Bitcoin (BTC) is lining up an “early bull market” as a unique chart feature plays out for the first time in history.
In a post on X (formerly Twitter) on Dec. 7, entrepreneur Alistair Milne drew attention to Bitcoin’s first ever weekly “golden cross.”
Bitcoin goes from death cross to golden cross in 10 months
Recent BTC price upside has delivered considerable profits to various Bitcoin investor cohorts, but 165% year-to-date gains are now significant for another reason.
Should current performance continue, Bitcoin will witness a crossover of two weekly moving averages (MAs) which have never delivered such a bull signal before.
The 50-week and 200-week MAs are key trendlines for Bitcoin traders and analysts alike. The latter is the ultimate bear market support level, and it has so far never decreased in value.
The 200-week MA made the headlines earlier this year when spot price fell below it in an unprecedented move.
Now back above, BTC price strength is on the way to taking the 50-week MA trendline above the 200-week counterpart. Known as a “golden cross,” on lower timeframes, this is considered a classic bullish signal, and for Milne, the impetus is that considerable upside could be in store should the phenomenon play out.
“This bear market was the ‘worst’ in that we spent time under the 200-week moving average price (red) for the 1st time in Bitcoin’s history,” he commented.
“The 50-week moving average will now soon cross back above the 200-week MA making a ‘golden cross’ for the 1st time. QED: Early bull market.”
BTC/USD 1-week chart with 50, 200MA. Source: TradingView
Some believe that buyer momentum is exhausted, and that powerful large-volume sellers are still able to drive the market significantly lower.
Among them is popular trader Crypto Chase, who revealed a short BTC position as Bitcoin crossed $43,000. What comes next, he warned, could involve a trip all the way to the low $20,000 range.
“I’ve not changed bias. I’m still bearish from the 40’s looking for low 30’s or even low 20’s before new ATH’s, and that’s where I’m at atm,” part of X analysis read on the day.
Crypto Chase added that only a move to new all-time highs, or ATHs, would change the prognosis, but that he “did not believe” this to be on the way.
He is not alone. Still holding firm on this even more bearish BTC price prediction is controversial trader Il Capo of Crypto, who maintains that $12,000 is Bitcoin’s true bottom target.
In a post to Telegram channel subscribers on Dec. 1, he called for a “big dump to $30k-31k with altcoins dumping about 30-40%.”
“That would be the beginning of the capitulation event,” he claimed.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
“The EU has developed one of the world’s most comprehensive policies for crypto asset regulation, which is why we chose the region to anchor Robinhood Crypto’s international expansion plans,” Robinhood Crypto’s general manager Johann Kerbrat said in the blog post.
Deep within Miami’s vibrant art hub, the Faena Forum has become the epicenter of creativity as Gateway Miami unfolds.
Situated in the heart of South Beach’s Faena District, the Faena Forum is an elegant venue designed by Rem Koolhaas and the OMA team, led by Shohei Shigematsu. It features two grand halls, a rose marble amphitheater, and ease of access from the week’s major art fairs on the beach.
After two years of hosting Gateway in downtown Miami, our move to Faena Forum represents a significant evolution for the event series, showcasing the intersection of the digital and physical art worlds and the rapidly growing digital fashion and luxury category.Produced in partnership with FACTBLOCK, the theme “Blossoming”— celebrates the “creativity and resilience” of artists in full bloom.
Attendees, speakers, art enthusiasts, critics, and visionaries for live programming, digital art, and fireside chats. If you cannot attend in person or just want a summary of events, watch this live blog for timely summaries, recaps of panels, and exclusive behind-the-scenes insights.
Here’s our speaker programming schedule for the day:
Economists are expecting Friday’s report to show a job gain of 185,000 in November, with the unemployment rate flat from October at 3.9%. A sizable miss to the downside is likely to reinforce bets about lower interest rates and might provide the fuel for bitcoin’s run to $50,000. The flip side, however – jobs added of 200,000 or more – might prompt a reversal of those rate cut bets and take a chunk out of bitcoin’s recent rally.
The preliminary trial, which is scheduled to take 15 days, will also seek to determine whether the alleged hack occurred and, if so, whether it deprived Tulip Trading of the private keys that controlled the bitcoin, among other issues.
Montenegrin official plans to extradite Do Kwon to the United States: Report
The Terraform Labs co-founder had been awaiting extradition to either the United States or South Korea after being arrested and charged in Montenegro.
Join us on social networks
Terraform Labs co-founder Do Kwon will reportedly be extradited to the United States rather than South Korea to face criminal charges.
According to a Dec. 7 Wall Street Journal report citing people familiar with the matter, Justice Minister Andrej Milovic in Montenegro plans to grant U.S. officials’ request for extradition. Kwon was arrested in Montenegro in March and sentenced to four months in prison for using falsified travel documents but has also been charged in the U.S. and South Korea for his alleged role in the collapse of Terraform Labs.
Milovic reportedly said the announcement would be made public “in a timely manner”.
This is a developing story, and further information will be added as it becomes available.
Former Terraform Labs CEO Do Kwon may be on his way to the US, according to a report from the Wall Street Journal.
The Journal reports that Montenegro plans to extradite Kwon to the US rather than South Korea. Kwon faces charges in both countries.
Kwon has been held in prison in Montenegro since March after authorities alleged that he falsified travel documents. He was sentenced to four months in prison back in June.
The US Securities and Exchange Commission has an open case against both Kwon and Terraform Labs, alleging the offer and sale of unregistered securities. South Korea charged Kwon with fraud and violations of the country’s capital markets laws.
Both the company and Kwon faced scrutiny from regulators after the collapse of the algorithmic stablecoin TerraUSD (UST). The stablecoin’s failure triggered a $40 billion crash in the crypto market and spurred the bankruptcies of multiple lenders with exposure to UST, including Celsius and Voyager.
Kwon’s extradition was approved by a court last month. Justice Minister Andrej Milovic was given the decision on where to send Kwon. According to local media reports in Montenegro, Kwon attempted to appeal the extradition.
The Journal report cites unnamed sources and quotes Milovic as saying that the “public will be informed of the decision in a timely manner.”
In the US, the SEC and Terraform have gone back and forth in regards to a deposition from Kwon — which Kwon’s lawyers argued was “impossible” — and a summary judgment from Judge Jed Rakoff.
The SEC wants Rakoff to rule on whether or not the tokens offered were indeed securities, as the regulator alleges, so that the decision is not up to a jury.
This week Hitachi is issuing a 5 year, 10 billion Yen ($69 million) digital green bond. In addition to issuing the unsecured tokenized bond, Hitachi developed the technology used to track the green credentials. It created the green credential tracking solution in conjunction with JPX, the Tokyo Stock Exchange owner. They are part of a consortium that includes Nomura and Nomura-founded DLT platform BOOSTRY.
We previously reported on plans for the “Digitally Tracked Green Bond” in November.
Last year the same consortium participated in the first Japanese digital green bond issuance by JPX. However, the size of that green bond was just 500 million Yen ($3.5 million) and its term was one year. The JPX bond proceeds were used to finance renewable energy facilities, and it publishes the green credentials in real time and logs them on BOOSTRY’s iBet for Fin blockchain network. The same blockchain network is used for bond tokenization.
Now Hitachi and JPX Innovation (JPXI) have expanded the tracking system to measure building emissions. It will use the tokenized bond proceeds to refinance the renovation costs of an energy saving building.
