Viva Bitcoin, crypto, crypto, blockchain!
What's up, YouTube, we are YouTube journalists
and hosts Jackson and Giovanni back with the
3rd episode of Beer and Bitcoin Quarantine
Edition.
We are here to drink beer and talk about the
biggest crypto stories of the past month.
Today, we've got two very special guests,
our very own editor in chief, Jay Cassano,
and managing editor Kristina Lucrezia Corner.
Welcome to the show, guys.
Great to be here with you guys. Hi, everybody.
What are you guys what are you guys drinking
today?
It's still a little early New York. So I'm
drinking a milk stout brewed with coffee.
And I don't drink beer, sorry, guys. But we
in Italy drink Spritz a lot.
Cheers guy! Welcome to the show.
So everyone is having to adapt to these quite
strange times we live in now, and Cointelegraph
is no exception. So we also had to start working
from home, as you can see. And Jay, maybe
you can tell us a little bit more about how
the company had to adapt this COVID-19 pandemic.
Sure. So Cointelegraph is already a global
company, so we're pretty used to working across
time zones and coordinating on video calls
and slack and things like that. But it's definitely
been a challenge. You know, having everyone
work from home, I think people are rightfully
a little anxious right now. And, you know,
just trying to cope with that here in New
York. I live in Brooklyn. You know, it took
people a little while to sort of start complying
with the lockdown and staying indoors. But
now, I mean, the streets, my block is completely
empty. There are literally no cars on my block.
And, you know, a month ago, I had friends
visiting and it was impossible for them to
find anywhere to park. So it's totally changed.
In just a matter of weeks. People have fled
the city and the people that are here are
just not leaving their house.
And Kristina, you're kind of in the thick
of it right over in Italy. What's it what's
it like over there?
Well, we've been locked for four weeks now,
almost. Sunday that will be the anniversary.
Well, I would say that is definitely a tough
experience, especially from a psychological
point of view, because, yes, we are all used
to work at home.
And we kind of used to use digital tools.
That is not the case of so many people now,
so many different professions.
But we are locked from going outside. All
our trips and conferences were canceled, actually
I was going to join Jay in New York this Spring
but it was canceled as well.
And it's very different, difficult for me
personally to divide sometimes work and private
life. And online offline reality. But we are
trying to adapt. We also trying to incentivize
our team by sharing experiences. And actually,
we've just published an article with different
stories from reporters and editors all over
the world, how they are coping with this very
unusual situation.
So if you want to know more about our team,
please check the article.
I also experience a lot more of digitalization
in different parts of life. So virtual events
have become something that we experience everyday.
I also personally launched a digital dancing
platform in order to keep myself in form.
So, yeah, and Internet is doing great, even
though in Italy, the load on Internet connection,
has tripled maybe more, but. It's doing great.
So thank you for all Internet providers.
I mean, even in New York, the Internet's been
been overloaded. And, you know, it's been
definitely a lot of people both working from
home and just streaming Netflix all day long.
But, you know, I should add that, you know,
at Cointelegraph we're really lucky to still
be able to keep working through this, to all
have our jobs and to get to, you know, keep
serving our readers and our audience through
this difficult time.
Cool.
And so, Jackson, what do you miss the most
about the pre quarantine period?
I mean, I miss going outside on a daily basis.
Don't you miss said, don't you miss having
beers with me for our classical beer and bitcoin
show?
I do. Well, we're still having beers right
now, man. But I do miss seeing your lovely
face in person.
Yeah, same here.
What about you, Giovanni? What do you miss
the most? I have a few answers I could say
for you, but I'll let you do them.
Well, I also miss contact with people because
I love I love being in direct touch with people.
And I'm still kind of getting used to these
kind of virtual way of communicating. It's
not it's not the same, unfortunately, but.
Yeah, better than nothing. Better than nothing.
Yeah. I mean, it's it's definitely a change
in lifestyle for us as well. I mean, you can
see that where we're here at home now, we're
not in the studio anymore. So just adjusting
to that to that lifestyle has been challenging.
But like Jay said before, it's a privilege
to still be able to work.
So I'm happy that we're doing the things that
we're doing now and it's a good way to move
forward.
Jackson, do you have a have a little studio
setup there in your apartment.
I have a light, a camera and two computers
and a microphone that constitutes a studio.
