Market analysis
This week saw BTC trading at the $11,800 mark, with DeFi picking up momentum causing serious shifts in Ethereum’s network, the fees of which have skyrocketed to a new all-time high, making it a lot less profitable for small players to take advantage of liquidity pooling. This weeks market movements saw Ethereum pricing surpass the $400 mark.
Bitcoin’s correlation with gold
The correlation rate between Bitcoin and gold, calculated on a monthly average, has reached a record-breaking 70%, surpassing the peaks of Q4 2018 and Q2 2019, according to data firm analysis. As central banks rush to release a new wave of economic stimulus plans, printing more money to save the economies, investors are seemingly fleeing fiat currencies (which are prone to inflation) for harder assets.
Mainstream adoption
Publicly traded business intelligence firm MicroStrategy purchased 21,454 bitcoin on Tuesday, effectively pouring all $250 million of its planned inflation-hedging funds into the digital currency. Disclosing its bitcoin buy alongside an equivalent stock buyback in a Securities and Exchange Commission filing, MicroStrategy, a Nasdaq-listed software firm worth over $1.2 billion, said the cryptocurrency provided a “reasonable hedge against inflation.
The Hype Cycle
Six months ago, Reuters revealed that JP Morgan might transfer its open source enterprise blockchain Quorum to ConsenSys. Unnamed sources say there are advanced discussions involving JP Morgan investing $20 million in ConsenSys as part of a $50 million convertible debt deal. And ConsenSys would take over the maintenance and support of Ethereum based Quorum.
ConsenSys has been involved in several high profile enterprise implementations that use Quorum. One is the LVMH AURA blockchain to authenticate luxury goods. For commodities, there’s the komgo trade finance network backed by ING, Citi, BNP Paribas, numerous other big banks, and Shell. Plus, the world’s largest agribusiness firms are working on the Covantis consortium with ConsenSys and Quorum.
Defi
A yield farming token called YAM launched on Tuesday generated tremendous community enthusiasm and criticism. After garnering a purported $750 million worth of deposits of Ethereum, DeFi protocol Yam Finance collapsed on the morning of Aug. 13. The self-proclaimed “experiment” folded just 36 hours after it launched. YAM 2.0 will be launched in two phases that will actually create a third iteration of the Ethereum-based protocol, which will be the one adopted. The Yam case calls on the industry for a more stringent security audit of the code and put in deposit limit to protect users.
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