The Friday Focus: Issue 54

Oct 07, 2022

Welcome to our Friday newsletter - Our weekly crypto news summary, separating the signal from the noise.

If you haven’t already subscribed, hit the button below to receive the newsletter in your inbox every Friday.

Weekly happenings

Crypto regulation is back in the spotlight. The EU passes its crypto regulation framework MiCA while simultaneously banning all crypto payments from Russia. Meanwhile, Russia also rattles its crypto sabers, blocking the crypto exchange OKX's website. MasterCard has launched a new feature that allows it to track where and how cardholders buy crypto.

Crypto exchanges keep on expanding. Binance signs an agreement with Kazakhstan to open a regional hub, while Coinbase expands to Australia. At the same time, Coinbase suffers a major outage for customers with US bank accounts. Crypto futures exchange BitMEX has long planned to launch an exchange token, and now its CEO confirms it may launch the token by the end of this year.

Security vulnerabilities of major blockchains keep being exploited. Binance Chain's validators agreed to temporarily halt the blockchain after it suffered an exploit draining $100M from the chain. At the same time, attackers are spamming Zcash with gigabytes of transactions, leading the blockchain to triple in size over the past three months.

Financial institutions keep offering new crypto products. Asset management giant Fidelity adds an Ethereum index fund, while investment manager Valkyrie joins Ark and Franklin Templeton in offering crypto SMAs to institutional investors. Meanwhile, bitcoin investment firm NYDIG raised $720M for a digital asset fund, and crypto lending firm Ledn will acquire Canadian fund manager Arxnovum.

Bitcoin bulls do their best to accelerate Bitcoin adoption. MicroStrategy, the biggest bitcoin hodler among public companies, makes a new bitcoin play, developing a Lightning Network-based SaaS platform. Meanwhile, the Plan B Foundation has persuaded McDonald's and other businesses to accept bitcoin payments in Lugano, Switzerland.

Stablecoins are lowering their risk profile, with MakerDAO - the issuer of the DAI stablecoin - deciding to invest $500M in US Treasuries and corporate bonds. The DAI stablecoin already had significant indirect backing by these assets through its extensive holdings of the stablecoin USDC. The biggest stablecoin issuer, Tether, also increases its US Treasury portfolio and is well underway in its plan to cut commercial paper holdings to zero before the end of 2022.

The bear market keeps ravaging the mining industry. Marathon, the biggest miner by market cap, reveals $80M in total exposure to bankrupt hosting provider Compute North. Mining economics are already heavily under pressure, and it will become worse as we brace for the largest mining difficulty increase in one year. Well-capitalized entities seek to capture the opportunities of the bear market, with Grayscale forming a new mining infrastructure investment vehicle.

South America continues proving its potential viability for mining operations, as Argentina's state-owned energy company starts mining bitcoin with stranded natural gas. With its vast hydro power capacity, Paraguay has become a popular place for bitcoin miners. In August, the country's president vetoed a law that would have regulated mining, but now the senators vetoed the veto.