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Heads I win, tails I win
How DeFi Differs from Traditional Financial Services
Decentralised Finance (DeFi) replicates many of the functions of the traditional financial system. It has seen tremendous growth over the last year, making it one of the most important applications of Distributed Ledger Technology (DLT). Is DeFi indeed a “digital” version of traditional finance, or…
Difficult by design
Democracy is messy, frustrating, and at times infuriating. But it is at least fair, right? In a democracy, we all get a say in who governs us, and the vote of the poorest, most marginalised citizen carries the same weight as that of a peer…
Bubbles in Cryptoasset Markets: A Review of the Literature
The very existence of bubbles in financial markets is somewhat controversial. For instance, the eminent financial economist Eugene F. Fama defines a “bubble” as an “irrational strong price increase that implies a predictable strong decline” (Fama 2014, p.1475). Fama’s argument, in essence, is that if…
The crypto culling
Digital and crypto asset markets are down dramatically from the highs set only last week, with attempted rallies mooted by some potentially negative news on the taxation front. The downtrend that started last weekend appeared to be waning until US President Joe Biden reportedly is…
Liquidity and Downside Risk in Bitcoin
Liquidity and Downside Risk in Bitcoin The likelihood of severe contractions in the price of an asset is inherently linked to liquidity. For instance, funding shocks decrease market liquidity, leading to speculator losses on their initial positions, forcing them to sell more, causing a further…
The end of the beginning
Love ‘em or hate ‘em, we should all be watching Coinbase’s IPO carefully and wishing ‘em well. Then again, Coinbase doesn’t really need our crossed fingers. The company has had a stellar Q1 with revenues up by nearly three quarters to almost $2 billion. More…
The Bitcoin Break-up
It’s not really prophecy if the writing’s on the wall. The signs of Bitcoin’s break-up were there for all to see, and my predictions were intended more to prepare us for an inevitable future. And now it’s upon us. On 19 March, the Financial Action…
FUD sets in as ETFs perhaps become a distant reality
Bitcoin is by far one of best performing assets so far this year in any market, yet this week’s bearish turn has many sounding the alarm bells. Bitcoin is up 79 percent year-to-date (YTD), an incredible return by any measure. But the mood around crypto…
If you strike me down
“You can’t win Darth. If you strike me down I’ll become more powerful than you can possibly imagine.” What does Star Wars have in common with the British classic, Vanity Fair? On the face of it, not much. The novel is a sardonic sketch of…
Digital Securities and Financial Markets
Digital securities are traded within a distributed ledger but represent assets that exist in the real world. In this post, we examine whether they can disrupt financial markets by offering a more efficient way of processing trades. Introduction A digital security, also known as a…
Weekly Market Roundup
Once upon a time, back in 2013, Federal Reserve Chairman Ben Bernanke announced that the Fed would reduce the volume of its bond purchases at a future date – this was enough to send traumatic shockwaves through the markets even though no asset sales actually…