Blockchain technology is claimed to be according to blockchain proponents to be one of the most impactfull discoveries in the recent history. It is promised to have a massive potential to change how we handle online transactions. Despite some skeptics, the majority of experts agree that blockchain has the potential to disrupt the banking and financial industry, and many other ones! To put it simply, blockchain enables decentralized transactions across a P2P network. There are applications where those propertied can be very useful, but there are many cases where blockchain migh not be the best solution even though it is hyped to be solution for very many application (remember to ask Do you need a blockchain? often).
This 16 Blockchain Disruptions (Infographic) by bitfortune.net tries to help you understand how the blockchain technology can and will improve 16 different industries, from music to government.
Infographic by bitfortune.net
1,206 Comments
Tomi Engdahl says:
https://www.coindesk.com/business/2022/06/21/miner-bitfarms-sold-almost-half-its-bitcoin-to-reduce-debt/
Tomi Engdahl says:
Terra Is Done, But Hopefully Investors Learned Something
Terra isn’t coming back, but the Luna saga showed us important truths
https://investorplace.com/2022/06/terra-is-done-but-hopefully-investors-learned-something/?utm_source=facebook&utm_medium=social&utm_campaign=post
The newest iteration of Terra (LUNA-USD) is only worth your time as a cautionary tale.
Stablecoins have suffered a serious blow.
CEO Do Kwon is facing serious accusations as troubles mount.
Terra’s (LUNA-USD) 2.0 network doesn’t seem to be fooling investors this time around. It debuted in late May following the dramatic collapse of the predecessor network. But the newest iteration is proving the old maxim that ends in “fool me twice, shame on me.” In other words, investors haven’t taken the bait this time around, with prices dropping immediately following this latest offering.
Prices dropped from $20 to $4 within 24 hours of the relaunch and are currently below $3 weeks later. Terra is little more than a cautionary tale at this point with CEO Do Kwon among the most unlikeable characters on the face of the planet.
But beyond the damage to his reputation, the premise underlying so-called stablecoins has been seriously undermined as well.
Terra Had Its Volatility Unchecked
The entire premise of stablecoins was to provide a means of checking the wild volatility that marks the cryptocurrency market. Many stablecoins are backed by cash and other assets that peg their price to that of the U.S. dollar or any other fiat currency.
Tomi Engdahl says:
Breaking: SEC Adds LUNA In Ongoing Mirror Protocol Investigation Targeting Do Kwon And Terra Labs
https://thecryptobasic.com/2022/06/21/breaking-sec-adds-luna-in-ongoing-mirror-protocol-investigations-targeting-do-kwon-and-terra-labs
#SEC #LUNA #Terra #TerraLuna #Crypto #Cryptocurrency #cryptonews #cryptocurrencynews #news #newsalert #altcoinnews
Tomi Engdahl says:
Staked ether is supposed to be worth the same as ether, but it’s trading at a widening discount right now. Here’s what’s going on.
What you need to know about staked ether, the token at the center of crypto’s liquidity crisis
https://www.cnbc.com/2022/06/20/what-is-staked-ether-steth-and-why-is-it-causing-havoc-in-crypto.html?utm_term=Autofeed&utm_medium=Social&utm_content=Crypto&utm_source=Facebook#Echobox=1655713419
KEY POINTS
Staked ether, or stETH, is a token that’s meant to be worth the same as ether.
For the past few weeks, it has been trading at a widening discount to the second-biggest cryptocurrency.
Instability in the token’s price has further constrained liquidity in the fragile crypto market.
Another controversial cryptocurrency is causing havoc in the digital asset market — and this time, it’s not a stablecoin.
Staked ether, or stETH, is a token that’s supposed to be worth the same as ether. But for the past few weeks, it has been trading at a widening discount to the second-biggest cryptocurrency, fanning the flames of a liquidity crisis in the crypto market.
On Friday, stETH fell as low as 0.92 ETH, implying an 8% discount to ether.
Here’s everything you need to know about stETH, and why it has crypto investors worried.
What is stETH?
Each stETH token represents a unit of ether that has been “staked,” or deposited, in what’s called the “beacon chain.”
Ethereum, the network underpinning ether, is in the process of upgrading to a new version that’s meant to be faster and cheaper to use. The beacon chain is a testing environment for this upgrade.
Staking is a practice where investors lock up their tokens for a period of time to contribute to the security of a crypto network. In return, they receive rewards in the form of interest-like yields. The mechanism behind this is known as “proof of stake.” It’s different from “proof of work,” or mining, which requires lots of computing power — and energy.
To stake on Ethereum currently, users have to agree to lock away a minimum 32 ETH until after the network upgrades to a new standard, known as Ethereum 2.0.
However, a platform called Lido Finance lets users stake any amount of ether and receive a derivative token called stETH, which can then be traded or lent on other platforms. It is an important part of decentralized finance, which aims to replicate financial services like lending and insurance using blockchain technology.
StETH isn’t a stablecoin like tether or terraUSD, the “algorithmic” stablecoin that collapsed last month under the strain of a bank run. It’s more like an IOU — the idea being that stETH holders can redeem their tokens for an equivalent amount of ether once the upgrade completes.
Decoupling from ether
When the Terra stablecoin project imploded, stETH’s price began trading below ether’s as investors raced for the exit. A month later, crypto lender Celsius started halting account withdrawals, which saw stETH’s value dropping even further.
Celsius acts a lot like a bank, taking users’ crypto and lending it to other institutions to generate a return on deposits. The firm took users’ ether and staked it through Lido to boost its profits.
Celsius has more than $400 million in stETH deposits, according to data from DeFi analytics site Ape Board. The fear now is that Celsius will have to sell its stETH, resulting in hefty losses and putting more downward pressure on the token.
StETh holders won’t be able to redeem their tokens for ether until six to 12 months after an event known as the “merge,” which will complete Ethereum’s transition from proof of work to proof of stake.
This comes at a price, as it means investors are stuck with their stETH unless they choose to sell it on other platforms. One way to do this is to convert stETH to ether using Curve, a service that pools together funds to enable faster trading in and out of tokens.
Curve’s liquidity pool for switching between stETH and ether “has become quite unbalanced,”
“Staked ETH issued by Lido is backed 1:1 with ETH staking deposits,” Lido said in a tweet last week, attempting to calm investor fears over stETH’s growing divergence from the value of ether.
Like many facets of crypto, stETH has been caught up in a whirlwind of negative news affecting the sector.
Investors worry that the fall in stETH’s value will hit even more players in crypto.
“In crypto there is no central bank,” Shea said. “Things will just have to play out, and it will continue to weigh on crypto asset prices, compounding the negative impact from the macro backdrop.”
Bitcoin briefly sank below $18,000 a coin on Saturday, pushing deeper into 18-month lows. It’s since recovered back above $20,000. Ether at one point dropped below $900, before retaking $1,000 by Monday.
The ‘merge’
The stETH debacle has also led to fresh concerns over the security of Ethereum. About a third of all the ether locked into Ethereum’s beacon chain is staked through Lido. Some investors worry this may give a single player too much control over the upgraded Ethereum network.
“So, when withdrawals are eventually enabled, any discount in stETH will likely be arbitraged away but until that unknown date arrives there will still exist some form of discount.”
Tomi Engdahl says:
Oliver Knight / CoinDesk:
eBay acquires NFT marketplace KnownOrigin for an undisclosed sum; DappRadar: KnownOrigin enabled $7.8M in digital collectible trade volume since its 2018 launch — The move comes one month after eBay released its debut collection of NFTs. — E-commerce giant eBay (EBAY) …
EBay Acquires NFT Marketplace KnownOrigin for Undisclosed Amount
The move comes one month after eBay released its debut collection of NFTs.
https://www.coindesk.com/business/2022/06/22/ebay-acquires-nft-marketplace-knownorigin-for-undisclosed-amount/
E-commerce giant eBay (EBAY) has continued its push into digital collectibles by acquiring U.K.-based non-fungible token (NFT) marketplace KnownOrigin, according to a press release on Wednesday. Terms of the acquisition were not disclosed.