Nomura Securities is the underwriter and digital structuring agent. The green bond structuring agent is Mitsubishi UFJ Morgan Stanley Securities. And Mizuho Bank is the bond registry administrator and fiscal agent.
Digital green bond learning curve
Meanwhile, after the previous green bond issuance in June last year, JPX convened 64 organizations to explore the learnings. The group included many of Japan’s biggest securities companies, banks and asset managers.
One of the key issues is the lack of on chain settlement. The first bond was settled free of payment, with settlement done later using conventional bank payment. We’re guessing that might still be the case.
However, given new supportive legislation, we’d expect stablecoins or tokenized deposits to be used in the not-too-distant future. Both the MUFG-found Progmat Coin platform and the DCJPY tokenized deposit offering should be online by mid 2024.
Other tokenized bond issues include unappealing tax treatment and the lack of a secondary market. The Osaka Digital Exchange will launch a solution to the latter point when it starts supporting tokenized securities from Christmas Day.
Exploring the Bitcoin ETF potential approval timeline the 50% discount and 300% rally of GBTC and the implied volatility of the assets
The cryptocurrency sector has been surrounded with speculation about the potential approval of a spot Bitcoin ETF. This presents the opportunity for straightforward access to the asset and the chance to gain exposure through conventional financial channels. The escalating interest from both traditional finance and crypto ecosystems has captured the attention of major players in traditional finance, who are now seeking to seize this opportunity. The approval process for applications has been both lengthy and tedious. Numerous companies originating from the crypto sector, such as Grayscale, have been pioneers in this area, but their applications are still awaiting approval.
The final deadline for other products applying is quickly approaching, and the speculation and interest surrounding this topic are rapidly increasing.
The SEC has the authority to postpone their decision on applications up to three times before making a final determination to either approve or reject them. Ark Invest is set to be the first to reach its final deadline on January 10th, 2024. The simultaneous listing of 9 Ethereum futures ETFs on Monday, October 2, hints at the possibility that the SEC might consider a similar approach in evaluating the approval of a Bitcoin spot ETF. Instead of approving each application by their individual deadlines, the SEC might choose to issue a wider range of approvals at the same time, to prevent showing preference towards any particular entity.
In early 2022, the bear market resulted in GBTC trading at a discount relative to the value of its Bitcoin holdings. After the downfall of Genesis, a branch of Digital Currency Group, which is also the owner of Grayscale, the discount on GBTC intensified towards the end of 2022, hitting a record high of nearly 50%.
Nevertheless, in the summer of 2023, BlackRock’s application for a Bitcoin ETF, coupled with its impressive track record of 575 approvals out of 576 ETF applications and nearly $10 trillion in assets under management, revived the optimism for an eventual ETF approval, leading to a reduction in GBTC’s discount. Shortly after, Grayscale achieved a significant win in its lawsuit against the SEC for denying its transition into an ETF. This victory further confirmed the shifting dynamics in the field.
As a result of these developments, the Grayscale (GBTC) product has acted as a barometer reflecting the market’s assessment of the probability of an ETF approval. This was evident in the 320% price surge of GBTC throughout 2023, outpacing Bitcoin’s 165% increase during the same period. These rising price changes and the discrepancies between GBTC and BTC have become particularly noticeable in the correlation between the assets and their different levels of volatility.
At the point of greatest price divergence between GBTC and Bitcoin, the correlation between the two assets was at -0.27. Such a low correlation indicates that during this specific period, GBTC was trading almost inversely to Bitcoin’s price movements. In the last two years, GBTC’s volatility has reached a peak of 103%, significantly surpassing Bitcoin’s highest peak volatility, which stood at 61%.
Additionally, it’s noteworthy to analyze the trend concerning the approved Bitcoin futures ETFs, BTF and BITO. Over the past two years, the 30-day volatility for these two ETFs has consistently been higher than that of BTC, the actual asset they are intended to track. The heightened volatility experienced by these futures ETFs can be attributed to their underlying structure, where the contracts for the asset are rolled over on a monthly basis. Typically, when a new futures contract is issued, it often carries a premium, but as the expiration date nears, this premium begins to diminish. In the process of rebalancing from one month’s contract to the next, futures ETFs typically buy Bitcoin at a premium, resulting in worse performance and higher volatility.
This dynamic is one of the reasons why a potential upcoming spot ETF would be a more advantageous product. Since the funds in a spot ETF can be redeemed, the closer alignment with the underlying BTC assets would likely result in a more accurate tracking, thereby reducing the higher volatility associated with futures ETFs.
While the concept of a Bitcoin spot ETF has been a topic of conversation for many years, grasping its deep significance is crucial. In contrast to the Bitcoin futures ETF, which was approved in late 2021 and involves derivative contracts, a spot ETF would involve the direct purchase of actual Bitcoin. A spot ETF would pave the way for participants in the traditional market to directly invest in Bitcoin. Despite the uncertain future of a Bitcoin spot ETF’s approval, recent events indicate a shifting landscape and a growing convergence between the traditional financial system and the cryptocurrency market. These developments highlight the evolving dynamics and increasing recognition of cryptocurrencies as a significant asset class.
United Arab Emirates firm Phoenix Group has disclosed a new purchase of hardware equipment from WhatsMiner, aimed at expanding its portfolio of hydro cooling rigs. According to an announcement on Dec. 7, the $380 million deal represents WhatsMiner’s largest order in two years.
Under the agreement, Phoenix received mining equipment valued at $136 million, with an additional option worth $246 million available. WhatsMiner’s line of hydro cooling equipment was released in 2022, with current prices ranging from $1,008 to $2,484, according to the company’s website.
WhatsMiner’s hydro cooling hardware uses a closed-loop water system, preserving the volume and quality of water inside pipes. According to the company, the system offers more efficient heat transfer since water is a more effective heat conductor than air or oil. The benefits of this system include a reduction in operational costs and a minimized environmental impact, the company claims.
Since 2022, Phoenix has been the exclusive distributor of WhatsMiner equipment. This new collaboration, according to Phoenix, is a crucial step for establishing High-Performance Computing (HPC) data centers. It’s unclear where the equipment will be deployed since Phoenix has mining facilities not only in the UAE but also in Canada and the United States.
WhatsMiner is a brand owned by MicroBT, founded by Zuoxing Yang in 2016, a former employee of Bitmain and one of the designers behind its Antminer S9. In October, WhatsMiner released its latest mining rigs with hydro, immersion, and air-cooling systems.
MicroBT presents WhatsMiner M60 Series in Dubai. Source: WhatsMiner.
Phoenix is not only an exclusive distributor of WhatsMiner hardware but also Bitmain’s official Middle East distributor. The company debuted trading on the Abu Dhabi Securities Exchange (ADX) on Dec. 5, with its stock price opening at 2.25 dirhams ($0.60), soaring over 50% from its initial public offering (IPO) of 1.50 dirhams ($0.41). Phoenix IPO subscriptions exceeded the offer by 33 times, with 907,323,529 shares sold for 1.3 billion dirhams ($371 million).
Crypto mining companies have been facing tough times due to rising energy costs and lower Bitcoin prices since early 2022. Mining firm Canaan, for instance, recently raised capital due to a sharp decline in revenue.
ORDI trading has also made the Bitcoin network more congested.
