September 2, 2022 | Issue 31
AN ANTI-CRYPTO CONFERENCE
On September 5th and 6th, there will be a conference to promote critical review on the cryptocurrency space. The "Crypto Policy Symposium – 2022" will be held in London and will cover policy, regulations, systemic risk, NFTs, DeFi, Web 3, and blockchains.
I have mixed feeling about the conference. While I support a venue for naysayers, I'm not sure it will help address risks. Ideally, this conference would be crypto agnostic and feature experts with all perspectives.
Perhaps the crypto industry has not matured enough to hold a conference drawing cynics and supporters.
I have not attended any crypto conferences, but based on what I've read and seen in videos, attendees were beyond bullish about crypto's future. If I was a cynic, I wouldn't feel welcomed at such a venue.
In the real estate crypto space, I have not seen events covering the multitude of perspectives on how real estate will be impacted by crypto. Maybe in 2023.
Until then, I'll continue to write about crypto's challenges and opportunities.
Have a productive week and stay crypto curious!
Rich Hopen
richard.hopen@compass.com | 908.917.7926
PS. You can find all CNR newsletters here.
PPS. This newsletter is supported by home buyers and sellers in NJ who retain me as their real estate agent. If you know of anyone looking to buy or sell a home, please reach out to me.
CRYPTO NEWS
▸ Snoop Dogg & Eminem In the Metaverse
Here, on planet Earth, as crypto is fighting economic and regulatory headwinds, there's a party in the metaverse. MTV's Video Music Awards (VMAs) featured rap artists Snoop Dogg and Eminem singing as their Bored Ape Yacht Club's (BAYC) NFTs. The rappers' performance helped promote BAYC and Otherside.
Yuga Lab, the owner of BAYC, is building a game "Otherside' where people can own digital real estate with NFTs.
The digital real estate is called "otherdeeds" and 55,000 virtual plots were auctioned in April. Within three hours, all lots were sold, for a total of 16.7 million ApeCoin or $317 million.
▸ Bankrupt Celsius Network, Ltd Requested to Return $50M This week, Celsius Network petitioned a bankruptcy judge to release $50M of crypto to customers who had custodial accounts. Custodial accounts did not offer a yield. It is similar to having a safety security box at a traditional bank. Customers never relinquished control of their title to Celsius.
There were about 58,300 Celsius custodial accounts totaling $200M.
Other customers who sought to earn interest transferred title of their crypto to Celsius. The earned accounts totaled $4.2B.
Celsius's liabilities are about $6.7B, its assets are $3.9B, and there is a shortfall of $2.8B.
▸ House Oversight Subcommittee Seeks Info From Crypto Companies On August 1, 2022, Chair Raja Krishnamoorthi sent letters to several large crypto companies requesting documents showing how fraud risks are being addressed.
The letter states, " I am concerned about the growth of fraud and consumer abuse linked to cryptocurrencies.... [C]ryptocurrency exchanges must themselves act to protect consumers conduction transaction through their platforms. By implementing audit policies, requiring certain disclosures, delisting, and adopting other safety mechanisms, cryptocurrency exchanges can – and should – create safer environments for consumers.
CRYPTO CLASS – Accounting Rules For Digital Assets Are Coming, But Not For NFTs Investors and businesses who hold digital assets have asked the the Financial Accounting Standards Board (FASB) how to treat their holdings. FASB created a project, Accounting for and Disclosure of Crypto Asset, to study and propose rules. This week, FASB narrowed the focus of the project to digital assets that meet the following criteria – ● It is intangible. ● Asset holder has no enforceable rights to, or claims on, underlying goods, services, or other assets. ● Created or lives on a blockchain and secured with cryptography. ● Fungible. NFTs are clearly outside the scope of the project as they are unique (non-fungible) and could carry rights to goods or services, e.g., utility tokens. Businesses who hold digital assets that will not be covered by a FASB rule, look instead to guidelines from the Association of International Certified Professional Accountants. The guidelines require the holder to assess the value yearly. If it falls below the purchase price, holders may need to write down the value. If it rises, companies should record the gain when they sell it. The guidelines are problematic because of crypto's volatility. A better approach for these businesses, according to a Wall Street Journal article, is to apply fair-value accounting rules which would treat crypto as financial assets. Losses and gains in value would be recognized immediately.
INFLUENCERS - People to follow Mike McGlone – @mikemcglone11
McGlone is a Bloomberg Senior Commodity Strategist who is followed by most of the top crypto folks I follow on Twitter. That warranted me checking out McGlone's work – very advanced charts that are miles above my head. However, I watched some interviews and was hooked on his insights and fascinating perspective on crypto. Below, is an interview worth watching if you dig the macro stuff.
RESOURCES – Books, websites, podcasts, interviews, articles, videos Mike McGlone said that the "speculative excesses" left the market and the Fed's aggressive interest rate hikes will likely favor Bitcoin. He sees bitcoin transitioning from a risky asset to a "risk-off" asset like bonds, gold, and US Treasury long bonds. When? 2022.
CRYPTO WORD – Mainnet
An independent blockchain running its own network with its own technology and protocol.
OH, ONE MORE THING – Below is the video of Snoop Dogg and Eminem.
Thanks for reading! See you next week. Go to Crypto News for Realtors to read previous issues.