The crypto industry has been a wild ride since we launched this newsletter in April 2022.

• In that time, we've seen digital currencies grow from the fringes of mainstream relevance to an asset class embraced by Wall Street, legitimized by Congress and capturing a growing slice of everyday investment portfolios.

What we saw: A few episodes from this newsletter's run — and their aftermath — might serve as the best examples for how resilient the industry has proved to be, and how far it's come in such a short time:

Stablecoins. Just a month after our launch, we saw the collapse of the stablecoin TerraUSD, which triggered massive liquidations and contagion across the crypto market.

• It was an "I told you so" moment for everyone who wanted crypto to just go away, and essentially ended the existence of so-called algorithmic stablecoins.
• But three years later, the U.S. would pass the Genius Act, legitimizing and regulating reserve-backed stablecoins — which today hold the promise of changing the way banks transact and how payments are made around the world.

FTX. In November 2022, we saw the rise and shocking implosion of the exchange FTX.

• The episode again shook confidence in the industry and drew unwanted attention through the high-profile fraud trial of founder Sam Bankman-Fried.
• But it also sparked a new emphasis on transparency. The industry worked to build back trust through mechanisms like proof-of-reserves audits and a new push for on-chain verifiability

Bitcoin. The oldest cryptocurrency has taken its lumps, but cracked through the door to mainstream adoption in January 2024 with the launch of bitcoin exchange-traded funds.

• That helped spark a run for the orange coin (chart 👆) that has caused nearly two years of FOMO for investors who remained on the sidelines.

🔭 What we're watching

Regulation and policy: Whether Congress will pass crypto market structure legislation is now anyone's guess (see below 👇). At the same time, there's been so much momentum that it may not ultimately matter. Perhaps just as good a question now is what the SEC may do around trading and issuance if Congress fails to act.

• What Treasury does with stablecoin regulation under Genius is another thing to watch. It has the option of just letting the clock run out. The law becomes effective eventually, either way.
• Lastly, privacy on-chain is going to be an ongoing fight. See the recent rise of Zcash.

The market: Key to watch is whether bitcoin stays above $100,000 and continues its gradual, sputtering climb, or if a big drawdown really comes.

• Also, Ethereum's ether, which has hung back. And whether or not some other chain appears to become a permanent blue chip like the big two.

Continued mainstreaming: We're watching how deep institutional integration goes. ETFs were huge, but Wall Street is increasingly flirting with new on-chain financial products.

• Include real-world assets in that too — if more stuff in the real world gets derivatives on chain that opens a fresh new kind of speculation in a speculation-loving sector.

Coinbase, a little while back, acquired Liquifi, and I wrote that it looked like the company was thinking about offering the sort of token launchpad that's worked so well on Binance.

The big picture: Looks like that call was right.

Driving the news: Coinbase announced Monday that it would begin running roughly one new token launch a month on its platform.

• The first sale will begin Monday, and it will be for Monad, a highly performant new layer-one blockchain.

In the weeds: The country's top crypto exchange contends it has a better design for token sales that will make sure new assets get distributed to a greater number of true fans, rather than letting investors with deep pockets buy up everything cheap.

The intrigue: "For the first time since 2018, users in the United States will now be able to widely participate — a huge win for the American cryptoeconomy," the blog post reads.

• Whoa.

The big picture: This is another example of the big change in regulatory climate for the crypto industry.

Flashback: From 2009, the launch of bitcoin, to 2017, not much happened with cryptocurrency and U.S. policy. A few weird cases, like the money transmission case against a maker of "physical bitcoins," but in truth, the crypto economy wasn't big enough for the state to pay attention to.

• Then, in 2017, the world found the first real use case for the then still new Ethereum blockchain: raising money for rough ideas. Billions of dollars went into that casino, and most of it (not quite all of it!) came to nothing.
• These were called "initial coin offerings" or ICOs, the nomenclature intentionally imitating IPOs.
• Then the SEC cracked down in 2018, kicking off the first "crypto winter." It lasted for two years.

