Bloomberg Crypto

Like many buzzy, fast-growth, high-risk industries, companies operating in and around crypto and the blockchain have relied heavily on venture capital to fund their activities.

Venture capitalists, or VCs, manage pools of private money. What sets them apart from many other kinds of investors is that they focus on the riskiest possible bets - for every 10 or so investments, they expect at least eight or nine of them to fail. But what keeps them in business is that every now and again, one of those high-risk bets pays off spectacularly - covering the losses in the rest of the portfolio.

Given their appetite for risk and reward, it’s no surprise that for a time, VCs big and small flocked to crypto. But what does this relatively depressed environment mean for VC investments in digital assets? Bloomberg reporter Hannah Miller joins this episode to discuss. 

Subscribe to the Bloomberg Crypto Newsletter at https://bloom.bg/cryptonewsletter 

This podcast is produced by the Bloomberg Crypto Podcast team: Supervising producer: Vicki Vergolina, Senior Producer: Janet Babin, Producers: Sharon Beriro and Muhammad Farouk, Associate Producers: Mo Andam and Ty Butler. Sound Design/Engineer:  Desta Wondirad.

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Nearly five months ago, the Ethereum blockchain successfully completed what was — at the time — a very complicated and years-in-the-making update. Called The Merge, it allowed the blockchain to move from validating transactions using computers, that took a lot of energy to run, to a proof-of-stake model. The switch cut Etherium’s power consumption by more than 99 percent. After The Merge, the price of Eth rallied a bit, but has since fallen about 15 percent.

Now, software developers who work on Ethereum are gearing up for a new upgrade called Shanghai. It will allow the tokens being used to order transactions on the blockchain to be withdrawn. Right now all those tokens are tied up in staking wallets.

To talk more about what’s entailed in the Shanghai upgrade, Bloomberg reporter Olga Kharif joins this episode.

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Surprising to some, it turned out to be a decent month for crypto. Bitcoin rose almost 40% and some smaller coins did much better.

Speaking of risk taking: Wall Street firms are still keen on crypto, despite all of last year’s calamities. And a failed crypto lender known for its risk appetite, Celsius, just got some harsh criticism from its bankruptcy examiner. Bloomberg senior editor Anna Irrera and Bloomberg reporter Emily Nicolle join senior editor Philip Lagerkranser to discuss the latest digital asset trends of the week.

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The digital-asset industry is reeling from challenges many blame on a handful of so-called crypto bad actors and wayward CEOs. Of course we’re talking about the Do Kwon’s, the Alex Mashinsky’s, the Su Zhu’s… oh, yes and the Sam Bankman-Fried.

But while some industry leaders say they are upset by the allegedly illegal actions of some of their peers, they still have hope that the digital asset industry will thrive and the crypto market will recover.

Mike Novogratz is a prime example. He’s the CEO of Galaxy Digital, one of the top investment firms in the digital-asset industry. The 58 year-old is known for his ubiquitous presence in the cryptosphere as well as his assertive demeanor, which aligns well with many in the crypto crowd.

Novogratz made it through the chaos of 2022 – but that doesn’t mean he and his firm were left unscathed.

Bloomberg reporter Sonali Basak recently sat down with him and she joins Vildana Hajric to discuss what’s next for the Galaxy Digital CEO. 

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One of the biggest shocks to the crypto market in the past couple of years came in 2021 - when China issued its most significant crackdown yet on all things digital assets. 

Fast forward to 2023, and there are signs that the country might be softening that stance ever so slightly. Just to set the scene a little bit - this is all related to broader signs and speculation that China is quote unquote “reopening”.  

To discuss China’s potentially softening stance on crypto, Bloomberg reporter Muyao Shen joins this episode. 

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The bankruptcy of crypto exchange FTX and the arrest of its former CEO San Bankman-Fried has had a lasting effect on the digital asset sector, for sure.

But it’s also made an indelible impact on the politicians and policy makers who are supposed to regulate the industry. 

There was already a fire lit under some lawmakers when it comes to imposing regulations on crypto - Last year, President Biden issued an executive order asking agencies to take coordinated action on digital assets. And in the summer, Senators Cynthia Lummis and Kristen Gillibrand issued a bipartisan crypto bill that, among other things, would step up oversight on stablecoins and crypto energy usage. 

And then there is the ongoing battle between the Securities and Exchange Commission and the Commodities Futures Trading Commission - over whether cryptocurrencies are securities…. or commodities. 

But with an ongoing wave of crypto bankruptcies linked to FTX, government officials are confronted with a new sense of urgency surrounding digital asset regulation.

Bloomberg reporters Allyson Versprille and Lydia Beyoud join senior editor Mike Regan in this episode.

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Long time Fidelity customers have been getting some interesting offers in their inbox from the financial services company over the past several months: a new crypto trading platform for retail investors. Last November, the brokerage firm launched a wait list for those interested in the services which include custody and zero-commission trading for Bitcoin and Ether. 

Fidelity Investments is one of the largest investment managers in the industry and is one of the first financial services firms to offer crypto trading services to clients. Clients who want to dip their toes in the digital asset market have usually reached towards exchanges such as FTX or Coinbase. But in the wake of the FTX collapse, news of Fidelity’s digital asset platform could provide crypto curious investors with an alternate opportunity. 

In this episode, Bloomberg reporter Claire Ballentine reviews what Fidelity’s retail crypto trading platform - and potentially others - means for industry and how it will shape the way retail investors interact with the digital asset market.

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As we reported this week, Binance acknowledged that it had been mistakenly mixing the collateral it holds for some of its tokens…. in the same digital wallet as other types of funds. 

This kind of operational issue is a challenge for these exchanges, especially now, at a point when both regulators and customers are paying super close attention to how this industry is managing its transparency.

Also, layoffs continue to happen in crypto - and that’s impacting other industries, with numerous companies tightening their belts and shedding workers. Bloomberg senior editor Anna Irrera and Bloomberg reporter Justina Lee join to discuss.

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Crypto lender Genesis has filed for bankruptcy. For many observers in crypto, this wasn't entirely unexpected, not least because the company itself had been warning that it was staring down a liquidity crisis and trying to raise money.

Over the past couple of weeks, Barry Silbert, who is the CEO of the Genesis parent company known as Digital Currency Group, has been in a very public and kind of increasingly nasty online dispute with some fellow billionaires, the co-founders of the Gemini Crypto Exchange, Tyler and Cameron Winklevoss. At the heart of this dispute is around $900 million worth of funds that customers of these two entities have lost access to.

Bloomberg editor Anna Irrera and reporter Emily Nicolle join the show to discuss what Genesis was, why it was so important to the crypto ecosystem and what its relationship is with Gemini.

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The end of Sam Bankman-Fried’s empire created a contagion effect especially felt by crypto exchanges, like publicly-traded Coinbase. In early January, the exchange settled with New York regulators who accused it of “significant” compliance program failings. 

Coinbase agreed to pay a $50 million dollar fine and set aside $50 million more to improve its compliance practices.

Ahead of its earnings report, CEO Brian Armstrong says Coinbase revenue will likely drop by half or more this year. And the picture may be equally dim for other global exchanges.

Crypto senior editors Philip Lagerkranser and Anna Irrera are joined by Bloomberg reporter Yueqi Yang to talk through the latest.

Subscribe to the Bloomberg Crypto Newsletter at https://bloom.bg/cryptonewsletter

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