ROLLUP: Top 10 Biggest Crypto Events of 2023

Bankless Nation, we got the 10 biggest events in crypto in 2023. Call it the yearly roll-up because it is the last week of December of the year, and it has been quite a year, I'll say. In January of this year, the wounds that FTX gave us were wide open. It was not a good 2022, and 2023 did not look like it was going to be any brighter.

We had just delivered the anti crypto regulators of the world the best possible leverage they could have ever asked to suppress the crypto industry.

The incoming onslaught of overly aggressive crypto regulation felt inevitable. Meanwhile, the macro climate was not good.

Interest rates were climbing without signs of slowing down, conversations of the looming recession were growing louder, consumer credit was rising, and consumer sentiment was down bad.

We all entered 2023 with PTSD,

all waiting with anticipation for the next shoe to drop. And then,

after all that,

the drop never came.

What seemed like one of the worst moments in crypto's history turned out to be the bottom. The bomb of Genesis and DCG turned out to be a dud.

Rising interest rates began to decelerate in Q1 and stopped completely in Q2.

The SEC took its first L in the courts, and sellers literally ran out of coins.

Halfway through the year, BlackRock filed its Bitcoin ETF on June 16th, 2023. And at that moment in time, Bitcoin was already up 200% on the year, recovering from 15,000 to 30,000. And the dark clouds from the demise of 2022 began to lift, and the path forward started to reveal itself.

Now, here we are, just 12 months later. Bitcoin is under one month away from a generally assumed spot Bitcoin ETF approval.

Solana, after flirting with death from capital fleeing the network, has risen from the ashes in an unprecedented fashion.

Gary Gensler has not taken a single W in the courts.

And the Fed just pivoted.

Funny how all the stars of the markets tend to align. Before we walk into the bull market of 2024, Bankless Nation, on this episode of Bankless, we want to cover the biggest events of 2023, lest we forget the lessons it taught us and the patterns we will see in the future.

Ryan, ready to get through the 10 biggest events of crypto?

Yeah, I am. And i overall just uh I would say twenty twenty three for me felt like a W, definitely. Twenty twenty two

is in the L category for short.

Uh 2023, we had we started our redemption arc, I think. And I'm feeling fantastic about the way we ended the year. So, David, I'm excited to get into the 10 biggest crypto events of 2023. And actually, uh, there's a rug here because we actually have 13. I don't know if you know this. We just say 10 because it seems good in a in a title, but like we couldn't help ourselves. We we got three bonus ones for you. Guys, we're gonna get right to that. But before we do, we want to thank the sponsors that made this episode possible, including we got the biggest events of 2023 for you, Bankless Nation. But before we get to them, let's take a look at how it all started. This is the charts as of January 1st, 2023, so just less than a year ago. And uh here we are. The total crypto market cap at the time was 840 billion.

Measured in billions.

So we were under a trillion uh and we have Bitcoin here, 16k Bitcoin at that time, David. Ethereum above uh a thousand, but one thousand two hundred was the ticker price. Um a number of other coins that that you'll recognize, one that we'll get to later in the episode. Solana was sitting at number 17, okay? It was

Not anywhere close to

3.6 billion or about $10 per Solana. So it was like flirting with that $10 mark. Number of other coins. Just in general, man, uh, do you remember January last year? Like, how how did you feel? It felt very much to me like crypto was licking its its wounds, but how did you feel personally?

I just remember seeing at the top of the CoinGecko charts all of the stable coins, and I'm like, oh yeah, that's a bear market. When stable coins are like numbers three through six on the total crypto market cap. You know, people are down bad.

Yeah.

Um if you go look at the tries today, things are not not necessarily that case. Things will look uh look a lot better, but that won't be at the end of the episode, because these are going in some loose chronological order.

We had a very somber start, I'll say to 2023, and then things started happening. I'll we'll go through these 10 to 13 events, and most of them are pretty bullish events, though sprinkled in some bearish events. But let's get to the first, and that is this. Coinbase introduced its layer two network. It's called base. They did that in February of last year, at least that was when it was announced. Why is this why does this make number one on our list?

