 Viva Bitcoin! Crypto! Crypto! Blockchain! Hola! Bitcoin! Bye! Bye! Bye! Su! What's up, YouTube? We are your YouTube journalists and hosts, Jackson and Giovanni. Back with the third episode of Beer and Bitcoin, Quarantine Edition. We are here to drink beer and talk about the biggest crypto stories of the past month. Today, we've got two very special guests, our very own editor-in-chief, Jay Casano and managing editor, Cristina Ucrecia-Corner. Welcome to the show, guys. Great to be here with you, guys. Hi, everybody. What are you guys drinking today? It's still a little early in New York, so I'm drinking a milk-stout brewed with coffee. And I don't drink beer, sorry, guys, but we need to drink spritz a lot. Awesome. Well, cheers, guys. Cheers. Cheers. Welcome to the show. So, everyone is having to adapt to these quite strange times we live in now, and Cointelegraph is no exception. So, we also had to start working from home, as you can see. And, Jay, maybe you can tell us a little bit more about how the company had to adapt to this COVID-19 pandemic. Sure. So, Cointelegraph is already a global company. So, you know, we're pretty used to working across time zones and coordinating on video calls and Slack and things like that. But it's definitely been a challenge, you know, having everyone work from home. I think people are, you know, rightfully a little anxious right now. And, you know, just trying to cope with that. Here in New York, I live in Brooklyn. You know, it took people a little while to to sort of start complying with the lockdown and staying indoors. But now, I mean, the streets, my block is completely empty. There are literally no cars on my block. And, you know, a month ago, I had friends visiting and it was impossible for them to find anywhere to park. So, it's totally changed in just a matter of weeks. People have fled the city and the people that are here are just not leaving their house. And, Kristina, you're kind of in the thick of it, right? Over in Italy. What's it like over there? Well, we've been locked for four weeks now, almost. Sunday, that will be the anniversary. Well, I would say that it's definitely a tough experience. Especially from the psychological point of view, because, yes, we are all used to work at home and we kind of used to use digital tools. That is not the case of so many people now, so many different professions. But we are locked from going outside. All our trips and conferences were canceled. Actually, I was going to join Jane, New York this spring, but it was canceled as well. And it's very difficult for me personally to divide sometimes work and private life and offline and online, offline reality. But we are trying to adapt. We are also trying to incentivize our team by being more... But by sharing experiences and actually, we've just published an article with different stories from reporters and editors all over the world, how they are coping with this very unusual situation. So if you want to know more about our team, please check the article. I also experienced a lot more of digitalization in different parts of life. So virtual events have become something that we experience every day. I also personally launched a digital dancing platform in order to keep myself informed. So yeah, an internet is doing great, even though in Italy, the load on internet connection has been, I don't know, tripled maybe more, but it's doing great. So thank you for all internet providers in the country. I mean, even in New York, the internet's been overloaded and it's been definitely a lot of people both working from home and just streaming Netflix all day long. But I should add that Cointelegraph are really lucky to still be able to keep working through this to all have our jobs and to get to keep serving our readers and our audience through this difficult time. Cool. And so, Jackson, what do you miss the most about the pre-quarantine period? I mean, I miss going outside on a daily basis. Don't you miss having beers with me for our classical beer and Bitcoin show? Well, we're still having beers right now, man, but I do miss seeing your lovely face in person. Yeah, the same here. What about you, Giovanni? What do you miss the most? I have a few answers I could say for you, but I'll let you do them. Well, I also miss contact with people because I love being in direct touch with people and I'm still kind of getting used to this kind of virtual way of communicating. It's not the same, unfortunately, but yeah, better than nothing, better than nothing. Yeah, I mean, it's definitely a change in lifestyle for us as well. I mean, you can see that we're here at home now. We're not in the studio anymore. So just adjusting to that lifestyle has been challenging. But like Jay said before, it's a privilege to still be able to work. So I'm happy that we're doing the things that we're doing now. And it's a good way to move forward. Jackson, do you have a little studio set up there in your apartment? I have a light, a camera and two computers and a microphone. If that constitutes a studio, then