Then I guess the answer's yes. Personally,
I'm not I'm not sure that does. But I'm looking
to acquire another light to get this side
of my face a little bit brighter.
But yeah, for now, we're just kind of working
with what we've got at the moment. Yeah, I
think that's true for everyone.
Well, everybody really stay safe. And also
keep your mind healthy. That's important because
it's not usual experience to be locked down.
But we need to be strong and everything will
be great and drink beer.
Cheers to that.
Cheers.
So moving on to the crypto news of the month.
During the worldwide market crashes of March
12th 13th, which is already becoming known
as Black Thursday. Bitcoin lost over 50 percent
of its price. March 12th was the worst day
for Bitcoin in the last seven years. It lost
over 40 percent of its price in 24 hours.
Global stock markets also suffered one of
their worst days ever. Italy was hit the hardest
with the FTSE MIB and Borsa italiana falling
nearly 17 percent. This was a significant
moment because it proved a strong correlation
between movements in equity markets and in
Bitcoin, something that Professor Harvey Campbell
had pointed out at the end of February. The
correlation held for all of March as Bitcoin
mirrored most major moves in the global stock
markets. You can see these on dates March
8th, 9th, 16th and the 20th. Other experts
begin to pick up this correlation. Matty Greenspan
tweeted that in times of stress, all correlations
go to one. And he pointed out in one of our
recent market discussions that Bitcoin had
a 0.6 correlation with the stock market and
a 0.1 correlation with gold.
What do you guys make of this correlation
that has been coming out between Bitcoin,
the stock market, over the month of March?
Well, my correlation point is that the fact
that crypto goes down together with all other
markets does mean that crypto is part of the
world economy.
And that is at the same time a bad point,
but also a good one, because actually, we
can see that it experiences the same phenomena
that all the world economy does. So I think
we are living altogether and crypto is now
indispensible part of the economy all over
the world.
Yeah, I think it's indicative of how much
Bitcoin and crypto more broadly have been
adopted into the general economic life and
how much we have, you know, traditional investors
taking part in speculation on crypto assets.
You know, there was a tweet from Michael del
Castillo at Forbes that I really liked about
the crash. And he said: "Bitcoin isn't magic.
It behaves the way its owners behave when
normal people around the world buy it because
they're afraid it goes up when traditional
investors sell it because they're behaving
like they always do in a crisis. It goes down.
Nothing has changed." I think that's really,
really true. I mean, you had a lot of likely,
you know, traditional money in Bitcoin that
panic sold during the crash because they were
panic selling everything. But then the fact
that Bitcoin recovered so strongly is also
indicative of where it sort of differentiates
from the wider economy. And there are some
people that are looking at it as a safe haven
asset. I think it's I think part of what's
going on is you can't really have a uniform,
holistic view of what Bitcoin is right now,
because there are lots of people trying to
get lots of different things out of it, so
it's going to behave somewhat erratically
because there's not people, a group of people
that have all have consensus on what exactly
it is and how to use it.
I kind of agree with Jay when he's pointed
out that the young age of Bitcoin, I think
that it's still a very young asset.
And so it's very difficult right now to predict
how we react to specific events. But I think
that through the passage of time, people will
get the better idea of his behaviors and that
that's probably going to become more more
stable as a as an asset, more predictable
at least.
Yeah, there's some really good points. And
Jay brought up the idea of Bitcoin, one of
those narrative surrounding Bitcoin, which
is the safe haven asset that Bitcoin could
become.
And a lot of people are putting a lot of weight
on this current financial crisis in creating
this narrative. Mike Novogratz, for example,
the CEO of Galaxy Digital, says that Bitcoin
will continue to be volatile over the next
few months, but the macro backdrop is why
it was created. This will be and needs to
be Bitcoin's year. Dan Moorhead, the CEO of
Pantera Capital, another big venture capitalist
firm in the crypto space, also said that "Bitcoin
was born in a financial crisis and it will
come of age in this one." However, some academics
are skeptical about Bitcoin's viability as
a store of value. Ariel Zetlin-Jones, associate
professor of economics at Carnegie Mellon,
does not see Bitcoin becoming a store of value
in the long run, saying that Bitcoin is one
of the riskiest stores of value in the world.
Bitcoin price volatility more than five times
that of gold or even U.S. equity prices.
How involved are you guys in this safe haven
asset? I know we talked about there being
many different narratives along with Bitcoin.
