BTC ATHs, Finally

U.S. crypto politics I Microstrategy private offering | Robinhood teams up with Arbitrum | Tether hits $100B

Author

Decential Media
March 08, 2024

Decential Media
A weekly recap of the most insightful news, analysis, and capital flows in the wild west we call crypto.

Hello and welcome back to the Web3 Rewind! Per usual in this industry, lots has happened this past week. Here's what we have in store for you:

  • U.S. crypto politics

  • BTC ATHs

  • Microstrategy private offering

  • Robinhood teams up with Arbitrum

  • Tether hits $100B

  • AI agents and the future of work

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The Latest

U.S. crypto must put country first

I’ve never understood single-issue voters. Politics is all trade offs, which is why it’s fundamentally icky, but that’s the state of play. As the political season heats up in the U.S. ahead of the presidential election in November it’s becoming hard not to notice the strange political bent many prominent voices in crypto have taken.

There has always been a strong strain of libertarianism within crypto, going back to the early Bitcoin adherents who were convinced it would displace the dollar and every other fiat currency post haste. It’s rather charming in a sense to watch batshit crazy people who have no conception of how politics works scream for the death of traditional finance. You want to pat them on the head. But it’s also important not to forget that the main promise of blockchain technology is to empower individuals to take charge of their financial world and escape the clutches of middlemen like Google, Apple, Facebook and so on. Siding with the Republican party and actively working to oust sitting Democrats flies in the face of this founding ethos.

The movement to make a pro-crypto position the only important thing this election cycle is also shortsighted and ignores the depravity at the heart of the current Republican party. An effort to make sure Katie Porter didn’t win the U.S. Senate primary in California spent $10 million successfully pointing out her anti-crypto positions. “From the White House to the Senate to the House, make no mistake: the crypto voter is here,” the group, Fairshake PAC, said in a statement.

That’s fine, I’m all for crypto being an important political issue. But if it ultimately leads to Democrats like Porter – and Sherrod Brown – losing seats in Congress that’s not ok. The unhinged, vindictive and authoritarian bender that is the Trump Republican party must be battled and defeated on every front. Porter was never going to beat Adam Schiff for the California Senate nomination, nevermind what the crypto backer’s say about their influence, and it would have been a much better use of resources to educate Porter and her staff, to get her on the side of crypto. Because I’d imagine the crypto hardliners have no idea how powerfully and often Porter stood up to abusive corporate interests while in the House. She truly fought for her constituents, is smart and would be a formidable ally at the side of the blockchain industry.

This is not a time to vote with your pocketbook or your financial interests. It’s time to put country first. Trump and his sycophants need to be defeated unconditionally. Then, and only, then can we get back to educating politicians and ousting those who seek to do the industry harm. – Matthew Leising, editor in chief, Decential Media

To the moon dept.

BTC ATHs

GM, and dare I say, we are so back. On Tuesday, BTC officially reached new ATHs. It feels like a short time ago that we were in the depths of the bear market, as we stared into the abyss, it was hard to see the light at the end of the tunnel. Yet here we are. To all those who said it was over, those who doubted us, faded us, and had no faith, I’m sorry, but prices went up. Me writing this paragraph will probably mark a local top though.

In five short months, the price of BTC has rapidly risen from $27K to $69K. Having a spot ETF approved will really do that to you. But BTC isn’t the only crypto that has gone up, ETH has also increased 55% in the past month, alongside various crypto equities. Coinbase now trades at ~$220, being up nearly 200% in the past half a year. As part of their previous earnings, the exchange gave Q1 guidance based on numbers from the first six weeks of Q1, and so far, it appears Q1 will be another blowout quarter.

Are things getting a little frothy though? Funding rates across all assets, be it BTC/ETH, blue chip DeFi tokens, and memecoins, are all rapidly increasing. Most tokens currently have funding rates of more than 100%, and most crypto trading analytics platforms literally don’t have enough colors on their scale to account for such high funding rates. However, such elevated funding rates usually don’t end well for the market, especially over a sustained period of time, as it means an excessive demand for leverage.

