In this patch of your weekly Dispatch:
- The US sanctions Tornado Cash
- Have we hit peak inflation?
- Crypto VC’s big H1
The Big Idea
100 Weeks Later…
On September 4, 2020 we published the zero edition of Dispatch. The crypto landscape was quite a bit different then, with only the first glimpses of the bull run coming into view. Just a couple weeks later, MicroStrategy announced their big Bitcoin buy and a new narrative was born.
By Dispatch #15, the industry had reclaimed the BTC $20,000 price point that had been so elusive for so long. By Dispatch #22, Tesla had supercharged the bull run with their BTC purchase, but 15 editions later, Elon had already broken our hearts by reversing course based on ESG concerns.
Dispatch #39 covered the remarkable announcement that El Salvador would make Bitcoin legal tender, but by Dispatch #52 we were talking about the battles between the industry and the SEC that have been somewhat omnipresent for the last year.
Dispatch #58 came in the thick of the fall surge, as Bitcoin claimed a new all-time high, and on Dispatch #62 we told the unbelievable story of a group of internet strangers raising $50M to (almost) buy the Constitution.
By Dispatch #76 we were discussing price not mattering, and in #87 we covered the collapse of Terra. As we write today, a new set of themes are driving the conversation: persistent global inflation (and the Fed’s response); geopolitical strife and competition; the end-game of US crypto regulation.
What’s clear, however, is that 100 weeks from that first issue, crypto has grown in a way that might even have been surprising to us back then. More people, more talent, more ideas, more allies, and more energy. This bear market doesn’t feel like crypto winter because believers and builders haven’t stopped.
And we don’t intend to either. Over these past 100 weeks, Nexo launched a swap feature, an NFT lending desk, an investment arm, and a sophisticated trading platform; collaborated with Mastercard and Fidelity Digital Assets; and became the only audited crypto lender. Following a few tumultuous months, we’ve proven that Nexo is the place to entrust your assets to and this is why we’re now nearing five million users. 🤯
Yet somehow, we feel like we’re still just getting started. Thank you for being on this journey with us, and here’s to the next 100!
The Latest In…
In what has to be the biggest news of the week in the crypto industry, the US Treasury Department's Office of Foreign Assets Control has placed sanctions on Tornado Cash, the popular crypto mixing service. The accusation is that Tornado has been used by North Korean state-sponsored hackers to launder illicit funds, but the implications are much bigger. For the first time, a piece of code rather than an individual is being sanctioned. The legal battles are likely to be numerous, but for now it’s forcing major reflection in the crypto industry about what decentralization really means.
The Latest In…
Given how much Federal Reserve policy is shaping markets from TradFi to crypto, Wall Street was delighted when July’s inflation numbers came in lower than expected. Year over year US inflation grew 8.5%, but month over month headline inflation was flat at 0%. This is contributing to a believe held by many in markets that we’ve seen peak inflation (and consequently, peak hawkishness from the Fed). What do you think: past the peak or still in sucker’s rally territory?
The Week’s Most Interesting Data Story
Crypto VC Continues
One of the things that has made this crypto bear market so different than the winter of 2018/2019 is the continued presence of funds with dry powder. The impact? Interesting, novel ideas that can expand real use and utility of crypto continue to be able to find capital (albeit at lower valuations than might have been expected six months ago). In fact, nearly the same amount of capital was deployed into crypto companies in the first half as was invested in ALL of the then-record-breaking 2021. If this keeps up, we have no doubt that crypto can innovate its way out of any market cycle.
P.S. Shout out to Messari and Dove Metrics for compiling the data. We forgive you for not including Nexo Ventures’ logo.
What the Community Is Discussing
Mailchimp is back to censoring crypto companies.
Do you agree?
What to Watch for Next Week:
- Will the crypto market momentum continue?
- Will Treasury clarify its positions on key questions surrounding Tornado Cash sanctions?
- Will the Fed start to change its thinking about fall rate hikes?