KnownOrigin was founded in 2018 and has facilitated $7.8 million in trade volume since launch, based on figures presented by DappRadar.
“With this acquisition, we will remain a leading site as our community is increasingly adding digital collectibles,” said Jamie Iannone, CEO of eBay, in a statement.
Last month, eBay released its debut collection of NFTs in partnership with Tezos- and Polygon-based NFT platform OneOf. It began selling NFTs in in 2021.
In February, KnownOrigin raised GBP3.5 million ($4.3 million) in a Series A round that was co-led by crypto venture capital firms GBV and Sanctor Capital.
Tomi Engdahl says:
Tomio Geron / Protocol:
Shopify expands NFT integrations for merchants, including letting their customers unlock special products, perks, and experiences by purchasing NFTs — Despite the crypto crash, Shopify is betting that NFTs will change the way people shop online and in person.
Shopify is betting on NFTs to unlock a new take on shopping
https://www.protocol.com/shopify-nft
Shopify is letting merchants use NFTs for their customers to unlock special products, perks and experiences.
Despite the crypto crash, Shopify is betting that NFTs will change the way people shop online and in person. The ecommerce giant has a new service to enable customers to use NFTs to unlock special perks, products and real-world experiences with merchants.
Last year Shopify added the ability for merchants to sell NFTs using Shopify so customers don’t have to go to another site to buy them. With this new product, Shopify is taking that a step further through what’s known as “token-gated commerce.” The NFTs can come from anywhere the merchants want.
The idea is that NFTs are a kind of loyalty card — in the form of a cryptographic key — that a brand’s top fans can use to access exclusive items.
The current crash in the crypto markets has hit NFTs as well. But Alex Danco, head of blockchain at Shopify, says he is excited about the current market because it removes distraction and is good for focusing on actual ways NFTs can be used to help merchants and decreases the interest in pure speculation.
As a result, merchants aren’t shying away from NFTs, Danco said. “If anything, it’s the opposite, right? The fact that this is very clearly not about ‘double your money in the next week or whatever by NFTs.’ The fact that it’s not that anymore is actually a great sign for real businesses and real brands.”
Some retailers are dubious, but Danco believes crypto wallets and NFTs will be a big benefit for merchants, once he persuades them to “wander into something that is so drowned out by noise of all of the speculative mania.”
The biggest benefit of crypto and NFTs is crypto wallets, he said. “Everybody sort of jokes about ‘This is a big bubble and it left behind no infrastructure.’ It left one very, very important piece of infrastructure: Everybody has a wallet now.”
The NFT can also be used in person. Shopify tried out the product with Doodles, a popular NFT project, at this year’s South by Southwest. Doodles NFT holders could buy exclusive merchandise or access a Doodles experience at the show.
One other use of NFTs is collaborations between brands, especially between Web3 and non-Web3 companies, Danco said. Superplastic, a toy company, partnered with Bored Ape Yacht Club to create toys for ape holders. Gucci also recently collaborated with Superplastic.
Danco sees this as akin to an old, famous band and a new, popular band playing a show together and sharing fans. NFTs enable that kind of experience, he argues. ”The funny thing is, it’s very hard to authentically do these kinds of exclusive collabs online where people invite each other in. But what people are seeing as token gating is actually just perfect for this.”
He believes companies will move beyond simply using an NFT to buy a product, but that is the easiest way for companies to get started. Danco also sees app developers that build on Shopify adding many more uses for NFTs. “I have an inside view of what some of these app developers are doing in the pipeline, and it’s gonna be nuts,” he said.
Tomi Engdahl says:
Wall Street Journal:
An in-depth look at the LUNA and UST fallout, as Do Kwon says he has been “devastated” but has “great confidence in our ability to build back even stronger” — Luna’s relaunch might be the ultimate act of chutzpah by the South Korean entrepreneur
Do Kwon’s Crypto Empire Fell in a $40 Billion Crash. He’s Got a New Coin for You.
Luna’s relaunch might be the ultimate act of chutzpah by the South Korean entrepreneur
https://www.wsj.com/articles/do-kwons-crypto-empire-fell-in-a-40-billion-crash-hes-got-a-new-coin-for-you-11655914487?mod=djemalertNEWS
Do Kwon used swagger and a cultlike Twitter following to build a cryptocurrency empire that collapsed last month in a $40 billion crash. Now, despite angry investors, government investigations and a crypto-market downturn, the South Korean entrepreneur is attempting a comeback.
“I have great confidence in our ability to build back even stronger than we once were,” Mr. Kwon told The Wall Street Journal.
Mr. Kwon has championed the launch of a new version of Terra, the blockchain network that underpinned the failed TerraUSD and Luna cryptocurrencies. TerraUSD was a so-called stablecoin designed to maintain its value at $1, but the coin is now valued at less than a penny. Its collapse triggered a plunge of more than 99% in Luna, the cryptocurrency that backed TerraUSD’s link to the dollar.
The implosion hurt thousands of investors world-wide, including many who put their savings in Anchor Protocol, a sort of crypto bank that offered high yields on TerraUSD deposits. The crash was also a foreshock to crypto-market carnage this month: a brutal selloff led lending platform Celsius Network to freeze all accounts, worth billions of dollars.
Since the TerraUSD crash, groups representing more than 90 people in South Korea have filed complaints against Mr. Kwon accusing him of fraud and illegal fundraising.
Last week, a U.S. law firm representing a Chicago investor who suffered losses in the TerraUSD crash filed a suit seeking class-action status against Mr. Kwon, his company Terraform Labs and several other firms, accusing them of fraud and the sale of unregistered securities.
Terraform Labs said it wouldn’t comment on any active investigations.
Earlier this year, when Luna was trading near $100, analysts said Mr. Kwon was a billionaire, based on his holdings of the coin. Mr. Kwon said that was probably the case, though he had “never really counted”—and that he lost nearly all his net worth in the crash. “This doesn’t bother me,” he added. “I live a fairly frugal life.”
The launch of the new Terra blockchain took place in late May, after a majority of Luna holders approved the move in a shareholder-style vote. The near-worthless old version of Luna was renamed “Luna Classic,” and holders of TerraUSD and Luna Classic were given a new coin called Luna.
So far it hasn’t gone well: The new Luna began trading at $18.87 on May 28, tumbled right away and was recently trading at $1.97, according to data provider CoinGecko.
“I don’t understand why anybody in their right mind would want to invest in Luna 2 after watching Luna 1 blow up so dramatically,” said Mati Greenspan, founder of crypto research firm Quantum Economics.
Supporters of the relaunch hope developers will build applications based on Terra technology, spurring activity that causes the new Luna to gain value. “Many builders are in the process of relaunching their apps on the new chain,” Mr. Kwon said.
The relaunch might be the ultimate act of chutzpah by Mr. Kwon, a man with a divided following within the crypto community. His admirers call themselves “Lunatics” and his critics consider him a snake-oil salesman.
Others in the crypto community say Mr. Kwon ran a sophisticated scam. “It was just really obvious from seeing how this guy tweeted, and how he spoke on camera, and how he carried himself that he was a fraudster,” said Cory Klippsten, chief executive of cryptocurrency firm Swan Bitcoin.
Mr. Kwon rejected Mr. Klippsten’s characterization. He noted that prominent players in the crypto industry had shared Mr. Kwon’s belief in the future of TerraUSD
Since its formation, Terraform Labs has raised more than $200 million from investors such as Coinbase Ventures and Mike Novogratz’s Galaxy Digital Holdings Ltd.
Mr. Kwon started Terraform Labs in 2018 with Daniel Shin, a respected figure in the Korean startup scene, to develop the Terra blockchain.