Do you see that Bitcoin will break away from
the equity markets and decouple this correlation
that we were talking about earlier?
I mean, I'm not really one for predictions
personally. You know, as a journalist, I look
at I tried to just report what's going on
and analyze it as much as I can. And, you
know, now as editor of Cointelegraph, I'm,
you know, overseeing a bunch of really smart
journalists, editors who are doing that themselves.
But I think the point that, you know, that
you read from Mike Novogratz and Dan Moorhead
are really kind of crucial because, you know,
this is exactly the scenario that Bitcoin
was created for.
You have, you know, the Fed money printer
meme going around right now. And, you know,
the Fed is printing money. And this is why
Bitcoin true believers say that Bitcoin is
a superior store of value or a superior currency.
So if this isn't Bitcoin's here, if Bitcoin
doesn't take off this year, then I think that's
actually kind of a problem for Bitcoin because
it means that it's missing something in terms
of what its core value proposition is supposed
to be.
So how much time do you give Bitcoin to show
these properties?
Oh, man. I mean, it depends on the wider economy,
of course. What are you going to say Jackson?
Well, I recently spoke to Dave Weissberger,
the CEO of Coinroutes, and he said that it's
more about what happens in this crisis. I
mean, this crisis could take years to resolve.
Exactly. But really what happens in this crisis
is the event itself is what's going to define
Bitcoin. And, you know, one of the arguments
against Bitcoin becoming a safe haven is that
it is very volatile. It is more volatile than
almost any other asset out there. And but
he had a very interesting perspective on this.
And he was saying that is not about short
term volatility with Bitcoin, because once
Bitcoin reaches high market caps like the
market cap of gold, that volatility is going
to be much reduced. We're not going to see
that same kind of price fluctuations or at
least the percentage difference. Is it going
to be as high? What really matters, and this
is what Jay, I think touched on earlier is
the critical mass of acceptance.
You know, are people using it? Do people believe
in it? Do they trust in it? And this crisis
will hopefully reveal whether people can trust
this hard asset in the midst of all of this
money printing that's going on with the central
banks.
Yeah, I totally agree with you, Jackson.
And I think that people should trust crypto
not only as a store of value, but also as
means of payment. And this is critical for
adoption and for development of crypto as
a part of our everyday life. As a person who
follows different platforms where you can
pay with crypto AG would say that it's definitely
something that has been developing more and
more actively. I don't know, I talked about
dance before. We have a tango school here
in my city that is accepting crypto for payments,
in my opinion it's incredible, because it's
a little city and actually two years ago,
nobody knew what is crypto and now there is
this opportunity to pay with crypto, even
in places that like are not associated with
fintech or innovative industry.
Yeah, I think that's very indicative of the
kind of signs you want to be watching out
for as Bitcoin's journey involves, you know,
how is it being used? Where's it being used?
And when is it not correlating with other
risky assets that are that are making big
movements in the markets. So for all of you
viewers out there who are curious and wondering
what you can look at to see how the bitcoin
narrative is evolving. Those are some key
factors you can keep an eye on. Long live
Bitcoin.
I just wanted to add that, Cointelegraph just
launched an Instagram mask where you can find
out which crypto are you?
So I, for example, found out yesterday that
am Bitcoin and I'm happy to be Bitcoin. But
if you want to check yourself, which coin
are you check Instagram of Cointelegraph?
On March 12th, the market crash impacted the
DeFi space. The de-centralized finance space,
and specifically it caused the meltdown of
one of the biggest platforms in the space,
which is MakerDao. MakerDao found itself with
over 4 million dollars outstanding debt because
of the crash. So why is that important? That
is important because MakerDao is the largest
application, the largest platform in the decentralized
finance space, and a stablecoin that it issues
the Dai is powering many other application
in decentralized finance.
So if MakerDao goes down, the whole DeFi space
goes down with it.
So just explain a little bit how it works,
so MakerDao is a lending platform, a decentralized
lending platform. And it issues the Dai, which
is a stablecoin pegged 1:1 to the U.S. dollar.
So if you are a user of MakerDao, you can
take out a loan from MakerDao a loan in Dai.
Dai is the stablecoin. In order to take out
a loan you need to put some Ethereum in a
smart contract. The value of the Ethereum
needs to be 150 percent higher than the amount
of Dai that you take out as a loan. That's
called overcollateralization.
