May 2023 Rollup | Latest Trends & Developments

Florida Governor Ron DeSantis, a Republican, has officially announced his 2024 presidential bid, underscoring his commitment to backing the cryptocurrency industry.

DeSantis's announcement came during a recent Twitter Space gathering with high-profile figures like Elon Musk and entrepreneur David Sacks. The governor did not mince words, voicing his concern about the present administration's stance towards Bitcoin. "The current regime, clearly, has it out for Bitcoin. And if it continues for another four years, they'll probably end up killing it," DeSantis said. He pledged his commitment to preserving liberties within the digital asset space, expressing no desire "to control everything that people may be doing."

Moreover, DeSantis criticized the Biden administration for its inflationary policies and pressure on banks to conform to its agenda. He described Bitcoin as a buffer against government interference and a means to empower individuals and communities. To illustrate the positive social implications of Bitcoin, DeSantis pointed to El Salvador, where it was legalized as tender, and Miami, where the mayor and local businesses embraced it.

Prior to his presidential bid, DeSantis demonstrated his stance by banning CBDCs in Florida. He enacted a law on May 12 prohibiting the use of any digital currency issued by a government entity within the state. He regards CBDCs as a "huge, huge imposition on people's financial freedoms and financial privacy," affirming he would necessitate congressional approval before the federal level could ever implement a CBDC.

The 2023 Bitcoin Miami conference was noticeably more reserved compared to its precursors, primarily due to the fallout from the turbulence in the digital asset space in 2022. Nevertheless, the overall atmosphere remained hopeful, even in the midst of the challenges of the preceding year, which included the disintegration of the FTX exchange.

The event saw a diverse lineup of speakers and engaging panel debates. One such speaker, Michael Saylor, the CEO of MicroStrategy and a prominent Bitcoin supporter, elaborated on Bitcoin's potential to counter inflation and oppressive regimes. He also stressed the significance of building applications on Bitcoin's second and third layers. Saylor adopted a neutral stance on the contentious issue of Bitcoin Ordinals, a topic that sparked intense debate due to the associated network congestion and fee spikes.

Prominent figures in the 2024 election race, Joseph Kennedy III and Tulsi Gabbard, also contributed to the discourse. Kennedy, a democratic representative from Massachusetts, and Gabbard, a former democratic representative from Hawaii, emphasized Bitcoin's role as a safeguard against governmental overreach. They also expressed their concerns about the current inhospitable environment for crypto companies and investors in the United States.

Esteemed author Michael Lewis, known for his bestsellers like "Moneyball" and "The Big Short," voiced his interest in the cryptocurrency sector and spoke of a potential financial revolution brought about by decentralized finance (DeFi).

The conference also featured a range of talks that examined the current and potential uses of Bitcoin, along with challenges in the wider technological, investing, and regulatory landscape. Notable sessions included "The Art of Bitcoin Banking" and an exploration of "Transaction Censorship." The exhibition area housed a Bitcoin Bazaar and Ordinals Alley, where Bitcoin-themed items and artworks were on display.

The conference wrapped up with a modest observance of Bitcoin Pizza Day, a day that marks Laszlo Hanyecz’s infamous 10,000 BTC pizza purchase. Even though attendance numbers were down from the previous year, the event remains a significant platform for the crypto community to discuss Bitcoin's societal implications and the technology's future. With the increasing momentum in the Ordinals and BRC20 movements, the conference set the stage for a potentially promising 2024.

US Bitcoin Corp (USBTC), a leading operator of industrial-scale Bitcoin mining sites, recently announced plans to utilize the mining assets of the now-defunct crypto lender, Celsius. The crypto lender succumbed to Chapter 11 bankruptcy protection in New York in July 2022 after halting customer withdrawals and transfers in June of the same year.

At the time of filing, Celsius was in a $1.2 billion deficit, grappling with $5.5 billion in liabilities while holding only $4.3 billion in assets, much of which was illiquid. Before the bankruptcy, Celsius CEO Alex Mashinsky allegedly withdrew $10 million from the company.

As part of a consortium called Fahrenheit, USBTC successfully emerged as the winner of a bankruptcy auction for the beleaguered Celsius's assets. This acquisition included a lending portfolio, crypto assets, and an impressive stock of 121,800 mining machines.

Following this, USBTC plans to forge operating and service agreements with the restructured company. This will give USBTC exclusive control over all Bitcoin mining rigs formerly under Celsius's possession. USBTC anticipates a significant increase in its hashrate by 12.2 EH/s through integrating the Celsius machines. These devices will be strategically deployed across various hosting partners.

With this significant acquisition, USBTC aims to cement its position as a Bitcoin mining behemoth. Utilizing its specialized expertise and proven track record, the company plans to restore the operational capacity of the previously dormant Celsius machines.

