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♻️ Out with the old, in with the new

This weekend, I went back to college — in that I headed up north to the Midwest Blockchain Conference, which was held on the University of Michigan’s campus. 

The conference held talks and panels on a variety of topics, from memecoins to the University of Michigan’s endowment fund. As one student told me, the vibes are overall pretty positive. Students were eager to take in as much information as possible — as were some of the nonstudents like yours truly. 

While the rooms were packed for a lot of the talks, the one session that seemed to animate and excite the students the most was one on memecoins, hosted by the founder of Hype — an app that lets you easily trade memecoins.

As Hype’s founder Ravi Bakhai put it: Memecoins are risky but you can get rich though.

I quickly found out that Crypto Twitter is late to the game when it comes to a lot of the newest memecoins, which are based on videos on TikTok a lot. And Bakhai argued that the correlation between the presidential memecoins and the prediction markets was pretty strong as election results came in, which could point to memecoins serving a similar purpose. I’m gonna need David’s analysis on that though.

One of my biggest takeaways was Bakhai’s belief that memecoins are the entry point for retail in crypto. 

“In the US, this is how we get retail back into crypto,” Bakhai told me. And going by the eagerness of the students in the room to download Hype and engage on the platform, he very well just may have a point. 

Outside of the memes — and finding out that the younger generation may or may not think that Crypto Twitter is a bit old and late to the game a lot — there were panels hosted by folks like Volt Capital founder and general partner Soona Amhaz who gave students an inside baseball look at what to do (and what not to do) when pitching VCs. 

Throughout the weekend, students eagerly soaked up the information. I saw multiple blockchain clubs from universities including the University of Kansas, Vanderbilt, the University of Illinois and the University of Texas interact with one another and network peer-to-peer as well as with the speakers. 

On Saturday, the final day of the conference, Coinbase’s booth had a very consistent and long line as young crypto enthusiasts sought out advice from one of their recruiters.

Putting aside everything we’re seeing right now — including bitcoin $80,000, which I’ll get to just below — the enthusiasm and the expertise that the next generation is bringing to the table was pleasantly surprising.

We’ve talked so much about devs and other crypto folks being lured away from the US thanks to the overall environment, but give it a few years and we’ll have an entirely fresh and eager talent pool to pull from. All in all, that’s pretty cool.

— Katherine Ross

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• Bitcoin is over $82,000 to kick off the week, up over 3.2%.

• ETH’s down slightly in the past 24 hours, holding at $3,178 per Coinbase data.

• Mt. Gox transferred around 32,000 bitcoin — worth over $2.6 billion — to unmarked wallet addresses, per Arkham Intelligence data. 

• Cronos, dogecoin and dogwifhat top the leaderboard in gains this morning, climbing 20%, 17% and 15% respectively per CoinGecko.

• Meanwhile, crypto stocks including COIN, MARA and MSTR are gaining ahead of the opening bell on Wall Street. The stocks are up 13%, 15% and 9%.

✌️ 2 years later

On this day in 2022, FTX filed for Chapter 11 bankruptcy. 

With Sam Bankman-Fried and two of his executives in prison, we’ve made some headway since that awful November that almost destroyed crypto. 

But FTX itself is still in bankruptcy proceedings, though the process is set to come to an end fairly soon… hopefully. 

That’s not stopping the estate of the former exchange from going after other entities in the space, however, as we saw on Sunday when FTX filed a lawsuit against Binance and its former CEO Changpeng Zhao. 

I trust that we all remember part of the sticky mess that Binance and FTX were in right before FTX was found to be insolvent and collapsed. When SBF and CZ seemingly struck a deal, only CZ and Binance pulled out, leaving the curtain to pull back and expose what happened at FTX. Good times.

Anyway, the estate in this case is arguing that a July 2021 transfer worth a whopping $1.76 billion — which would have happened well before the public had even begun sniffing around the exchange — was a “constructive fraudulent transfer.” Basically, at the time, FTX was trying to buy out CZ and Binance’s stake in the exchange. 

We know now, post-SBF trial, that former Alameda CEO Caroline Ellison allegedly tried to warn off SBF from the repurchase, warning that they didn’t have the funds. And that’s part of what the estate is arguing in its 43-page suit. 

In that same testimony, Ellison also alleged that Zhao sought to hurt FTX by publicly offloading his FTT — which did end up doing a lot of damage to FTX and exposed the cracks. Binance, however, ended up walking away scot-free and even claimed to gain 20% market share by the end of 2022. To be fair, Binance has had its own issues, including a multibillion-dollar lawsuit with the US government and Zhao’s brief stint in jail.

Anyway, I’m not just looking to rehash the past by bringing up the suit, so let’s talk about the other big event on the eve of the anniversary: bitcoin topping $82,000.

Unless some of you have crystal balls hidden away, I think it’s fair to say that none of us could have foreseen this level of recovery so quickly (though I know it feels like a long time for some). In just a few years, we went from wondering if FTX could end crypto as we know it to crypto becoming a prominent industry. 

Take that, SBF. 

— Katherine Ross

• Microstrategy announced that it acquired 27,200 bitcoin for over $2 billion in the first few weeks of November at an average price of $74,000 per bitcoin.

• Binance Labs invested an undisclosed amount into BIO Protocol, marking the venture arm’s first foray into decentralized science.

• Crypto inflows hit nearly $2 billion last week, setting a new global AUM record of $116 billion.

• ByBit is introducing a new head of institutional role, highlighting the exchange’s efforts to position itself as a top choice for institutional clients.

• A new crypto advisory business is in town. Former execs from Pimco and Millenium have set up x2B, with token launches, raises and treasury management in their scope, according to Bloomberg.

Q: Just how much has crypto changed since FTX?

Crypto’s changed a lot, though the core has remained much of the same. I’d liken it to a Phoenix — specifically Fawkes from Harry Potter — the base personality is the same, though it’s arguably a different bird. 

We’re in a very different spot now, and in some ways, I think the collapse of FTX helped crypto legitimize itself. In order to survive the fallout, a lot of the damaged parts of crypto had to either be cut off or repaired, which allowed the industry to move forward. 

And now we’ve risen from the ashes. The price action since election night speaks volumes, and it’s possible that we see bitcoin top $100,000 before midnight strikes on Dec. 31. 

FTX was a horrible scar for crypto, but it’s one that seems to have healed. Now we just need to wrap up the legal proceedings and bankruptcy and bid it adieu so we can finally stop reminiscing on it.

— Katherine Ross