BitGo: Crypto Water Cooler — Apr 3
GM. It’s Wednesday, April 3.
Newsmakers
From Visionary to Villain: Finding Closure After SBF’s Sentencing
The crypto industry can perhaps find some measure of closure in last week’s sentencing of Sam Bankman-Fried (SBF) to twenty-five years in federal prison. Sitting atop new highs, the industry can say it rose from the ashes of one of the largest financial crimes in U.S. history. Opinion on the sentence was divided, but there was widespread agreement that SBF did little to help his case. In a defense characterized by incoherent ramblings and non-apology apologies, he insisted to the end that he could have righted the ship if it weren’t for those meddling bankruptcy lawyers.
The victims of his crimes may be less sanguine; Judge Lewis Kaplan noted that SBF lost $11B of other peoples’ assets. Even if victims will likely , eventually, be repaid in full, they’ll have missed out the recent runup, which in a way, their losses helped to create.
That’s just one of many ironies in this $32B riches to rags story. SBF dreamt big, but the collapse of FTX miners sent markets to a two year low . He positioned himself as an advocate for regulation as a path to mainstream adoption, frequenting the halls of Congress and making over $100MM in donations to lawmakers.
But it was the scale and scope of his crimes that steeled the spines of regulators around the world, pushing MiCA , the world’s first comprehensive legislation, across the finish line in the EU and sparking new laws in many other jurisdictions. U.S. SEC enforcement actions increased 50% in 2023, the year following the FTX collapse. And while the country still lacks comprehensive legislation, the SEC’s begrudging approval of spot Bitcoin ETFs opens the door to an industry not so far from what SBF envisioned. He just won’t be presiding over it.
Read more →The Atlantic ($)
Mining Industry Retrenches as Bitcoin Halving Approaches
The quadrennial Bitcoin halving, slated to occur in sixteen days , will cut block rewards for miners in half from 6.25 BTC to 3.125 BTC. Miners have been making a number of moves to protect their profits.
It currently can cost $10K to $15K to mine one BTC; some observers believe costs may increase to over $40,000 post-halving. Miners have been pulling in record profits of about $78MM/day in 2024, which should provide some cushion. Nonetheless, the event may spell trouble for smaller operators as well-capitalized miners snap up new facilities and machines, cut costs, and diversify business models.
Marathon Digital (Nasdaq, MARA) acquired two new mining facilities in Texas and Nebraska in January and recently announced an agreement to purchase another in Texas. CleanSpark (Nasdaq, CLSK) acquired three data centers in Mississippi in February.
Outside the U.S., Bitfarms recently bought land in Paraguay that will give it access to renewable hydropower. Marathon has also expanded into Paraguay and Abu Dhabi and is considering Africa . Smaller firms will likely spread out to geographies with cheaper power but will have to weigh the risk of less reliable electrical grids.
Research from Blocksbridge Consulting shows a dozen publicly traded miners combined to spend $1B+ on state of the art mining equipment in 2023. One knock-on effect is that thousands of older units will be sold to companies in developing countries such as Paraguay, Uruguay, Tanzania, and Ethiopia .
Hut 8 Mining (Nasdaq, HUT) merged with US Bitcoin Corp late last year and closed that company’s mining site in Alberta, Canada. Both Hut8 and Hive Digital Technologies are expanding into providing infrastructure for the high-powered computing needed by AI applications — similar to the playbook followed by Core Scientific, which is emerging from bankruptcy and providing computing power to high-profile AI cloud startup CoreWeave.
Read more →Blockworks
Gamified Work: How Gamers Could Help to Improve the World’s Infrastructure
According to Manpower’s 2023 Global Talent Shortage report , four-fifths of companies, worldwide, are struggling to find skilled labor. Singapore’s Digital Entertainment Asset (DEA), owner of the PlayMining GameFi platform, has an answer: “gamified work .” A pilot project, PicTrée Grid Grab: Capture the Current, is set to launch a series of demonstrations in Maebashi, Japan beginning April 13.