ORDI, a buzzy token on the Bitcoin blockchain, has registered a 204% gain since the start of December, placing it among the top performing crypto assets so far this month.
The reason? Growing enthusiasm for the Ordinals protocol — a way to give normally interchangeable micro units of Bitcoin unique identifiers — allowing them to be tracked, transferred, and imbued with individual meanings.
The growing interest in ORDI is mirrored in Bitcoin network’s transaction fees. They’re at their highest point in over two years as traders speculate on assets within the network’s Ordinals ecosystem.
And ORDI is at the centre of such speculation.
ORDI is a BRC-20 token, a token standard made possible by the Ordinals protocol.
BRC-20 tokens are similar to the ERC-20 standard which lets users create fungible tokens on Ethereum. Uniswap’s governance token, UNI, is an example of an ERC-20 token.
ORDI was the first BRC-20 token created, and just like Bitcoin, it has a total supply of 21 million coins.
Other major BRC-20 tokens include SATS, named after the smallest possible denomination of Bitcoin — a Satoshi — and DOMO, named after the pseudonymous developer who created the BRC-20 token standard.
Although ORDI doesn’t do anything at the moment, other BRC-20 tokens are starting to incorporate utility, such as token voting.
But ORDI has become the main proxy for the success of other assets built on the Ordinals protocol, and the potential the new technology brings to the Bitcoin blockchain.
Top crypto exchange Binance’s decision to list ORDI for trading in early November has also contributed to its rise in popularity.
ORDI currently sits at a $1.4 billion market capitalisation, making it the 52nd-biggest crypto asset.
What are Ordinals?
The Ordinals protocol was created by software engineer Casey Rodarmor in January. The protocol helps generate eponymous Ordinals, or also called Inscriptions. They represent the closest counterpart to Ethereum’s non-fungible tokens within the Bitcoin blockchain.
Unlike many NFTs on Ethereum, Ordinals inscribe their data directly onto the Bitcoin blockchain, making them immutable.
But the protocol has split opinions within the Bitcoin community.
Supporters say it heralds new use cases for the Bitcoin blockchain, which has received criticism in recent years due to its limited functionality compared to other blockchains such as Ethereum and Solana.
But detractors argue that Ordinals clog Bitcoin with excess data, and detract from Bitcoin creator Satoshi Nakamoto’s original vision of the blockchain as a payments network.
Bitcoin Frogs is currently the top-traded Ordinals collection, with an all time trading volume of over 935 BTC — or about $41 million.
And they’re starting to receive mainstream attention.
This month, Sotheby’s is auctioning artwork from BitcoinShrooms, a project on the Bitcoin Ordinals created by the artist known as Shroomtoshi.
ORDI drives Bitcoin fees — and congestion — higher
Since ORDI lives on the Bitcoin blockchain, traders must pay fees in Bitcoin to buy and sell it.
The increased ORDI trading has made Bitcoin more congested, causing transaction fees to rise substantially. The cost to use Bitcoin now consistently sits at its highest level since 2021, according to data from BitInfoCharts.
Over the past week, Bitcoin has generated $26.4 million from transaction fees according to DefiLlama data. That puts it ahead of popular DeFi protocols like Uniswap and Lido.
Data from mempool.space shows that there are currently over 245,000 unconfirmed Bitcoin transactions waiting to be processed.
But every day users of Bitcoin — like those in El Salvador where it’s legal tender — typically rely on a scaling solution called the Lightning network. That makes Bitcoin transactions much faster and cheaper.
Sam Bankman-Fried faces a maximum sentence of 115 years in prison for FTX’s loss of customer funds.
If sentenced to over 100 years, his punishment will match that of serial killers and rapists, child molestors, mass shooters, cult leaders and top gangsters. Only a handful of US fraudsters in history have ever been sentenced to over 100 years. Ponzi scheme mastermind Bernie Madoff was sentenced to 150, but his fraud was the scale of $64 billion versus Bankman-Fried’s mere 10.
With all that in mind, should Bankman-Fried spend the rest of his life behind bars?
The natural inclination of many, myself included, is no. White collar financial crime doesn’t “hurt” anybody — its instruments aren’t guns and intimidation, but meetings and signatures. If they hurt anyone, they hurt faceless corporations and the already rich. Losing your freedom for life for cheating people who have money to lose and “know the risk” feels harsh.
But the thing is, the economic well-being of everyday Americans is becoming increasingly tied with giant corporations.
Americans have long heard from politicians that the economy is powered by small businesses, but this is a misconception. Most Americans now work for large employers — more than a quarter of all US employees work at firms of 10,000 people or more. And these large companies account for more sales of products and services than smaller companies do.
In addition to wages and the cost of goods, corporate activity touches households in the form of their relationships with their suppliers (who in turn employ people), investments and taxes as well. While high-income households benefit more from corporate prosperity than lower income ones do, corporations still dominate the economy and its growth, a trend that’s likely to continue.
In 2021, corporate fraud committed by public companies alone destroyed an estimated $830 billion in value in 2021 — 4% of US GDP that year, a figure greater than the overall GDP growth rate from 2022 to 2023.
When corporate leaders misbehave, their victims usually don’t know it or end up with a neat, sensational, true crime-worthy story to tell. And as such, these victims usually go unstudied. But corporate fraud bears real costs to us all. Corporate fraud means significantly less wealth flows from the economy’s main driver to American households, and it’s impossible to know the true extent to which our emotions, health and relationships are impacted. After all, money is a predictor of health, divorce rate, job satisfaction and longevity, and the correlation between money and quality of life is set to only get stronger as our social fabric continues to fray.
It’s easier to bear losses as a collective than it is individually, which is one explanation for why white collar criminals are prosecuted less aggressively and sentenced to less time when they’re found guilty. In 2022, prosecution of white collar crime reached an all-time low since it started being tracked, and was prosecuted at almost half the rate of drug offenses. A 2016 empirical study found that judges regularly sentence fraud cases at the exact bottom of the sentencing guideline range.
If fraud is punished less because its damage is spread out, the converse should be true as well. In the rare cases when fraud is punished, we should feel no guilt for doing so to the full extent.
For Bankman-Fried to spend the remainder of his prime in prison would serve as an important reminder of two things: that greed still has an effect, and none of us live in a vacuum. Upholding ideals like fairness and interdependence means we’ll sometimes have to act in ways that feel unnatural, especially as life becomes more digital and financialized. Though I feel for Bankman-Fried as a human, he should pay the fair price for his crimes.
Jess Sun is an independent writer and content strategist. She loves bringing good ideas to light, helping the people behind them shine, and bridging gaps in understanding. Follow her on Twitter or LinkedIn. Go to her website to learn about working with her.
The Bitcoin wallet will ship in early 2024 and cost $150 in the U.S., a purchase price that includes the actual wallet, a charging cable, a mobile app, as well as recovery tools.
In an interview with Fortune, Lindsey Grossman, the business lead for Bitkey, touted the wide international availability of the hardware wallet but said that Block was focusing on a select number of countries to promote its new device. She pointed to the U.S., Canada, U.K., Nigeria, Argentina, Mexico, and India as key markets, where Block believes customers would both use Bitcoin for longterm savings as well as cross-border payments.
She declined to specify any internal sales projections for the hardware wallet and said that, currently, Bitkey is not available in any brick-and-mortar stores. However, Block is “definitely open to partnerships and exploring that,” she added.