Between the lines: If Operation Chokepoint 2.0 has an origin, it's back in the days of the ICO, which happened in the first Trump administration, when the industry did a flagrant runaround of rules about raising money for new ventures.

Zoom out: Which brings us to today. The fact that Coinbase is coming out with a token-launch product and welcoming Americans to take part confirms that a great deal has changed.

Senate Ag committee chair Sen. John Boozman (R-Ariz.) and Sen. Cory Booker (D-NJ) released a draft discussion bill on digital asset market structure legislation, the long-awaited bipartisan draft.

Why it matters: It's a sign that congressional leaders have not run out of steam on this issue quite yet.

The big picture: At 155 pages, this legislation goes into a lot of related topics (the right to self-custody, undiluted authority for the CFTC), but the one that jumps out is its clear definition of which digital assets are explicitly non-securities (and, therefore, not under the purview of the U.S. SEC).

• This question, which digital assets are securities, has been the persistent policy bugbear of this new sector.

Zoom in: "The term 'digital commodity' means any fungible digital asset that can be exclusively possessed and transferred, person to person, without necessary reliance on an intermediary, and is recorded on a cryptographically secured public distributed ledger," the discussion draft says.

• Then it describes a bunch of things that would not be included under that description. It carves out stablecoins, saying they are a matter for the Genius Act.
• It also carves out representations of commodity futures, various financial instruments (like puts and straddles), pooled investment vehicles, etc.

In the weeds: Everything that falls under digital commodity (such as everything thought of as a "coin," the fundamental economic unit of various blockchains, such as solana, dogecoin, atom, etc.) is then, in the spot market, the purview of the CFTC.

• As a nod to the "consumer protection" question that has pervaded this topic, the bill establishes an office of retail advocate, whose chief reports to the CFTC chair.
• It also (finally) authorizes the CFTC to raise some money for itself, by permitting it to levy fees on registered entities in the digital commodity space (up to now, all CFTC funding has been appropriated by Congress).

What's next: A markup in Ag or Banking, which has circulated two discussion drafts.

Uniswap, the decentralized exchange, has been the most influential decentralized app ever created, and it is finally moving to turn on revenue for holders of its token, UNI.

Why it matters: Much like the Coinbase news above, it's something that everyone has expected Uniswap to do, but insiders have put off for fear of severe blowback from D.C.

By the numbers: The market clearly approved.

• UNI price jumped 50% on the news (it's given back a fair amount, but it's still up).

Details: The proposal, called "Unification," would turn on a small amount of transaction fees for the protocol, on Uniswap v2 and v3 (liquidity providers have always earned a small fee).

• The proposal comes from Uniswap Labs (the team that created Uniswap) and the Uniswap Foundation.

Background: There are other big decentralized exchanges out there, such as PancakeSwap, which runs on Binance Smart Chain. That one often beats Uniswap in volume.

• However, most other DEXes are outright forks of Uniswap's code. If they aren't that, they are very much following where the protocol led.

The intrigue: There's a twist for UNI holders, however.

• To get their cut of protocol fees, they will have to burn their UNI. That will get them the pro rata share of fees up to that point, but since their tokens are burnt, they will be giving future fees to everyone that remains.
• This will also, of course, generate a gradual reduction in the supply of UNI (which should enhance price, over time).

The bottom line: The Uniswap team always seems to have a clever twist.

🧮 The deal driving the $500 million Ripple investment. (Unchained)

🚥 Coinbase's $2 billion acquisition of BVNK, a stablecoin infrastructure company, has been called off. (Fortune)

⛏️ A New York Bitcoin miner cut a deal, ending a legal dispute with a state environmental regulator. (The Block)

🎓 George Mason professor responds to the Bank Policy Institute's critique of the Genius Act. (Medium)

🐂 Bullish price forecasts are coming in as bitcoin arrests its fall. (Investopedia)