I guess the answer is yes. Personally, I'm not I'm not sure that it does, but I'm looking to acquire another light to get this side of my face a little bit brighter. But yeah, for now, we're just kind of working with what we've got at the moment. Yeah, I think that's true for everyone. Well, everybody really stay safe and also keep your mind healthy. That's important because it's it's not a it's not a usual experience to be locked down, but we need to be strong and everything will be great. And drink beer. Cheers to that. Cheers. So moving on to the crypto news of the month. During the worldwide market crashes of March 12th, 13th, which is already becoming known as Black Thursday, Bitcoin lost over 50 percent of its price. March 12th was the worst day for Bitcoin in the last seven years. It lost over 40 percent of its price in 24 hours. Global stock markets also suffered one of their worst days ever. Italy was hit the hardest with the FTSE Mib and Borsana Italiana, falling nearly 17 percent. This was a significant moment because it proved a strong correlation between movements and equity markets and in Bitcoin, something that Professor Harvey Campbell had pointed out at the end of February. Bitcoin, Ethereum, other cryptos are more in the category of risk assets. That means they will move in big systemic events like other risk assets like stocks. The correlation held for all of March as Bitcoin mirrored most major moves in the global stock markets. You can see these on dates March 8th, 9th, 16th and the 20th. Other experts began to pick up this correlation. Maddie Greenspan tweeted that in times of stress, all correlations go to one. And he pointed out in one of our recent market discussions that Bitcoin had a 0.6 correlation with the stock market and a 0.1 correlation with gold. What do you guys make of this correlation that has been coming out between Bitcoin and the stock market over the month of March? Well, okay, my correlation point is that the fact that crypto goes down together with all other markets does mean that crypto is part of the world economy. And that is at the same time a bad point, but also a good one because actually we can see that it experiences the same phenomenon that all the world economy does. So I think we are living all together and crypto is now an indispensable part of the economy all over the world. Yeah, I think it's indicative of how much Bitcoin and crypto more broadly have been adopted into general economic life and how much we have traditional investors taking part in speculation on crypto assets. There was a tweet from Michael Del Castillo at Forbes that I really liked about the crash and he said, Bitcoin isn't magic. It behaves the way its owners behave. When normal people around the world buy it because they're afraid it goes up. When traditional investors sell it because they're behaving like they always do in a crisis, it goes down. Nothing has changed. I think that's really, really true. I mean, you had a lot of likely traditional money in Bitcoin that panic sold during the crash because they were panic selling everything. But then the fact that Bitcoin recovered so strongly is also indicative of where it sort of differentiates from the wider economy. And there are some people that are looking at it as a safe haven asset. I think part of what's going on is you can't really have a uniform, holistic view of what Bitcoin is right now because there are lots of people trying to get lots of different things out of it. It's going to behave somewhat erratically because there's not a group of people that have all have consensus on what exactly it is and how to use it. I kind of agree with Jay when he pointed out the young age of Bitcoin. I think that it's still a very young asset and so it's very difficult right now to predict how it reacts to specific events. But I think that with the passage of time people will get a better idea of his behaviors and that's probably it's going to become more stable as an asset. More predictable at least. Yeah, those are some really good points and Jay brought up the idea of Bitcoin, one of those narratives surrounding Bitcoin which is the safe haven asset that Bitcoin could become and a lot of people are putting a lot of weight on this current financial crisis in creating this narrative. Mike Novogratz for example, the CEO of Galaxy Digital says that Bitcoin will continue to be volatile over the next few months but the macro backdrop is why it was created. This will be and needs to be Bitcoin's year. Dan Moore had the CEO of Pantera Capital and another big venture capitalist firm in the crypto space also said that Bitcoin was born in a financial crisis and it will come of age in this one. However, some academics are skeptical about Bitcoin's viability as a store of value. Ariel Zetlin-Jones, associate professor of economics at Carnegie Mellon, does not see Bitcoin becoming a store of value in the long run, saying that Bitcoin is one of the riskiest stores of value in the world, the Bitcoin price volatility more than five times that of gold