Overcollateralization serves the purpose for
safeguarding their platform from possible
fluctuation in the price of Ethereum. So if
your Ethereum goes below the 150 percent threshold,
that triggers automatic liquidation of your
collateral unless you are ready to put some
Ethereum to cover the losses. So that's pretty
much how MakerDao works. It's pretty complicated,
but that's how it keeps everything working
and it keeps a very delicate balance. So on
March 12, this delicate balance was kind of
affected. Why? Because the price of the Ethereum
fell sharply. Unprecedented 30 percent of
the price of Ethereum. Sorry Ethereum lost
30 percent of its price in a matter of hours.
That was the cause of many of the smart contracts
on MakerDao platform to trigger the liquidation
process simultaneously. And another problem
was that the gas price of Ethereum skyrocketed
and the Ethereum network got congested. Those
two factors caused a bug in the MakerDao functioning,
which caused the MakerDao to find itself with
this over four million dollars of uncollateralized
Dai in the market. So the Ethereum in this
in these contracts got fully liquidated and
the system didn't get any Dai in return. That's
why there were over 4 million dollars worth
of uncollateralized Dai in the market. Why
is that important? If such a big amount of
Dai is uncollateralized means that the peg
of Dai to the U.S. dollar might be compromised
as well, and that can have catastrophic consequences
on the DeFi space as a whole. So what did
MakerDao did to face this crisis? What it
did, it announced an auction, a debt auction
in which they sold the Maker tokens. Maker
token is basically a share in the MakerDao
system. They sold these Maker tokens in order
to buy back the four million dollars uncollateralized
Dai and restabilize the system. So at the
end of the day, the auction went fairly successfully
and they managed to restabilize the system.
But there is a but.
So basically, even if the point is that if
even if MakerDao managed to restabilize the
whole system, the people who lost their Ethereum
that the people who had their Ethereum liquidated
have not been reimbursed yet, they haven't
been refunded yet. And there is an ongoing
debate in the community on whether these people
should actually be reimbursed. So there are
someone who say these people took the risk.
These people should have been aware of the
risk they were running that's why they shouldn't
be reimbursed. Other people are saying that
actually it is MakerDao's fault because it
wasn't able to handle a situation like the
market crash on March 12. So I would like
to know, guys, what do you think about this
issue?
Yeah. So, I mean, first of all, I think it
highlights the. Fundamental risk with using
an extremely volatile asset like Ethereum
or any crypto asset as collateral for a loan.
So on the one hand, this is sort of foreseeable
risk. You know that there could be this kind
of volatility that could cause people's positions
to be liquidated. On the other hand, you know,
I think people would say that what happened
on March 12th, 13th was pretty exceptional.
But, you know, you can argue over how much
people should've been able to foresee that
we were due for a recession anyway and so
on and so forth. I think the questions that
remain are, you know, did the MakerDao protocol
function correctly and did it do enough to
protect users in this scenario? And I think
that's what people are really focusing on.
You know, we publish a lot of great articles
over the past week, past couple of weeks on
Cointelegraph on this. You know, there was
one earlier this week talking about a crypto
venture fund that won about 68 percent of
all of the auction Dai that came in from the
March 28 auction. So, you know, there's a
lot of movement happening right now to try
to stabilize MakerDao, but it still is sort
of teetering, I think, on what is going to
happen next. And it's the faith that we're
going to put in depends on reassuring them
that something like this isn't going to happen
again.
Yeah, I would like to add that it's also media
responsibility in covering these events very
delicately because rumors of MakerDao shutting
down actually created a lot of panic in the
market and it could definitely impact the
situation even more.
We had an opportunity our Head of News reached
Rune Christensen and actually he was put in
contact with his team. So we followed all
the discussions within MakerDao community
that were searching for solutions because
it's definitely a difficult situation to handle
and it's important how quickly do the company
react, but also it's very important how media
cover the rumors that are appearing in the
industry.
Yeah. And actually, if I can add on that.
You know, another part of that is not just
talking to the people at the top like Rune,
which is, of course, really important and
essential for us. But also, you know, we have
reporters, who are following discussions and
debates that are going on the MakerDao forums,
you know, and there's a huge thread, you know,
about, you know, do we compensate vault holders
that were completely liquidated and that's
a massive thread right now. And, you know,
we're following debates like that. So we're
getting both input from the top of these organizations
and from the ordinary users as well.
