Diving into energy usage and bitcoin concentration

Last week, FalconX introduced a new series expounding on misconceptions, institutionalization, and technological advancements encountered in crypto every day. I highlighted that bitcoin volatility adds to technological advancement and that central bank digital currencies will coexist with bitcoin, not replace it. This article tackles two major controversial points in this article: bitcoin is not the ESG disaster that everyone thinks it is, and that bitcoin is not as concentrated as top-level statistics often tout.

A quick summary:

  • Bitcoin’s electricity usage is on par with the traditional banking system, and 40% of hashing power consumption comes from renewable sources.
  • Statistics quoted…

Addressing Volatility, Risk, and Central Bank Digital Currencies

Multiple traditional asset institutions have released reports on cryptocurrency, with mixed views, discussing digital assets as an investment. Large institutions are taking notice of crypto and researching the asset class, but there are a few overarching themes that we’d like to approach.

FalconX has been deeply involved in building tools for institutional asset managers, and our mission is to support our clients with not only technology and products, but insight into a nascent asset class that many are exploring for the first time. …

As I reflect on my first few months at Ridgeline, what initially seemed like another small step in my career feels more like the beginning of something entirely new. For those working in finance and considering a job in tech, this post is for you. My personal journey from portfolio management to product management was a long, winding road. I am thankful to have found a company that values my experience while providing tons of opportunities to learn. …

Key Highlights

  • Bitcoin returned 11.5% for October, compared to mid 2% returns for gold, the S&P500, and the MSCI All-World Index. The S&P hit new highs to close the month, returning 23% YTD — a favorable return for traditional assets, but one that is dwarfed by bitcoin’s 150% YTD return.
  • Macro events continue to be a factor for the asset, as the congressional Facebook hearing pushed bitcoin down 10%, only to see a 40% rally caused by China’s big push on blockchain technology.
  • Baidu trends saw a significant spike for the words blockchain and bitcoin, although searches for blockchain outweighed those for…

Key Highlights

  • Bitcoin closed out the month of September on a negative note, falling 14.4% for the month, the third consecutive month of negative performance. Global asset class performance was book-ended by bitcoin and gold, with gold being the best performing major asset for the third quarter, up 4.5%, while bitcoin was down 23.8%.
  • Bitcoin had its 3rd worst quarter since 2012, down 23.8%. Historically, the 4th quarter provides the most upside for cryptocurrency so there may be a rally into year end.
  • Trading volumes on the CME were down in 3Q vs 2Q, but open interest remained the same, a positive…

Key Highlights

  • Gold was the best performing asset, returning 7.5% in August, while broader markets were slightly negative and bitcoin closed the month down 4.5%
  • With the recent elevated volatility and macroeconomic news cycle, its often a forgotten point that the S&P 500 is up 18.3% YTD. Gold has experienced a nice run as of late, up 18.5% for the year, while bitcoin’s 162% return is head and shoulders above the broader market’s return
  • Non-correlated assets are great diversifiers, but leave questions surrounding an asset's performance in an untested, broader risk-off scenario. …

Key highlights

  • Global assets were relatively unchanged in July, while bitcoin was down about 6.8% for the month.
  • The floor of the Chinese Yuan was removed by the Central Bank of China, causing the currency to fall about 7% while bitcoin rose in tandem.
  • Digital asset volatility may stay elevated versus its peers, even as the asset class gains mainstream adoption as the general nature of an asset trading 24/7 leads to five times the amount of data in a given week versus traditional stock markets.
  • CME bitcoin futures volume has fallen considerably since June, but open interest remains on a healthy…

This report contains monthly commentary provided to current and prospective investors. If you would like to be added to the distribution list, please sign up here.

Key Highlights

  • Bitcoin continues its outperformance of major asset classes and other top cryptocurrencies, up 26.2% for the month of June, after posting a 62% gain in May. It continued to significantly outpace other major asset classes June returns, with gold gaining 8%, the S&P 500 gaining 6.9%, the ACWI All-World Index gaining 6.5%, and two-year Treasuries declining by 8.7%.
  • On June 18th, Facebook unveiled details of its long-rumored cryptocurrency initiative, Libra. Libra will be backed…

Executive Summary

This report contains monthly commentary provided to current and prospective investors, and if you would like to be added to the distribution list, please sign up here.

Key Highlights

  • Bitcoin significantly outperformed other major assets in May, returning 62% for the month, compared to the S&P 500 (-6.6%), the ACWI All-World Index (-6.0%) and gold (+1.7%)
  • The S&P 500 had inflated volatility during the month of May, while gold’s volatility stayed relatively flat.
  • Binance coin continues to outperform the broader crypto market, outperforming bitcoin by 307% YTD through the end of May.
  • Since the digital asset market started its rally on April…

David Martin

Product developer. Risk mitigator. Alternative asset (yes, that includes crypto) strategist, with an emphasis on risk mgmt. Twitter @crypotquantopia

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