or even US equity prices. What are you guys, how involved are you guys in this safe haven asset? I know we talked about there being many different narratives along with Bitcoin. Do you see that Bitcoin will break away from the equity markets and decouple this correlation that we were talking about earlier? I mean, I'm not really one for predictions personally. As a journalist, I look at, I try to just report what's going on and analyze it as much as I can and now as editor of Point Telegraph, I'm overseeing a bunch of really smart journalists and editors who are doing that themselves. But I think the points that you read from Mike Novogratz and Dan Moorhead are really kind of crucial because this is exactly the scenario that Bitcoin was created for. You have the Fed money printer meme going around right now and the Fed is printing money and this is why Bitcoin true believers say that Bitcoin is a superior store of value or superior currency. So if this isn't Bitcoin's year, if Bitcoin doesn't take off this year then I think that's actually kind of a problem for Bitcoin because it means that it's missing something in terms of what its core value proposition is supposed to be. So how much time do you give Bitcoin to show these properties? Oh man, I mean, it depends on the wider economy of course. What were you going to say, Jackson? Well, I recently spoke to Dave Weisberger, the CEO of CoinRoutes and he said that it's more about what happens in this crisis. I mean, this crisis could take years to resolve. Exactly. But really what happens in this crisis is the event itself is what's going to define Bitcoin and one of the arguments against Bitcoin becoming a safe haven is that it's very volatile. It is more volatile than almost any other asset out there but he had a very interesting perspective on this and he was saying that it's not about short term volatility with Bitcoin because once Bitcoin reaches high market caps like the market cap of gold that volatility is going to be much reduced. We're not going to see that same kind of price fluctuations or at least the percentage difference isn't going to be as high. What really matters and this is what Jay I think touched on earlier is the critical mass of acceptance. Are people using it? Do people believe in it? Do they trust in it? And this crisis will hopefully reveal whether people can trust this hard asset in the midst of all of this money printing that's going on with the central banks. Yeah I totally agree with you Jackson and I think that people should trust crypto not only as a store of value but also as means of payment and this is critical for adoption and for development of crypto as a part of our everyday lives. As a person who follows different platforms where you can pay with crypto I could say that it's definitely something that is being developing more and more actively. I don't know, I talked about dance before. We have a tango school here in my city that is accepting crypto for payments. That in my opinion is incredible because it's a little city and actually two years ago nobody knew what is crypto and now there is this opportunity to pay with crypto even in places that are not associated with FinTech or innovative industry. Yeah I think that's very indicative of the kind of science that I'd be watching out for as Bitcoin's journey involves. How is it being used? Where is it being used? And when is it not correlating with other risky assets that are making big movements in the markets? So for all of you viewers out there who are curious and wondering what you can look at to see how the Bitcoin narrative is evolving those are some key factors you can keep an eye on. Long live Bitcoin! Long live Bitcoin! I just wanted to add that Cointelegraph just launched an Instagram mask where you can find out which crypto are you. So I for example found out yesterday that I am Bitcoin and I am happy to be Bitcoin but if you want to check yourself which coin are you check Instagram of Cointelegraph. On March 12th the market crash impacted the DeFi space the decentralized finance space and specifically it caused the meltdown of one of the biggest platforms in the space which is Mekadao. Mekadao found itself with over 4 million dollars outstanding debt because of the crash. So why is that important? That is important because Mekadao is the largest application the largest platform in the decentralized finance space and the stable coin that it issues the die is powering many other applications in decentralized finance so if Mekadao goes down the whole DeFi space goes down with it. So just to explain a little bit how it works so Mekadao is a landing platform a decentralized landing platform and it issues the die which is a stable coin packed one-to-one to the US dollar. So if you are a user of Mekadao you can take out a loan from Mekadao a loan in die, die is the stable coin and in order to take out a loan you need to put some Ethereum in a smart contract the value of the Ethereum needs to be 150% higher than the amount of die that you take out as a loan. That's