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📈 Ethereum to $10k

  • April 5, 2022

Good morning! This is your Tuesday edition of Crypto Dispatch.

Today, we start with an update on the hacker who stole $625 million from the Ronin bridge. In our last edition, we mused that the thief didn’t have a plan for all that stolen crypto since they had deposited some of it onto centralized exchanges. 

They must have realized their mistake (by reading this newsletter? If so, hi hacker!) because they transferred over 2,000 ether to Tornado Cash, a privacy tool used to “wash” cryptocurrency, early Monday morning. 

So good on the hacker for realizing they needed to maintain anonymity if they didn’t want to get caught, but today, we have another issue: they transferred the funds into a wallet called “Ronin Bridge Exploiter 8.” 

It’s hard to decide if this person is a criminal mastermind or a DeFi dunce, but we will keep our eyes on the movement of this money.

For an in-depth explanation of the vulnerability of blockchain bridges, this Wired article does a great job explaining. 

In today’s edition:

📈BitMEX Co-Founder sees Ether at 10k

🙋‍♀️The gender gap is closing in crypto

Hayes holds Ethereum

Arthur Hayes, a co-founder and former CEO of cryptocurrency exchange BitMEX, says that the “Ethereum Merge” could send ether prices to $10,000. 

What happened: Hayes posted his predictions on Medium in an article called “Five Ducking Digits,” where he outlined what the merge will mean for the blockchain network, why he’s recently become more bullish on ether, and how investors can prepare for Ethereum 2.0.

  • Hayes wrote that post-merge, Ethereum will present new investment opportunities. He sees ETH as neither a commodity nor a currency but rather “an infinite duration bond,” a label that will make the cryptocurrency more appealing to money managers or “fiduciary clowns,” as he calls them. 
  • “The native rewards issued to validators in the form of ETH-based issuance and network fees for staking ETH in validator nodes renders ETH a bond,” he wrote. Experts have speculated that staking yields could range from 10-15%.
  • “When the dust settles at year-end, I believe ETH will be trading north of $10,000,” he wrote, adding that he is transitioning his crypto holdings from a 50/50 Bitcoin and ether split to a 25/75 ratio to reflect his prediction.

Why it matters: The merge is expected to take place by the end of June and will allow users to become validators by staking 32 ether (as of this writing, ether is sitting at US$3,437, making the cost of becoming a validator on Eth 2.0 over US$100,000).

  • The Ethereum Merge will transition the consensus mechanism of the blockchain from Proof-of-Work to Proof-of-Stake, a more secure and scalable method of validating transactions that will reduce the network’s energy consumption by 99%.
  • Hayes pointed out that post-merge Ethereum will outperform any rival blockchains that tout faster and cheaper transactions because it “supports extremely positive price fundamentals from a flow of and return on capital basis.”

Big picture: Crypto’s environmental impact has been a big topic this year, so if Ethereum meets environmental, social and governance (ESG) criteria post-merge, it becomes much more appealing for investors and more accessible for institutions to adopt—not to mention those top tier yields. 

2021: Year of Crypto

According to data from crypto-focused surveys, digital currencies are gaining popularity worldwide.

What happened: A survey of 1,000 people conducted by NBC News found that one in five American adults have traded, invested or used cryptocurrency to complete a purchase, proof that there has been growth in the space and a signal that mass adoption is around the corner.

  • While almost 20% of those polled have interacted with crypto, only 19% have a favourable view of digital currencies, and 25% said they have a negative outlook. 
  • 56% said they have “neutral” feelings about the crypto industry.
  • 50% of men aged 18 to 49 say they have “dabbled” in crypto in the US.

But a second survey on US crypto habits conducted by Gemini, the Winklevoss brothers’ crypto exchange, has a much larger pool of participants and shows some interesting emerging trends.

  • The data showed that the average age of investors already in the space is 38, whereas the average age for those deemed “crypto curious” is 44. And of those “crypto curious,” 53% are women. 
  • Another interesting takeaway is that men outnumber women as crypto investors across the board except in the 25-34 age range, where women are out investing men in crypto by 6%. 

The global market: The American attitude surrounding cryptocurrencies differs widely from the international perspective. Gemini’s Global State of Crypto report was compiled by surveying 30,000 people across 20 countries. 

  • Over 40% of people surveyed purchased cryptocurrency for the first time in 2021, with many citing inflation as their primary motivation for investing in DeFi.
  • The report found that the industry lacks accessible educational tools for the “crypto curious,” with 40% of people polled saying they would look to those resources compared to 22% who would take investment advice from friends. 
  • Regulation seems to be a hurdle some people just can’t get over. In Asia, Latin America and Europe, almost 40% of people who don’t hold crypto cited “legal uncertainty” around crypto and government regulations as a concern. 
  • The gender gap is closing on crypto. Of the people surveyed who said they would be investing in crypto this year, 47% were women. 

The big picture: While US respondents haven’t embraced crypto with wide-open arms, countries with less wealth seem to be betting on it as a more reliable currency. Indonesia and Brazil are top adopters, with 41% of those surveyed owning crypto, although both governments are pushing through regulations much quicker than the US and Europe.

Bits & Blocks

The charitable crypto billionaire: In an interview with Bloomberg, Sam Bankman-Fried, the 30-year-old billionaire behind FTX crypto derivatives exchange, said he only wants to keep 1% of his wealth and give the rest away. Some other fun facts: he drives a Toyota Corolla and sleeps on a beanbag. 

A long sentence for Turkey’s crypto crooks: Turkish authorities shut down the Istanbul-based Thodex crypto exchange last year after alleging it was a criminal organization participating in fraud and money laundering. The CEO split, and now 21 high-ranking officials within the defunct company are facing over 40,000 years of jail time. 

Twitter, but make it a DAO: If the endless string of groups chats we’re all required to be in isn’t irksome enough, now there’s a decentralized autonomous organization that wants to bring that same energy to its Twitter feed. TweetDAO sells NFTs of eggs in exchange for membership in the DAO. Members can tweet once a day from the shared account about anything they want and as you can imagine, it’s a pretty incoherent thread. 

NFTs, trading cards, and art—together at last: Collectible trading cards are the new NFTs. But wait, we thought NFTs were the new trading cards? (time really is a flat circle) StockX founder Josh Luber is launching a new company based on this idea. ZeroCool creates “non-sports” trading cards, focusing on icons in culture and art instead.

Penguin NFT project purchased: Pudgy Penguins NFT co-founders have been put out on an ice flow after Luca Netz bought the collection for 750 ether or $2.5 million. 

Buying NFTs gets easier: OpenSea just made buying NFTs more accessible! In partnership with MoonPay, the biggest NFT marketplace now accepts most traditional payment forms, including all major credit cards, Apple and Google Pay. 

Convenient crypto: Australian convenience chain On The Run (OTR) is the largest retail brand to accept crypto as payment in the country, and you can buy more than just “fuel and sandwiches” they sell Krispy Kreme, so you can also get dessert!

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