The Breakdown - Crypto Daily 3@3 - 7.10 | Alt Season Dreams & Nightmares | New Crypto Funding | Mr. Libra Goes To Washington

Episode Date: July 10, 2019

We discuss: 1) the chatter around a potential alt season and what makes things different this time around; 2) new financing that shows where crypto investors heads are at (hint: infrastructure not apps); 3) the latest salvos between Libra and regulators. 

All right. Check, check. Welcome back, everyone to another three at three. What's going on, guys? Welcome to the party. Quick announcement, I guess, before we get going. So last night, I tweeted this out, but this is now available as a daily podcast as well. It's something that I've heard from a lot of folks that maybe don't have time. to watch every day or it's during their workday or 3 p.m. Eastern is a weird and convenient time or whatever. But they want this sort of content. So now it is going to be available as a podcast. It's up on iTunes and Spotify now. It's coming to Google Play as soon as they approve it. So yeah, so if you prefer to get this type of content via audio, check it out there. I'll post links. And I will try also to make sure that the content is, thinks about the, the audio listeners as well. It's pretty visual. I go through a lot of different, you know, Twitter streams and things like that, obviously, but I'll try to keep better track for

for everyone who's on the audio. So on that note, let's dive in. All right. So the discussion today, so the number one, alt season dreams and nightmares. So basically, I noticed a kind of a weird inordinate amount of conversation just this morning around alt season. And so this has kind of been a recurring theme ever since you saw BTC rally a couple weeks ago. And the question is, you know, is Altseason coming back? When is Alt season coming back? So on and so forth. Alt season, for those of you who maybe haven't been in crypto for a while, is this idea that at some point the gains from BTC and maybe Ethereum shift over into other coins, right? People take profit and then they diversify trying to get kind of a bigger pop or whatever. So this pattern happened,

obviously, it was a huge part of the ICO boom, was this money, you know, from Bitcoin flooding into other assets. And so, you know, people who, especially people who have been holding the bags of their, you know, favorite alt coin, whatever it may be for, you know, X amount of time, are particularly inclined to want all season to come back. And I think that the, The question is will it and why or why not? And so I think there's a few things. So, you know, one is let's look at actually what people were talking about first. So you've got Barry Silbert starting to feel like it's time for quality alt coins to begin catching up with BTC.

I think the bottom is in. There are more people than I need to pointing out that Barry might have, you know, some investment, some intrinsic interest in there being a new alt. season. Other people thought, you know, yes, it is ready for the next set of, set of alts. You've got Crypto Bitlord with full, full mask regalia on saying that they're likely won't be today, likely won't be tomorrow, but there will always be another alt season. You've got Galaxy BTC just asking straight up, do you hate alt coins, which is at 54-046 yes, with like 2,000 votes on Twitter. You've got Peter McCormick saying, the reason you have, you have, haven't had an alt season is simple. You all know that alters are junk and aren't worth shit.

You're hoping for more clueless morons to pump this shit, but they aren't here. 2017 was a one-off. We were all clueless. Buy Bitcoin. Go along. STFU. And so let's actually dive in there, I guess, for the last 30 seconds or whatever about this. So what's different this time around? I think this is a relevant question, right? People who are interested in an old season or who are waiting for an alt season are taking a pattern that they saw before and trying to apply it now, as though there are any real clear patterns in crypto, which may be the first challenge with this. But I think even beyond that, there's a couple of things going on. First, Bitcoin and Ethereum have definitely not hit the point yet in this bull cycle or whatever that we've started, where I think

they're spitting off profits, right? There's still a lot of people who are just getting whole, we're just not there yet, right? We haven't hit a new all-time high. Most people are still really, really focused on BTC. Second, you know, we lived through a first round of this. And, and we've And I think that we wizened up a bit. Like on average, the average participant in this market has now been through a cycle. The idea of building a better Bitcoin and trying to get Bitcoin like gains is kind of lost its luster. It doesn't seem as realistic because it isn't realistic as realistic, certainly. You know, you're going to see, even if there is an alt season, it might be more a lot of little pumps and dumps here and there versus kind of like the screaming, hurtling insanity that was the ICU boom.

And third, I think that it's really valuable and worth noting who's been advocating for new people to come into crypto over the course of the last year. It really hasn't been folks who are invested in tokens trying to get institutional investors in SAFs or whatever. It's been people who have a strong interest in getting people into crypto as an asset class and who are really trying to pull them into, you know, in particular Bitcoin as a unique asset that's a hedge against kind of global instability and money printing. that's been the narrative that has been pushing for all the new audiences. So there isn't necessarily a big set of new buyers who are really stoked on these alt. So alt season dreams and nightmares, I think right now this idea that it's somehow coming back is, it's, you know, we'll see. But there's more to funding in crypto than alt season. So let's jump to number two.