The opening of Bitkey to the general public follows an open beta for the device announced in June, and it continues Dorsey and Block’s commitment to Bitcoin across the company’s business verticals, despite the cryptocurrency’s lack of centrality to Block’s current quarterly revenue.
Formerly known as Square, Block derives the majority of its profits from its digital wallet Cash App as well as its payments offering for businesses, Square. In the third quarter of 2023, Dorsey’s firm generated a gross profit of $1.9 billion. The profit derived from customers’ purchase and sale of Bitcoin, which Dorsey integrated into Cash App in 2018, was only $45 million.
That said, Dorsey is a noted Bitcoin evangelist, and in 2021, he changed the name of his payments company to Block to signify the firm’s commitment to integrating Bitcoin into its core business.
Since then, Dorsey himself has led a number of investments in Bitcoin-specific enterprises, including miningenterprises. Part of his Bitcoin boosterism is predicated on his belief—one that many in the Bitcoin community share—that the cryptocurrency is a means to open up the world’s financial system to those in developing countries who often struggle to gain access to banks.
Accordingly, Bitkey’s availability in more than 95 countries echoes that ideology, beliefs that trickle down to Dorsey’s employees. “We think that Bitcoin has the highest chance of actually solving true payments and economic problems for the world,” Grossman, the Bitkey business lead, said.
Learn more about all things crypto with short, easy-to-read lesson cards. Click here for Fortune’s Crypto Crash Course.
Following the collapse of Sam Bankman-Fried’s trading empire, Cumberland has emerged as arguably the most important trading firm in cryptocurrency.
Protos analysis showed in 2021 that Bankman-Fried’s Alameda Research and Cumberland had received the majority of all tether (USDT) ever made. Since then, Alameda has gone bust and its largest shareholder, Bankman-Fried, has been convicted of multiple felonies.
When we published the Tether Papers in late 2021, Alameda was responsible for at least $36.7 billion in USDT issuance; Cumberland for $23.7 billion at minimum.
Cumberland is a subsidiary of Chicago-based DRW, named after its founder Donald R. Wilson. DRW is an important commodities trading firm that has previously jousted with the Commodity Futures Trading Commission (CFTC).
The CFTC filed a lawsuit in November 2018 alleging that DRW manipulated illiquid markets, and in an unusual twist, DRW won the case with the court ruling that “it is not illegal to be smarter than your counterparties in a swap transaction.”
Cumberland has focused on the cryptocurrency markets ever since it launched in 2014. Its long history with the industry means that when the Securities and Exchange Commission (SEC) needs a better understanding of “the nature of trading in the over-the-counter market for bitcoin” or other questions in the cryptocurrency market, the agency will turn to Cumberland for a better understanding.
Cumberland serves a wide variety of purposes in the cryptocurrency industry, including market-making, over-the-counter (OTC) trading, venture capital investing, and proprietary trading.
Cumberland’s interactions with big names and shadowy firms
Cumberland was an incredibly important market maker on Binance; the vast majority of USDT issued to Cumberland was sent directly to Binance — approximately 79%. Smaller amounts were sent to other exchanges, including Poloniex, FTX, Bitfinex, Huobi (now HTX), and OKEx.
Cumberland primarily issued USDT on Ethereum, though also issued on Omni and Tron; Alameda Research primarily issued USDT on Tron, though also issued on Ethereum.
Cumberland interacted with a variety of other trading firms as well, including transacting with a web of companies we dubbed ‘Shilong’s Web’ comprised of Paretone Capital, Aoide Capital, Max Victory Wealth Management, and ZB Trade.
Cumberland was also engaged with cryptocurrency lenders, noting in a tweet that it previously borrowed from Genesis.
The crypto firm has begun sending significant amounts of USDT to Coinbase addresses since the publication of the Tether Papers, following Coinbase’s listing of USDT in May 2021. Cumberland has also started interacting more frequently with Kraken, especially using its Tron-based wallets.
Alameda sent Cumberland $1.82 days before bankruptcy
Cumberland and Alameda Research have a series of interesting interactions.
On November 8, 2023 — six days after CoinDesk published its famous piece that revealed Alameda Research was overstating its assets — Cumberland received $1.82 in USDT from Alameda. Three days later, Alameda and FTX declared bankruptcy.
Arkham posted on X (formerly Twitter) the following month that this address appears to be used by liquidators to consolidate assets.
So, what’s up with the $1.82? At first glance this seems to be a strange amount for one trading firm to send to another; it’s not even enough for a Big Mac.
However, this amount closely mimics other stablecoin transactions between these firms:
On March 17, 2023, Alameda Research sent $1.83 in BUSD, $1.82 in DAI, and $1.81 in Paxos Standard (USDP) to Cumberland.
Unlike the November 8th transaction, these were followed by larger transactions, including $2,896,700 in BUSD, $2,107,100 in DAI, and $138,000 in USDP.
On March 13th, 2023, Alameda Research sent Cumberland $1 in USDT.
This was followed on the same day by another $49,929,000 in USDT and $379,078 in USDT the next day.
The earlier transactions almost seem like test transactions, but no larger transaction ever followed the small transaction on November 8th.
A love for algorithmic stablecoins
Cumberland was one of the firms that provided input on the President’s Working Group Report on Stablecoins, making clear that it believes stablecoins should be regulated by banking regulators, reserves should be limited, and stablecoin issuers should be publishing proof-of-reserves.”
In the document An Overview of Stablecoins in the Marketplace, the firm also makes clear that it still believes that Terra does not prove algorithmic stablecoins are dangerous.
“The incentives paid by UST overwhelmed the utility that existed for the Luna taken by itself,” Cumberland wrote. “This was unique to UST and is not representative of the structure of most algorithmic stablecoins.”
Cumberland is also a very active participant with other stablecoin issuers, including USDC, and previously interacted with Binance-peg BUSD before its end.
It’s important to note that none of this behavior is evidence of malfeasance by Cumberland, and a major market-making and OTC desk would be expected to use a variety of stablecoins as a function of its role in the ecosystem.
Got a tip? Send us an email or ProtonMail. For more informed news, follow us on X, Instagram, Bluesky, and Google News, or subscribe to our YouTube channel.
Spot bitcoin ETFs could be just around the corner.
A new Reuters report said that the US Securities and Exchange Commission is working with asset managers to hammer out “key technical details.”
21Shares president Ophelia Snyder said in an interview in late November that the regulator engagement felt different and that the applicants are in a “pattern break.” Together, 21Shares and Ark form one of 13 spot bitcoin ETF applicants.
The SEC has been engaging with the firms on various details in the applications from the surveillance-sharing agreement — of which many applicants named Coinbase. The majority of the applicants also tapped Coinbase as a custodian.
Amendments to applications have steadily poured in, even as the SEC continues to delay its decision on the ETF hopefuls.
ETF experts, including Bloomberg analyst Eric Balchunas and Van Buren Capital’s Scott Johnsson, noted that the amendments are a “good sign.”
Bloomberg Intelligence analyst James Seyffart believes that — if the SEC is looking to approve the applications — a slew of acceptances could take place between Jan. 8 and Jan. 10. Ark and 21Shares bitcoin ETF proposal has a Jan. 10 deadline.
The approvals could even be “lined up” so that the SEC greenlights multiple applications at once. A phenomenon that Balchunas dubbed the “Bitcointucky Derby.”
