Currently Relevant
May 25, 2023

Currently Relevant: Edition 4

This week: Are Bitcoin and Ethereum trying to enact a full-on “flippening”? Crypto infrastructure projects continue to shine, and Jack Dorsey is back with yet another launch.

Welcome to Currently Relevant, The Relevance House’s regular roundup curating the best of news, views, and stories from the blockchain, crypto, and Web3 space.  

This week: Are Bitcoin and Ethereum trying to enact a full-on “flippening”? Crypto infrastructure projects continue to shine, and Jack Dorsey is back with yet another launch.

What’s currently relevant in The Relevance House

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The Big Picture

  • Something strange is happening at the top tier of the crypto ranking tables. For several years now, Bitcoin has been the (relatively speaking) stable elder statesman of crypto, while Ethereum has been the anarchic younger cousin, supporting successive waves of ICOs, DeFi, and NFTs. More recently, the advent of Ordinals has led to a surge of memecoins (aka BRC-20 tokens) on Bitcoin, lending it some distinctly Ethereum-like qualities.

Two headlines this week have caught our eye.

  • Firstly, Bloomberg reports unusual activity in BTC and ETH volatility levels, with analysts predicting that ETH has the potential to become the more stable asset – bucking historical trends. The report believes the high amount of staked ETH accounts for the shift.
  • Secondly, BTC miners are enjoying a boost from all the meme-related action happening on Bitcoin in the form of transaction fees. Given the long-term tokenomic model will see newly-minted BTC dwindle, transaction revenues are an important revenue source for miners. A shift to transaction fee dominance could play a critical role in securing the future of the network. However, as ever, the change has the potential to reignite old feuds in the Bitcoin community over the necessity of adhering to Satoshi’s vision.  

“The flippening” was always supposed to refer to ETH prices rising above BTC, but could Ethereum and Bitcoin be engaged in a full-scale existential flippening? It may be too early to tell, but these are unprecedented events.

  • The funding outlook for crypto, blockchain, and Web3 initiatives continues to grow brighter, with Asian investment firm Hashkey reportedly in talks to raise $200 million based on a $1 billion valuation. Meanwhile, Blockworks reports that crypto funding last week was up 330%, thanks in no small part to an $80 million investment in Auradine,  a Silicon Valley-based Web3 infrastructure firm.

What’s new in Web3?

  • Serial entrepreneur Jack Dorsey is back with yet another new launch, – this time with TBD, (which, despite the obvious conclusion, appears to be a permanent name.) TBD is a division of Block, formerly Square, and is billed as a “new open-source toolkit for building Web5 applications.” Web5 is Dorsey’s vision for a decentralized internet built on Bitcoin, although whether the world is yet ready for Web5 remains TBC.
  • Sotheby’s concluded an auction of two rare NFTs that previously belonged to collapsed crypto firm 3 Arrows Capital last week. From the popular “Grails” collection, the pieces fetched a total of nearly $2.5 million, demonstrating that blue-chip NFTs are still attracting high-end buyers.
  • Bitcoin is now the second-most popular blockchain for issuing NFTs, following the memecoin mania that’s blown up over recent weeks. It now outpaces Solana, Polygon, and BNB Chain for NFT issuance. Is Satoshi grinding his gears or pining for $PEPE? We will probably never know.

Focus on fintech and digital assets

  • French wallet unicorn Ledger learned some hard lessons in on-brand messaging last week following a furor after the firm launched a new recovery option for its hardware wallets. In response to speculation about whether this meant Ledger devices were compromised by the firm, a rep on Twitter appeared to state that yes, Ledger devices were compromised but implied that this had always been the case. Inevitably, there was a reasonable technical explanation but inevitably, Crypto Twitter was outraged at the implication of a privacy breach, and much finger-wagging about Ledger’s communication faux-pas ensued.
  • Q1 is apparently a quiet time for hackers, according to Chainalysis, which reports that less crypto was stolen in the first quarter of 2023 than in any quarter of 2022. However, it warns the reduction is likely to be temporary.

Inside the infrastructure

  • The appetite for Ordinals is spreading. Litecoin and Dogecoin are both seeing record transaction volumes after developers moved to re-create the inscriptions functionality on both networks, allowing users to issue ERC-20-like assets and NFTs on each.

  • A flurry of exchange-related news has landed this week. Huobi Global has been ordered to close by Malaysian regulators, while Hotbit has ordered all users to withdraw funds as it halts operations. However, OKEx has stated that it will be aiming to set up a regional hub in France, subject to regulatory approval.

“It could only happen in crypto” story of the week

Crypto’s lack of anonymity is not exactly a secret these days. The field of crypto asset forensics, pioneered by industry leaders like Chainalysis, has become an established market aimed at tracking down crypto fraudsters and those using digital assets for illicit purposes such as money laundering.

However, the so-called “crypto hunters” are now also working for a new client base – soon-to-be divorced couples. CNBC has uncovered the story and spoken to clients and lawyers who reveal some eyebrow-raising stories about secret crypto stashes and unwitting spouses.

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