It makes number one because Coinbase is just such a signal of legitimacy because of the way that it has developed the company. It does things slowly, it does things intentionally, it does things that it feels is very safe. And when Coinbase decides to build its own layer two network to finally enter the arena with Binance Smart Chain and Binance, which had dominated the conversation and had made Binance a ton of money, when Coinbase in the West in America was spinning up its own native layer two chain using the OP stack, using a layer two on Ethereum, that was just a huge signal of doubling down and building in a bear market. There are a couple of core principles of base that they launched with. First, a bridge, not an island, whereas Binance Marching, kind of an island, kind of a siloed ecosystem that's beholden to the Binance world.

Base was supposed to be a bridge, a bridge for users into the crypto economy. They wrote built for an easy on-chain experience and interoperability with other chains, meant to be the home of Coinbase's on-chain products. And also built in collaboration, like I said, with the OP stack, with Optimism. So Coinbase is the second core dev team working on the OP stack. So it was really Coinbase and the decentralized world of Dow governance and MIT open source licensing coming to build something for Coinbase, but also for the greater crypto world. And it was just a huge signal of building in a bear market, building a layer two, and open innovation for all to contribute to.

We also got some traction pretty quick. It was the fastest L2 to 100,000 users in history, uh, reached that milestone in 56 days after launch. So even those dark times, we had some traction early on. Uh, so that's number one. That happened in February of 2023. I think we're going somewhat chronological here as well. Number two is the collapse of Silicon Valley Bank. David, I almost forgot that happened, but we had this whole bank crisis in Q1 earlier this year. And it kind of culminated in the collapse of this major bank, Silicon Valley Bank. And there was all of this talk about contagion. Take us down memory lane. So, what what what happened in March of 2023?

March 10th. The joke, I think, is that crypto exported its yield contagion to the Trad world because we had just watched Terra collapse, then 300 capital collapse, and then things were kind of okay for a bit. And then we watched FTX collapse, all because of this like contagion yield. This yield is toxic yield.

And then it worked its way into TradFi. And we all kind of got a lesson on how banks are constructed and long term maturity securities. The significant thing is that.

A lot of crypto startups were banked at Silicon Valley Bank and of the few other banks that were also adjacent to Silicon Valley. Also, USDC

depegged because it had $3.3 billion of reserves hosted at Silicon Valley Bank. And that bank went under, a few others went under. And one of the huge bits of collateral damage as a result of this is Signature Bank, which also went under, had Signet, which a lot of crypto market makers would use to transfer money around very, very quickly. And since Signature Bank went down, it was more or less there was a conspiracy that the Fed allowed it to go so that they could they could capture the Signet infrastructure. And that is uh the an L that we took as an industry. We lost Signet and we lost a big crypto banking partnership, and was one of the beginnings, I would say, of Choke Point 2.0.

Yeah, so choke point two dot oh was uh really the Fed coming after banks that um banked crypto companies. And there was also a legitimacy hit. You said that USDC depegged. Do you remember it it depegged to 87 cents?

Yeah.

$1 USDC, and then you see a D pegging to 87 cents. That was very concerning at the time for all stablecoin holders. I think a good outcome of this is uh Circle and the issues of USDC got into some of the top 10, the too big to fail types of banks. So now it's no longer uh assets are no longer backed by some of these smaller regional type players like Silicon Valley Bank. So maybe that was an upgrade. But at the time, there was talk of contagion. Uh it wouldn't stop at Silicon Valley Bank. That many of the other regional banks in the US would get the the virus and they would start to collapse. Um, in fact, Bology, if you remember at the time, David, this was uh March of last year, he made his famous $1 million Bitcoin bet. He said, You buy one Bitcoin, I will send $1 million USDC. This is 41 odds, as Bitcoin is now worth 26k. The term is 90 days. He was essentially betting that Bitcoin would hit a million dollars in the next 90 days this year. Of course, he fell short on that bet.

But I remember doing an episode with him where he we talked about the reasons. There was also an episode with Arthur Hayes where we talked about the contagion and how the Fed was going to have to bail out the banking system. The FDIC essentially guaranteed all of the assets at these companies and stopped the contagion in its tracks. But it was a dicey Q1 of this year for sure.

Yeah, it definitely didn't bode well for the looming recession macro crisis that we all kind of still thought was gonna definitely going to come in Q one, Q two of of twenty twenty-three.

Moving in to the third subject of this year. This one spans uh the whole entire year, but it really first started in March. Before I really introduce the subjects, I want to pull out this uh this tweet from Nick Carter

where he says, if you want to pick a bottom, it's when all of Doquan, Bankman, Alex Mashinsky, and Suzu have reached their reckoning. Only then can we recover. And I heard Nick Carter gave this take on his podcast as well. He was saying

we cannot proceed as an industry, we cannot come out of this bear market until the scammers and frausers of 2022 were jailed.