The project’s vision, according to a 2019 white paper co-written by Mr. Kwon, was to create a family of Terra stablecoins tied to the dollar, the Korean won and other traditional currencies. The idea was that people could use these coins—called TerraUSD, TerraKRW and so on—in everyday transactions. Unlike major stablecoins such as USD Coin, Terra stablecoins weren’t backed by real dollars or investments, instead using financial engineering to maintain price stability. Such a design made it harder for governments to control transactions, Mr. Kwon argued. He adopted the motto: “A decentralized economy needs decentralized money.”
Mr. Kwon often differentiated Terra from rival crypto projects by citing the use of its stablecoins by Chai, a South Korean payment app.
Mr. Kwon repeatedly overstated the links between his blockchain projects and Chai
A Chai spokesperson said Messrs. Kwon and Shin parted ways in March 2020. By 2021, Chai was no longer using Terra’s blockchain technology or digital assets to process its payments or store its assets, the spokesperson said. Chai and Terra maintained only a marketing partnership that lasted from May 2021 to March 2022, according to the spokesperson.
Still, Mr. Kwon told one interviewer in April 2021 that 2.6 million Koreans were using Terra stablecoins for payments. He mentioned Chai’s use of Terra stablecoins on a podcast as recently as March this year.
As TerraUSD swelled in size, critics—including academics, crypto fund managers and Mr. Kwon’s competitors—warned it was prone to collapse. They noted that similar algorithmic stablecoins had failed in so-called death spirals after the mechanisms tying them to the dollar broke down.
Mr. Kwon dismissed such critics on Twitter. In March, he called people who said TerraUSD could lose its peg “idiots.”
Tomi Engdahl says:
Bitcoin could stay below $69,000 peak for two years, says Binance boss
Changpeng Zhao says people would have been happy with current $20,000 value four years ago
https://www.theguardian.com/technology/2022/jun/23/bitcoin-below-69000-dollar-peak-two-years-binance-boss?CMP=fb_a-technology_b-gdntech
Tomi Engdahl says:
Hacker exploits Harmony blockchain bridge, loots $100M in crypto
https://techcrunch.com/2022/06/24/harmony-blockchain-crypto-hack/?tpcc=tcplusfacebook
A hacker has exploited a vulnerability to steal $100 million from Harmony’s Horizon Bridge, which allows users to transfer their crypto assets from one blockchain to another.
Harmony, the U.S. crypto startup behind Horizon, said in a blog post on Friday that it was notified of a “malicious attack” on its proprietary Horizon blockchain bridge on Thursday. Blockchain bridges, also known as cross-chain bridges, facilitate communication between different blockchains and allow users to send assets from one chain to the other. Using Harmony’s Horizon bridge, for example, users can move assets — including tokens, stablecoins, and NFTs — between Ethereum, Binance Smart Chain, and Harmony blockchains.
https://medium.com/harmony-one/harmonys-horizon-bridge-hack-1e8d283b6d66
Tomi Engdahl says:
https://cryptopanic.com/news/15570407/China-warns-Bitcoin-could-go-to-zero-after-crypto-market-crash?utm_source=notifications&utm_medium=facebook&utm_campaign=Facebook%20Trending
China warns Bitcoin could ‘go to zero’ after crypto market crash
https://finbold.com/china-warns-bitcoin-could-go-to-zero-after-crypto-market-crash/
Amid uncertainty that has engulfed the cryptocurrency market after an extended period of bearishness, during which its flagship asset, Bitcoin (BTC), briefly slumped below $19,000, before returning above the $20,000 mark, pessimistic warnings about its future are coming from China.
Specifically, the media outlet Economic Daily, run by the Central Committee of the ruling Chinese Communist Party, published an article on June 22, warning investors about the risk of Bitcoin prices “heading to zero,” after the carnage of the crypto market, South China Morning Post reported.
Tomi Engdahl says:
Venture capitalist Tim Draper thinks cryptocurrency is going to go up more than 10-fold by the end of 2023. He isn’t the only crypto mogul whistling in the dark. https://trib.al/o4XXeFI
Tomi Engdahl says:
Crypto, the currency that can’t even buy you a Whopper.
Crypto-Themed Restaurant No Longer Accepts Cryptocurrency As Payment
Crypto, the currency that can’t even buy you a whopper.
https://www.iflscience.com/cryto-themed-restaurant-no-longer-accepts-cryptocurrency-as-payment-64207
Acrypto-themed restaurant is no-longer accepting cryptocurrency as payment, following the crash of various cryptocurrencies since it opened in April.
When the restaurant Bored & Hungry opened on Long Beach, California, earlier this year it accepted cryptocurrencies in return for burgers. It even bragged that it was the first restaurant to accept Ethereum and Apecoin as payment.
Following the crypto-crash, the restaurant has stopped accepting the volatile currencies, and is only accepting regular US dollars, the Los Angeles Times reports. Despite finding a market of people who want to look at pictures of bored apes while they eat, it’s not clear how popular paying the bill using cryptocurrency was in the first place, with one diner telling the LA Times that people who have the currencies tend to want to hold onto them as an investment, even as those investments plummet.
Tomi Engdahl says:
Will they accept NFTs?
One of the most prominent crypto hedge funds just defaulted on a $670 million loan
https://www.nbcnews.com/tech/crypto/one-prominent-crypto-hedge-funds-just-defaulted-670-million-loan-rcna35485?cid=sm_npd_nn_fb_ma
3AC’s solvency crunch comes after weeks of turmoil in the crypto market, which has erased hundreds of billions of dollars in value.
Prominent crypto hedge fund Three Arrows Capital has defaulted on a loan worth more than $670 million. Digital asset brokerage Voyager Digital issued a notice on Monday morning, stating that the fund failed to repay a loan of $350 million in the U.S. dollar-pegged stablecoin, USDC, and 15,250 bitcoin, worth about $323 million at today’s prices.
3AC’s solvency crunch comes after weeks of turmoil in the crypto market, which has erased hundreds of billions of dollars in value. Bitcoin and ether are both trading slightly lower in the last 24 hours, though well off their all-time highs. Meanwhile, the overall crypto market cap sits at about $950 billion, down from around $3 trillion at its peak in Nov. 2021.
Voyager said it intends to pursue recovery from 3AC (Three Arrows Capital). In the interim, the broker emphasized that the platform continues to operate and fulfill customer orders and withdrawals. That assurance is likely an attempt to contain fear of contagion through the wider crypto ecosystem.
“We are working diligently and expeditiously to strengthen our balance sheet and pursuing options so we can continue to meet customer liquidity demands,” said Voyager CEO Stephen Ehrlich.
How did 3AC get here?
Three Arrows Capital was established in 2012 by Zhu Su and Kyle Davies.
Zhu is known for his incredibly bullish view of bitcoin. He said last year the world’s largest cryptocurrency could be worth $2.5 million per coin. But in May this year, as the crypto market began its meltdown, Zhu said on Twitter that his “supercycle price thesis was regrettably wrong.”
The onset of a new so-called “crypto winter” has hurt digital currency projects and companies across the board.
3AC had borrowed from BlockFi but was unable to meet the margin call.
A margin call is a situation in which an investor has to commit more funds to avoid losses on a trade made with borrowed cash.
Then the so-called algorithmic stablecoin terraUSD and its sister token luna collapsed.
3AC had exposure to Luna and suffered losses.
“The Terra-Luna situation caught us very much off guard,” 3AC co-founder Davies told the Wall Street Journal in an interview earlier this month.
3AC, which is one of the biggest crypto-focused hedge funds, has borrowed large sums of money from various companies and invested across a number of different digital asset projects. That has sparked fears of further contagion across the industry.
“The issue is that the value of their [3AC’s] assets as well has declined massively with the market, so all in all, not good signs,”
“What’s to be seen is whether there are any large, remaining players that had exposure to them, which could cause further contagion.”
Already, a number of crypto firms are facing liquidity crises because of the market slump. This month, lending firm Celsius, which promised users super high yields for depositing their digital currency, paused withdrawals for customers, citing “extreme market conditions.”
Another crypto lender, Babel Finance, said this month that it is “facing unusual liquidity pressures” and halted withdrawals.