Yeah. So basically, media serves as a mediator
between different actors of the industry.
And it's a very big responsibility on us because
basically we accumulate different opinions,
different problems, different issues and try
to just present them as objectively as we
can to me.
To me, this topic is crucial. I mean this
MakerDao meltdown has a huge impact on the
reputation of the whole DeFi system. It opened
the eyes on the fact that DeFi system, DeFi
infrastructure is relatively fragile and fundamentally
not prepared to face events like the market
crash on March 12. So that event was considered
a black swan. So something that it's unpredictable
and cannot be predicted. But on the other
hand, we are in the crypto system. We are
in the world of very volatile assets. So I
think that's these kind of events should be
taken in consideration.
And I'd love to hear from our audience, you
know, what they think MakerDao could have
or should have done differently as well. I
think that there'll be a value point of input
for us as reporters and editors.
So this week, the news came out that Binance
has acquired CoinMarketCap. This is a pretty
big move. There were some numbers being thrown
around about how big the deal actually was.
It's unclear about what the exact figure was.
But for someone in the space making moves
like this at this particular time, it is a
really interesting, interesting decision.
Yeah, I think, you know, the big question
is, you know, why did Binance want to acquire
CMC? And, you know, it's worth noting that
Binance says, you know, OK, we're not going
to start charging for listings on CMC. And
they say, you know, we're not gonna influence
the rankings or try to manipulate trade volume
or anything like that on CMC. At the same
time, you know, for now at least, we kind
of have to take their word on that. We can't
confirm that we can say what's going to happen
in the future. So, you know, at Cointelegraph
we're just going to continue, as always, to
report the facts of what's going on there.
But in terms of why they acquired it, I mean,
I think any exchange right now is trying to
find ways to gain new users. And if I had
to speculate, I would say that, you know,
they're hoping that they can convert people
visiting CMC. And sort of direct them towards
Binance and make them become Binance customers
and users.
Yeah, definitely. CoinMarketCap has traffic,
has data and has experienced team. So I think
this is something that Binance is always in
search of in the space. CZ and his team seem
to be really people who think a lot about
the community and about different ways of
attracting more people into the space. Of
course, becoming their client.
Well, I'd say, you know, even though we don't
have the numbers confirmed, there are lot
of numbers circulating that I don't think
are worth really paying attention to right
now, because there's nothing that's actually
publicly disclosed or I think even sourced
from any kind of, you know, formal merger
documents or anything like that.
So, you know, again, at Cointelegraph, we're
just gonna report the facts of what's happened
there.
But I think what's notable, aside from the
specific numbers, is that you have a major
acquisition, regardless of the exact amount
happening right now in the middle of an economic
crisis. And to go back to my earlier conversation
today, that is somewhat indicative of, you
know, the crypto economy being separate and
somewhat resilient to these general market
economic downturns. So I think I think it's
a pretty big deal that Binance went out and
made this massive acquisition right now. You
have an international multinational company
making a massive merger play at a time I can't
think of any other industry where that's happening
right now. Certainly there are no airline
companies or hotel chains, you know, doing
that at the moment.
Yeah, but at the same time, I think that it
like it could have happened by inertia in
the sense that it definitely had to start
months if not years ago.
So this is something that had to happen now.
I would also like to highlight this little
detail that Brandon Chez, who was founder
of CoinMarketCap, actually stepped out as
the executive top manager and CMC's chief
strategy officer became its CEO, Carylyne
Chan.
And I think it's a very interesting thing,
because Brandon, who was not at all public,
who was a person that was definitely famous,
and he, I imagine did make a lot of money
out of his project that went so well. And
he should be kind of young person and he steps
out. It it also reflects a bit, in my opinion,
what's happening in the space that we already
see that some generations change. So even
within our space, that is so quick, that is
so young. We see already people who like got
everything that they wanted and they just
want to relax and to dedicate more time to
families and their hobbies. I think this is
an interesting case to think of and I'm really
glad that the space has now one more female
CEO. Congratulations, Carylyne!
Cheers to that. Yeah, well, cheers to that.
Thank you, everyone, for watching. The Cointelegraph
editorial team wishes you a safe and healthy
quarantine.
If you like the video and you want to see
more, hit the like button and subscribe to
our channel.
Stay safe and read Cointelegraph. Thank you
very much,.
Bye everyone!
