Bitcoin, Stablecoins, DeFi and Privacy: How COVID-19 is Changing Key Crypto Narratives

The Breakdown

Blockworks

Investing, Business

4.8 • 806 Ratings

🗓️ 30 March 2020

⏱️ 21 minutes

🔗️ Recording | iTunes | RSS

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Summary

On January 28th, Bloomberg’s Joe Weisenthal tweeted “Notable overlap on here between the most alarmist people tweeting about the virus and those who are obsessed with the size of the Fed balance sheet.” There is no doubt that the bitcoin and crypto community broadly were far earlier in recognizing the potential significance of the Covid-19 crisis than most professional communities. Today, America preps for at least another month of lockdown and social distancing. The markets continue their chaotic swing as investors are simply unable to price in such a once in a lifetime event. A question for the crypto community becomes: how is this impacting narratives about our own industry? In this episode, @NLW looks at the impact of the Covid-19 crisis on narratives around: Bitcoin Stablecoins Digital Dollars and Central Bank Digital Currencies DeFi Privacy

Transcript

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0:00.0	Welcome back to The Breakdown, an everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond, with your host, NLW.
0:15.0	The Breakdown is distributed by CoinDesk.
0:20.5	Welcome back to the breakdown.
0:22.5	It is Monday, March 30th, and today we are discussing narratives.
0:28.4	It's hard to believe that we are really less than a month into the widespread
0:33.5	acknowledgement of the coronavirus crisis, and so fast already so much has changed. And I thought it would be interesting in this context as we prepare to expand the duration of the social distancing period for at least another month through April, to actually ask how much this crisis is changing the narrative of some key aspects of crypto.
0:57.8	I'm going to start with Bitcoin, and then we're going to look at stablecoins,
1:01.3	defy, cash slash digital dollars, or central bank digital currencies, and finally, privacy.
1:08.4	All right, so first up is Bitcoin. And obviously, Bitcoin as the biggest asset in the
1:14.1	crypto space, the asset that everything is really built around, has the highest stakes in some
1:19.2	ways from a narrative perspective. And we've seen this play out in some pretty interesting
1:23.6	ways over the course of the last few weeks. The long and the short of it is that what's been up for grabs a little bit is Bitcoin's narrative as an uncorrelated or a safe haven
1:34.1	asset. And actually, let's start by unpacking those two things because I feel like the first
1:39.7	thing that happened in this crisis was a decoupling of the uncorrelated narrative from a safe haven
1:46.5	narrative. These are actually two separate things. The idea of an uncorrelated asset is something
1:51.1	that doesn't move in concert with other types of assets. The idea of a safe haven is something
1:55.6	that moves perhaps in opposite directions as other types of assets. So if you look at gold as an exemplary safe haven, and you think that it moves in a way that's
2:05.1	oppositely correlated to equities, that's what you would expect in times of crisis.
2:09.6	Now, with an uncorrelated asset, it might move opposite to other things, but the point of it
2:14.3	being uncorrelated is that it doesn't really engage with or respond to the same
2:18.6	set of stimuli that a correlated asset does. So it's not a safe haven by definition in the sense of
2:24.9	going in the opposite direction of equities markets or whatever you're trying to provide
	...

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