In May, Bitcoin transaction costs catapulted to a record-breaking $7 per transaction, a staggering increase of five times the usual cost. Analysts trace this marked increase to the skyrocketing popularity of Ethereum-inspired "BRC-20" tokens and "Inscriptions" akin to NFTs (Non-Fungible Tokens), intrinsically linked to the highly coveted Ordinals project.

The BRC-20 token standard, a model echoing Ethereum's ERC-20 framework, is in the spotlight of this unforeseen market trend. Introduced earlier this year in March, this standard has revolutionized the issuance and transfer of fungible tokens via the Bitcoin blockchain, contributing to approximately 6% of all Bitcoin transactions.

Inscriptions, which cleverly weave images or text strings into Bitcoin transactions, have amplified the demand for Bitcoin block space. Consequently, the Bitcoin network is grappling with traffic congestion, pushing transaction fees to an all-time high.

Despite the apparent setback, the escalating fees have not ruffled all feathers in the cryptocurrency community. Bitcoin miners, for instance, are likely to reap benefits from this trend, as they earn their revenue in Bitcoin fees for processing transactions. Conversely, a faction within the community believes that the BRC-20 tokens and Ordinals inscriptions dilute Bitcoin's core objective of fostering a decentralized, global medium of a sound currency.

Whatever the varying opinions, one thing remains unchallenged: the formidable impact of the Ordinals project and the BRC-20 token standard. Both have caused ripples in the existing digital order and reaffirmed the dynamic nature of the constantly evolving cryptocurrency ecosystem. As the digital currency landscape transforms, stakeholders globally keenly watch these developments and assess their long-term implications for the Bitcoin network.

Digital wallet firm Strike, leveraging the Lightning Network, has extended its services to 65 countries and relocated its global headquarters to El Salvador, the first nation to accept Bitcoin as legal tender. This expansion underscores Strike's Bitcoin-first approach and supports El Salvador's pioneering digital assets law, which offers a comprehensive regulatory framework for cryptocurrency.

Bolstering its aim to disrupt conventional payment systems, Strike recently raised $80 million in a Series B funding round led by Ten31, a venture capital firm with a focus on Bitcoin-centric companies. The funds will be used to build strategic partnerships with major retailers to improve payment experiences. Additionally, Strike has integrated Tether (USDT), the largest stablecoin, onto its platform to provide users with the benefits of stablecoins without the complexity of crypto exchanges or wallets.

In the high-stakes negotiations over raising the federal debt limit, a proposed tax on Bitcoin mining was scrapped at the eleventh hour. Initially intended to generate additional revenue and address environmental concerns, the 30% tax proposal was set aside in the bill's final draft that emerged from the Sunday meeting of lawmakers.

Bitcoin mining has garnered significant regulatory attention due to the environmental implications of its power consumption. Recognizing this, the Biden administration sought to impose the Digital Asset Mining Energy (DAME) excise tax as part of its financial strategy to raise the debt ceiling and fund infrastructure projects.

This progressive tax, structured to start at 10% in 2024 before escalating to 30% by 2026, was designed to counterbalance the environmental and social repercussions of Bitcoin mining. The tax would have specifically targeted the electricity used by Bitcoin miners.

However, the DAME tax was conspicuously absent from the Fiscal Responsibility 5 Act of 2023, the resultant bill from May 28 negotiations. This legislation, a product of a compromise between President Biden and Republican leaders, aims to avert a default on the U.S. debt. According to Congressman Warren Davidson from Ohio, one of the victories within this deal was preventing the proposed taxes on Bitcoin mining.

The crypto sector and the Bitcoin mining industry have celebrated the omission of the DAME tax. Industry proponents argued that such a tax could stifle growth and innovation within the crypto sector. They further contended that the environmental impact of Bitcoin mining is often overemphasized and that many miners utilize renewable energy sources.

Nevertheless, some analysts suggest that the tax may be revisited in the future, given the temporary nature of the debt ceiling deal. They reason that with the U.S. government grappling with persistent fiscal challenges, such a tax could re-emerge in subsequent negotiations.

In a strategic move to amplify its European operations, the globally recognized cryptocurrency exchange, Gemini, has elected Ireland as the home for its new European headquarters. Gemini's founders, Cameron and Tyler Winklevoss, have accredited this decision to Ireland's vigorous regulatory structure, innovation-driven ethos, and pool of talented professionals.

Regulated and licensed, Gemini facilitates its user base to purchase, sell, store, and earn a variety of cryptocurrencies, including Bitcoin, Ethereum, and Litecoin. In catering to institutional investors, the platform also extends Gemini Custody into the burgeoning crypto market.

Gemini said it secured an electronic money institution (EMI) license from the Central Bank of Ireland. This permit allows the company to extend its services throughout the European Economic Area (EEA). Furthermore, the firm has aligned with CryptoUK, a self-governing trade organization representing the interests of the U.K.'s crypto sector.

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