Tomi Engdahl says:
Crypto companies are at a crossroads with the introduction of zero-fee trading. Analysts are uncertain about how these trading platforms may handle it.
No-fee trading has arrived for crypto. Here’s what that may mean for revenue at these companies
PUBLISHED SUN, JUN 26 20228:34 AM EDT
Tanaya Macheel
@TANAYAMAC
https://www.cnbc.com/2022/06/26/no-fee-trading-has-arrived-for-crypto-heres-what-that-may-mean-for-revenue-at-these-companies.html?utm_term=Autofeed&utm_medium=Social&utm_content=Intl&utm_source=Facebook#Echobox=1656247349
Tomi Engdahl says:
More on the current state of crypto, GPUs and proof-of-work. I don’t think crypto creators ever though ght of the impact their tech would have had in industry, other than various philosophical ideologies (decentralization), getting rich quick or simply PoC.
Ethereum Mining Is Going Away, and Miners Are Not Happy
https://www.bloomberg.com/news/articles/2022-06-16/ethereum-mining-tweak-renders-some-crypto-tech-worthless#xj4y7vzkg
The shift from proof-of-work to proof-of-stake will cut power consumption sharply—and leave some expensive technology searching for new uses.
Tomi Engdahl says:
This crypto winter may be long, but builders remain bullish
https://techcrunch.com/2022/06/27/this-crypto-winter-may-be-long-but-builders-remain-bullish/?tpcc=ecfb2020
Many of the top digital assets in the cryptocurrency market are down significantly, but some market participants are shrugging it off and focusing on the long game.
The top five cryptocurrencies by market capitalization have fallen 55% or more year to date, according to CoinMarketCap data. The top two, bitcoin and ether, have dropped 56.5% and 68.5%, respectively, during that period.
But Pascal Gauthier, chairman and CEO of Ledger, said during a panel at his company’s Op3n conference in New York City that “this doesn’t feel like a [crypto] bear market.”
“Now, for the macro economy, it’s a bloodbath,” Gauthier added.
For example, Swedish buy now, pay later provider Klarna is considering raising capital at about a $10 billion valuation, down from its mid-2021 valuation of over $45 billion, TechCrunch reported last week. And a number of fintech companies’ values are declining sharply, taking the downturn even harder than most other sectors.
Gauthier also referenced the Nasdaq, which is down 26% year to date. “So there are macro trends that are just impacting everything at a global scale, everywhere,”
Tomi Engdahl says:
Mastercard survey: 50% of Latin Americans use crypto
https://www.cryptopolitan.com/mastercard-survey-50-of-latin-amr-use-crypto/
Mastercard survey says 50% of Latin Americans transact with crypto
Mastercard survey hints at a strong stablecoin patronage
Latin America crypto adoption expected to rise
The usage of crypto has become widespread as digital assets have continued to gain ground across different countries worldwide. According to a recent Mastercard survey, more than half of its users have been using digital assets in their daily activities. According to the survey, most of the said users were located in the Latin American continent. However, the report highlights that there could be a host of reasons by the usage of the assets are into the roof. One such reason is inflation and other factors affecting the economy.
Mastercard survey hints at a strong stablecoin patronage
Before now, there has been a widespread connotation that digital assets have not been able to penetrate some countries. However, the new Mastercard survey has noted that most people are not looking deeply into these parts have people have continually adopted these assets. Latin America is one such continent at the top of the adoption chain.
In the Mastercard survey, a little above half of the respondents have recently used crypto for payments or purchases. One exciting fact is that more than half of the population used stablecoins to carry out their transactions.
Latin America crypto adoption expected to rise
With the rapid adoption rate, users are convinced that it is only a matter of time before more people are won over to the side. 54% of the respondents affirmed that they believe that digital assets would perform well, which will sway more people their way. In addition, the survey also buttressed the fact that users have at least made transactions with a specific type of digital asset over the last year. This metric shows that they have been up there in the same time frame, surpassing their compatriots from other parts of America.
However, this has been attributed to the standard payment practices used in the other parts of the continents concerning Latin America. A top executive at Mastercard chipped in by mentioning that users across the Latin American region already recognize the future of payments and are now embracing it. The executive also expects the trend to continue, stating that there could be as high as a 95% patronage in the coming year. Asides from crypto, users across the continent have been introduced to other forms of payments. However, the Mastercard survey showed that most would prefer a more navigable payment system.
Tomi Engdahl says:
Comments from https://www.facebook.com/1804660779654493/posts/pfbid022WzaAXo7sYAMehQSJGoxuDbduSSaQatCSfkdsCWpeq52yjKudp3pzKjh2PyMT3t5l/
most pathetic misleading title ever. it should read half of Mastercard clients use crypto, the majority of those are from LATAM. I’m in LATAM and hardly anyone uses MC here and even less use crypto. ridiculous “journalism”
Rebecca Monkman not journalism this a crypto commercial.
As someone who lives in Latin America, this is false. Not even 50% of the people even KNOW of crypto, let alone use it.
This is absolutely misleading and definitely not true , they just want you to buy Crypto
Most Latin Americans don’t even have a banking account, don’t know how to use a credit card, it just impossible that so many people use crypto
Tomi Engdahl says:
Vicky Ge Huang / Wall Street Journal:
As crypto markets melt down, hedge funds are increasingly shorting tether, as a bet against either the broader economy or the quality of the assets backing USDT
More Hedge Funds Are Betting Against Tether as Crypto Melts Down
https://www.wsj.com/articles/more-hedge-funds-are-betting-against-tether-as-crypto-melts-down-11656322200?mod=djemalertNEWS
Professional investors got interested in shorting tether after the collapse of another stablecoin, TerraUSD
Short sellers have been ramping up their bets against tether, the world’s largest stablecoin, amid a broad market selloff that has called into doubt the financial health of some crypto companies.
In the past month, more traditional hedge funds have executed trades to short tether through Genesis Global Trading Inc., one of the largest crypto brokerages for professional investors. These trades are worth “hundreds of millions” of dollars in notional value, said Leon Marshall, Genesis’s head of institutional sales. He declined to be more specific.
“There has been a real spike in the interest from traditional hedge funds who are taking a look at tether and looking to short it,” Mr. Marshall said in an interview.
Tether is a stablecoin, which are virtual currencies that are supposed to be pegged to the dollar or other national currencies, and it is the most widely traded in the world. Tether’s market cap stood at about $67 billion on Friday, according to CoinMarketCap data.
Genesis, which doesn’t take a view on tether, said the short trades are almost exclusively put on by traditional hedge funds in the U.S. and Europe, while crypto firms—especially those based in Asia—have been happy to facilitate the other side of the transactions.
A number of investors have been betting against tether for at least 12 months. But more hedge funds got interested in shorting tether after the collapse in May of another stablecoin, TerraUSD, according to Genesis.
TerraUSD is a so-called algorithmic stablecoin, which means it doesn’t have to be backed by real assets. Other more traditional stablecoins, including tether, say they hold $1 of cash, Treasury bills or other traditional financial assets for each unit of stablecoin.
Tether briefly lost its peg during the TerraUSD collapse in May. It traded as low as 95 cents on May 12, reflecting investors’ concerns about the value of its assets and whether they would be readily convertible to cash in a market panic. It has since recovered and is now close to $1.
There are two main factors driving hedge funds to short tether,
Some hedge funds are shorting tether as a bet about the broader economy. The Federal Reserve is raising interest rates to curb 40-year-high inflation, scaring investors away from riskier assets including cryptocurrencies.
Other hedge funds are concerned about the quality of the assets backing tether.
Tether has faced intense regulatory pressure over its reserves.
Some short sellers say they believe that most of tether’s commercial-paper holdings are backed by debt-ridden Chinese property developers, The Wall Street Journal previously reported. Tether said in a blog post this month that “these rumors are completely false.” The company added that it has been reducing its portfolio of commercial paper.
Tether’s market cap has been declining since it briefly lost its $1 peg. It is down about $16 billion since a peak on May 5, according to CoinMarketCap data.