called overcollateralization it means that overcollateralization serves the purpose for safeguarding the platform from possible fluctuation in the price of Ethereum. So if your Ethereum goes below the 150% threshold that triggers automatic liquidation of your collateral unless you are ready to put some Ethereum to cover the losses. So that's pretty much how Mekadao works it's pretty complicated but that's how it keeps everything working and it keeps a very delicate balance. So on March 12th this delicate balance was kind of affected. Why? Because the price of Ethereum fell sharply unprecedented Ethereum lost 30% of its price in a matter of hours. That was the cause of many of the smart contracts on the Mekadao platform to trigger the liquidation process simultaneously. Another problem was that the gas price of Ethereum skyrocketed and the Ethereum network got congested. Those two factors caused a bug in the Mekadao functioning which caused Mekadao to find itself with this 4 over 4 million dollars uncollateralized die in the market. So the Ethereum in this contract got fully liquidated and the system didn't get any die in return. That's why there were over 4 million dollars worth of uncollateralized die in the market. Why is that important? If such a big amount of die is uncollateralized means that the peg of die to the US dollar might be compromised as well and that can have catastrophic consequences on the DeFi space as a whole. So what did Mekadao did to face this crisis? What it did was it announced an auction, a debt auction, in which they sold maker tokens. The maker token is basically a share in the Mekadao system. They sold these maker tokens in order to buy back the 4 million dollars uncollateralized die and re-stabilize the system. So at the end of the day the auction went fairly successfully and they managed to re-stabilize the system. But there is a but. So basically the point is that even if Mekadao managed to re-stabilize the whole system the people who lost their Ethereum, the people who had their Ethereum liquidated have not been reimbursed yet, they haven't been refunded yet. And there is an ongoing debate in the community on whether these people should actually be reimbursed. So there are some who say these people took their risk, they know these people should have been aware of the risk they were running and that's why they shouldn't be reimbursed. Other people are saying that actually this is Mekadao fault because it wasn't able to handle a situation like the market crash on March 12th. So I would like to know guys, what do you think about this issue? Yeah, so I mean first of all I think it highlights the fundamental risk using an extremely volatile asset like Ethereum or any crypto asset as collateral for a loan. So on the one hand this is sort of foreseeable risk that there could be this kind of volatility that could cause people's positions to be liquidated. On the other hand I think people would say that what happened on March 12th, 13th was pretty exceptional but you can argue over how much people should have been able to foresee or do for a recession anyway and so on and so forth. I think the questions that remain are did the Mekadao protocol function correctly and did it do enough to protect users in this scenario? And I think that's what people are really focusing on. We published a lot of great articles over the past week, last couple of weeks at Cointelegraph on this. There was one earlier this week talking about a crypto venture fund that won about 68% of all of the auction die that came in from the March 28th auction. So there's a lot of movement happening right now to try to stabilize Mekadao but it still is sort of teetering I think on what is going to happen next and the faith people are going to put in it depends on reassuring them that something like this isn't going to happen again. I would like to add that it's also media responsibility in covering these events very delicately because rumors of Mekadao shutting down actually created a lot of panic in the market and it could definitely impact the situation even more. We had an opportunity, our head of news reached Rune Christensen and actually he was put in contact with his team so we followed all the discussions within Mekadao that community that were searching for solutions because it's definitely a difficult situation to handle and it's important how quickly do the company react but also it's very important how media cover the rumors that are appearing in the industry. Yeah and actually if I can add on that another part of that is not just talking to the people at the top like Rune which is of course really important and essential for us but also we have reporters who are following discussions and debates that are going on on the Mekadao forums and there's a huge thread about do we compensate vault holders that were completely liquidated and that's a massive thread right now and we're following that, we're following debates like that so we're getting both input from the top of these organizations and from the