Feb 20th: Uncle Sam shifting lanes

Views expressed are mine albeit watered down by compliance and not intended as research or financial advice.

The ripple effects of the second bZx hack in less than a week are trickling down — not just into Defi tokens: Syntethix ($SNX) -8.4%, 0x ($ZRX) -5.9%, Chainlink ($LINK) -8.3%, Ren Protocol ($REN) -9.1%; but all tokens. Interestingly $KNC +15% is pumping.

https://defipulse.com

DeFi platforms are taking it on the chin as collateral locked in smart contracts have dropped 15% since top ticking at $1.25bn just days before the initial hack. bZx’s defense is that the second $635K breach is different from the earlier $300K. It’s understandable to expect mishaps with tech start-ups as they iterate their product — especially in nascent, cutting-edge technology. But, come on, two hacks in less than two weeks? This is a very hard pill to swallow.

There may be a day when these ingenious, trustless platforms reign supreme but I can hardly imagine a professional money manager at ease with parking assets in any smart contract today. Centralized solutions for a decentralized asset… the irony is not lost, but for now, they will be the go-to until a bulletproof defi alternative comes around. #OSLCustody anyone?

Meanwhile, American regulators may have started to take the space more seriously:

However, until they get their ducks in a line, the asymmetric risk of dealing with anything US will stop many from even engaging as the risks remain too high. Here’s looking at you taxman! Poloniex is the perfect analogy. Just three months after throwing in the towel in the land of the free, they have launched Russian language support. Countries that have been shot down will continue seeking for alternatives to existing dominant payment rails and they are looking likely to pull it off more than ever. By uncle Sam giving the shaft to the nations they don’t like for whatever reason, they are actually helping accelerate the move away from the petrodollar.

https://youtu.be/4fECrSQ9ifM

A volatile start to the year has actually led to the best January on record for crypto hedge funds and with the looming halvening you can look for further market dislocation triggered by speculators on both sides of the fence. Pullback from recent highs of $10,500 has nudged the momentum indicators back to mean levels while the ichimoku cloud remains positive. Risk to the upside, for now.

Eurekahedge

May the trend be your friend… Happy Trading!

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SJ Oh

Common Base CEO, pow.re co-founder. the strait jacket has been removed