July 16 2020 Digital Gold Institute: Vision R&D center of excellence focused on teaching, training, consulting, and advising about scarcity in digital domain (bitcoin and crypto-assets) and the underlying blockchain technology Bitcoin: Digital Gold Blockchain: Hype or Reality? The most successful attempt at creating scarcity Blockchain requires an intrinsic native digital in the digital realm without a trusted third party. asset to provide the economic incentives for the Bitcoin is the digital equivalent of gold, blockchain maintainers to be honest. Without disruptive for our current digital civilization and the seigniorage revenues associated to its native the future of money and finance. More a crypto- asset, a blockchain system would need to select commodity than a crypto-currency, Bitcoin aims and appoint its maintainers, ultimately resorting to be world reserve asset. to central governance. Beyond Bitcoin: Timestamping Financial Services for Crypto A timestamp demonstrates that a document The most promising field, instead of existed in a specific status prior to a given point technological applications of blockchain, is the in time. Digital data can be securely development of financial services for crypto timestamped though the attestation of its hash assets: those tools, practices, and facilities value in a blockchain transaction. What jewellery needed by institutional investors and high net is for gold, Timestamping could be for bitcoin: worth individuals. Finance might not need not essential but effective at leveraging its blockchain, but the blockchain economy needs beauty. new financial services. 2/54 Digital Gold Institute: Services R&D center of excellence focused on teaching, training, consulting, and advising about scarcity in digital domain (bitcoin and crypto-assets) and the underlying blockchain technology Partnership Program Training Program Becoming one of our partners means We offer training and education about Bitcoin, empowering your business with a proper crypto assets, blockchain, distributed ledger, understanding of Bitcoin, crypto assets, and smart contracts, and cryptography: the program blockchain technology. It is a strategic choice is based on the Bitcoin and Blockchain that will allow you to leverage unique Technology course taught at Milano-Bicocca and opportunities while avoiding the irrational hype other universities. that pollutes these topics. Research Development Our research activity includes We write code and love to get our hands dirty in quarterly reports on the bitcoin and blockchain programming and technology. ecosystem and the thesis works of our students. Check out our OpenTimestamps calendar free Anyway, the bulk of the activity is happening at facility and btclib, an open-source Python library the Crypto Asset Lab (CAL), a joint research intended for teaching/learning/using bitcoin, its initiative with the University of Milano-Bicocca. blockchain, and the associated elliptic curve cryptography. 3/54 Digital Gold Institute: Partners Educational Program Partner Partner 4/54 The DGI Quarterly Report ▪ Exclusive for our partners and their guests ▪ A quarterly update on the crypto assets world with a focus on: 1. Market 2. Technology 3. Regulation 4. Ecosystem 5. Updates from the Institute 5/54 1. MARKET Bitcoin Performance Market Cap (June 2020): about $170B (USD M0 1959-2017 average has been $680B) Yearly Date Price performance 31-Dec-11 $ 5,00 31-Dec-12 $ 13,59 172% Price dynamic is the discovery process of 30-Dec-13 $ 739,10 5339% value: volatility is physiologic when it comes 31-Dec-14 $ 320,19 -57% to assess the fair value of something so 31-Dec-15 $ 430,57 34% controversial as the digital equivalent of gold 31-Dec-16 $ 963,74 124% 31-Dec-17 $ 1 4.156,40 1369% 31-Dec-18 $ 3 .742,70 -74% 31-Dec-19 $ 7 .193,60 92% 30-Jun-20 $ 9 .137,99 27% 7/54 Bitcoin Performance (Log Scale) Year Min Price 2011 $ 0,30 2012 $ 4,33 2013 $ 13, 40 2014 $ 310,74 2015 $ 178,10 2016 $ 364,33 2017 $ 777,76 2018 $ 3.236,76 2019 $ 3.399,47 2020 $ 4.970,79 +46% 8/54 Bitcoin Performance (2020 Q2) 9/54 Correlation with Bitcoin: 1Y rolling window 10/54 Correlation with Bitcoin: 3Y Rolling Window 11/54 Correlation