ordinary users as well. Yeah so basically media serves as a mediator between different actors of the industry and it's a very big responsibility on us because basically we accumulate different opinions, different problems, different issues and we'll try to just present them as objectively as we can. To me this topic is crucial regarding, I mean this Mekadao meltdown has a huge impact on the reputation of the whole DeFi system so it opened the eyes on the fact that DeFi system, the DeFi infrastructure is relatively fragile and fundamentally unprepared to face events like the market crash on March 12th so that event was considered a black swan so something that is unpredictable and cannot be predicted but on the other hand we are in the crypto system, we are in the world of very volatile assets so I think that this kind of event should be taken in consideration. And I'd love to hear from our audience what they think Mekadao could have or should have done differently as well. I think that'd be a valuable point of input for us as reporters and editors. So this week the news came out that Binance has acquired CoinMarketCap. This is a pretty big move, there were some numbers being thrown around about how big the deal actually was. It's unclear about what the exact figure was but for someone in the space making moves like this at this particular time it is a really interesting decision. Yeah I think the big question is why did Binance want to acquire CMC? And it's worth noting that Binance says we're not going to start charging for listings on CMC and they say we're not going to influence the rankings or try to manipulate trade volume or anything like that on CMC. At the same time for now at least we have to take their word on that, we can't confirm that, we can't say what's going to happen in the future. So at CoinTelegraph we're just going to continue as always to report the facts of what's going on there. But in terms of why they acquired it I think any exchange right now is trying to find ways to gain new users and if I had to speculate I would say that they're hoping that they can convert people visiting CMC and sort of direct them towards Binance and make them become Binance customers and users. Definitely CoinMarketCup has traffic, has data and has experienced team. So I think this is something that Binance is always in search of in the space. I think it's easy and all his team seem to be really people who think a lot about the community and about different ways of attracting more people into the space, of course becoming their clients. Even though we don't have the numbers confirmed, there are a lot of numbers circulating that I don't think are worth really paying attention to right now and nothing that's actually publicly disclosed or I think even sourced from any kind of formal merger documents or anything like that. So again CoinTelegraph or not we're just going to report the facts of what's happened there. But I think what's notable aside from the specific numbers is that you have a major acquisition regardless of the exact amount happening right now in the middle of an economic crisis. And to go back to some of our earlier conversation today that is somewhat indicative of the crypto economy being separate and somewhat resilient to these general market economic downturns. So I think it's a pretty big deal that Binance went out and made this massive acquisition right now. You have an international multinational company making a massive merger play at a time and I can't think of any other industry where that's happening right now. No airline companies or hotel chains doing that at the moment. Yeah but at the same time I think that it could have happened by inertia in the sense that it definitely had to start months if not years ago. So this is something that had to happen now. I would also like to highlight this little detail that Brandon Chess who was founder of CoinMarketCup actually stepped out as executive top manager. And CMC's chief strategy officer became a CEO Caroline Cham. And I think it's a very interesting thing because Brandon who was not an old public who was a person that was definitely famous. And he I imagined it made a lot of money out of his project that went so well and he should be kind of young person and he steps out. It also reflects a bit in my opinion what's happening in the space that we already see that some generations change. So even within our space that is so quick that is so young. We see already people who like got everything that they wanted and they just want to relax and to dedicate more time to families and their hobbies. I think this is an interesting case to think of and I'm really glad that the space has now one more female CEO. Congratulations Caroline. Cheers to that. Yeah I'll cheers to that. Thank you everyone for watching the coin telegraph editorial team wishes you a safe and healthy quarantine. If you like the video and you want to see more hit the like button and subscribe to our channel. Stay safe and read coin telegraph. Thank you very much. Bye everyone.