So number two, new crypto funding, but seriously not for alt season. So a couple different projects announced funding today. A big kind of venture capital style funding, right? So the first was Near Protocol. It announced a little over $12 million from Metastable, which is the fund that Naval Rabacont is involved in. Accomplice, Ash, again, those of you guys who are in crypto Twitter know him, you might know Ash, Electric Capital with Avichal, Pantera, multi-coin, scalar, Svangel, Coinbase, IDO. So a pretty big set of, I would.

say kind of the Silicon Valley core crypto community invested in this. And I liked Linda's threat about this project. She kind of got into what made it exciting for them. Basically, the way that she argued or the way that she described it is this is a project designed almost entirely with user adoption and developer adoption in mind. So designed to make it easier for devs who aren't already in blockchain to build applications with the languages they already know, provides hosted wallets so that users don't have to deal with that right away, gives developers the options to pay gas fees, transaction fees, whatever, so that that's not a source of user friction.

So anyways, the name of the game, and I think the relevant point here, way beyond the individual protocol, is the idea of adoption, right? And designing for adoption, designing for audiences beyond us. Second company that announced funding was Anchorage. So Anchorage, first made news about six months ago, feel like when they announced like 16 million or 17 million from Andreessen Horowitz for funding. They made news news again when the Libra partner announcement came out and they were one of the 28 founding members because it's kind of like them and Bison Trail were the two that people

really hadn't seen before. And today it was announced that $40 million had gone into this company from a number of partners. Andrews and Horowitz doubled down. Visa came in, which I think is a pretty notable one. And so what do these guys do? It's a different type of custody solution, basically. So they are trying to design a custody solution that does away with the convention of passwords and instead kind of has a combination of biometrics, a social permission system where if you're in an institution that's got assets custody, there's kind of multiple people that need to be involved. And part of the big idea is to allow even offline assets to be used for participation in crypto asset protocols.

So their thesis is basically that you kind of can't just like bury the private key in the backyard because you wanna participate in governance. You wanna know what's going on, right? You wanna participate in staking. And so it's designed to accommodate that. So I think that there's just two quick things I wanna say about this.

One, it's notable to me because I think that you're seeing more and more of the funding that isn't for Bitcoin specifically or that isn't kind of just institutional capital coming into Bitcoin, is in these sort of either like one, like layer one projects that are trying to do something like very kind of profound and different versus random, you know, tokenize the world type projects, or two, these sort of infrastructure projects like Anchorage that are really trying to make

the traditional markets able to get involved with Bitcoin and get involved with crypto much more easily at lower risk, whatever, whatever, right? I think that the second piece is a common thread here is user adoption, what it's going to take to actually get people using decentralized apps. These are not solved questions, and I think that you're seeing a lot of funding flow into that. So again, much more infrastructural than kind of that application layer, one degree up. All right. And with that, let's move to number three really quickly. So it wouldn't be a crypto daily, wouldn't be a week of LRS without talking about Facebook.

So number three, Mr. Libra goes to Washington. So we are right near the kind of congressional hearings around Libra. You had a couple weeks ago, I guess maybe last week, the folks in Congress who kind of immediately reacted to Libra and requested them to stop effectively did their version of a please, cease and desist kind of letter appealing to, I think, a shared set of values that I'm not really sure that are actually shared between Congress and Libra in terms of the money system. And this week you had David Marcus, who obviously runs the project over at Libra for Facebook, write a letter to the Senate Banking Committee addressing a number of their specific concerns. I think this is interesting mostly in terms of how detailed and granular it is and how specific it is to the questions they have.

I think that the interesting thing about this letter is that in some ways it shows just what the – this is what Libra is going to be doing for the next, I don't know, six months, year, two years is answer. kind of one by one every different kind of regulators questions, and that's both in the U.S. and probably beyond. Like this is the kind of grueling work of trying to do a regulated, institutionalized, permission, you know, cryptocurrency. And I think it's a, it's going to be interesting to watch just what a burden, what an overhead it is, and where it actually leaves the project. Now, simultaneously you had Jerome Powell's testimony today, head of the Fed, in front of, of the Senate Banking Committee, and right away, the question of Libra came up, shows just how kind of top of mind this is for folks. I think I saw, I didn't confirm this, but I think I saw

it was Brad Sherman, who's obviously been super, super antagonistic towards Bitcoin and who has kind of been vocal about recognizing the threat that Bitcoin potentially represents to the U.S. dollar's status as global reserve currency. I think he was the one who brought it up first. And basically Powell said that Libra, quote unquote, cannot go forward until Facebook addresses concerns. And so, of course, you know, this is nothing that we haven't heard before, that we haven't heard in the last two weeks. AML concerns and just money laundering concerns. You have the standard set of privacy concerns. You have people kind of throwing around how much power Facebook has in his institution.

I think it is notable the extent to which all of this focus and this heat, is on Facebook's Libra, when in a lot of ways you could argue that Bitcoin is potentially more threatening in a lot of the vectors that they're concerned with. But it's interesting. So again, this is presented maybe today, not so much as new information, but as a recognition that this conversation is going to do nothing but continue to grow in importance and significance, and it's going to be interesting to watch. I'll be keeping track, obviously, when the hearings actually do happen. I think we'll learn a lot more. We'll get a better read of what different people think. And that is the 3 at 3 for today. So thanks for hanging out guys. I hope this was useful.

Let me know in comments on Twitter or on YouTube what you think about this. For audio listeners, please hit me up on Twitter at NLW and let me know what would make this more useful as you're just listening to it. I want this to be super valuable and high impact. So let me know and thanks for hanging I will see you tomorrow, guys.