with S&P500: 3Y rolling window 12/54 Correlation Matrix (1/3) 3Y BTC 100.00% Data set: 2017-07-01 / 2020-06-30 ETH 16.50% 100.00% LTC 14.58% 78.24% 100.00% XRP 12.99% 68.11% 57.01% 100.00% GOLD 14.30% 7.47% 4.86% 4.31% 100.00% IND MET 3.50% 1.81% 1.41% 8.23% 8.27% 100.00% WTI 11.31% 1.00% 0.91% 2.60% 6.22% 17.37% 100.00% GRAIN 7.06% 0.37% 0.21% 1.15% 4.31% 6.09% 11.71% 100.00% EUR 2.68% 7.50% 5.04% 4.22% 37.09% 21.73% -4.38% 5.33% 100.00% Positive CHF 2.18% 7.12% 4.12% 2.41% 41.55% 11.19% -8.18% 3.30% 75.89% 100.00% Negative GBP 5.89% 8.03% 5.04% 2.92% 28.06% 21.03% 6.07% 3.70% 57.83% 44.54% 100.00% JPY 1.86% 8.91% 6.07% 3.66% 41.59% -7.09% -18.25% -6.73% 44.12% 60.34% 27.22% 100.00% NASDAQ 17.40% -8.18% -5.83% -3.24% 3.66% 27.05% 25.52% 11.59% -4.87% -15.87% 10.82% -34.49% 100.00% EURSX5E 17.83% 5.10% 4.88% 4.91% 2.57% 32.97% 20.11% 15.21% -5.80% -20.91% 17.39% -36.21% 61.25% 100.00% S&P500 17.50% -7.30% -5.64% -2.44% 3.34% 28.46% 26.62% 11.58% -2.56% -13.97% 14.31% -34.09% 96.42% 66.59% 100.00% MSCIBRIC 10.91% 4.42% 4.91% 4.67% 5.61% 44.53% 20.87% 13.22% 9.67% -2.91% 24.33% -22.90% 58.19% 67.10% 59.01% 100.00% VIX -11.72% 1.64% 4.76% -3.60% 5.94% -21.92% -20.79% -15.98% 4.50% 17.86% -5.72% 33.17% -72.45% -46.77% -69.66% -44.56% 100.00% EURAGG 7.70% 1.52% -0.78% 1.63% 30.40% -8.31% 7.88% 0.83% -0.64% 10.51% 10.17% 20.93% 5.55% 10.46% 5.67% 6.06% -1.48% 100.00% PANEUR 7.66% 4.17% 1.65% 2.17% 30.84% -6.86% 8.60% 0.92% -6.09% 9.46% 26.61% 22.73% 6.19% 13.66% 6.59% 9.20% -1.08% 93.11% 100.00% PANUS 1.73% 4.58% 4.23% 2.94% 39.39% -9.32% -4.29% -3.67% 21.59% 34.95% 16.78% 51.95% -21.79% -12.19% -22.43% -14.17% 24.01% 50.89% 53.57% 100.00% BTC ETH LTC XRP GOLD IND MET WTI GRAIN EUR CHF GBP JPY NASDAQ EURSX5E S&P500 MSCIBRIC VIX EURAGG PANEUR PANUS Crypto-currency Commodity Currency Equity Volatility Bond 13/54 Correlation Matrix (2/3) 1Y BTC 100.00% Data set: 2019-07-01 / 2020-06-30 ETH 18.33% 100.00% LTC 18.30% 92.01% 100.00% XRP 18.20% 88.08% 86.68% 100.00% GOLD 27.20% 13.79% 8.80% 7.28% 100.00% IND MET 8.00% 2.35% -0.28% 4.62% -15.45% 100.00% WTI 22.52% -1.02% 2.12% 3.59% 6.67% 19.42% 100.00% GRAIN 12.96% 0.56% -4.79% -3.02% 3.47% 12.00% 17.97% 100.00% EUR 1.20% 15.70% 12.02% 9.83% 21.38% 16.10% -9.84% 6.60% 100.00% Positive CHF -1.93% 15.57% 12.36% 9.42% 29.30% 2.99% -12.90% 1.95% 84.57% 100.00% Negative GBP 14.28% 24.56% 18.16% 17.56% 20.88% 29.54% 7.73% 7.13% 56.25% 47.26% 100.00% JPY -6.19% 17.64% 13.62% 13.60% 27.56% -15.08% -24.24% -16.69% 52.61% 67.21% 31.47% 100.00% NASDAQ 36.65% -20.96% -17.79% -17.62% 8.77% 42.18% 26.59% 22.27% -12.63% -22.36% 15.24% -42.50% 100.00% EURSX5E 36.55% 6.16% 4.75% 6.08% 11.88% 47.80% 18.50% 24.09% -2.49% -18.47% 27.24% -34.04% 69.45% 100.00% S&P500 35.44% -18.91% -15.87% -15.48% 8.01% 43.49% 26.23% 21.32% -8.40% -18.99% 19.33% -39.53% 97.74% 72.65% 100.00% MSCIBRIC 21.94% 5.54% 3.00% 5.87% 3.07% 57.81% 20.92% 19.89% 2.61% -10.50% 30.65% -31.09% 65.31% 77.90% 67.77% 100.00% VIX -19.29% 15.74% 14.11% 11.84% 8.53% -35.96% -24.36% -26.22% 15.64% 30.25% -7.11% 45.54% -74.76% -54.79% -71.88% -48.69% 100.00% EURAGG 16.29% 8.07% 1.67% 7.29% 38.31% -8.09% 10.60% 4.62% 10.55% 20.76% 25.63% 20.86% 7.41% 13.64% 8.34% 11.46% -1.07% 100.00% PANEUR 16.07% 13.65% 6.22% 11.61% 38.93% -3.37% 11.58% 4.80% 8.52% 19.53% 41.74% 22.71% 9.89% 18.76% 10.99% 17.64% -3.97% 94.57% 100.00% PANUS 3.61% 12.52% 11.24% 9.25% 41.81% -10.52% -1.68% -9.70% 38.94% 48.83% 31.39% 58.16% -21.58% -7.26% -21.08% -13.17% 25.35% 53.25% 56.13% 100.00% BTC ETH LTC XRP GOLD IND MET WTI GRAIN EUR CHF GBP JPY NASDAQ EURSX5E S&P500 MSCIBRIC VIX EURAGG PANEUR PANUS Crypto-currency Commodity Currency Equity Volatility Bond 14/54 Bitcoin Listed Futures ▪ After a drop in volumes due to Covid-19 in May the CME Futures market restarted ▪ CME is still the market leader ▪ Bakkt physically settled Futures continue to show low volumes 15/54 Bitcoin Listed Options ▪ CME Options traded volumes exploited in May ▪ Bakkt options instead had zero volume ▪ The option market is starting gaining interest and a lot of new player are approaching this market ▪ Not regulated options, like the one proposed by Deribit, are still by far the most traded 16/54 2.