“What [people] don’t realize is there’s never in ETF history been a case where multiple products that basically do the same thing have launched on same day,” Balchunas said in a post on X.
Bloomberg Intelligence analysts believe that the odds of approval by Jan. 10 are roughly 90%.
“I think the fact we’re seeing very material differences in this round of the spot process versus prior rounds is a very promising indication of a different outcome,” Wood said on a webinar Wednesday.
Aside from Ark and 21Shares, BlackRock, Franklin Templeton, WisdomTree and VanEck have also thrown their hats in the ring. Pando Asset, a Swiss-based asset manager, rounded the applications up to 13 when it filed for a spot bitcoin ETF at the end of November.
Jack Dorsey’s Block (the company formerly known as Square) announced today that it is releasing its hardware Bitcoin wallet, Bitkey, in 95 countries. However, users can only pre-order the device at the moment with shipping starting in early 2024. The company hasn’t specified the price of the product yet. Block’s pitch to Bitcoin holders is […]
Now, the chief executive of U.S. crypto bank Custodia, Caitlin Long, has fanned the flames of a rumor that another country could be about to follow in El Salvador’s footsteps and begin buying bitcoin.
Bitcoin’s historical halving that’s expected to cause crypto price chaos is just around the corner!Sign up now for the free CryptoCodex—A daily newsletter for traders, investors and the crypto-curious that will keep you ahead of the market
The bitcoin price has rocketed higher this year, boosting the price of ethereum, XRP and the wider … [+] crypto market, as excitement builds over a long-awaited bitcoin spot exchange-traded fund (ETF).
Getty Images
“I caught up with a big bitcoiner and investor in bitcoin infrastructure [companies] who said he doesn’t think this rally is all about the spot ETF,” Long, a Wall Street veteran who founded Custodia, previously known as Avanti, in early 2020, posted to X and linking to a September report that Qatar’s head of state had visited El Salvador.
“He thinks it’s about this too,” Long wrote. “I missed this at the time but looking into it this morning, it seems there wasn’t much coverage at the time.”
Qatar and El Salvador signed various agreements during Amir Sheikh Tamim bin Hamad Al Thani’s official visit to the country in September, Qatar News Agency reported at the time.
“The rumors are getting very loud on this,” Max Keiser, an outlandish bitcoin investor who is working with El Salvador on its bitcoin strategy, posted to X, adding without evidence that Qatar’s sovereign wealth fund is “rumored to looking to buy $500 billion bitcoin.”
El Salvador’s president Nayib Bukele this week prematurely celebrated the country’s $120 million bitcoin investment crossing back into profit after years in the red.
El Salvador’s Bitcoin investments are in the black,” Bukele posted to X, around 24 hours ahead of the bitcoin price crossing the $42,000 level that made the country’s bitcoin investments profitable and adding there had been “literally thousands of articles and hit pieces that ridiculed our supposed losses.”
The bitcoin price has regained ground this year following last year’s price crash that wiped $2 … [+] trillion from the combined bitcoin, ethereum, XRP and crypto market.
Bitcoin, SBF, ether and SEC Chair Gensler all came up at the Republican presidential debate on Wednesday night. Pro-crypto candidate Vivek Ramaswamy said U.S. regulation needs to catch up to prevent episodes like FTX founder Sam Bankman-Fried defrauding customers and Binance breaking sanctions laws. Ramaswamy announced a plan to drastically reduce the SEC workforce and relax regulations on the crypto industry, advocating for most cryptocurrencies to be treated as commodities outside the SEC’s jurisdiction. “It’s nothing short of embarrassing that Gary Gensler, the SEC chair, couldn’t even confirm in front of Congress whether Ethereum is a regulated security,” Ramaswamy said. “This is another example of the administrative state going too far.”
Is a game even a game without bots? Pixels CEO doesn’t think so
Some think that bots in games is a sign of the apocalypse, or perhaps just the makers trying to fill up an empty venue to make it look popular.
But Pixels founder and CEO Luke Barwikowski says that conversely, if people aren’t trying to fill your game with bots, then it’s probably because the game isn’t exactly the talk of the town.
“If people aren’t trying to bot your game — it’s not because they can’t — it’s because they don’t care enough to do it.”
According to Barwikowski, if you’re making a game that doesn’t have any bots and flaunting it, that’s not something to boast about.
“It’s not always the flex you think to say you don’t have any bots in an ecosystem,” he declares.
To be fair, bots do bring with them some perks – such as shorter wait times for gamers and a guaranteed opponent whenever you are up for a game.But the bots are starting to take over.
In November last year, anti-botting company Jigger analyzed more than 60 games and services and found 200,000 bots.
About 40% of all GameFi users are bots, and for certain titles like MetaGear, AnRkey X, and ARIVA, it’s a massive 80%. And brace yourself — for Karma Verse Zombie, it’s a mind-blowing 96%.
Web3 Games: The easy pick for crypto firms to throw shade at
Web3 Games have been catching a lot of flak lately, with frequent criticisms including their sky-high failure rates and that many games aren’t much fun.
A recent CoinGecko highlights that three out of four blockchain games have flopped since 2018. This year, a whopping 70% of games launched have bitten the dust. Still, their figures are unusual, suggesting the failure rate in 2022 was a mind-bogglingly unlikely 107%.
Illuvium offers multiple games, including an auto battler. (Illuvium)
Kieran Warwick, co-founder and big boss of Illivium, isn’t second-guessing the numbers, though. He tells Magazine that creating a Web3 game ain’t a walk in the park like releasing a memecoin.
“It makes sense; it’s tough for a game to be successful,” he says. “You need a combination of fantastic gameplay, huge funding and effective marketing,” he declares.
Although he’s on the same page with the masses about NFT games being a letdown.
“Almost every game released has been sub-par when you add the need to create sustainable economic models using bleeding-edge blockchain technology, the likelihood of succeeding declines again.”
Fortunately, Warwick believes there is a ticking clock on when these crazy failure rates in Web3 game reports are gonna turn around.
“Good games also take a long time to build. In the next few years, once the games that have been in development for 3-5 years start releasing, sentiment will quickly shift,” he declares.
Warwick believes there’s no magic moment when everyone’s gonna ditch regular gaming for Web3. He suggests it’s not rocket science; it’s just straight-up logic for when the switch will happen.
GameFi failure rates 2018-2023. (CoinGecko)
“Once gamers experience a blockchain game just as good as its mainstream competitor and have ownership of their assets, they aren’t returning to the game they used to play,” he says.
Meanwhile, crypto analyst Miles Deutscher recently told his 383,000 followers that crypto gaming is still a small fry in the vast gaming world. But that just means it has a lot more potential.
“The total gaming space is projected to hit $610b by 2032. Crypto gaming is currently valued at just $14.5b. That’s a 42x discrepancy. We’re still so early.”
Hot take: Galaxy Fight Club
Galaxy Fight Club is a PvP battle game built on the Polygon blockchain. It has a fairly impressive turnaround time from downloading the game to being able to jump right into the chaos of online shooting with random players in no time.
Getting matched into a game had a similar ease to joining a game in Call of Duty or Battlefield.
Galaxy Fight Club multiplayer action. (Galaxy Fight Club)
You can dip your toes in as a guest, get a feel for the game, or go all in by creating an account linked to your crypto wallet.
If you’re sitting on some NFT characters – you can bring them to the brawl.
