Bitcoin 2022 Recap & Highlights

Saturday marked the end of Bitcoin 2022, the largest Bitcoin conference/event in history, annually hosted in Miami, Florida.

The event was home to several product launches, company announcements, and panel conversations featuring some of the crypto industry's favorite thought leaders. In other words, there's a lot to catch up on.

Here are the highlights:

A buzz around mining: For the mining industry, Bitcoin 2022 was a moment to take center stage after spending previous conferences more in the shadows. The sector took over almost half the exhibition space at the show, and there were plenty of lively discussions and some interesting announcements, including Blockstream and Square breaking ground on a solar and battery-powered mine in Texas. Here are more mining takeaways, courtesy of CoinDesk.
Peter Thiel went off: The co-founder of PayPal called Warren Buffett “a sociopathic grandpa from Omaha," threw cash into the crowd, and publicly shared his Bitcoin “enemies list” that included JPMorgan's Jamie Dimon and BlackRock's Larry Fink. He also made some snarky comments pointed at today's financial regulators, the CCP, and "woke" tech companies.
Block takes on the Lightning Network: Payment giant Block announced U.S. users can soon receive Bitcoin via the Lightning Network, the speedy, low-cost settlement layer for Bitcoin. The company also announced CashApp users can choose to be paid in Bitcoin.
Robinhood flexes its crypto arm: After four years of allowing users to trade cryptocurrencies, Robinhood (HOOD) is finally launching its wallet and will begin to enable Bitcoin withdrawals. Additionally, the company said it will add support for Bitcoin transactions on the Lightning Network.
Regulatory progress: Samson Mow, the former chief strategy officer of Blockstream who stepped down in March to focus on “nation-state Bitcoin adoption,” brought legislators from around the world on stage at Bitcoin 2022 to highlight regulatory progress being made to encourage adoption.
Strike steals the show: In what was perhaps the biggest, most memorable, and most impactful announcement from the conference, Strike CEO Jack Mallers said that the company has partnered with three of the world’s largest payments providers, Shopify, NCR and Blackhawk. This will enable Bitcoin payments at 400,000 storefronts (including big brands like Mcdonald's and Whole Foods) and all U.S. Shopify sites. The integrations essentially eliminate legacy banks from the payments process, saving merchants on fees and enabling privacy for shoppers.

From Bitpay and Kraken (discussed last week) to Block and CashApp, Robinhood, NCR, and Shopify, it's been a historic month for Bitcoin adoption, ease of use, and utility all thanks to the Lightning Network and game-changing companies like Strike.

Coinbase 'Increasing Transparency' for New Listings with Q2 Asset Roadmap

There could be as many as 50 new tokens listed on Coinbase between April and June, as America’s largest crypto exchange reveals a list of assets under consideration.

According to a blog post from Coinbase, the exchange is publishing the list “as part of an effort to increase transparency by providing as much information symmetry as possible.”

While your common investor may take this as "good news," – yay more tokens! – there is something to be said here. We cannot forget that just because Coinbase lists something, it doesn't necessarily mean the token is worth your money. As @PastryEth points out, there are some questionable – dare we say s***coins – being considered here.

Interestingly, hours before the post was made, an Ethereum wallet purchased more than $400,000 worth of tokens on the list. Since the trading activity is publicly viewable on the Ethereum blockchain, the public discovered that the wallet was trading up until three minutes before the list was made public. The tokens purchased by the wallet increased in value by 42% less than 24 hours after the announcement.

Related: Robinhood appears to be adding four cryptos including Shiba Inu and Solana

Crypto Startup Wyre Being Acquired by Payments Company Bolt for $1.5 Billion

Bolt Financial, an online payment provider, is acquiring Wyre, a crypto-based payments platform for $1.5 billion.

First covered by WSJ and later confirmed by Bolt, the deal represents the largest crypto M&A deal in history, behind Galaxy Digital's $1.2 billion pending acquisition of BitGo.

What Is Bolt?
Founded in 2014 by Ryan Breslow, Bolt created a way for merchants to compete more directly with Amazon's one-click buying experience. It allows shoppers to create a single Bolt account that can be used on any company that uses the software.

To date, the company has raised ~$1.3 billion in venture capital, and was valued at $11 billion.

What Is Wyre?
Wyre provides APIs and infrastructure to merchants who want to build crypto businesses by allowing users to exchange fiat for cryptocurrencies. They have worked primarily with exchanges and NFT marketplaces to date.

What's The Big Deal?
Although crypto is in the news constantly, consumers have been hesitent to use digital assets as a means of traditional payment. With the acquisition of Wyre, Bolt plans on changing that by integrating Wyre's capabilities with Bolt's technology and entrenchment in existing companies payment processes.

As the digital payment provider space heats up with the likes of PayPal, Apple Pay, and Block's CashApp, Bolt is going for more of a "buy then build" approach.

