\nThe Dogefather sends his regards<\/br>
\n2023-01-20 22:26:00<\/br><\/p>\n
Welcome back to Chain Reaction.<\/strong><\/p>\n Last week, we looked at a crossover episode for meme investing. This week, we\u2019re talking about Musk dumping tokens while holding onto others.<\/p>\n You can get this newsletter in your inbox every week by subscribing on TechCrunch\u2019s newsletter page.<\/a><\/p>\n A weekly dispatch from the desk of TechCrunch crypto editor Lucas Matney<\/a>:<\/em><\/p>\n Elon Musk shared that Tesla sold some Bitcoin this week. Well, to be fair they sold an awful lot of Bitcoin \u2026 tens of thousands of coins.<\/p>\n And while Tesla\u2019s announcement last year that they were buying Bitcoin sent prices to the moon, the disclosure Wednesday that they sold 75% of their Bitcoin reserves in Q2 didn\u2019t drastically impact the crypto market, which has been on a tear this week with BTC prices pumping and Ethereum shooting even higher (though still wildly below prices from a couple months ago).<\/p>\n At the end of the day, Tesla was one of the top corporate holders of Bitcoin and Elon Musk was, for a while at least, the currency\u2019s top billionaire hype man. His stock in crypto circles seems to be falling; crypto Twitter was broadly upset by the announcement with some noting that crypto holders should join those shorting the electric car maker\u2019s stock.<\/p>\n Hidden inside this disclosure that the company had offloaded nearly $1 billion worth of Bitcoin was a small admission from Musk that Tesla was holding onto Dogecoin and had not sold any of it. What was unclear from this statement is how much Dogecoin Tesla actually owns. Musk has written on Twitter that he owns it, and Tesla has accepted Dogecoin payments for merchandise on its site for months, but they haven\u2019t disclosed any buys of the cryptocurrency.<\/p>\n I tried to do some napkin math<\/a> on how much Dogecoin the company may hold this week:<\/p>\n The company disclosed that it currently owns $218 million worth of digital assets after selling $963 million worth of Bitcoin. The bulk of that $218 million is likely its remaining Bitcoin.<\/p>\n Tesla reportedly had around 42,000 Bitcoin heading into the second quarter, so after selling 75% of them, it should have had around 10,500 at the end of the quarter. Now, to determine exactly how much of that total holding is Bitcoin, we\u2019d have to know exactly when the snapshot was taken. It was assumedly taken sometime the last day of June when fiscal Q2 ended, so 1 Bitcoin would have been trading for between $18,750 and $20,300 throughout the day, which at 10,500 coins would mean that around $197 million to $213 million of its total \u201cdigital assets\u201d would be in Bitcoin.<\/p>\n<\/blockquote>\n Ultimately, Musk\u2019s assertion that Tesla was holding onto its Dogecoin was probably more about keeping in the good graces of that Twitter community that anything else, especially during a time when his Twitter dealings have taken some digs at his popularity among retail investors.<\/p>\n Chain Reaction has recapped plenty of negative news in the past month as token prices took a beating and web3 companies suffered as a result. The pain is far from over, but crypto prices did see a fairly substantial recovery this past week, with ETH up 45% week over week. Lucas and Anita talked about what might have driven the uptick, though they also had to talk through the much more unfortunate news of layoffs at OpenSea.<\/p>\n Both co-hosts were hard at work this past week on two separate feature articles that relate to current crypto news, so they unpacked those on the show. Anita talked about her piece<\/a> on intensifying competition between crypto exchanges for the U.S. market (and which is most likely to win), while Lucas shared his thoughts<\/a> on Yuga Labs\u2019 highly hyped Otherside metaverse video game as one of its very first players.<\/p>\n Subscribe to Chain Reaction on Apple<\/a>, Spotify<\/a> or your alternative podcast platform of choice to keep up with us every week.a<\/p>\n Where startup money is moving in the crypto world:<\/em><\/p>\n A weekly window into the thoughts of web3 reporter <\/i>Anita Ramaswamy<\/i><\/a>:<\/i><\/p>\n More than a few times recently, I\u2019ve heard people in crypto say a bear market will separate the good companies from the bad ones. Former SEC Chairman Jay Clayton put it more directly at Bloomberg\u2019s crypto summit on Tuesday, saying regulators should make responding to the \u201cgarbage\u201d going on in web3 their first priority<\/a>.<\/p>\n Clayton invoked the 2017 ICO boom when describing the aforementioned garbage, a time during which all sorts of rampant scammery and securities fraud was unfolding within crypto. I couldn\u2019t help but wonder \u2026 has crypto made any material progress since then in improving its reputation as a refuge for miscreants?