However, it is a shame you cannot communicate with other players on your team. Sometimes, you feel like you are left deciphering the thoughts of a character on the screen when you’re right in the middle of virtual warfare.
Not trying to be overly picky, but those attack buttons are a bit off-center. It might feel a tad awkward for the thumbs, especially if you’re used to playing shooter games on those smaller iPhones.
The developers compare it to Super Mario Bros, but instead of facing off against Pikachu with Mario, you’re in for a brawl with an Ape from Bored Ape Yacht Club or a Cool Cat throwing down with a Cryptopunk in the game.
But don’t stress if you’re NFT-less; you can start with a default character and level up from there.
I’m actually on the grind playing the game trying to grab some NFTs for myself. My original NFTs are stuck on a MetaMask account from a phone I lost, and I can’t seem to track down the seed phrase.
Total rookie move.
Galaxy Fight Club Tutorial Mode. (Galaxy Fight Club)
Luckily, getting your hands on NFTs is pretty straightforward when you win matches.
Score a win, and you can grab some Silver Key Fragments. Combine those, and you might even score some lootbox keys to unlock virtual weapons and armor NFTs.
Even better, when you eventually get bored of the game, you can cash in. Everything—your loot, keys, and even those fragments — can be sold on OpenSea or any other NFT marketplace.
Animoca Brands backs The Open Network (TON)
Animoca Brands is going all-in on TON’s blockchain, the fully decentralized layer-1 blockchain originally cooked up by Telegram. They’ve grabbed the top spot as the biggest validator on the blockchain.
Yat Siu, co-founder and executive chairman of Animoca Brands, believes it will help more traditional gamer types make the move over to Web3.
“This strategic investment in TON is a key part of our broader commitment to help onboard the next million Web3 users by facilitating a seamless transition from Web2 to Web3.”
The gaming giant insists it’s not betting on a flop.
“Animoca Brands undertook extensive research before deciding to invest in TON’s ecosystem,” the company declares.
Other News
— Amazon Prime Gaming just joined forces with Immutable’s TCG Gods Unchained. Now, if you link up your in-game account with Amazon Prime Gaming, you score monthly access to some exclusive in-game perks.
— The founder and CEO of G2 Esports, Carlos Rodriguez, joined the board of blockchain gaming metaverse Farcana.
— Fintech company Ramp Network announced that it is integrating its on-and-off ramp products with the blockchain gaming development studio Games For A Living.
Subscribe
The most engaging reads in blockchain. Delivered once a week.
Ciaran Lyons
Ciaran Lyons is an Australian crypto journalist. He’s also a standup comedian and has been a radio and TV presenter on Triple J, SBS and The Project.
The NFT trading platform Tensor, which launched earlier this year, has taken the number one spot in Solana’s NFT marketplace, overtaking Magic Eden in trading volume on the network.
Over the past month, Tensor has seen an NFT trading volume of over $1 million, almost double Magic Eden’s, according to analytics platform TIEXO.
This means that Tensor makes up an estimated 60% of the total NFT trading market share on Solana, with Magic Eden coming in under 30% of total volume.
Magic Eden still has more unique wallet users than Tensor, however, with roughly 116 thousand wallets and a 70% engagement rate compared to Tensor’s 86 thousand wallets and 52% engagement rate.
The implication is that many Tensor traders are trading higher with volumes, while Magic Eden may cater to more casual NFT buyers.
Becoming the Solana NFT leader
According to Ilja Moisejevs, the co-founder of Tensor, the path to building Tensor and attracting NFT traders was not an easy one.
“At first [we did] a lot of stuff that doesn’t scale,” Moisejevs told Blockworks. “We got our first 50 users by literally hopping into the DMs of top traders and asking them to try the product. Many said no, but some said yes, and that was enough to get started.”
Tensor shipped various products in order to appeal to its audience, Moisejevs said, noting that the first version of its product looked similar to the Bloomberg terminal, an approach which appealed to more financial and analytical folks.
“[We] listened to user feedback and kept iterating; we’ve turned the product over like thirty times,” he said.
Tensor’s identity is linked strongly to the Solana ecosystem, Moisejeves added. Even when the price of SOL, Solana’s native token, dipped to $8, the team did not leave for other ecosystems, “We stayed and doubled down,” Moisejeves said.
He adds that in order for Tensor to be successful, Solana itself must be a massive success.
“That’s why we’re not shopping chains and 10x-ing our focus on Solana. We really think Solana can be the chain that brings crypto and NFTs in particular to the masses,” Moisejevs said.
Like Blur — the Ethereum NFT trading platform — Tensor initially started off as a trading platform for pro-traders. Though this cohort of customers is still prioritized by the team, Moisejevs notes that it is slowly moving towards appealing to retail traders as well.
Further, there has been speculation from community members that Tensor would introduce a similar airdrop strategy to Blur. Most recently, community members were encouraged by speculators to purchase the Tensorian NFT, Tensor’s own NFT collection which would give buyers unique access to its pro trading product, and access to exclusive chat rooms.
The Tensorian collection currently has a trading volume of $11.5 million, making it one of the most popular on Solana.
Loyal customers
NFT trader that goes by the pseudonym Weekend Whale told Blockworks that Tensor became an instant ‘home’ for NFT trading after it came around.
“I did a little bit of trading on OpenSea, and then I used Magic Eden quite a bit when it was the dominant NFT market on Solana. When I used ME, I always felt like there was no way from a UI and speed standpoint it would ever scale well enough to be practical for someone of my portfolio size and activity level,” Weekend Whale said.
They note that the collapse of FTX actually played a large role in the decision to became a Tensor trader.
“All I really had after FTX collapsed was my Solana on-chain, and there wasn’t another CEX with anything particularly interesting to offer me, so I was in a perfect position to pivot to NFT trading full-time,” they said.
Tensor was initially presented to Weekend Whale as a marketplace which would be familiar to traders who were used to trading on centralized exchanges, and this proved to be true.
Then there was their belief in the potential for a significant future.
“That’s why I’ve stuck around and stayed loyal despite the hard times we went through on Solana and other marketplaces’ and blockchains’ attempts to lure us away,” Weekend Whale added.
Pseudonymous trader Retired Chad Dev shares similar experiences. After taking an interest in MadLads NFTs he began looking for a platform to purchase the NFT from.
“Everything felt so intuitive with Tensor, I can clearly see the prices with and without royalties, can see how the prices were moving up and the trends, just filter for traits and see how the listings have been doing in the history,” Retired Chad Dev told Blockworks.
This is an essay about the intersection of Web3 and games written by Colleen Sullivan, Co-Head of Venture at Brevan Howard Digital. It’s intended for anyone who enjoys games and is curious how Web3 technologies may impact the gaming industry. This essay is written in a modular fashion enabling readers to skip around and read the sections that are of most interest.
The gaming industry is thriving with 3.38 billion gamers globally and $184 billion in expected revenue in 2023. Gen Z and Gen Alpha — who increasingly view digital and physical experiences as one — devote considerable time to gaming (~15 hours/week). $135 billion was spent in 2022 on virtual gaming items — none of which are owned or tradeable by gamers. In my opinion, it’s inevitable that (younger) gamers will eventually demand ownership of virtual gaming items, and Web3 enables just that. Gaming goes through paradigm shifts approximately every 10 years, and in many respects, the rise of Web3 gaming is similar to the rise of free-to-play (F2P) gaming. I believe that over the next 10 years, most games will incorporate Web3 technologies and that monetization enabled by Web3 will become a dominant business model in gaming. When these paradigm shifts happen, they seem obvious only in retrospect, and this essay is an attempt to pull that future forward.