Well,

Doquan was arrested in Montenegro in March of 2023. Fun fact, Bankless actually broke that news.

Alex Mashinsky was r arrested in July 13th.

Suzu was arrested on September 29th, and the SPF was found guilty of seven counts of fraud on November third.

So over the year, one by one, all of the fraudulent scammers of 2023 were one by one arrested all over the world, uh, which resort a little bit of my faith in humanity, Ryan, to discover that we still have due process and rule of law. And no matter what you do inside of crypto or outside of crypto, if you scam people, you will go to jail.

That was uh number three. So scammers arrested. And it it took many months for that to play out. But but some people at the beginning of the year were saying things like SBF would never be held to account. You had too many friends in Washington, that sort of thing. Uh and it turned out none of that was correct. Um justice did prevail in in crypto. So hopefully we've learned some lessons going into uh to this bull cycle going to 2024. Um, something as well happened in March that is significant, David. This is the Arbitrum airdrop that happened on March 16th. 1.5 billion dollars was dropped to individual arbitrum addresses and making it the largest, one of the largest airdrops in history.

It might be the largest.

Yeah, this is the this is the promo video for that absolutely massive amount of money. Um, of course, Arbitrum was the first layer two roll up, uh, kind of out of the gates uh early on. Optimism on it close on its heels, but Arbitrum was first. And um, like this was a very significant event, kind of kicking off the growth of uh layer twos.

The Arbitrum token, of course, spawned the Arbitrum DAO. And the the very vibrant DeFi ecosystem on Arbitrum made it pretty easy, I would say, to distribute Arbitrum tokens into on-chain users of Arbitrum. Uh but you also uh didn't necessarily have to use Arbitrum to get it. The uh Arbitrum Nova was also on the table, as well as a few other criteria. And this also marked the launch of Arbitrum Orbits, which was Arbitrum's chain development kit. So you could launch layer threes on top of Arbitrum, and then also with Arbitrum DAO approval, you could uh launch Arbitrum chains on top of Ethereum as well. So it was also Arbitrum entering the race of the chain development kit, the horizontal scaling of layer twos on Ethereum. I think to this day, I think Arbitrum has one of the largest treasuries in crypto, and that is all governed by the DAO, all by the ARP token. Uh, and that is not including the very positive economics that Arbitrum has from uh sequencer fees. So Arbitrum just, you know, makes ETH from reselling Ethereum layer one block space, and they are very, very cash positive as an organization, which I would say was just a big plus one to the overall layer two economic thesis.

Yeah, a big moment that was certainly uh coming in at number five. And I'm I'm not sure what the exact date is for this, David. Maybe you could give us some insight, but it's definitely been an evolving trend through the course of 2023, and that is Bitcoin Ordinals, revived Bitcoin building culture. Give us the recap on what ordinals actually is. And I'm looking at uh the dude analytics charts here of daily inscription data, and it looks like a straight line up starting really in May. That's when it will like the charts show it really taking off. But but what is this and what did it do for Bitcoin culture and the community of Bitcoin?

Yeah, so Bitcoin Ordinals was launched in February and it it made a pretty big splash between February and March. And then the absolute vertical line of further inscriptions, which are ordinals, uh coming after the first wave just was massively significant. And to this day

uh inscriptions is a very vibrant ecosystem on Bitcoin.

When you say inscriptions, what do you mean? Because it's coming somebody coming from like the Ethereum space might might not uh fully understand. What's an inscription, Dave, and what does it empower?

An inscription is kind of like a packet of data, I would say. An ordinal is a single Satoshi.

Which is a very, very small division of the smallest division of Bitcoin. And it spawn it like splits from the UTXO set. So you send one Satoshi, and all of a sudden you have a unique trail of one single Satoshi running around Bitcoin. That's how Bitcoin works. And with inscriptions, you can append data to that one Satoshi. So you're kind of making an NFT. And so an inscription is like a little packet of data. It could be a JPEG, could be anything. Someone, Ryan, put Doom, the video game, into an inscription that you could legitimately play on Bitcoin through ordinals through this inscription technology.

Not not just NFTs too, uh tokens, right? The I'm seeing a chart here, BRC20s, which is uh Bitcoin's version of an ordinal-based token. Is that right?