Banks failure, regulatory clampdowns and stablecoins depeg — all in a week.
Gm,
There’s quiet weeks in crypto. And there’s weeks like the last one, where everything seems to be on fire. Let’s see, there was…
- ETH may be labeled a security
- A power tax on BTC mining proposed
- One bank going under
- Another bank going under
- USDC de-pegging
- Elon firing an employee over Twitter and taking him back
So yes, it was busy. Let’s dive right in.
Whose Threads Are a Must-Read?
Keeping this section shorter than usual because there is so much to cover elsewhere.
But before everything went up in flames, @divine_economy covered which difficult choice every crypto project is facing:
- Projects have to build for the 1% of the users that have 99% of the money.
- But it can’t succeed long-term if it doesn’t build for the 99% of the users.
- The OpenSea vs Blur NFT marketplace war is the perfect example of this.
A very interesting thread that should give everyone in crypto a lot to think about.
Crypto in the US is going all sorts of wrong at the moment. But crypto in Asia is a different story. Hong Kong used to be a crypto capital, and Jason Choi covers why Hong Kong will become a crypto capital again:
Lastly, Winter Soldier covered the TLDR of last week’s mess. That was before USDC de-pegged and triggered PTSD in crypto circles:
If you don’t want to read the full round-up this week, make sure to not miss that thread.
Oh, and a new Arthur Hayes essay dropped. He explains his vision for a new BTC-collateralized stablecoin. That may be very well worth looking into now…
Wisdom of the Week
This week’s nugget of wisdom is that we should all appreciate inversebrah:
If you don’t know the inversebrah account on Twitter, you are seriously missing out. It is like a living breathing memory of everything that happens on Crypto Twitter: the good, the bad, the memes, the outrageous and anything in between.
Whoever runs the account doesn’t seem to sleep because inversebrah is online. All. The. Time.
And Crypto Twitter is so much better for it.
Elon Building Twitter
Oh there was some drama on Twitter last week. This is how it all kicked off:
Then this was how it was going:
And that is how it ended:
As Adam Cochran explains in his thread, Halli is a top-class designer and a highly expected person in Iceland’s civil society. Turns out that he was fired initially but because Twitter bought out his company, firing him for good would be quite, ahem, pricey.
Elon’s reaction to Halli asking for clarification on whether he was fired was not exactly smooth according to most people in the comment section:
Maybe it was a genuine misunderstanding — and Elon did in fact backtrack on his statement — but it still did not improve his standing with the Twitter crowd:
Either way, Elon did obviously not miss out on summarizing the crypto situation in one short sweet meme:
Quite accurate.
Talk of the Town
Last week’s talk of the town…well, it changed almost every hour.
After the New York Attorney General declared ETH a security in a lawsuit against KuCoin, Crypto Twitter was outraged. Coin Center maintains ETH is not a security because the ETH token is different from the agreement to fund Ethereum as a project:
Although some still noticed how the Feds are improving their arguments against Ethereum:
Then there was a quite stunning proposal by the Presidential administration to tax the electricity used to mine Bitcoin. Of course, that did not sit well with the Bitcoin community:
And there is a real danger that Bitcoin mining will be pushed into countries that are not America’s friends. Which could create a real strategic danger for the US:
But it’s not only the government’s policies that can create problems for Bitcoin. It’s also the government unlocking a significant amount of Bitcoin and dumping it on the market:
And then there was the big one, Silicon Valley Bank going bust. Even before it caused USDC to de-peg, it created trouble, as Jamie Quint explains here:
Genevieve Roch-Decter explained it in more details here:
Long story short, Silicon Valley Bank is going down and crypto got caught up in the aftermath of it. Inverse Cramer strikes again:
That by itself would have been enough to cause shockwaves in crypto, but then USDC happened. We covered that situation in a separate explaining the USDC de-peg article.
Our Favorite Coinfession
As the old chess saying goes: “when you see a good move, you should look for a better one.” That applies here as well:
Memes
This week’s meme heroes are Jay Powell…
…and the Ethereum community:
Hoping for a better week next week. Stay safe out there!
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