This essay covers:
Chapter 1: Why I care so deeply about games and why we have an ownership problem
Chapter 2: The size, scope, and make-up of the overall gaming industry
Chapter 3: The definition of game “games” and, more specifically, “Web3 games”
Chapter 4: Why gamers don’t actually hate Web3 gaming or NFTs and how the rise of Web3 gaming is similar to the rise of F2P gaming
Chapter 5: What Web3 uniquely provides to games, including:
ownership of assets
programmability/composability of game assets
community and bringing non-spenders into game economies
royalties for developers and gamers
democratization/UGC on steroids
ownership of the game
mobile games, which generate 50% of gaming revenues, get their own sub-section, which covers the disproportionate impact Apple and Google have on the industry — and how adding Web3 to mobile games may be particularly impactful
Chapter 6: A transparent take on where we are with crypto wallets in the context of gaming and where we need to go
Chapter 7: Why most luxury and streetwear brands will start to operate like video game companies and “Forever Brand” Web3 activations; brand/Web3 collaborations; phygitals/digital twins; RWA in the form of sneakers, hoodies, and hats; and net new monetization opportunities for brands in Web3
Chapter 8: Everything old is just new again and why Second Life is unlikely to get a second life in Web3. Also, why it’s important for game developers to consider money transmission rules
Chapter 9: Why it’s all about the (digital) Benjamins for kids and why we have an “old people don’t understand” problem
Afterword: My good friend Peter Kieltyka, CEO and Co-Founder of Horizon Blockchain Games, closes the essay out with an Afterword
For the full essay, download the PDF version of this report.
Important Legal Information & Disclaimer
The commentary contained in this essay represents the personal views of its author, Colleen Sullivan, and does not constitute the formal view of her employer or its affiliates. It does not constitute investment research. The views expressed in the document are not intended to be and should not be viewed as investment advice. This document does not constitute an invitation, recommendation, solicitation, or offer to subscribe for or purchase any securities, investments, products or services, or any investment fund. Unless expressly stated otherwise, the opinions are expressed as at the date published and are subject to change. No obligation is undertaken to update any information, data, or material contained in the essay. This essay is issued by Colleen Sullivan in a personal capacity.
Tether is one of the most important companies in crypto and also one of the most notorious. Its business is going gangbusters as its namesake stablecoin has swollen to over $90 billion in market value, which lets Tether make fat margins in his era of 5.5% Fed rates. But despite this success, the company is still a villain to many who complain of its slippery morals and lack of transparency.
That’s why it was interesting to hear firsthand from Tether CEO Paolo Ardoino who joined us for Fortune’s Q&A-style Future of Finance series. He shared details about learning to code at the age of eight in his native Italy, and and how he first came to view Bitcoin as a superior form of financial technology. But the most intriguing part of me is what he said about his critics:
“Everyone was supporting FTX—as everyone was cheering for Celsius, for BlockFi, for Voyager, and Genesis, and all the companies that went down in 2022. Even this year, three banks, four banks, Silicon Valley Bank, Signature, Silvergate, and also Credit Suisse, they went bust. So when I hear bankers pointing the finger at us, when I hear other people in the crypto industry pointing the finger at us, I always remind them about what’s happened. They should look in their own house before pointing the finger at us.”
Regardless of how you view Tether, it’s hard not to read this and think “well, the guy has a point.” Even as once-reputable companies in crypto and banking got washed away in the last year, Adroino’s firm has demonstrated remarkable staying power. And given that stablecoins pay no interest to customers, Tether is likely stronger than ever in this high interest environment.
As for competition, the company’s nearest rival is Circle where growth has sputtered to the point where its $24 billion of USDC is worth barely more than a quarter’s of Tether’s stash. Part of this is because Circle must compete with one-hand tied behind its back since, unlike Tether, it has to follow U.S. regulations and try to screen out dodgy clients. But Circle’s runner-up status is also because of its ill-advised decision to park a big chunk of its reserves at Silicon Valley Bank, which triggered a crisis of confidence in USDC.
The other thing that jumped out from the Q&A was Ardoino’s comments on Tether’s murky auditing practices, which has seen it rely on off-brand “attestations” rather than a conventional sign-offs from one of the Big 4. Ardoino says he has tried his best to get a big league audit, but that accounting firms won’t touch Tether because the U.S. government has warned them to stay away from crypto firms.
Ardoino’s explanation is reasonable and, for now at least, there’s no reason to suspect Tether lacks the reserves to back its stablecoins—though in the past those reserves have contained large chunks of Chinese commercial paper and god knows what else. Meanwhile, the company has had little to say about the popularity of its stablecoin with Chinese “pig butchering” scammers, and other faraway rogues. If Tether wants to enjoy the respect Adroino believes it deserves, the company needs to start purging these bad actors, and elevating its moral standards to the level of its business performance.
Robinhood launched crypto trading in the EU with 26 tokens, including some like Solana it had to delist in the U.S. (Fortune)
The abrupt rise in the price of Bitcoin, which is trading near $44,000, wiped out $90 million in futures bets against it. (WSJ)
Worldcoin, the controversial eye-scanning project backed by Sam Altman, announced a development road map that includes more decentralization. (Fortune)
Last night’s GOP debate included a question for Vivek Ramaswamy, who thinks 9/11 and Jan. 6 might be inside jobs, about his crypto policy and plans for the SEC. (CoinDesk)
Bitcoin financial firm Swan raised $40 million to expand lending and other offerings in the institutional sector. (Fortune)
The fundraise was led by Polychain Capital and Hack VC and included contributions from Framework Ventures, Polygon Ventures, Castle Island Ventures and OKX Ventures.
Hapag Lloyd and Vodafone have partnered with Deloitte to use a public blockchain solution for cargo identification and tracking.
In October, Deloitte announced KYX, a combination of know your customer, know your cargo and a specialist IoT device from Nexxiot that attaches to containers. The objective is to digitize supply chain assets. Nexxiot has clients in both the rail sector and maritime sector.
Separately, earlier this year Deloitte announced an identity collaboration with the KILT Protocol, a parachain on the Polkadot public blockchain. KILT is a self sovereign identity and credentials solution.
Coindesk reported that Hapag Lloyd would adopt the solution first followed by Vodafone. We reached out to Deloitte, Hapag Lloyd and Vodafone, but didn’t receive a response in time for publication.
Just like people, objects such as cargo containers need to be identified and have credentials. Hence, the Deloitte solution combines the Nexxiot and KILT offerings.
One of the drawbacks of public blockchains for corporations is the need to use cryptocurrency to pay gas or transaction fees. KILT’s founder, BTE BOTLabs Trusted Entity, allows enterprises to make a bank transfer to prepay for a large number of blockchain transactions.
Meanwhile, Hapag Lloyd has participated in multiple blockchain shipping consortia. That includes the defunct IBM/Maersk TradeLens initiative and Hong Kong-based GSBN where it is a current shareholder. It is also one of the signatories to the Digital Container Shipping Association (DCSA) digitization commitment to ensure that 50% of containers have electronic bills of lading in five years and 100% in ten years.
