Bitcoin Finance in a Black Swan Event with Zac Prince & Flori Marquez

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“We are more bullish on crypto than we ever have been. I mean, could there be a better macroeconomic backdrop for Bitcoin right now? I don’t think so.”
— Zac Prince

SHOW DESCRIPTION

Location: Zoom
Date: Wednesday, 8th April
Project: BlockFi
Role: Co-Founders

On March 12th Bitcoin fell by over 50% from ~$8,000 to ~$3,800. One day earlier, the World Health Organisation had escalated the evolving COVID-19 situation to pandemic status, and Bitcoin wasn't alone in this, markets around the world crashed. 

The Coronavirus black swan event caused huge volatility which has been a critical concern held by many Bitcoiners about Bitcoin financial service companies. Critiques of these services have questioned what the impact would be of such an event on crypto-backed loans and whether they would lead to high default rates from borrowers. Would the risk management strategies put in place by companies such as BlockFi be robust enough? 

Coronavirus would trigger the market collapse that would test the doubter's theories.

In this interview, I talk to Zac Prince and Flori Marquez, the co-founders of BlockFi, a bitcoin financial services business. We discuss how they manage high volatility, operating as a custodian and the state of the Bitcoin market.

TIMESTAMPS

00:05:50: Introductions
00:07:11: Working environments with Covid-19
00:10:23: The impact of the market collapse on BlockFi
00:17:31: Customer reaction to the market collapse
00:20:16: Current banking system
00:21:40: Gap-risk
00:24:50: Differences with traditional currency markets
00:27:00: Risk of business collapse with market crashes
00:31:55: Spreading portfolio risk
00:35:38: Bitcoin custody and insurance
00:37:07: Partnership with exchanges
00:40:09: Recent VC raise
00:42:23: Bitcoin the on the balance sheet
00:45:09: Rejection of CoinJoin transactions
00:49:51: Thoughts for the future
00:54:21: Has Covid-19 affected world-view perspectives
00:58:54: Future products and plans
01:00:53: Final comments

 

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PodcastPeter McCormack