Happy December! I can't believe it's the last month of the year?! Time flies when you're having fun. I guess. This is Taylor, CEO of Hedgehog, the one-stop-shop for your crypto portfolio.
In case you missed it, last week I gave you a sneak peek of Hedgehog's near future. You also don't wanna miss the weekly giveaway, which you can find at the end of every newsletter.
Before we get into the news: Hedgehog has started bringing on users to test the mobile app! Yay! If you're interested in doing a 20-minute walkthrough with Jon, please reply to this email and we'll get you set up 🙏
FTX Fallout Keeps Falling Out
The FTX domino toppling over was not great for the other dominos standing next to it:
- BlockFi is bankrupt — everybody knew this one was coming.
Bloomberg columnist Matt Levine pointed out, "it is possible that when FTX extended a loan to BlockFi to shore up its customers' confidence," this summer, "it loaned BlockFi tokens," specifically FTT, the now-almost-dead exchange token that FTX created. (Kind of amazing that FTT is still trading above zero.) Levine continued:
"Here, have some magic beans we made up, people really believe in them," FTX could have said to BlockFi, and over the summer that would have been enough. "Ah, BlockFi has some FTX magic beans, everything is fine," customers could have said, and the bank run would have halted. Now the beans no longer work, and BlockFi is bankrupt.
This may not be exactly what happened… but as Levine said, it certainly seems possible.
As a further bummer for BlockFi customers, it sounds like the SEC will get paid first.
Tldr: Magic beans have their perks, but they are not the most reliable form of corporate financing.
- Crypto lender Genesis might be next, although "creditors to the firm are organizing with restructuring lawyers to prevent insolvency." According to a Genesis spokesperson, "Our goal is to resolve the current situation in the lending business without the need for any bankruptcy filing." Good luck!
Tldr: "Ah you think darkness is your ally? You merely adopted the dark. I was born in it, molded by it. I didn't see the light until I was already a man, by then it was nothing to me but blinding!" — Seasoned Crypto Lawyer
- "The DeFi community is watching nervously as Wrapped Bitcoin (WBTC), the leading wrapper for Bitcoin on the Ethereum network, continues to trade at a slight discount to Bitcoin."
This is a weird one, since WBTC offers on-chain proof of reserves. But FTX sister company Alameda Research was involved with WBTC, hence the freakout. BitGo CEO Mike Belshe reassured on Twitter:
Only BitGo mints WBTC. We do that when someone gives us BTC first, which we store 1:1 backed, and then issue tokens. Alameda did pay us BTC which we minted into WBTC, and now we hold the BTC safe and sound.
Still, as I write, a small gap between the two assets remains. Again, it's weird!
Tldr: "On-chain proof of reserves" is such a wonderful phrase.
Elon GOAT Ghosted
After that grim news section, here's some classic crypto ridiculousness to cheer you up:
One group of fanboys [of Elon Musk] took their devotion to the next level this past Saturday, delivering a $600,000 sculpture of Musk to Tesla headquarters in Austin, Texas. The richest man in the world ignored them.
The fanboys made a pilgrimage to Tesla HQ in October as a stunt to promote their cryptocurrency company — Elon GOAT Token, or EGT — which sells a token of the same name. According to the EGT website, the company commissioned the sculpture to honor Musk's accomplishments and tell him they think he's the GOAT, the "greatest of all time." The Musk sculpture, which weighs 12,000 pounds (5,440 kilos), features the Tesla CEO's head on top of a goat's body riding a rocket. The bust is also wearing a gold-plated dogecoin necklace. To date, however, Musk has disregarded their gifts.
Have no fear, the sculpture will not be wasted! "The EGT team plans to take it on tour and use it to create an 'Elon Santa' for Christmas." Because of course. Check out the pictures on Instagram, this enormous metal creation is certainly… quite something.
Tldr: Is this the first time that Elon Musk didn't say anything? This… surprises me. Though, looking at the statue… uh… I don't think I would say anything about it either. YIKES.
Giveaway time! The winner gets to choose three of these prizes:
- cozy Hedgehog hoodie
- comfy Hedgehog baseball tee
- snazzy Hedgehog socks
- insulated stainless steel water bottle with Hedgehog logo
- official Hedgehog team baseball cap
Question of the week: What would you do to get Elon Musk's attention? And which of his various company headquarters would you visit?
Reply with your answer for a chance to win the giveaway.
Walking in a winter wonderland,
To get future newsletters delivered straight to your inbox every week, sign up here! Check out past newsletters in the complete archive.