If youâre a younger sibling, youâll relate to this feeling: You know something is cool. You have a feeling, a hunch, and you try to get your family onboard, but because youâre the youngest, everyone just ignores your pleas for reason from the third row of the minivan.
Then one day, you come home from soccer practice, and your entire family is talking about the thing youâve been trying to get them into as if they discovered it.
Thatâs basically what Warren Buffetâs Berkshire Hathaway just did to DeFi.
After years of downplaying the crypto markets as assets that âdonât create anythingâ (besides a whole new economy but okay Warren), his firm has just bought a billion dollars worth of stock in Nubank, a fintech giant in Brazilian banking. Nubank is popular among the countryâs Bitcoin enthusiasts.
While it isn’t a direct investment into Bitcoin, the indirect exposure can generate massive profits for the âOracle of Omaha,â who compared cryptocurrencies to rat poison.
The rich get richer, yâall, even while talking smack.
In todayâs edition:
âŽď¸ War, what is it good for? Crashing markets!
đľď¸ââď¸ Another crypto crime solved
No more war
Over US$250 million was wiped out of crypto market after Russian President Vladimir Putin forged ahead with his invasion of Ukraine, but prices rebounded after US President Joe Biden spoke yesterday afternoon.
What happened: The invasion caused markets to plummet and investors to stash their cash away in âhavenâ investments like gold. Crypto suffered as investors fled assets perceived as riskier, but rebounded yesterday afternoon, with Bitcoin and Ethereum finishing the day up slightly.
Meanwhile, crypto bigwigs are airing their grievances with Putinâs government.
- Ethereum founder Vitalik Buterin tweeted, âReminder: Ethereum is neutral, but I am not.â
- Buterin also criticized Putinâs decision in a tweet written in Russian, saying itâs a crime against the citizens of both nations and wishing glory for Ukraine.
- Sam Bankman-Fried, CEO of trading platform FTX, explained via Twitter thread why crypto prices are fluctuating right now but hit the nail on the head when he said people are selling off Bitcoin and other cryptos âto pay for war.â
- Barry Silbert, CEO of Digital Currency Group, said what weâre all thinking when he tweeted âF*ck War.â
Why it matters: Western countries often rely on economic sanctions as punitive measures. They didnât deter Putin from invading Crimea in 2014, and they donât seem to bother him now. Experts speculate that cryptocurrency has enabled governments like Russia to develop a âparallel financial systemâ with crypto.
- Bloomberg reported that Russians hold 12% of the worldâs cryptocurrency, valued at roughly $200 billion.
- If Russia has enough crypto capital to skirt around sanctions imposed by NATO partners, itâs just a matter of building the tools to access and use it as payment; the digital ruble will allow Russia to trade with any country that accepts crypto.
Big picture: As a relatively new asset class, it remains to be seen how crypto will weather major global conflict. So far itâs been volatile, but thatâs not anything new, is it?
A âwhodunitâ hack
Journalist Laura Shin believes she has identified the person responsible for a 2016 hack that drained an Ethereum-built DAO of nearly a third of its funds. But the person sheâs accusing says sheâs got the wrong guy.
Background: The DAO was the first decentralized autonomous organization designed to work as a fund for crypto projects that would get approved via a vote open to anyone holding DAO tokens.
- The DAO was built on Ethereum and raised 12.7 million Ether, at the time valued at US$139 million. Then on June 17, a hacker made off with 3.6 million Ether, and no one has managed to solve the crime until now. Maybe.
What happened: Shin is pointing the finger at Toby Hoenisch, a 36-year-old Austrian programmer and CEO of TenX, a failed crypto debit card company. Hoenisch replied to Shinâs inquiries about the hack, saying her â…statement and conclusion is factually inaccurate.â
Shin worked with Chainalysis to track Etherâs movement on the blockchain, trying to understand the methods used to accomplish one of the biggest hacks in DeFi at the time.
- Shin found that the hacker converted the Ether to Bitcoin then sent it to a WasabiWallet. WasabiWallet âmixesâ the transaction making it challenging to trace, but Chainalysis âdemixedâ the transactions.
- The âdemixingâ showed that the Bitcoin had been exchanged to Grin, a privacy coin. The hacker withdrew the funds to a non-custodial Grin node named âgrin.toby.ai.â
- Hoenisch goes by âtoby.aiâ on social media, and Shin found the IP address linked to the Grin node also hosted a TenX node. (k, this is getting real sus now)
Why it matters: Crypto crimes used to be these mysterious, unsolvable cases that people kind of accepted as growing pains in a brave new economy. But weâre seeing time and time again that these major hacks leave a trail of breadcrumbs. As journalists and financial crime investigators deepen their understanding of cryptocurrency, we imagine there are a lot of early crypto criminals waiting to be tattled on by the blockchain.
Bundle Up, âCrypto Winterâ Is Here
Sponsored by Masterworks
Bitcoin giving you the cold shoulder? Join the club. BTC is down -21% since January. Thatâs over $600B in market cap lost, or approximately [irreverent stat]. The founder of ETH even declared âCrypto Winterâ is here.
So what can you do? Well, most financial planners would say D-I-V-E-R-S-I-F-Y. In fact, certain crypto whales have already diversified with an unexpected alternative asset, contemporary art.
Take BTC billionaire, Justin Sun, heâs bought over $100 million of contemporary art last year alone.
Mindblowing right? Check this out:
- Contemporary art prices outpaced the S&P 500 by 164% (1995-2021
- Total wealth in art is projected to increase by $1 TRILLION by 2026
- Art has a low correlation to stocks according to Citi
Thatâs amazing if you have $5,000,000 to buy Picassos. For the rest of us, thereâs Masterworks.ioâ the investing app securitizing multimillion-dollar paintings. With over 345,000 users, demand is high.
Want in? For a limited time, Crypto Dispatch Subscribers get priority access to their new offerings.
*See important Regulation A disclosures
Bits & Blocks
1Password is partnering with Phantom and Solana to integrate its tech into the world of crypto wallet keys, but people do not seem to want it.
A collection of CryptoPunks was pulled from an auction with Sothebyâs after the seller backed out.
A man in Texas is suing OpenSea for $1 million after his ârare and valuableâ Bored Ape NFT sold for $26. Read the complaint here. (We suggest at least reading point 15, where he brags about having a rarer Bored Ape than Justin Bieber.)
Most people invest with no rhyme or reason and lose their shirt every. single. time. Join Bryce Paulâs free crypto trading masterclass and position yourself for the biggest profits youâve ever seen. Register today!*
The CEOs of Coinbase and Kraken are under investigation by the Ontario Securities Commission (OSC) for tweets supporting the Freedom Convoy.
A woman wiped out almost $400k of her and her fatherâs money after getting tangled up in a crypto scam with someone she met on a dating app.
Ouch! Someone just spent over $550,000 in Eth transaction fees to mint 950 Tuby Cat NFTs, which are only worth $265,000.
âBuyTheBroncosâ is trying to raise $4 billion to buy the NFL team and, if successful, would govern it through a DAO.
*Sponsored Content