Changpeng “CZ” Zhao’s tenure as the CEO of Binance may be over, but the exchange giant’s loss could be a boon for the decentralized science (DeSci) sector.
In a comment on X (formerly Twitter) on Tuesday, Nov. 28, the former Binance CEO revealed an interest in the rapidly developing sector.
In November, Cointelegraph reported a United States Justice Department (DOJ) investigation into Binance concluded with a record $4.3 billion settlement by the exchange. As part of the deal, CZ is required to personally pay $50 million to U.S. authorities and step down from his leadership role at Binance.
The transition from head of the world’s largest crypto exchange to man of potentially infinite leisure is unlikely to sit well with the crypto billionaire. The 46-year-old businessman started working in his teen years and expressed no intention to retire before his run-in with the DOJ.
With abundant time and money, CZ’s options are manifold, but should the former Binance chief opt to jump into DeSci, he’ll be joining a dynamic sector encompassing decentralized autonomous organizations (DAOs), biotech, financing, publishing, data storage, foundations and more.
It is also a sector that still has much opportunity. A spokesperson for OpSci, an autonomous research community, told Cointelegraph that DeSci is still in its early days and “finding its footing in the wider scientific community.”
The shape of medicine to come
DAOs are among the major trends fueling the growth of DeSci. Medicine’s next prospective innovation wave has 20 or more DAOs in operation, with more emerging.
One such DAO is VitaDAO, a decentralized collective working to advance longevity research and extend human lifespans. Cointelegraph spoke with VitaDAO awareness steward Alex Dobrin to learn more about the market and what makes longevity science an attractive field of study.
“DeSci offers a new way for people to participate in funding and supporting projects. Instead of relying on traditional methods like for-profit initial public offerings or charity models, DeSci creates a new model,” said Dobrin. “Anyone can contribute both skills and capital while receiving tokens in a more scalable, effective model aligned with humanity since it’s decentralized.”
Dobrin believes that DeSci is particularly important in areas that are either dismissed or forgotten about by the incumbent players.
“The best example is aging research and longevity biotech,” argued Dobrin. “Crypto was also dismissed by the incumbents, but at least anyone could build something from their laptop. Imagine if it needed government grants and required credentials to access expensive equipment and billions of dollars over 10–15 years to deploy a product with the oversight of bureaucratic regulators.”
According to Dobrin, organizations such as VitaDAO can help biotech sciences escape what is known in the industry as “the valley of death.” This valley is said to exist in the gap between scientific discovery and the point at which a pharmaceutical company or venture capitalist is willing to invest.
As a new funding model, VitaDAO and others may bridge that gap, helping to bring novel ideas and innovations to market.
A broken system of misaligned incentives
If you ask DeSci’s proponents why we should decentralize science, they’ll point to the state of the current centralized medical profession — especially in pharmaceuticals.
Tyler Golato, co-founder of Molecule — a decentralized biotech firm inspired by the open science movement — told Cointelegraph that decentralized science can positively impact the medical and pharmaceutical industries.
“Biotech and drug development suffer from a problem of misaligned incentives: patients and researchers who drive most of the value creation are excluded from governance, ownership, upside and consumer choice,” said Golato.
“The majority of the best-selling drugs on the market originated in academic laboratories, but the researchers who invented them and the patients that take them are almost completely disintermediated from the process of their development.”
Gelato argued that better medical outcomes will follow when these incentives are realigned: “Companies favor healthcare economics that require a patient to take a drug every day for their entire life, and are often misaligned with good healthcare outcomes.”
“Decentralization changes this — patients, researchers, parents of children with rare diseases and enthusiasts can contribute funding, work and data to projects in a more open-source way, and be incentivized and rewarded with governance and ownership in projects. This allows for genuinely novel ways to collaborate and develop biotechnology that is fundamentally aligned with cures,” he said.
A grand vision for the future
One of the things that makes DeSci so powerful is its ability to incorporate people from various disciplines and backgrounds. The major contributors in the field often participate as a point of passion and belief.
AthenaDAO contributor Sara Peoples, who also works for the public relations firm YAP Global, is a prime example. Peoples’ career began in law before she transferred to marketing, but at AthenaDAO, she took her knowledge into the field of medicine, working to improve health outcomes for women suffering from female-specific illnesses.
Peoples told Cointelegraph, “There is such a genuine welcoming of anyone who brings a new skill-set to the community, whether their strengths lie within operations, tokenomics, communications and awareness, or the more traditional scientific research background.”
Each individual can help to serve DeSci in the way that best fits their abilities. The dream many within the sector hold is to make lasting changes for the better.
“With DeSci, there is potential to overhaul the traditional model of research and funding, and open these up to become not just more transparent but also more efficient. It could also incentivize research in areas which are chronically underfunded at present — from illnesses which are less common, to even areas which should rightfully be seen as mainstream, but haven’t been adequately funded.”
Peoples describes this move toward greater transparency and reduced gatekeeping as “a total paradigm shift.”
“Women’s health issues are completely underserved, shockingly poorly funded, and with a real poverty of information stemming from an unwillingness to fund the crucial research into women’s health conditions,” said Peoples.
What would CZ do?
If CZ does venture into the DeSci sector, there are plenty of things the former Binance man could conceivably do.
Dobrin of VitaDAO sees the upside to CZ’s recent interest in the field.
“High-profile people like CZ getting interested in DeSci and longevity can draw attention and resources to the cause,” said Dobrin. “Diversity is good. It’s important to stay focused on the shared goal of advancing science and medicine through decentralization, ultimately benefiting humanity’s well-being.”
Peoples said that Zhao is not the only big hitter in crypto taking an interest in the field.
“CZ’s interest in biotech is just one example of prominent figures within crypto signaling their support for the nascent but exciting space of DeSci. We have already seen Vitalik Buterin and Brian Armstrong of Coinbase expressing their interest in the area.”
Babylon has raised $18 million to develop a protocol that lets users put up bitcoin to secure proof-of-stake blockchains.
Polychain Capital and Hack VC led the round, which also drew participation from Framework Ventures, Polygon Ventures, and OKX Ventures.
Bitcoin’s continued price run has coincided with growing dry powder deployment in mining companies. But Babylon’s raise points to investor interest in something beyond funding GPUs: finding new use cases for bitcoin.
Babylon originated in a blockchain lab at Stanford. It spun up a novel way to stake bitcoin as an economic security token on blockchains that use proof-of-stake to reach consensus. Proof-of-stake chains typically use their native tokens for staking — ether secures the Ethereum network, for instance — which can compromise security on chains where the native token isn’t sought-after.
Babylon’s staking service joins bitcoin ordinals as an attempt to put bitcoin to use aside from its being a store of value. A vocal segment of bitcoin’s community contest novel use cases for bitcoin, but Babylon founder David Tse believes there is demand for his product among the asset’s holders.
“I think a good number of them do want to participate in a yield-generating opportunity, and those are the ones we are targeting. So for those folks who really believe bitcoin is just gold, then we just have to, you know, leave them with that belief,” Tse said.
Tse said Babylon will hit testnet in January 2024. The protocol would ideally like to go to mainnet by the time of bitcoin’s “halving,” when bitcoin rewards given to miners are cut in half, in April. Tse noted the mainnet deployment depends largely on the outcome of security audits on Babylon’s testnet.
“Several” bitcoin miners participated in the funding round, Tse said, though he declined to disclose Babylon’s valuation.
