - Link
Outlier Ventures published “The Invisible Protocol Thesis”:
• “‘more decentralised’ today is only a necessary quality and compromise in a handful of limited use-cases where either regulatory arbitrage is critical ie gambling, porn”
• “mass adoption will only come when we have found ways to abstract away the complexities of web 3’s protocols, and their respective token economies, making them invisible to the average user”
• “we believe there simply isn’t the capital left in the system for many new big multi-year infrastructure plays any time soon. This may be more true in The West than in The East”
- Link
Top Tweets Of The Week
“Launching a new layer 1 still pays too well. HBAR at $0.04 gives Hashgraph $2Bn network valuation. What "middleware", layer 2, or tooling company can reach $2Bn this fast? None. Until these gains normalize, crypto tooling and dev experience will continue be sub par.” - Marc Weinstein 🧘(@WarcMeinstein)
“Most people think the US dollar has been around for a couple hundred years. In reality, it's been around since 1971. Before that, "US dollar" was a proxy term for a specific weight of gold. The fiat dollar is just a middle-aged payment instrument with high cholesterol.” - Erik Voorhees (@ErikVoorhees)
“Fat protocol thesis was dangerous in that it diverted funding from the application layer to a bunch of useless protocols with no network effects, bad teams, bad dev tooling, and slow execution. It’s crazy how contrarian it is to actually work on a practical application now.” - Jiho (@Jihoz_Axie)
“Sharding will NOT break defi composability.” - Vitalik Buterin (@vbuterin)
“Shame on us for lending our legitimacy to Libra” - Vlad Zamfir (@VladZamfir)
“🦄🐷🦄🐷🦄🐷🦄🐷🦄🐷🦄🐷
Are you team UNI or team PIGI? Prepare to battle for price dominance!!! We are thrilled to announce https://unipig.exchange a scalable, instant demo of Uniswap. This is a collaboration powered by @plasma_group's Optimistic Rollup.” - Uniswap (@UniswapExchange)
“Over the past year, the number of Dai holders by owned coins is up significantly across the board. 📈@MakerDAO is proliferating at a truly incredible rate. 🌱” - Cole Kennelly (@ColeGotTweets)
“Price of LEO dropped below the private sale price of $1 for the first time today.” - Larry Cermak (@lawmaster)
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