Tomi Engdahl says:
Jen Wieczner / New York Magazine:
Q&A with crypto billionaire Mike Novogratz on crypto as a scam, differences with past crashes, an incoming recession, LUNA’s collapse, blaming the Fed, and more
Mike Novogratz on His Big Crypto Mistake and What’s Ahead for Bitcoin
https://nymag.com/intelligencer/2022/06/mike-novogratz-on-crypto-blowups-and-whats-next-for-bitcoin.html
(In recent days, the price of bitcoin fell below $20,000 from a high of nearly $70,000, while ethereum — the second-largest cryptocurrency — fell under $1,000 after topping out at almost $5,000.) The wipeout led to mass casualties in crypto funds, spreading a dangerous contagion throughout the industry akin to what the financial crisis did to Wall Street in 2008. The pain is particularly severe in some decentralized finance, or DeFi, companies, such as Celsius, which lent out their crypto assets only to have to freeze withdrawals as investors came rushing back to pull out their money. Novogratz has been on Wall Street long enough to know how this happens, yet he admits even he took on too much risk. In an interview, he reflected on what happened this time around and what he might do differently ahead of the next crypto bubble and crash — because in crypto, there is always a next one not too far away.
A lot of people are saying, “We told you crypto was a scam.” Were they right?
You have to put things in perspective. If I told you at the beginning of the pandemic you could buy Zoom stock or bitcoin — today you would have doubled your money on bitcoin and you’d have made nothing on Zoom. So that’s what I think is hard for people to get their heads around. This has been a complete and total old-school ass-beating. But it’s important not to throw the baby out with the bathwater because we had a speculative mania in lots of asset classes. Bitcoin is not going away as a macro asset. Web3 is not going away. We’ll spend more time in the metaverse, therefore companies will sell digital assets, and for digital assets to have value, they have to be unique, and to be unique, they have to live in a blockchain.
Now, is crypto criticizable? Well of course it is because it’s such an amazing mechanism that if you own a token in an ecosystem, you benefit by more people buying into your ecosystem. And so it gets very tribal. I was loved by some ecosystems and literally despised by others. Because I’d say “Hey, I think this is overvalued,” and just making that comment was like a declaration of war against their mother. And so, to this day, I get trolled just for making what seemed like rational statements. And I don’t think tribalism leads to great investing decisions long term.
Does this crypto collapse feel different from what we’ve seen in the past — for instance, in 2018 or 2014? How are you making sense of this?
It’s like in Beauty and the Beast — “Tale as old as time.” In an asset bubble, which we obviously had, when it crashes, you always find far more and bizarre pockets of leverage than you had expected. And even though you kind of know there’s leverage in the system, when it breaks apart, you’re like, “Oh, there was gambling going on here?”
I’m hoping we saw the worst last weekend. I’d be more confident of that if I knew where inflation was going to be in the next two quarters. But if you had a sell order, you most likely sold
You don’t think it’s terrible for crypto? Why not?
It’s not great for crypto, but crypto also needs a pause. The lead horse that pulls the sled in crypto is bitcoin. And bitcoin is one of the only scarce things we have on the frigging planet. If the Fed is going to have to pause its rate hikes because the economy slows down, and we know there are still inflationary pressures, crypto takes back off or bitcoin takes back off. And that fuels the rest of the industry.
Is there anything in crypto that you’re still worried about right now? We keep learning about new casualties of this contagion in crypto, like the hedge fund Three Arrows Capital, which seems to have imploded and created various cascading effects.
I think people have their arms around the worst situations, at least understanding where things stand. It will take a while for these things to be either put into bankruptcy or sold off. Just like after ’08, there was a whole industry of Lehman claims and buying broken hedge funds or the assets of broken hedge funds. That’s going to happen. But the biggest worry everyone had was that the largest stablecoin, tether, would collapse. And the best I can tell is that it doesn’t feel like it’s a category-five worry right now. Those guys, for lots of different reasons, seem pretty stable (though there’s not transparency there as much as we’d like — we’d love more transparency).
People been worrying about the specter of a potential Coinbase bankruptcy after a warning the company made recently. Do you see that as a threat?
They have a bunch of cash on their balance sheet. They have a burn rate that’s way too high. And so my guess is CEO Brian Armstrong will cut that burn rate over the next quarter or two pretty immensely. They have a great brand.
What seems scary about this crash is that some of these companies or protocols that have collapsed were highly regarded in the industry. Luna, of course, but also Celsius, a multibillion-dollar company that offered consumers relatively generous interest payments in exchange for taking custody of their bitcoin or other cryptocurrencies. Did you see this coming in any way?
I was worried about the macro environment. But I was hoping bitcoin would stay in the $30,000 to $50,000 range. We weren’t invested in any of the credit shops like Celsius. We had been invested in their competitor BlockFi, but we exited that over a year ago because I worried about that business model. We had at times been big investors. And in terra, we scaled back our holdings — that’s what we do with most positions when things kind of go to the sky. With hindsight, looking at luna, you can’t offer people 18 percent interest, as they did with Anchor, and not have the world all run into yours. And so they grew their ecosystem too fast — before they grew the rest of the use cases. And I think that’s one of the lessons of crypto. With this bull run, with the money printer goes brr — everything kind of went up. And the speculative mania that took place in baseball cards and fine wines and watches and tech stocks also happened in crypto. I think the speculative frenzy part is over for the time being. So it becomes a much more sober business of having to build shit that people use.
Is it over for DeFi, a decentralized financial system on the blockchain? Has the crash raised too many doubts?
In some ways, the regulators are going to lick their chops and say, “Oh my goodness.” But DeFi, for the most part, has worked. It just is worth a lot less. Where the big losses are, it’s really in this weird combination of CeFi (centralized finance) and DeFi. Celsius and BlockFi were black boxes that investors put their money in and then they did whatever they wanted with it. It wasn’t on-chain. You didn’t know what the leverage was unless you got under the hood. You didn’t know what their asset-liability mismatch was. They borrowed short and they lent long. Those are the two ways you die a sudden death in markets. You see financial services companies like the European banks in 2008, like Lehman Brothers, like Merrill Lynch, in bull markets take a bizarre amount of leverage and think they’re geniuses. And that’s what happened.
Luna and terra are a little different because it was completely transparent. So that was a combination of greed by the investors, and it was a very charismatic founder. The stablecoin was a peg based on bullishness, and when the market turned, the mechanisms to create that peg just didn’t withstand the pressure. But that was the biggest black eye because it was transparent. You’re going to have failures, but broadly, DeFi lending systems have worked — projects like Compound, Aave, MakerDAO, and Uniswap. But they’re going to have a whole lot fewer assets on them.
Is there anything you’re completely avoiding, like staked ether — a derivative of ethereum tokens that traded in ways people didn’t expect — or algorithmic stable coins, like the terra tokens that are now worth basically zero?
Well, so to be fair, we never really participated in algorithmic stable coins. We looked at them and we didn’t participate. We’re not in staked ETH. But I do think staked ETH is going to be a big business. And so my sense is we will be in that business. The mistake we made is we were still too long crypto assets — you’re never happy when you lose money. The mistake other companies in the space made is they took more credit risk than they should have.
You can look at the “GDP” of the crypto space as the total value of the coins plus the value of the public companies plus the value of private companies — it’s about a trillion dollars. I think the industry was built for at least a $2 trillion GDP, and so we’ll get back to $2 trillion. It’s going to take a while and then, in time, will be far, far higher than the old high.
So it’s kind of a crypto recession right now.
Yes, crypto is in a recession. The rest of the economy is also going to get a recession.
How severe do you think it will be and how long will it last?
I wish I had that crystal ball. My instinct is 18 months, maybe even a little shorter because I think the Fed is going to have to pause hiking rates by the fall, and I think that’ll get people comfortable to start building again.
Who do you blame for this crypto crisis we’re in?