<\/p>\n For U.S. lawmakers, the answer seems to be \u201cyes,\u201d perhaps because they are loathe to stifle what\u2019s proven to be a substantially large industry worth millions (or billions in a strong market) of dollars. So despite their sluggishness, they are finally coming around. Specifically, U.S. Senators Cynthia Lummis and Kirsten Gillibrand proposed a bipartisan crypto bill last month that has been on everyone\u2019s lips. The pair made an appearance at the Bloomberg summit to share updates on the bill\u2019s status since it was introduced. Gillibrand shared that while certain provisions look set to move forward, the entirety of the legislation is likely to be deferred to next year.<\/p>\n Still, there are two provisions in the bill Gillibrand predicted could garner consensus much sooner than the rest. The first is a set of rules for banks looking to issue stablecoins \u2013 it\u2019s understandable that those are an area of particular concern for lawmakers after the Terra fiasco. The second is the portion of the bill that would make the CFTC the key regulatory authority overseeing crypto, which she said is currently being finalized in committee. Congress will be able to vote on that provision by the end of the year, she noted.<\/p>\n While U.S. lawmakers and regulators alike will probably always drag their feet in cracking down on crypto because they don\u2019t want to be seen as stifling innovation, the new bill seems to be moving right along, faster than many expected. It\u2019s not exactly a sudden 0 to 100 shift, but it\u2019s very possible the U.S. is on the brink of a faster and more furious regulatory response than most in web3 could imagine just a few months ago when the markets were in better straits.<\/p>\n Here\u2019s some of this week\u2019s crypto analysis available on our subscription service TC+ from senior reporter Jacquelyn Melinek<\/a>:\u00a0<\/em><\/p>\n Regulators should address crypto \u2018garbage\u2019 first, former SEC Chairman Clayton says <\/a><\/strong> NFTs have the potential to become media companies, Rarible co-founder says <\/a><\/strong> Some venture investors are doubling down on crypto despite an unknown recovery timeline<\/a><\/strong> MetaMask co-founder sees a developer-led future for its crypto wallet<\/a><\/strong> Thanks for reading and, again, you can get this newsletter in your inbox every week by subscribing on TechCrunch\u2019s newsletter page.<\/a><\/p>\n<\/p><\/div>\n <\/br><\/br><\/br><\/p>\n![\"\"](\"https:\/\/i0.wp.com\/techcrunch.com\/wp-content\/uploads\/2022\/04\/chain-reaction-newsletter.jpg?resize=1140%2C321&ssl=1\")
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As the crypto industry continues to grow, regulators across the world are looking for operational and legal frameworks to guide their actions to more effectively monitor the industry. While there\u2019s a \u201ctremendous number of responsible players in the industry\u201d there are also irresponsible ones, former U.S. SEC chairman Jay Clayton said during the Bloomberg Crypto Summit conference on Tuesday. \u201cAnd regulators have to respond to the garbage first. That\u2019s the job.\u201d<\/p>\n
As NFTs work to retain mainstream attention, one founder predicts the digital asset sector will pivot in a new direction. \u201cI think NFT collections will evolve as media companies [into something] like Disney,\u201d Alex Salnikov, co-founder and head of product at NFT marketplace Rarible, said to TechCrunch. In recent months, major \u201cblue-chip\u201d NFT projects like Bored Ape Yacht Club (BAYC) and Doodles propelled their collections beyond just images and into different sectors, which may be the beginning of what\u2019s in store for NFT expansion into the mainstream, Salnikov said.<\/p>\n
The crypto markets might be red all over, but that isn\u2019t stopping many venture capitalists from investing in the space. People who entered the crypto market briefly \u2014 aka tourists \u2014 are \u201calready going home,\u201d Craig Burel, partner at crypto-focused firm Reciprocal Ventures, joked to TechCrunch. But a number of VC firms are looking at the space as a huge opportunity, even though there might not be measurable traction for a number of years.<\/p>\n
Six years ago, MetaMask was founded and today it\u2019s the largest non-custodial crypto wallet. But that wasn\u2019t always the plan, co-founder Dan Finlay told TechCrunch. \u201cWe thought it was going to be a quick in-and-out thing. Aaron thought we\u2019d be working on it for a few weeks; I thought it would be a few months. It became clear pretty quickly that wasn\u2019t the case.\u201d Now, the team is testing out a hands-off approach to be \u201cless opinionated\u201d and get out of users\u2019 way.<\/p>\n
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