Unfortunately, I could not write my newsletter last week due to my work schedule and travel commitments. Given the recent developments in the banking and crypto industry, I am committed to ensuring an article is posted every Thursday.
Bitcoin 28k
As recent events have shown, the banking system is far from perfect. The collapse of Silicon Valley Bank, First Republic Bank, Silvergate, and Credit Suisse Bank has left many investors questioning the stability and reliability of traditional financial institutions. In response, people are increasingly turning to Bitcoin, which has seen a surge in value, breaking the $28,000 mark for the first time since June 2022.
Bitcoin's rise in popularity reflects the growing sentiment that decentralization is the way forward. It serves as a reminder of the shortcomings of the central banking system, which has been printing more money and ultimately leading to inflation.
Bitcoin was created in the aftermath of the 2008 financial crisis to address the shortcomings of traditional finance. Its decentralized nature and peer-to-peer transactions offer an alternative to centralized financial institutions, giving people greater control over their finances. The past few weeks have demonstrated Bitcoin is becoming an increasingly attractive option for those looking to safeguard their wealth and secure their financial future.
Today, users who completed items on the checklist received an airdrop of Arbitrum tokens. This layer 2 scaling solution has been designed to alleviate congestion and gas fees on the Ethereum network. Instead of executing transactions on layer 1 Ethereum, users can now spend their transactions on Arbitrum, which is faster and cheaper. Currently, there is a total value locked of $2.11B in Arbitrum protocols, with GMX and Uniswap taking the lead with $495M and $300M+. In addition, Arbitrum holders will have governance over the protocol, which includes upgrades, inflation adjustments, and grants. The airdrop supply will be distributed as follows:
12.5% to Arbitrum users (airdrop)
43% to the DAO treasury
27% to the Offchain Labs team and future advisors
17.5% to Offchain Labs investors
In a recent move, Florida Governor Ron DeSantis proposed a law banning the use of CBDCs (central bank digital currencies) within the state. Interestingly, this comes at a time when the Biden administration is currently studying the possibility of introducing a CBDC at the federal level. Governor DeSantis's proposal would not only restrict the use of CBDCs issued by any overseas central bank, but it could also inspire other states to adopt similar measures. This move continues last year's call by President Biden for the federal government to research the use of CBDCs. With the ongoing debates surrounding CBDCs, it remains to be seen how this will all unfold.
What’s Happening in the Crypto Space
Coinbase has received a notice from the SEC indicating its intention to pursue enforcement action against the company's staking services and aspects of its spot market, Coinbase Prime, Coinbase Wallet, and Coinbase Earn. Despite sticking to US laws, Coinbase has had to slow down its operations to remain compliant, sacrificing its competitive edge. The company has invested significant time and resources in working with the SEC to achieve regulatory clarity in good faith. Thus, receiving a wells notice has come as a shock. In the past nine months, Coinbase has held over 30 meetings with the SEC, providing detailed information about their business to ensure optimal regulation. However, the SEC has not received any feedback on the necessary changes or registration procedures. Coinbase took a step forward in 2018 when it acquired two broker-dealer licenses to comply with SEC regulations. In addition, Coinbase has successfully obtained permits and regulatory approval from countries worldwide, including Singapore, Ireland, Germany, and Australia.
I hope you're all enjoying my crypto and digital asset newsletter! I'm eager to hear your thoughts on any subjects you'd like me to dive into over the next few weeks. Feel free to share your ideas with me!
Not Financial Advice
Please note that all opinions in my newsletter are strictly my own and should not be considered financial advice. It is important to conduct your own research and make your own investment decisions. Always consult a qualified financial advisor before making any investment decisions.