Coinbase takes 1st step toward IPO
Bitcoin reached new highs this week, flirting with $24k as news of big investor purchases trickled out. Ethereum has also been on the move, reaching prices not seen since mid-2018. Coinbase took the first step toward an IPO, which would be the first for a crypto company, bringing even more legitimacy to the space. There was another jaw-dropping hack this week, this one involving the personal wallet of Nexus Mutual’s CEO. At the same time, companies like Paxos and mining startup Core Scientific pulled in new capital to expand their services, with the latter hoping to put a dent in China’s BTC mining dominance by adding mining operations across the U.S.
There’s also news about possible clemency for Silk Road founder Ross Ulbricht. A journalist looks back at an enormous sushi dinner from 2013 paid for entirely in Bitcoin — and we’ve got all kinds of quizzes for you to test your crypto knowledge.
On Unchained, Marguerite deCourcelle tells us about her crypto OG roots, how she has translated her work as a fine artist into crypto puzzles and now crypto games and social tokens, and how Blockade Games’s new game, Neon District, takes advantage of crypto’s unique features. On Unconfirmed, Mike Winkelmann, aka Beeple, gives us the scoop on the $3.5 million auction he had in his digital art — and how he thinks NFTs could be a game changer for artists.
This Week’s Crypto News…
Bitcoin has spent the week reaching new all-time highs, breaking through $20,000 and $21,000 on Wednesday, and then surpassing $22,000 and $23,000 on Thursday. Bitcoin options’ daily trading also surpassed $1 billion for the first time Thursday.
As the price of Bitcoin surges, Guggenheim Investments global chief investment officer Scott Minerd said on Bloomberg TV that he believes the fair value of the cryptocurrency is far from being achieved, pointing to “rampant money printing” and Bitcoin’s scarcity as reasons to think the price could eventually reach $400,000.
Meanwhile, U.K.-based Ruffer Investment confirmed it had accumulated $744 million in Bitcoin in what it is calling a hedge against “some of the risks that we see in a fragile monetary system and distorted financial markets.” Also, a U.S. hedge fund that specializes in volatility bets has quietly purchased more than $600 million in cryptocurrencies, including Bitcoin, with plans to bring its holdings of Bitcoin and Ethereum to $1 billion by 2021. Eric Peters, CEO of One River Asset Management, foresees a generational allocation to cryptoassets, adding, “Covid-19 provided the ultimate catalyst for that transition. This is the most interesting macro trade I’ve seen in my career.”
On Wednesday, on-chain Bitcoin analyst Willy Woo tweeted that, based on his charts, $100k is “a ridiculously low target at the current trajectory.” Woo said he views $55k Bitcoin as the next landmark, which would turn the cryptocurrency into a $1 trillion macro asset.
After reports this summer that it planned to go public, Coinbase filed a draft Form S-1 to the Securities and Exchange Commission, the first step to having an initial public offering. If it is approved, it will be the first crypto company to go public, a huge milestone for the industry. This week, the company also welcomed a new board member, Kelly Kramer, who was previously executive vice president and chief financial officer at Cisco; she will chair the audit and compliance committee. Also, Marc Andreesen, cofounder and general partner at Andreesen Horowitz, will take a more active role on the Coinbase board, transitioning from board observer to board director.
CME Group plans to list Ethereum futures in February, pending regulatory approval. CME’s announcement comes as Ethereum reached its highest price since May of 2018, briefly hitting $672 on Thursday. CME, which has previously said it was focusing solely on Bitcoin futures, seems to have had a change of heart due to the growth of its futures and options market.
The day after Bitcoin surpassed $20k, Paxos announced a $142 million series C investment led by Declaration Partners, an investment advisor to the family office of billionaire David Rubinstein of the Carlyle Group. Other prominent investors include PayPal Ventures. With a total of $240 million in venture funding, Paxos is now one of the highest funded firms in crypto, though the current valuation was not disclosed. The company plans to use the investment to develop new products for institutional clients and entice Wall Street to use its settlement and crypto products.
The Daily Beast reports President Trump is considering giving clemency to Silk Road founder Ross Ulbricht, who is serving life in prison without the possibility of parole for computer fraud, money laundering, and drug charges tied to his role as founder and administrator of the first online drug market. Sources tell The Daily Beast the President has “privately expressed some sympathy for Ulbricht’s situation,” and some prominent Republican Party figures have recently said that Ulbricht’s sentencing was unjust.
A Fortune story by Jeff Roberts reports that U.S. companies are attempting to challenge China’s dominance in cryptocurrency mining. For Bitcoin, 65% of the hashrate comes from China, while the U.S. is in second place, at 7%. The startup Core Scientific raised $23 million this week for mining operations in Georgia, North Carolina and Kentucky. Its investor, Digital Currency Group subsidiary Foundry, plans to spend $100 million on mining ventures. Meanwhile, Crusoe Energy, Great American Mining, and Upstream Data are using energy waste from oil-and-gas activities to run crypto miners. However, these startups have to counter bad impressions left by a previous wave of Bitcoin miners who descended on small communities with cheap energy and promising jobs, only to pack up without a trace.
$8 Million in NXM Tokens were stolen from the personal wallet of Hugh Karp, CEO of DeFi insurer Nexus Mutual. The attacker is a Nexus Mutual member, but the project tweeted that the mutual itself “is not impacted; the pool of funds and all systems are safe.” The attacker gained remote access to Karp’s computer, then tricked Karp into signing a transaction that transferred funds to the attacker’s address. The hacker has since been attempting to convert the funds into Bitcoin and has cashed out at least half the stolen funds.
In 2013, Kashmir Hill, then a reporter for Forbes, tried living only on Bitcoin for one week as an experiment. It proved difficult. When she decided to finish off with a sushi blowout at San Francisco restaurant Sake Zone, one of the few eateries accepting BTC, her online invitation to a few Bitcoin enthusiasts turned into dozens of attendees. Still, Sake Zone owner Yung Chen graciously accepted the $1,000 payment in 10 BTC. Now, eight years later, for The New York Times, where she is now a reporter, Kashmir checked back in with Yung, who said, “I sold some. I feel so bad. Now, I just keep it. I just put it there like stock and wait. The Bitcoin has become one of the major saving assets in my portfolio. It’s a lot. It’s close to like a half-million dollars in my account.”
For some reason, this was the week of crypto quizzes, with the first one being kicked off by Larry Cermak, the director of research at The Block, who was looking for an intern. Along the way, he found a lot of already highly accomplished people in the space would make fine interns. This inspired Nic Carter of Castle Island Ventures to make his own quiz, a Bitcoin-themed one. And finally Frank Chaparro of The Block also created one, for crypto and business journalists. I have to confess Frank’s is the only one I’ve taken so far — I’ve had an extremely busy few weeks! — but I was happy to score at the 90th percentile. Enjoy testing your crypto knowledge!