Dispatch #41: The End of John McAfee

In this patch of your weekly Dispatch:

• The passing of a crypto legend
• Nexo connects the dots with Polkadot launch
• Positive regulatory indicators in the US

The Big Idea

The End of the McAfee Era

John McAfee was one of the most original, controversial, loud, and totally un-ignorable figures in the crypto industry.

Coming to prominence as the inventor of the first commercial anti-virus software, McAfee had a winding career in technology, security, and even botany in Belize (although that one ended with him fleeing the country around some pretty serious violent allegations).

Eventually, he found his way into decentralization, Bitcoin and crypto, a domain that fit his Libertarian politics (he ran for president in 2016 and 2020) quite well.

Still McAfee became best known during the ICO era for being both one of the most unabashed project shills (he got a “Skycoin” tattoo in 2018) as well as one of the more hilarious commentators. No one will ever forget what body part he said he’d eat if Bitcoin didn’t reach $1M a coin by the end of 2020.

Over the last few years, as the SEC started to come after him, he went deeper into hiding – spending most of his time tweeting from his boat. In October of last year he was caught and arrested in Spain. In March of this year he was formally indicted. On Wednesday, a Spanish judge authorized extradition and within hours, McAfee was dead from an apparent suicide.

The internet is filled with disbelief and yes, theories that all was not as reported.

But whatever the actual cause, one of the icons of an increasingly bygone age of crypto is gone. RIP.

The Latest In…

Bitcoin

Bitcoin ETF’s had a mixed record this week. On the one hand, the SEC followed up last week’s delay of the Van Eck proposal with another one – this time for Valkyrie’s Bitcoin Fund. That was the third of the month, with June 2nd’s Wisdom Tree delay kicking it off. At the same time, South America got its first Bitcoin ETF as QR Capital’s Bitcoin ETF was listed on a Brazilian stock exchange. At this point, the SEC is making it clear that they won’t be pressured by anything happening elsewhere.

The Latest In…

Monster Financing Rounds

For a market that some people think is getting bearish, there sure is a lot of capital floating around. Solana raised $314M a few weeks ago. dYdX cashed in $65M. Ledger raised a whopping $380M. The BitDAO – a new approach to funding DeFi – raised $230M and also has a commitment from Bybit that could be worth $1B a year. Oh, and don’t forget that A16Z unveiled the biggest-ever crypto investment fund – a $2.2B behemoth. Raising a slew of money doesn’t mean that a project will be successful but at least it allows teams to weather downturns with a greater peace of mind.

The Latest In…

Regulation

Really interesting week in US crypto regulation. First, two pro-crypto bills passed through the House and are on their way to the Senate. The bills focus on getting the Federal Trade Commission and the Department of Commerce more engaged with blockchain, ultimately aiming to create a center for excellence. SEC Commissioner Hester Peirce also came out strong in support of the disintermediating potential of decentralized finance protocols. Let’s hope this positive momentum continues!

The Latest In…

Nexo x Polkadot

We connected the dots by making DOT available on our platform, thus helping to increase the asset’s utility, easing selling pressure, and making HODLing stress-free for users. Nexo clients can now buy DOT on the Nexo Exchange (with a limited-time rewards promo until June 29), earn up to 8% interest on DOT, paid out daily, and borrow against your DOT with the industry’s most versatile crypto credit line.

The Latest In…

Mainstreaming

If we are headed into a bull market, no one got around to telling Sam Bankman-Fried. The FTX CEO has just announced yet another major partnership – this time with FTX becoming the official crypto exchange of Major League Baseball. And in a surprise move to no one alive, Kim Kardashian became the latest celebrity to shill a cryptocurrency, namely EthereumMax. The result? EthereumMax’s price halved shortly after, although it was not entirely Kim’s fault given the overall direction of the market earlier this week. The point is and has always been – DYOR, folks – and don’t take financial advice from TV personalities. Yes, even from the rich ones.

The Week’s Most Interesting Data Story

The Story of the Market in Two Charts

When alts are soaring, for many crypto traders Bitcoin is the last place one wants to be. But when things turn the other direction, the Lindy Effect and resilience of Bitcoin go on full display. This week has seen a shift from some of the most bearish sentiments we’ve seen at the beginning of the week to a much stronger sentiment. That return has been led by Bitcoin bouncing back hard from its dip below $30,000. Two charts tell this story: the first is the Bitcoin dominance chart, rising again as people move back to the safest long-term crypto asset, while the second is within Bitcoin – an interesting divergence between the price and the amount of Bitcoin held by strong hands. Taken together they show that Bitcoin is holding it down trying to keep us away from true bear sentiment.

Hot Topics

What the Community Is Discussing

Pretty accurate crib notes of how most of Crypto Twitter feels about recent China crypto crackdowns.

As DeFi gets bigger, there is going to be more pressure for it to confirm with regulations. Could it end up splintering the industry?

We really doubt you still need it, Cobie.

Our Take

@AntoniNexo This Week

• Antoni spoke to Bloomberg’s Matt Miller and Amber Lang late last week about Bitcoin price predictions for 2021, El Salvador’s acceptance of the currency as legal tender, and Nexo’s role as a bridge between traditional finance and the “brave new world of crypto.” In Antoni’s opinion, crypto depends on fiat entering the system from the traditional sector and centralized companies are the ones servicing these on- and off-ramps.
• How correlated is Bitcoin to alts? According to Antoni, “China’s ongoing ‘love-hate’ relationship with crypto made a dent in Bitcoin’s price only to set a sour pattern for the rest of the market.” He added to Cointelegraph, however, that if “inflation continues its marching upwards after the record-high month of May, I expect cryptocurrencies to outperform all other asset classes this year. This could possibly translate into a renewed decline in Bitcoin’s correlation with altcoins, much like during the peak of the market earlier this year.”

What to Watch for Next Week:

• Will Paraguay become the second country to introduce Bitcoin as legal tender?
• Will Ethereum and DeFi regain some momentum?
• Will China take any more anti-crypto action?