That El Salvador, home of one of the world’s highest crime rates, became the first country to announce it may buy bitcoin, news of which broke during the event to a full standing ovation, just adds to the occasional sense of lawlessness surrounding the asset class.
And yet while this seeming un-seriousness might have hindered the institutional adoption curve of digital assets in the past, that is clearly changing now.
Meanwhile Blockchain.com, already backed by Moore Capital, Lightspeed and Baillie Gifford, raised another $300M last week, pushing their valuation up 73% to $5.2B in just one month! Total crypto market cap may be down 1/3 from its April peak, but Silicon Valley and Wall Street are doubling down.
I rode the group bus to and from the event, made eye contact, and opened myself up to the kinds of conversations that might at first appear to be a waste of time.
In the last year he bought 1,200 Chinese bitcoin mining machines and shipped them to Siberia, where the Russian firm he paid to host them is soft-pedaling the installation, costing my new friend “one million dollars in foregone revenue in the last few months.” He was undeterred by that and by bitcoin’s recent swoon.
“If we can save them a few pennies on transactions, or cut down on some red tape, we can create real value.” Although Mexico regulation is complex and favors large firms, my new friend pointed to Mexican exchange Bitso’s recent “unicorn” status and the purchase of bitcoin by Mexico’s third richest man as tailwinds.
I met a self-described independent capitalist with a vague European accent, who regaled the bus riders with his tale of a 75-year-old hard charging “pure evil” nameless billionaire who had become so mesmerized by DeFi in recent weeks that he had dropped everything to learn how to trade it, and was calling my raconteur almost daily with specific “how to” questions about each protocol.
Closely-held Crusoe Energy just raised an additional $128M from the Winkelvoss brothers, Coinbase and Tesla co-founder JB Straubel, to accelerate the growth of their venture which operates 40 modular data centers mining BTC from otherwise wasted and flared natural gas throughout North Dakota, Montana, Wyoming and Colorado.
Legendary hedge fund manager Stanley Druckenmiller said in a recent speech that what attracted him to bitcoin was the fact that even in the depths of the bear market, 86% of bitcoin holders hadn’t sold.
Dorsey’s retort: “Inspired entirely by bitcoin, we want to do the same thing for social media,” he said, detailing Twitter’s plans to compete with itself with a decentralized social network.
Given the efficiencies already present in existing digital networks, any upstart would need to offer substantial savings to the ecosystem or it will not take share.
“It’s just that in the past it has been hoarded by the banks, and now it’s available to everyone.” I don’t know what Celsius profit margins are, but the largest decentralized bank Maker Dao sports a cost/income ratio of 1%.
Celsius’ native token, which depositors can choose to accept in lieu of stablecoins to boost the interest rate, is just pennies from its all-time high, up 40% this year after 2020’s 50x increase.
“For me, everything changed when I started thinking of myself as a corporation,” said NFL tight end Sean Culkin during a session called “pay me in bitcoin,” which included athletes, artists and musicians who have embraced bitcoin and other digital assets.
The value of cryptocurrency may be derived from the continued willingness of market participants to exchange fiat currency for cryptocurrency, which may result in the potential for permanent and total loss of value of a particular cryptocurrency should the market for that cryptocurrency disappear.
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