"With Bolt and Wyre combined, we will bring Coinbase-like functionality to all of commerce, and in the process, introduce cryptocurrency to a new generation of merchants and consumers."

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The Metaverse: Coming Soon To A Child Near You

Last week, The LEGO Group and Epic Games announced a partnership to build out a kid-friendly metaverse, one that would allow for children and families to engage in digital experiences in a safe way. We shouldn't need to explain who The LEGO Group is, but for those who don't know, Epic Games is the maker of one of the most popular games in the world, Fortnite.

This week, in a further commitment to the project, Epic Games announced that they have raised $2 billion from Sony and KIRKBI (the holding company behind The LEGO Group). This funding round gives Epic a valuation of $31.5 billion.

Why A Kid-Friendly Metaverse?
As we have seen with the success of Roblox (RBLX), the $25 billion behemoth that creates an online platform for children generally between the ages of six and fourteen, focusing on building games for children can be a lucrative business.

With all of its success though, Roblox has been accused of widespread pedophilia, child abuse, and illegal gambling, by short sellers and journalists. It makes sense then that Epic Games is strongly highlighting that their metaverse will focus on three components:

Making children’s safety and well-being a priority
Safeguarding children’s privacy
Equipping children and adults with tools that give them control over their digital experience

But... Is There Crypto?
Interestingly, what is missing from all of these announcements is how this relates to crypto. Sure, saying metaverse is cool, but actually implementing it with a blockchain, NFTs, or a cryptoasset is a different story.

Although this announcement wasn't clear on the matter, Epic Games has discussed the metaverse and NFTs positively in the past.

The Competition:
This funding represents one of the largest investments to date into the metaverse and easily the largest focused directly on children, but there is still plenty of competition (and dollars) entering the scene:

Niantic, the creator of Pokémon Go, raised $300 milllion last November to create a "real-world metaverse"
Genies, which we covered two weeks ago, recently announced the raise of another $150 million
Improbable also raised $150 million this week
And of course, we can't forget Meta, which has committed billions of dollars to becoming the overlords of not only the physical but also metaphysical world

Why This Matters:
If you're like us, you are both excited and worried about the metaverse. On one hand, we see some of the largest companies in the world investing directly into the metaverse, which can certainly fuel crypto adoption. On the other, we have some of the largest companies in the world structuring how our children will potentially spend most of their waking hours.

The Q-Trap

After last week's essay talking up Ethereum post 2.0 merge, former BitMEX CEO Arthur Hayes is back this week with a bearish view for crypto in the short term.

The former investment banker claims crypto is moving in tandem with U.S. technology stocks and Russia’s invasion of Ukraine will damage them both. While he remains bullish on crypto prices over the long term, he puts forward the view that they’re standing on the precipice of a “calamitous outcome.”

The premise is based on the idea that if the Nasdaq 100 drops, it will drag down crypto with it. He puts forward a range of charts showing the correlation between traditional markets and crypto to back up this suggestion.

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REGULATORY FRONT

Important Celsius Update For U.S. Users

By the end of this week, crypto-lender Celsius will stop offering U.S. users crypto interest accounts.

According to an announcement from the company, starting on April 15th, only accredited investors will be able to deposit tokens into Celsius to earn rewards. Any existing deposits from unaccredited investors will continue to earn interest (which as of today can be as high as 18%), but any new deposits will not.

Users of course were quick to point out the hypocrisy of the SEC in only allowing a certain class of individuals to receive passive income on their investments.

Celsius joins the ranks of companies – such as BlockFi and Nexo – which regulators say are offering interest accounts that resemble bank accounts but without FDIC insurance.

This all comes only a week after Celsius claimed that they hold over 150,000 Bitcoin... more than Coinbase, Microstrategy, and Galaxy Digital.

Ethereum Dev Virgil Griffith Sentenced To 63 Months For North Korean Crypto Expedition

Virgil Griffith, a prominent Ethereum developer who gave a presentation at the Pyongyang Blockchain and Cryptocurrency Conference in 2019 has been sentenced to 63 months in jail for "conspiring to violate the International Emergency Economic Powers Act (EEPA)." Virgil will also have to pay a $100,000 fine.

The EEPA prohibits U.S. citizens from "exporting goods, services or technology to sanctioned countries." Prosecutors accused Virgil of jeopardizing U.S. diplomacy and weakening economic sanctions intended to pressure a hostile foreign power.

The judge on the case said he reached the sentence after weighing the need to set a punishment to deter others from violating sanctions.

Now, Virgil has a checkered history... no doubt about it. But whatever your thoughts are on the matter, it's worth highlighting the U.S. government's heavy handed approach to individuals in comparison to their buddy-buddy, slap-on-the-wrist approach to large corporate banks such as this case.

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