The game, developed in collaboration with TEPCO, the world’s fourth largest electrical power company, and Greenway Grid Global, a power utility business development venture, is presented as an opportunity to save the world with photography. Grid Grab’s “inspect to earn’’ business model incentivizes players to walk the neighborhoods where TEPCO provides power and photograph the electrical infrastructure in a battle game between the Ampere, Volt, and Watt teams. Teams can score by amassing photos, earning Amazon gift certificates and DEA’s DEAPcoin tokens for their efforts.
DEA is working on gamified work in other industries. It has an upcoming collaboration with robotics company Rita Technology to gamify waste management, and investment from Japan’s second largest telecom operator, KDDI, will help to create games to reduce CO2, prevent disasters, improve quality of life for the elderly, promote animal welfare, provide employment for people with disabilities, and fuel local revitalization.
Read more →Alexa Blockchain
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Midweek Market Pulse
Total Market Cap: $2.45T — 7 day change as of Tuesday 4/2/24 12 PM EST: -7.6%
The crypto market took a pronounced downturn as Q2 2024 opened with the total crypto market cap dropping 7.6% to $2.45T. Top assets Bitcoin (BTC, -7.8%) and Ethereum (ETH, -9.8%) are trading lower, possibly in sympathy with the equity market, which is selling off as hot inflation data and lowered expectations that the Fed will drop interest rates in June have cast a “risk off” mood over the broader investment community.
Other popular layer-1s like Solana (SOL, -6.9%), Avalanche (AVAX, -17.3%), and Cardano (ADA, -12.1%) also fell, but several other altcoins picked up the slack with major gains.
Bitcoin Cash (BCH, +32.2%) (born from a Bitcoin fork in 2017) hit its highest levels since November 2021. BCH has its own halving today and also garnered a lot of attention with the publication of a contentious new book by early Bitcoiner-turned-BCH-proponent Roger Ver, leading to a high-profile exchange between Ver and Blockstream CEO Adam Back.
Meanwhile, Litecoin (LTC, +19.7%) is higher for very different reasons. In documents pertaining to the CFTC’s suit against KuCoin, the regulator refers to Litecoin as a commodity, theoretically placing it outside of the purview of the SEC.
Elsewhere, Ethereum layer-2 Mantle (MNT, +34.4%) hit an all-time high as it launched its rewards system , allowing users to lock their MNT into vaults to earn rewards. In the world of meme coins, Dogwifhat (WIF, +20.8%) shook off the market malaise and continued to climb past an incredible $4B market cap, making it the 29th-largest crypto by market value.
The Last Word
Gamification
Noun
: A method of design that uses elements of game play to increase engagement, productivity, and learning among other things
/ The term “gamification” gained currency in the internet era, but its concepts have long been used in industry, education, and the military.
About BitGo
BitGo provides the most secure and scalable solutions for the digital asset economy, offering regulated custody, borrowing and lending, and core infrastructure to investors and builders alike.
Founded in 2013 — the early days of crypto — BitGo pioneered the multi-signature wallet and later built TSS to improve upon other companies’ MPC offerings. Between multi-sig and TSS, BitGo offers the safest technology on the market and safeguards over 600 tokens across a wide variety of blockchains.
Over the years, BitGo has expanded from offering wallets into providing a full-suite solution that lets clients hold assets safely and then put them to work.
BitGo launched BitGo Trust Company in 2018, providing fully regulated, qualified cold storage to complement BitGo Inc’s original hot wallet solution. In 2020, BitGo launched BitGo Prime, which allows its clients to trade, borrow, and lend. Moreover, BitGo also provides access to DeFi, staking, NFT wallets, and beyond, and serves as the world’s sole custodian for WBTC, or wrapped Bitcoin.
Today, BitGo is the leader in digital asset security, custody, and liquidity, providing the operational backbone for more than 1500 institutional clients in over 50 countries — a list that includes many regulated entities and the world’s top cryptocurrency exchanges and platforms. BitGo also processes approximately 20% of all global Bitcoin transactions by value.
For more information, please visit www.bitgo.com .
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