You could blame the Fed. You could blame COVID, and you can blame the Russian war. I say all that kind of tongue in cheek. You put all those together and it just forced a much faster unwinding of the bubble. There are lots of people that took too much leverage, and they’re suffering immensely. BlockFi raised money at a $5 billion valuation last year; it basically just sold for zero. Celsius was valued at more than $3 billion and it’s in all likelihood going bankrupt. And so people that took too much leverage have paid the price already.
Is there a lesson in all of this?
But I do think it’s important for people to understand that the investments they make change in character; they change in valuation.
Tomi Engdahl says:
Chainalysis:
A distribution analysis of 10 major DAO governance tokens finds that, on average, less than 1% of all holders have 90% of voting power
Dissecting the DAO: Web3 Ownership is Surprisingly Concentrated
https://blog.chainalysis.com/reports/web3-daos-2022/
Decentralized autonomous organizations (DAOs) are a staple of web3. Internet-native and blockchain-based, DAOs are intended to provide a new, democratized management structure for businesses, projects, and communities, in which any member can vote on organizational decisions just by buying into the project.
At a high level, this is how DAOs work:
DAO founders create a new cryptocurrency, known as a governance token;
They distribute these tokens to users, backers, and other stakeholders;
Each token corresponds to a set amount of voting power within the organization. Each token also corresponds to a price on the secondary market, where it can be bought and sold at will.
While this process is often described as a way to decentralize power, governance token data suggests that DAO ownership is highly concentrated.
The concentration of governance token holdings
By analyzing the distribution of ten major DAOs’ governance tokens, we find that, across several major DAOs, less than 1% of all holders have 90% of voting power.
This has meaningful implications for DAO governance. For example, if just a small portion of the top 1% of holders worked together, they could theoretically outvote the remaining 99% on any decision. This has obvious practical implications and, in terms of investor sentiment, likely affects whether small holders feel that they can meaningfully contribute to the proposal process.
Overly concentrated voting power in DAOs can result in decision-making that seemingly contradicts the tenets of decentralization on which web3 is built.
Tomi Engdahl says:
BORED APE RESTAURANT NO LONGER TAKING CRYPTO, JUST US DOLLARS, AFTER CRASH
https://futurism.com/the-byte/bored-ape-crypto-dollars-crash
Tomi Engdahl says:
CRYPTO ALERT: Billionaire warns that some crypto exchanges already “secretly insolvent” https://trib.al/S2WVMOE
Tomi Engdahl says:
Michael Saylor, Who Owns 130,000 BTC, Gives Advice to Crypto Investors
https://u.today/michael-saylor-who-owns-130000-btc-gives-advice-to-crypto-investors
The CEO of MicroStrategy, a company that owns around 130,000 BTC, has some advice for crypto investors who are in the process of surviving another bear market present on the cryptocurrency market.
By constantly funding its position, Saylor’s company can comfortably hold Bitcoin even if it plunges below $10,000. According to Saylor’s portfolio tracker, Bitcoin must spike below $30,000 to become profitable for the company once again. On April 5, Saylor announced his company’s most recent Bitcoin purchase worth $4,167.
At press time, Bitcoin is trading at $20,914 with a 1% increase in the last 24 hours and has been struggling to break through $22,000 for the past week.
Tomi Engdahl says:
Canadian investment firm Cypherpunk has sold all of its #bitcoin and #ether holdings as the crypto winter makes it challenging to hold onto digital assets.
Investment Firm Cypherpunk Holdings Sells All of Its Bitcoin and Ether
https://www.coindesk.com/business/2022/06/28/investment-firm-cypherpunk-holdings-sells-all-of-its-bitcoin-and-ether/
The publicly listed firm has transitioned its treasury to cash amid increased market volatility, but it hasn’t ruled out reinvesting in cryptocurrencies when the market settles down.
Tomi Engdahl says:
Jack Schickler / CoinDesk:
EU lawmakers finalize anti-money laundering rules for crypto, requiring verified customer identity for transfers between regulated digital wallet providers
No AML Checks For Most Transfers To Unhosted Crypto Wallets, EU Policymakers Decide
https://www.coindesk.com/policy/2022/06/29/eu-finalizes-crypto-money-laundering-rules/
A Wednesday meeting secured a final deal on anti-money laundering legislation for crypto transfers and largely overturned a proposal from the EU Parliament to impose laundering checks on all payments to private wallets.
BRUSSELS, Belgium – The European Union (EU) finally agreed on landmark anti-money laundering rules for crypto transactions Wednesday, despite industry concerns over the law harming privacy and innovation.
The final proposals will mean customer identity needs to be verified for even the smallest crypto transfers, if it’s between two regulated digital wallet providers – but payments to unhosted private wallets will largely be left out of laundering checks.
EU lawmakers and government representatives have been meeting over the last three months to hash out a political deal on the bill, which was introduced in July 2021 by the European Commission.
Two sources leaving the meeting, who asked not to be named, told CoinDesk a deal had been reached on the legislation after just over an hour of talks.
Just under an hour following the publication of this article, EU lawmaker Ondřej Kovařík confirmed the provisional deal in a tweet, saying that it “strikes the right balance in mitigating risks for fighting money laundering in the crypto sector without preventing innovation and overburdening businesses.”
For the rules on transfers to unhosted wallets, Kovařík said the final result had “moved quite far from the initial proposal of the European Parliament” – something likely to be met by a sigh of relief by many in the industry.
Kovařík said those unhosted wallet rules would only apply when transfers were made to a person’s own private wallet, and only when the value was over 1,000 euros ($1,052). A further source briefed on talks has confirmed those details.
Ernest Urtasun, a member of the European Greens party, who jointly led parliament’s negotiations on the law, tweeted that the rules were “putting an end to the wild west of unregulated crypto, closing major loopholes in the European anti-money laundering rules.”
Urtasun confirmed that the final deal would mean that, for transactions between regulated wallets, customer identity details have to be recorded for even the smallest transaction. That makes crypto rules unlike those for the conventional banking sector, which only catch those worth over 1,000 euros.
Lawmakers and governments overturned European Commission plans to exempt small transactions, arguing that price volatility and the ability to break up payments into smaller chunks would make it unworkable for crypto.
Socialist lawmaker Paul Tang, who had pushed for tough anti-money laundering measures, told CoinDesk in a statement the deal meant “the verification of unhosted wallets is deeply engrained in the EU’s fight against money laundering through crypto.”
“We cannot just focus on the regulated sector while keeping the backdoor open to large anonymous crypto flows,” Tang said.
Tomi Engdahl says:
Allyson Versprille / Bloomberg:
Sources: the Treasury Department and the IRS are likely to postpone a January 2023 starting date for crypto companies to track clients’ capital gains and losses
Crypto Tax Cheats Likely to Get Relief as US Crackdown Hits Snag
https://www.bloomberg.com/news/articles/2022-06-29/crypto-tax-cheats-likely-to-get-relief-as-us-crackdown-hits-snag#xj4y7vzkg
Treasury mulls delay for exchanges to collect clients’ data
Firms supposed to start tracking capital gains, losses Jan. 1
Tomi Engdahl says:
CoinDesk:
Sources: digital asset trading firm Genesis is potentially facing “hundreds of millions” of dollars in losses, partly through exposure to 3AC and Babel Finance — The DCG-owned trading colossus is said to have suffered nine-figure losses partly through exposure to Three Arrows Capital and Babel Finance.
Genesis Faces ‘Hundreds of Millions’ in Losses as 3AC Exposure Swamps Crypto Lenders: Sources
https://www.coindesk.com/business/2022/06/29/genesis-faces-hundreds-of-millions-in-losses-as-3ac-exposure-swamps-crypto-lenders-sources/
The DCG-owned trading colossus is said to have suffered nine-figure losses partly through exposure to Three Arrows Capital and Babel Finance.
Tomi Engdahl says:
Nikhilesh De / CoinDesk:
Grayscale Investments sues the US SEC after the agency rejected its application on Wednesday to convert its flagship Grayscale Bitcoin Trust product to an ETF — The SEC rejected Grayscale’s application to convert its Grayscale Bitcoin Trust to an exchange-traded fund earlier Wednesday.
