The Weekly Pen: New world economic warfare, Twitter Musk & the fun of funds

# fintech
# defi
# blockchain
# bitcoin
# crypto

Another week passed, slowly approaching 8 weeks till the end of the year, and we’ll finally be out of the most negative year in crypto history. This week offered a shift in politics, ethics, tweets, and much more. The weekly pen, once again, brings you the most trending and interesting stories in DeFi, crypto, and web3 layered (pun not intended) with a penned-up take on the tech, trends, and trades in the industry. Have a good read and Sunday.


The 3rd new prime minister in just 7 weeks of UK’s country leader churns, Rishi Sunak has spurred joy amongst crypto community members as he announced that he wants to turn the UK into a crypto hub. He’s been instrumental in the Financial Services and Markets Bill, which if passed could give local regulators wider influence over the crypto industry. Interestingly enough, in 2021 Rishi Sunak launched a task force on the Bank of England's digital currency and is recognized as one of the main architects of G7 summits talk on implementing CBDCs worldwide. Having said that, Rishi Sunak is also establishing a Cryptoasset Engagement Group which will work closely with the industry in order to explore ways of building the UK’s competitiveness in the space. Whatever one's view is of the new PM, this new leader made sure that British Lawmakers voted to include crypto assets in the scope of the regulated financial services industry. Time will show the true intentions of these initiatives, but all in all, it is indeed exciting, intriguing, and interesting times and news.


We’ve all heard or experienced the various warfare countries impose on the world for influence and power. The most tried and trialed of them all is economic warfare. Whilst El-Salvador was betting on becoming a bitcoin nation and now the UK aiming to become a worldwide crypto-hub, Spain overtook El Salvador to become 3rd largest crypto ATM hub. With their 215 crypto ATM’s they’ve overtaken El Salvador down the fourth position who is the host of 212 ATMs. Each country is offering its own strategy to be crypto-friendly as the industry sees no halt to its continuous growth, but of the 3 countries battling in the “crypto-warfare”, which one will take the cake? Up until the entry of the winter, countries “won” the game through loose regulation and welcoming crypto-companies into their jurisdiction. Not only did it offer a platform for the rise of crypto-scammers and bros, but in many ways, it ruined the organic, sustainable, and healthy growth of the industry. It seems now, that the paradigm has shifted where regulators and lawmakers work more closely with the industry, as is the case in the Nordics and particularly Denmark.


And on that note, Kazakhstan, a historically favorite for crypto-mining companies, is now among the top 3 bitcoin mining destinations after US and China. With the energy warfare occurring in the European region and the crackdown on European crypto miners, the destination's popularity will most likely increase. With the UK dominating regulatory adaption of the industry, Spain empowering the industry’s, consumer and user adaption, and Kazakhstan covering the mining infrastructure we only have the most innovative, entrepreneurial, and novelty movers and shakers nations left. Who is in the race to win that battle?


Staying on the topic of adaptation and working towards multi-nation-wide acceptance, recently partnered with VISA to offer a crypto debit card. Many would see this as a no-brainer following VISA’s partnerships and offering similar products in collaboration with FTX and BitOasis, but also wonder what took them so long. The whole purpose of Decentralized Finance was/is to democratize financial freedom and access with little to no intervention of the centralized and established monetary infrastructures’ influence, but now in many ways seems that the space is serving and enabling financial and technological advancements for the established space rather than innovating for themselves. On the other hand, it also means that there is a straightforward understanding and collaboration of the “two worlds” which enhances the adaptation advancements, and that’s the “team” Penning especially leans towards.


The Pen team has covered good old Elon Musk and his Kanye West style-like stunts in the business world a few times in our Weekly Pen drops. While we were all waiting for the Twitter saga to come to an end, in a surprising and seemingly odd turn of events, not only did Elon Musk actually follow through with the acquisition of Twitter Binance together with Sequoia Capital is investing $500M to support the “takeover”. Didn’t Binance recently get hacked for that same amount? Interesting…There’s been plenty of theories about what Elon Musk plans to do with the platform and this is all while Jack Dorsey, the founder of Twitter, revealed his roadmap for a New Decentralized “Social Protocol”. And this all comes down a year after Twitter built a crypto team. You connect the dots, we’re done here.


Being a giant doesn’t mean you’re safe from global turmoil. While you might be better at withstanding its winds and falls, you’re also more likely to drop deeper than the ones who can tip-toe their way through the dark waters. A16Z, Andreesen Horowitz’s flagship fund is down 40% on their crypto fund in the first half year of 2022 alone. One might think that they made the FoMo move, as they only set up the fund as the crypto market peaked. The 40% fall is much larger than the 10 and 20% drops in competitive venture capital funds as most venture capital firms have stayed away from crypto-related investments as they’ve traditionally viewed them as risky and in a regulatory grey area. Andreesen Horowitz has been one of the largest players from the traditional VC space to take a giant leap in the murky waters of the crypto ocean through a crypto-focused fund sized at $4.5BN, making it the largest ever crypto fund in the crypto space. But building on their investment thesis, that they invest for and in the future a16z seems not worried about their massive fund decline and foresees their investments paying off in the future. With the ballad of bitcoin and crypto adaption, countries conspiring to become the most sought after crypto-regions, cross-border collaborations between the “two worlds” and innovative initiatives, a16z might be right on their bet for being the best VC fund in the space. Time will tell.

Till we yield again. The Pen team.