Ep 30. Crypto 200M users!

Thrilling week Hey y’all! I love the Olympics. I admire the passion, discipline and resilience to win. There have been so many triumphs and disappointments. I particularly enjoyed seeing Philippines and Bermuda win their first gold medals EVER. What a thrill! It’s also been a thrilling week in crypto as bitcoin price rebounded to $42k. I’m almost kinda famous I recently appeared on the Citizens of Blockchain podcast. I got to share my “come to crypto” story. I also discussed crypto in Nigeria vs US, bitcoin mining, energy, banking and more. I really enjoyed the conversation. Please check it out here. Side note - it’s a bit weird watching yourself on video. I was struck by how similar my brother and I are. We don’t look alike but boy do we have similar mannerisms and speech patterns. Twins! NEWS 1. 200 million crypto users! * Research by Crypto.com finds there are now more than 200 million crypto users around the world, it took only 5 months to double from ~100 million in January * Bitcoin’s dominance was eroded from 67% (Jan 2021) to 51% (Jun 2021) share as other cryptocurrencies (excluding ethereum) surged from 20% to 38% share. * Investors are looking beyond the blue chips to Cardano, Polkadot, Solana and many others. Let’s not forget the impact of Elon Musk and dogecoin. * The chart below indicates that the big surge in crypto users occurred AFTER the bitcoin bull run simmered down. Odd. I would have expected more users jumping on board during the price increase. If this is true, then a number of users caught a falling knife. Will they have the conviction to #HODL? Source: Number of users from Crypto.com and bitcoin prices are from Coindesk 2. Happy 6th birthday Ethereum! * The second largest cryptocurrency turned 6 this week. There aren’t many 6-year olds valued over $300B. What a run! * Last month, 20,000 validators staked their ethereum in anticipation of the move from proof-of-work to proof-of-stake. Ethereum now has over 200,000 validators representing about 5% of the ethereum supply earning about 6% yield. * Ethereum continues to be the main blockchain where DeFi applications are being built. However, it’s been plagued with high fees and increasing competition. The Eth 2.0 upgrade is expected to ease some of these issues. 3. Uniswap going mainstream * The internet never forgets. A new video from the EthCC conference was deleted last week. In it, Uniswap’s Growth Lead talks about plans to partner with FinTechs like PayPal, Stripe, to provide DeFi to mainstream consumers. Exciting! * The video was taken down at the request of Uniswap concerned that the comments might be understood and taken out of context. * Uniswap is the largest decentralized exchange on Ethereum. A marriage with FinTechs could enable mainstream users have access to a wider set of assets, 24/7/365 access and instant settlement…these are all wins for the everyman! 4. Wall Street in and out on crypto startups * Paxos announced that Bank of America and Coinbase joined it’s recent Series D fundraise. Paxos has raised more than $540M. BoA is also a Paxos customer after the US’ second largest bank joined Paxos Blockchain Stock Settlement Network. * It’s not all good news though. BlockFi has been faced with rising regulatory challenges from at least 4 US states. The lead investor in BlockFi is reportedly developing cold-feet and mulling pulling in the face of mounting legal and regulatory challenges. Stay tuned! 5. US Infrastructure bill targets crypto * The Infrastructure Bill was a centerpiece of President Biden’s campaign. Congress has been working on an ambitious proposal to build roads, railways, and other core infrastructure. * But that’s not all. Buried in the bill is language that could increase the tax reporting burden on crypto users. The verbiage is so broad and ambiguous that it is open to interpretation and stifle adoption. * Crypto industry groups are petitioning Congress to exercise restraint. President Biden is forcefully behind the Infrastructure Bill. Remains to be seen if this addition targeting crypto will stand in the final version. Explore 1. Fractional NFT ownership * NFTs are still having a moment. The artist Beeple sold NFT for $69M. Since then NFT art have continued to post significant appreciation. However, iconic pieces are often out of reach of entry level collectors. * Enter Fractional Art. This platform enables fractional ownership of the world’s most sought after NFTs ex Beeple’s Elon piece. Fractional unlocks liquidity, reduces entry costs, and allows for synergy with other DeFi primitives. * I’ve been thinking about adding art to my investment portfolio. The fractional model exists for NFTs ex Fractional Art and conventional analog art ex Masterworks 2. More on retirement * Last week, I invited you to check out Choice which enables you to invest tax advantaged retirement dollars into bitcoin and other cryptocurrencies * This week, Choice announced that they are partnering with my friends at Compass Mining to enable users to purchase mines using retirement dollars. I like this idea! I expect Compass will expand the program to other retirement account providers. * Caution: One of my friends wrote back sharing his experience with Choice. It was not pleasant. He found the process to be a bit clunky and manual. He ended up closing his account and going with KeyKeeper IRA. Solutions like KeyKeeper might be particularly attractive if you value holding your own keys. To be fair, he tried using Choice earlier on, their products may have evolved since. Tweets of the week Thanks for reading. Let me know what’s on your mind. Have an awesome August! Afolabi This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit afolabio.substack.com