Grayscale Sues SEC Over Bitcoin ETF Application Rejection
https://www.coindesk.com/policy/2022/06/30/grayscale-sues-sec-over-bitcoin-etf-application-rejection/
The SEC rejected Grayscale’s application to convert its Grayscale Bitcoin Trust to an exchange-traded fund earlier Wednesday.
Tomi Engdahl says:
Joanna Ossinger / Bloomberg:
Bitcoin is on track for its worst quarter since Q3 2011, dropping 56%, after falling as much as 4.4% to just above $19K on Thursday
Bitcoin Set for Biggest Quarterly Drop in More Than a Decade
https://www.bloomberg.com/news/articles/2022-06-30/bitcoin-poised-for-biggest-quarterly-drop-in-more-than-a-decade#xj4y7vzkg
Bitcoin’s 58% drop is biggest since third quarter of 2011
JPMorgan analysts say deleveraging process may end soon
Tomi Engdahl says:
TechCrunch:
Meta rolls out NFT support on Facebook, letting select US creators display NFTs under a new tab on their profiles, after adding support to Instagram in May 2022 — After debuting NFT support on Instagram in May, Meta has launched digital collectibles support on Facebook with select creators.
Facebook begins testing NFTs with select creators in the US
https://techcrunch.com/2022/06/30/facebook-testing-nfts-select-creators-us/
After debuting NFT support on Instagram in May, Meta has launched digital collectibles support on Facebook with select creators. A spokesperson for Meta told TechCrunch that the company has started a slow rollout that allows a select group of creators in the United States to post digital collectibles on Facebook. With this feature, these creators will be able to show off NFTs on their profiles under a new tab, and the art will have a “digital collectibles” label — just like Instagram.
The official launches comes a week after Meta CEO Mark Zuckerberg said the company would be testing NFT support on Facebook soon. At the time, Zuckerberg said the test will allow creators to cross-post on Instagram and Facebook. However, the spokesperson said the sharing feature across both platforms has not yet rolled out, but is coming soon.
Tomi Engdahl says:
As the NFT boom fades, major gaming companies slow their crypto plans
https://techcrunch.com/2022/06/30/as-the-nft-boom-fades-major-gaming-companies-slow-their-crypto-plans/?tpcc=ecfb2020
Blockchain games and NFTs in video games were a hot topic toward the end of 2021, and they continue to be so, spurred by the early success of Axie Infinity’s play-to-earn (P2E) model. After all, it’s hard to ignore a sector that’s playing with billions of dollars.
The potential of Axie’s P2E model, which gives players ownership of collectible in-game items (tokens) that they can sell for actual money, was immediately apparent. Its success showed the potential economic rewards of combining blockchain technology and gaming, and spurred a slew of smaller developers to put out similar offerings. More notably, it also led to established video game studios trying to elbow their way in.
And they tried hard indeed. Between November and February, video game giants, from Ubisoft and Sega to Square Enix, all signaled their intention to cash in on the NFT craze.
Their fans didn’t like it. But despite overwhelmingly negative feedback from gamers as well as the industry, companies said they’d incorporate NFTs into future releases (or even shoehorn them into updates for existing titles). And the backlash only seemed to worsen with every announcement about NFTs.
When there’s money to be made, feedback can, and often does, go unheard. Still, a few major gaming companies did backtrack on their plans. So, what happened?
Blockchain gaming unfazed by crypto volatility as gamers ‘seek out entertainment’
It seems that the lackluster performance of a few companies’ gaming NFT implementations may have caused some to reconsider their crypto efforts. From Ubisoft’s embarrassing attempt with Ubisoft Quartz, to Axie Infinity falling off the edge of the world, it’s easy to assume that the gaming-blockchain party ended before it really even began.
Well, it hasn’t. Pandora’s Box is now open, and the attempts to legitimize a potentially predatory monetization model aren’t going to stop any time soon.
But that’s still a while away.
Image of a man using virtual reality glasses amid lights.
While the crypto industry was in free fall over the past few months, web3 games remained fairly stable.
Tomi Engdahl says:
Danny Nelson / CoinDesk:
CFTC charges South Africa-based bitcoin pool operator Mirror Trading International with a $1.7B fraud, in its “largest ever fraud scheme case involving bitcoin” — MTI’s self-described CEO was recently detained in Brazil on an Interpol warrant, the regulator said.
CFTC Charges South African Bitcoin Club Mirror Trading International With $1.7B Fraud
MTI’s self-described CEO was recently detained in Brazil on an Interpol warrant, the regulator said.
https://www.coindesk.com/policy/2022/06/30/cftc-charges-south-african-bitcoin-club-mti-in-17b-fraud/
Tomi Engdahl says:
Crypto mega hedge fund Three Arrows Capital reportedly files for bankruptcy in New York
https://techcrunch.com/2022/07/01/crypto-mega-hedge-fund-three-arrows-capital-reportedly-files-for-bankruptcy-in-new-york/?tpcc=tcplusfacebook
Crypto hedge fund Three Arrows Capital (3AC) has filed for Chapter 15 bankruptcy in New York, according to a report in Bloomberg.
The mega fund, founded by Credit Suisse traders Zhu Su and Kyle Davies, at one time managed an estimated $10 billion in assets and was a linchpin among crypto finance players. Its insolvency has forced major industry players to reshuffle operations and limit customer withdrawals amid a crypto selloff that seemed to catch plenty of mega firms off guard.
Chapter 15 bankruptcy will allow the foreign firm to protect its stateside assets while the liquidation is carried out in the British Virgin Islands following a court order this week after 3AC defaulted on a $660 million loan to Voyager Digital. 3AC is based in Singapore.
The firm’s ongoing collapse is causing trouble for plenty of venture-backed crypto darlings.
https://www.bloomberg.com/news/articles/2022-07-01/crypto-hedge-fund-three-arrows-files-for-chapter-15-bankruptcy#xj4y7vzkg
Tomi Engdahl says:
Bitcoin Will Be a Failure Even If It Hits $100,000, Says “Black Swan” Author
https://u.today/bitcoin-will-be-a-failure-even-if-it-hits-100000-says-black-swan-author
Bitcoin promoters are betting on an eventual recovery that will vindicate their strength of conviction. However, even if the flagship cryptocurrency manages to surge to as high as $100,000 during another bull market, it will still be a failure, according to Nassim Taleb.
The famed mathematician explains that the leading cryptocurrency has failed as a hedge against inflation. In fact, it has actually acted with opposite properties.
As reported by U.Today, Taleb believes that the ongoing cryptocurrency winter may degrade into a full-blown “ice age,” meaning that prices will not recover for a long period of time (if ever).
Tomi Engdahl says:
The world’s largest cryptocurrency is currently down 72.33% from its record peak.
Tomi Engdahl says:
Jeremy Hill / Bloomberg:
Three Arrows Capital files for Chapter 15 bankruptcy, protecting its US assets from creditors while a British Virgin Islands court carries out a liquidation — Crypto hedge fund Three Arrows Capital has filed for Chapter 15 bankruptcy, a move that protects its US assets while a liquidation is carried out in the British Virgin Islands.
Crypto Hedge Fund Three Arrows Files For Chapter 15 Bankruptcy
https://www.bloomberg.com/news/articles/2022-07-01/crypto-hedge-fund-three-arrows-files-for-chapter-15-bankruptcy
Crypto hedge fund Three Arrows Capital has filed for Chapter 15 bankruptcy, a move that protects its US assets while a liquidation is carried out in the British Virgin Islands.
Representatives for Three Arrows filed the bankruptcy petition in New York on Friday, court papers show. Chapter 15 bankruptcy filings stop creditors from seizing a company’s assets in the US.
