ETH merge reignites censorship debate

ETH merge reignites censorship debate

September 07, 2022

Friends and associates,

Ethereum’s merge to Proof of Stake serves as a fascinating crypto focused event in the face of tough trad-fi macro conditions, which have dragged the broader crypto markets lower in August. Eventual implementation of the complex adjustment from Proof of Work to Proof of Stake may be exciting but it also leaves numerous question marks for censorship, incentives and the role of energy. We continue to view ETH as a complementary high-beta asset to BTC reserve asset qualities and current conditions are not ideal for high-beta assets.

Highlights

  • BTC fell 14.7% in August 2022, while ETH fell 3%, outperforming ahead of the much-anticipated merge

  • Tight trad-fi liquidity spilled over into crypto in August as the S&P500 fell 4.2%

  • Dollar strength will pressure economic growth, asset prices, tax receipts and the Fed but it is a wrecking ball for risk appetite in the short-term

  • PoS increases censorship risks on ETH and censorship resistance is critical to a non-state monetary network

  • Merge reaffirms ETH’s place as an interesting experiment and complimentary asset to BTC

  • Merge creates numerous uncertainties that will take time to iron out

London Speaker Dinner

Technology has added tones of value to our lives in the work-from-home era, allowing many of relationships to blossom despite large physical distances. But there is nothing like respectful face to face debate as we aim to solve the world’s biggest problems.

In August we hosted the Sound Money Speaker Dinner with clients and our broader London community. I am looking forward to the next dinner in a city near you.

Hedge News Africa: Crypto is the last Bastion of free markets

I recently penned an article for Hedge News Africa. It was useful to pull back the lens and contextualized the market movements in crypto in the first 9 months of the year. The way I see it, “crypto is the last bastion of free markets, where creative destruction is still allowed”.

I recently appeared on the MoneyWeb podcast with Ciaran Ryan. We talked about the ethical case for investing in bitcoin and cryptocurrencies, as well as current market conditions.

Enjoy!

See you in October