Thanksgiving 2023: Binance, SBF, and Building A Better 2024

After a tumultuous 2022, marked by the infamous "crypto contagion," 2023 has emerged as a year of rebuilding, resilience, and remarkable progress. As we gather around our Thanksgiving tables this year, let's reflect on the positive strides made in the crypto world and what we should be thankful for in 2023.

The Binance Shake-Up

Recently, news broke out that Changpeng "CZ" Zhao will be stepping down as the CEO of Binance. CZ pled guilty to violating AML laws. Binance will also be paying around $4 billion fine as part of a larger settlement with the United States Department of Justice (DoJ). 

The change in leadership signals Binance's commitment to compliance and regulatory cooperation. Binance is the biggest crypto exchange in the world. If it collapses like FTX, it will be a genuine black swan event. CZ’s decision to step down in the wake of acknowledged failures in AML adherence demonstrates a readiness by Binance to address past deficiencies and align more closely with regulatory expectations.

Moving Past the FTX Saga

For most of 2023, we have dealt with the business and PR fallout of the FTX disaster. The saga, involving figures like Sam Bankman-Fried (SBF) and Caroline Ellison, had dominated the crypto narrative, casting a shadow of doubt and uncertainty over the industry. 

Since SBF was the poster child of crypto, his lawsuit garnered significant attention from mainstream media. Inevitably, the narrative became - “SBF is a scammer and crypto is a scam.”

Now that the lawsuit is finally over and SBF has been appropriately charged, it is time to move on. The resolution allowed the community to shift focus from the controversy to more constructive aspects of crypto, such as technological advancements, market growth and finding product market fit. 

The closure of this chapter is not just a relief but a reason for gratitude.

Bear Market = BUIDL Time

2023 has been bearish for the most part. Many see that as a negative, but as any grizzled vet knows, bear markets are the best times for building (aka BUIDL).

The focus on BUIDL has led to significant advancements, especially in Layer 2 solutions. These developments have addressed scalability issues, enhancing blockchain's efficiency and accessibility. Projects like Base have attracted substantial Total Value Locked (TVL) and have been instrumental in the growth of innovative protocols like Friend.Tech.

Speaking of which, Friend.Tech also triggered the SocialFi boom. SocialFi is an amalgamation of social media and decentralized finance. This model offers a Web3 approach to social media, empowering content creators, influencers, and participants with greater control over their data and monetizing their social presence.

At their highest point, SocialFi applications like Friend.Tech, PostTech, Stars Arena, FriendRoom, and Cipher collectively achieved a total value locked (TVL) of up to $50 million. However, as illustrated in the chart above, Friend.Tech is the clear leader in terms of TVL dominance.

The Promise of Spot ETFs

The filing of BTC and ETH spot ETF applications by financial giants such as BlackRock and Fidelity has been another exciting development in 2023. ETFs are investment funds traded on stock exchanges, much like stocks. They track the price of an underlying asset or group of assets, offering investors a way to gain exposure to markets without owning the actual assets. 

Spot ETFs, in particular, are based on the current market price of the underlying asset – in this case, Bitcoin and Ethereum. Unlike futures ETFs, which are based on contracts predicting the future price of an asset, spot ETFs provide a more direct link to the current market value of cryptocurrencies.

Introducing BTC and ETH spot ETFs is a game-changer, especially for institutional investors. Traditionally, direct investment in cryptocurrencies has been fraught with challenges, including regulatory concerns, security risks, and the complexities of managing digital assets. Spot ETFs offer a familiar, regulated, and easily accessible avenue for these investors to gain exposure to the crypto market. This development is instrumental in mitigating the hurdles associated with direct crypto holdings.

This reflects a growing recognition of the potential and legitimacy of digital assets as an investment class. This trend clearly shows the crypto market's growing maturity and potential to become a staple in diverse investment portfolios.

Ripple-SEC Drama Resolved

The long-standing legal battle between Ripple and the SEC, which started in December 2020, finally concluded with the court ruling in favor of Ripple. As per the SEC, Ripple’s native token, XRP, is an unregistered security. 

The lawsuit, which resulted in XRP being delisted from numerous exchanges, had been a source of uncertainty and negativity within the crypto ecosystem. 

The resolution of this three-year legal saga is not only a victory for Ripple but a positive development for the entire crypto industry. 

Looking Ahead to 2024

The crypto community has displayed remarkable resilience and adaptability, turning obstacles into stepping stones for growth and innovation. This Thanksgiving, let's be thankful for a year that has not only tested our resolve but also highlighted the unyielding spirit of the crypto world.

In embracing these positive narratives, we're not just celebrating the past year's achievements but also setting a foundation of hope and anticipation for the future. As we savor our Thanksgiving feasts and relish the presence of family and friends, let's also remember to celebrate the progress made in crypto this year—a year filled with challenges but also abundant in reasons to be grateful.

P.S. - Our team will be on break for the remainder of the week as we celebrate the holiday, and we’ll return back on Monday!