Dispatch #123: BTC Erases Post-FTX Losses

In this patch of your weekly Dispatch:

• A big rally & a big resolution
• GTX, because G comes after F
• Crypto developers grow despite 2022

The Big Idea

A Near-Record BTC Green Streak

We’ve all been through a lot together this (crypto) winter. Yet the beginning of January has brought something of a respite from the cold. In fact, up until the middle of this week, Bitcoin and crypto as a whole were on a bonafide heater.

Heading into Wednesday, BTC had gone up 14 days in a row – approaching the all time record of 15 consecutive days set in November 2013. Over that period, Bitcoin was up more than 28%, and recovered more or less the entirety of its losses since the collapse of FTX last November.

There were many explanations for the move, including a broader move to risk-on as inflation ebbs and the justification for continued monetary tightening reduces. Some in the crypto space saw it as simply an affirmation that, having survived such a brutal period, there was the beginning of a return to optimism.

Alas, the streak was broken on Wednesday – in part by some speculation and defensive positioning for an “international enforcement action” announcement from the Department of Justice that turned out to be, in the estimation of the community, a total nothingburger.

The question now is whether the last couple of weeks represents a return to something approaching optimism, or just a temporary thawing in an otherwise stark winter?

The Latest In…

2022 Fallen Hero Shenanigans

The cleanup from last year continues, but that hasn’t stopped some of its…ahem…most notorious figures from trying to jumpstart their redemption arcs. This week, that took the form of yet another Sam Bankman-Fried blog post. The even bigger story however was a pitch deck that emerged showing that none other than Three Arrows Capital’s Su Zhu and Kyle Davies were out on the hunt for $25,000,000 to start a new exchange called – and we’re not joking here – GTX. The pitch deck explained the logic: “G comes after F.”

Woooooooow. Deep.

The Latest In…

Staking DeFi

We haven’t checked in on DeFi here on Dispatch for a while, but all the while builders have been quietly BUIDLing.

• Lido became the largest DeFi app by TVL (up 33% over the last month alone). Remember that thread by our KryptoKiril about stETH being ultra sound money? No joke.
• DeFi applications like Frax have also seen more engagement, with Frax’s FrxETH token holding more than $100m - up from $50m at the beginning of the month.
• New milestone for Ethereum – more than 16 million ETH are now staked. On-chain activity is also on the rise. And smart nETH staking on Nexo is a click away.

The Latest In…

Nexo’s Landmark Resolution

At Nexo, we have thrived in every downturn and are one of the very few companies to emerge unscathed from the 2022 round of bankruptcies.

On Thursday, we reached another milestone – a landmark, final resolution with the U.S. Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), consisting of all 50 U.S. States and three territories, and several state regulators.

“We are content with this unified resolution which unequivocally puts an end to all speculations around Nexo’s relations to the United States. We can now focus on what we do best - build seamless financial solutions for our worldwide audience,” said Antoni Trenchev, Co-founder of Nexo. Read more.

The Week’s Most Interesting Data Story

Builders Gonna Build

Over the last couple of years, Electric Capital has built the industry-standard developer report. They aggregate information from across open-source code repositories to paint a picture of the overall growth and health of the crypto developer community across protocols and projects.

The headline stat that stood out – even with a 70%+ decline in prices in 2022, the number of crypto monthly active developers still grew more than 5%. There are now 23,343 devs in crypto. While 5% growth might not seem like a lot, the fact that it continued during one of the most difficult years in crypto’s existence is quite bullish for the future orientation of our incredible developer community.

Hot Topics

What the Community Is Discussing

The Russian exchange targeted by the DOJ surprised the crypto community, given how much fanfare the announcement had.

Does this assessment of NFTs resonate?

Hal Fin was so ahead of his time.

What to Watch for Next Week:

• How much of the last two weeks' gains will Bitcoin give back?
• How will the Genesis bankruptcy impact markets?
• Are we reclaiming $1tn market cap this weekend?