Arthur Hayes / Entrepreneur’s Handbook:
After 3AC’s collapse, centralized lenders with exposure to 3AC had failed, while their decentralized counterparts liquidated collateral and continued operating — This current crypto nuclear bear market marks my third brush with generalised market carnage.
https://entrepreneurshandbook.co/number-three-511f334d8fae
Tomi Engdahl says:
Michael McSweeney / The Block:
Voyager Digital suspends trading, deposits, withdrawals, and rewards citing market conditions, after issuing a default notice to 3AC in June over a ~$650M loan
https://www.theblock.co/post/155528/voyager-digital-suspends-withdrawals-deposits-and-trading
Tomi Engdahl says:
Nelson Rauda Zablah / New York Times:
How El Salvador President Nayib Bukele weaponized bitcoin to whitewash his government’s growing authoritarianism on the world stage and spread local propaganda
https://www.nytimes.com/2022/07/02/opinion/bitcoin-el-salvador-bukele-crypto.html
Tomi Engdahl says:
Dan Primack / Axios:
BlockFi agrees to an option to be acquired by FTX for up to $240M, plus a $400M revolving credit facility; BlockFi CEO: “we continue to see a healthy ecosystem” — Troubled crypto lender BlockFi said Friday that it agreed to an option to be acquired by FTX for up to $240 million.
https://www.axios.com/2022/07/01/blockfi-to-be-acquired-ftx
Tomi Engdahl says:
Meir Orbach / CTech:
Source: Celsius has laid off 150 employees, around a quarter of its staff, after pausing withdrawals on June 13; the lender says it is exploring restructuring
Ailing crypto lender Celsius to lay off a quarter of its employees
https://www.calcalistech.com/ctechnews/article/syvuxha99
The American-Israeli company is parting ways with around 150 employees as it continues to look for a way out of a crisis that saw it pause all withdrawals from its platform three weeks ago
Cryptocurrency platform Celsius has laid off 150 employees, including in Israel, Calcalist has learned. The crypto lender announced on June 13 that it was pausing withdrawals citing “extreme market conditions,” raising concerns about its solvency. The American-Israeli company has since hired restructuring consultants and lawyers to make organizational changes to the company amid its financial issues.
“We are focused and working as quickly as we can to stabilize liquidity and operations, in order to be positioned to share more information with the community,” Celsius wrote on its blog on Friday. “We are operating with the entire community and all clients in mind as we work through these challenging times.”
The company added: “We continue to take important steps to preserve and protect assets and explore options available to us. These options include pursuing strategic transactions as well as a restructuring of our liabilities, among other avenues. These exhaustive explorations are complex and take time, but we want the community to know that our teams are working with experts from many different disciplines. Our relationship with the community and our clients has been a source of pride for all team members at Celsius, and we will continue to share information with our customers as and when it becomes appropriate.”
The company, which raised $750 million in funding late last year, reaching a valuation of $3 billion, offered interest-bearing products to customers who deposit their cryptocurrencies with the company, and lends out cryptocurrencies to earn a return. As of May 17, the company had processed $8.2 billion worth of loans and had $11.8 billion in assets, according to its website.
Tomi Engdahl says:
Meta is pulling the plug on its crypto payments wallet, Novi
https://techcrunch.com/2022/07/04/meta-novi-pilot-ends/?tpcc=tcplusfacebook
Three years after Facebook announced its ill-fated push into cryptocurrency, aka the Libra project, the tech giant has signalled another scaling back of its activity — announcing Friday that Novi, the digital wallet payments pilot it launched last October, will be ending on on September 1.
In a statement provided to CoinDesk, the tech giant that’s now known as Meta suggested it has plans to repurpose the digital wallet technology (neé Calibra) for future products, including those related to its eponymous focus on “metaverse” development. Although it’s not clear exactly what Meta might have in mind for repurposing the Novi tech.
Tomi Engdahl says:
Sidhartha Shukla / Bloomberg:
CoinGecko: daily trading volumes at Indian crypto exchanges ZebPay, WazirX, CoinDCX have dropped 60%-87% after the 1% transaction tax became effective on July 1
https://www.bloomberg.com/news/articles/2022-07-04/trading-dries-up-on-india-crypto-exchanges-as-new-tax-kicks-in
Tomi Engdahl says:
Dan Milmo / The Guardian:
Chainalysis: NFT sales totaled just over $1B in June 2022, a 12-month low since June 2021 when sales were $648M; sales peaked at $12.6B in January 2022 — Sales of non-fungible tokens totalled just over $1bn in June, compared with peak of $12.6bn in January
NFT sales hit 12-month low after cryptocurrency crash
https://www.theguardian.com/technology/2022/jul/02/nft-sales-hit-12-month-low-after-cryptocurrency-crash
Sales of non-fungible tokens totalled just over $1bn in June, compared with peak of $12.6bn in January
Tomi Engdahl says:
Manish Singh / TechCrunch:
Crypto lender and exchange Vauld pauses withdrawals, trading, and deposits and says it’s exploring a restructuring, after users withdrew $197.7M+ since June 12 — Vauld, a Singapore-headquartered crypto lending and exchange startup, has suspended withdrawals, trading and deposits …
https://techcrunch.com/2022/07/04/crypto-lending-platform-vauld-suspends-withdrawals-trading-and-deposits-amid-financial-challenges/
Tomi Engdahl says:
Keith Cornett / CorvetteBlogger.com:
Chevrolet’s first NFT auction, of an original artwork with a unique green 2023 Corvette Z06, had zero bids, as ETH’s price fluctuated between $1,160 and $1,225 — Sometimes what might have been a great idea when it was proposed months ago can turn out to be a dud.
Chevy’s First Foray into NFT Auctions Was a Bust With Zero Bids for the Minted Green Corvette Z06
https://www.corvetteblogger.com/2022/06/29/chevys-first-foray-into-nft-auctions-was-a-bust-with-zero-bids-for-the-minted-green-corvette-z06/
Tomi Engdahl says:
Yiwen Lu / Washington Post:
RadioShack, purchased by private equity firm REV in 2020, reintroduces itself as a crypto exchange trying to attract users with a stream of often profane tweets
Remember RadioShack? It’s now a crypto company with wild tweets.
Image without a caption
By Yiwen Lu
https://www.washingtonpost.com/business/2022/07/01/radio-shack-tweets/
Gen Z may not be familiar with the RadioShack of their grandparents, but they’re getting to know its replacement. The 100-year-old retailer reintroduced itself on Twitter this week with a stream of often-profane tweets — some since deleted — filled with crude comments and drug references.
Variations of, “What in the world is going on?” peppered the comment threads, but a glance of the company’s Twitter profile partly held the answer: RadioShack is no longer the electronics store Americans ran to for generations, but rather an online cryptocurrency company that also happens to sell batteries.
REV was formed by Alex Mehr, the co-founder of online dating site Zoosk.com, and Tai Lopez, an online influencer known for coaching about his lavish lifestyle. They launched RadioShack Swap, a decentralized crypto exchange platform that allows users to swap coins or tokens, a format that comes with more flexibility and lower transaction fees than trading. Its token, called $RADIO, is worth about a penny.
Tomi Engdahl says:
Emily Flitter / New York Times:
As crypto markets tumbled, strict US regulatory rules on risky bank assets largely insulated Wall Street from the chaos, while retail investors were hit hard
How Wall Street Escaped the Crypto Meltdown
https://www.nytimes.com/2022/07/05/business/economy/wall-st-cryptocurrency-prices.html
Tomi Engdahl says:
Hannah Murphy / Financial Times:
Meta’s Stephane Kasriel says the company still plans to roll out NFT support to help creators monetize through cross-platform “memberships” and “subscriptions”
https://www.ft.com/content/c035ed13-d646-493f-83be-0f56f8cb69c1
Tomi Engdahl says:
The Bank of England says it time to get tough with crypto regulation.
BOE Says Crypto Needs Tougher Rules After $2 Trillion Drop
https://www.bloomberg.com/news/articles/2022-07-05/boe-says-crypto-needs-tougher-rules-after-2-trillion-drop?utm_medium=social&utm_campaign=socialflow-organic&utm_source=facebook&utm_content=bloomberguk#xj4y7vzkg