One of the larger outperformers of the past week has been memecoins. There are two categories of memecoins that fall into this camp. The first is the OG memecoins from last cycle, the DOGEs, and the SHIBs. As BTC caught a bid, these memecoins also rallied alongside. The other class is newer memecoins that were born in the depths of the bear market, such as PEPE, BONK, and WIF. These have vastly outperformed pretty much everything, and it’s interesting to witness the differing dynamics. Will retail entrants latch onto last cycle’s memecoins, or will they find new ones to buy? Only time will tell. — Joseph Cooper, Decential Media

Quick Bits

MicroStrategy proposes private offering

  • MicroStrategy is proposing a private offering of $600M of convertible senior notes to, you guessed it, buy more BTC. The madman Michael Saylor is back at it. The stock market seemed to like the move, as the stock ended the day up 23%.

  • In what will likely be a masterclass in financial engineering, Saylor has been continuously raising more debt and diluting MSTR equity holders to purchase more BTC. However, like most things in crypto, this is reflexive on the way up, but also on the way down.

Robinhood partners with Arbitrum

  • Robinhood users may now interact and transact on Arbitrum with their self-custodial wallets. Many seemed to like that announcement, with the ARB token trading up more than 10% moments after the news broke.

  • Robinhood could be the next in line to bring crypto to the masses, given its wide popularity across retail investors and its crypto strategy that leans deeply into onchain experiences and popular memecoins.

Tether $100B market cap

  • Tether is one of the bear market’s largest winners, and it has shown no signs of slowing down. Its flagship product, the stablecoin USDT, has hit $100B in market cap for the first time.

  • Assuming the company invests the stablecoin collateral in US Treasuries, the company probably makes close to $5B a year in annual interest. Tether currently has 92 employees, according to their LinkedIn, so that’s a cool $54M per employee.

And last but not least

Autonolas: Proof of Active Agents

Where is the future of work headed? If you had to guess the one thing I’m probably hinting towards here, yes, it’s AI. But where does crypto come into this? Well, for starters, crypto is the perfect rails to build AI upon. You get provenance, verification, security, low-cost payments, decentralized infrastructure and more. What is one component of AI that could eventually replace the workforce? AI agents. These are agents running some pre-determined model that have been assigned some task. These tasks can really be anything. If there’s a model out there for it and some instructions on the end goal desired, then an AI agent can likely execute that task. In that vein, it isn’t so different from asking ChatGPT to clean up an Excel spreadsheet or write some code for you. Those are all examples of AI agents.

So who’s winning the AI agent <> crypto war today? A frontrunner is a protocol called Autonolas, and before you ask, yes, they have a token. Anyways, on March 1st, they released a new concept called Proof of Active Agent. Stick with me here as I explain how it works. First of all, anyone can permissionlessly create a staking program on-chain. These staking programs have KPIs, and various AI agents will compete to achieve these goals within a certain period. Following some old-school vote escrow tokenomics, token holders can now direct emissions towards these staking programs.

To give a less abstract example — say you wanted to launch a prediction markets product — you would launch a staking program that had a betting volume KPI. From there, developers can build AI betting agents, and operators can run these agents. The creator can direct token holders to direct emissions towards his staking program such that these AI betting agents can be rewarded with token emissions. Ta-da, you have managed to bootstrap an entire product with flourishing activity, entirely run by AI agents.

The KPIs and work here can be anything, whether collecting data or executing tasks. In the future, it’s not too hard to imagine a world where a lot of both creative and mundane tasks are replaced by AI agents. Who knows, maybe Goldman Sachs and JP Morgan will compete to build the best DCF AI agent. Would you like such systems to remain closed source, non-composable, only available to large companies, and in a non-competitive environment? I certainly would not. Granted, it would make sense that Goldman Sachs wouldn’t want to open source their DCF agent, as that would erode their competitive advantage, but perhaps the democratization of labor, and having a globally available pool of AI workers to do any task your company requires, without needing to be paid as much, and not needing to take a single break, may not be such a bad thing in the future. — JC

Have you read the definitive history of Ethereum? No? Well then get your copy of Out of the Ether while you can.