BREAKDOWN: Why Today's Crypto Exchange Leaders Are Powerful, but Not Inevitable
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 21 February 2020
⏱️ 13 minutes
🧾️ Download transcript
Summary
After settling in to the $10,000 price level, BTC suddenly and rapidly dipped more than 5% in an hour on Wednesday. As the market discusses possible explanations, some floated the unexpected simultaneous downtime of Binance and Coinbase as a causal factor.
In this episode of The Breakdown, we discuss the power exchanges wield - both in terms of market liquidity as well as the ability to shape news cycles. The good news is that new funding for insurgent exchanges suggest that power today is not inevitable.
Lastly, we discuss the latest in central bank digital currencies, with Sweden launching an e-krona pilot; a former head of China’s national bank saying Coronavirus could accelerate efforts; and a new member of the Libra Association.
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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. |
| 0:20.0 | Welcome back to the breakdown. |
| 0:22.8 | It is Friday, February 21st, and today we are going to start by diagnosing the dip. |
| 0:29.2 | We're going to be discussing some theories for why the Bitcoin price fell so dramatically |
| 0:34.8 | a little earlier this week in such a short amount of time. |
| 0:37.6 | Second, we're going to be talking about fire in the exchange funding market and what it |
| 0:43.0 | might mean for what type of products investors are interested in. And third and finally, |
| 0:47.7 | we're going to take a little hop, skip, and a jump over to the world of central bank digital |
| 0:52.3 | currencies, looking at both Sweden, who has announced |
| 0:55.1 | some interesting tests as well as analysis around the impact of coronavirus on China's |
| 1:01.2 | digital currency plans. Let's break it down. We had been feeling pretty good about this 10K number. |
| 1:08.1 | It had gone up to 10K and then fallen and then gone back up and then fallen |
| 1:12.2 | and then gone back up again. And we were getting pretty settled at that level. When all of a sudden |
| 1:17.0 | on Wednesday, the price dumped something like 6% in under five minutes. It was this huge, huge falloff. |
| 1:24.9 | And we've more or less stayed at this 9500 to 9600 level ever since then. |
| 1:30.5 | So the most common analysis that I saw on what happened had to do with Binance and Coinbice |
| 1:36.9 | going down at the same time. Both of the sites had unscheduled maintenance, and that creates |
| 1:43.1 | potential liquidity issues, not to mention |
| 1:45.9 | concerns of volatility or concerns of hacks, right? Because at the beginning of Binance |
| 1:51.4 | going down, we weren't sure what the answer was. It wasn't clear why the site was going |
| 1:56.1 | down. And so you potentially have a scenario where if you have major providers of liquidity who are going |
... |
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