Crypto Has a Marketing Issue

Plus: Gemini is expanding to South Asia, Visa tallies $1 billion in crypto cards and more |

What you need to know today in crypto and beyond  July 8, 2021 Sponsored By:     Welcome to The Node.   If you were forwarded this newsletter and would like to receive it, sign up here.   Questions? Feedback? We'd love to hear from you! Simply reply to this email.   –Daniel Kuhn Today's must-reads Top Shelf GOING PUBLIC: USDC backer Circle is going public in a deal that values the company at $4.5 billion, it announced Thursday. The crypto financial services firm will go public by way of Concord Acquisition Corp, a publicly traded SPAC. Last month, Circle raised $440 million in one of the biggest funding rounds in crypto history.   BILLION-DOLLAR MARK: Visa crypto cards saw over a billion dollars in spending in the first half of 2021, the company disclosed Wednesday. However, the number isn't entirely made up of consumers spending cryptocurrency. Some transactions are tied to fiat accounts but result in crypto rewards, some are indeed crypto transactions. More than 50 crypto firms have launched cards with Visa so far.   NOT SAFE: A regional and economic union comprising 15 West African nations has expressed concerns over the use of crypto in the sub-region. The members said bitcoin's decline in recent months was a reminder that cryptocurrencies are not safe-haven assets.   FIRST TEST: The central bank of France has tested a cross-border CBDC transaction with Singapore, marking the first use of a smart contract-based, automated liquidity pool for the digital EUR/SGD currency pair. The transaction was executed using a permissioned version of Etherum called Quorum, which was developed by JPMorgan and now owned by ConsenSys.   EXPANSION: U.S.-based cryptocurrency exchange Gemini is looking to expand its operations in Southeast Asia in an attempt to capitalize on the region's growth, the company's managing director Asia Pacific said Wednesday. The exchange already offers support for trading in Australian and Hong Kong dollar pairs.   –Helene Braun  A message from Nexo Your digital assets deserve a savings account in their BEST INTEREST. Leading crypto lender Nexo treats you, your crypto and your fiat to industry-best Crypto & Fiat services, featuring:    * Up to 12% interest on digital assets, paid out daily! * Yields available on BTC, ETH, LTC, BCH, XRP, XLM, EOS, TRX, LINK, BNB, PAXG, USDT, USDC, TUSD, PAX, DAI, HUSD, GBP and EUR. * No minimum or maximum limits on funds deposited, offering infinite opportunities to earn. * #ZeroFees on all transactions. * Military-grade wallet security and top-tier insurance on all custodial assets with SOC 2 Type 2 certified crypto custodian BitGo.   Get started at nexo.io "The big thing for Circle is that it has a huge opportunity to provide more transparency than any other stablecoin issuer on the planet right now. "   –CoinDesk Managing Editor, Global Policy & Regulation and author of State of Crypto newsletter Nik De, on CoinDesk's "First Mover" A message from CoinDesk The Investor's Perspective on the Bitcoin Taproot Upgrade Taproot is a bundle of three upgrades to Bitcoin aimed at improving network security, privacy and scalability. At the same time, it poses some potential drawbacks to Bitcoin including risks of low adoption, unintended privacy shortcomings and Bitcoin community disappointment and fracturing.   CoinDesk Research's newest report dives into the economic impact and investment implications of the Taproot upgrade. Download the full report. What others are writing... Off-Chain Signals   Britain's crackdown on Binance has boosted other crypto exchanges including Bitstamp, Kraken and Gemini (CNBC) U.S. Sen. Pat Toomey has crypto exposure (The Block) Bloomberg Wealth covers crypto scams, notes: "crypto scams seem to be getting smaller. … [But] there are more of them. –H.B. A message from DeversiFi You've heard of DeFi, but have you heard of DeversiFi? DeversiFi is the easiest way to access DeFi opportunities on Ethereum: invest, trade and send tokens without paying gas fees. This summer we're launching our full suite of tools – from managing your portfolio, to providing liquidity through our AMMs and earning rewards.  DeversiFi is the place to be. So go on, what are you waiting for?    Click here to use DeversiFi today. Putting the news in perspective The Takeaway Crypto Has a Marketing Issue There's a troubling cultural trend around cryptocurrency, one that encourages retail investors to "ape into" the market in search of riches.    In one recent example, Blockfolio, a crypto-trading and portfolio-tracking mobile app, kicked off an ad campaign with the call to action to buy now. The slogan: "There's a price to waiting, especially when it comes to crypto." Then there are the celebrity endorsements, paid and unpaid. There isn't just one factor that drives a bull run, but statements that glorify greed or promote the fear of missing out (FOMO) contribute to turning a bottom-up revolution into a directionless stampede.      According to a survey conducted in May, during the height of the recent market run-up, over one-third of retail crypto investors in the U.K. said their knowledge of the asset class was "poor" or "non-existent." One in five said they lacked an understanding even after they invested in crypto.  The survey was conducted by Oxford Risk, a financial services firm, which found that a significant portion of investors were driven by FOMO. Many were persuaded by media coverage of outsized gains or by word of mouth.    Crypto isn't alone in attracting people to invest with reckless abandon. Over the lockdown year we saw the rise of meme stocks and dog tokens alike. Platforms designed to lower the barrier to investing – "democratize finance," to use Robinhood's lingo – did just that.  It's all part of a trend towards narrative-driven finance, focused on the stories that projects and companies can sell rather than their fundamentals. Some call this moment "financial nihilism," the idea that everything is rigged so you might as well capitalize. Others advance the "boredom markets hypothesis," that people cooped up during the coronavirus pandemic are seeking a diversion. Crypto has a powerful story, and the potential to effect real change. Removing gatekeepers and opening access to financial services is a move in the right direction, for many. In this sense it's less of an asset class than a tool. Censorship resistance isn't just a story. Neither is supporting a new class of digital artists.  But crypto will not be a tool to become ultra-rich for many, or even for most. Promulgating that idea is hazardous, but it's also one of the stories that is most often told about crypto.    Spike Lee recently directed and starred in a commercial for bitcoin ATM firm Coin Cloud, where he called crypto a "digital rebellion." An ad executive who watched the clip was quoted in the New York Times:  "I get very nervous because I start looking at the way that some of the platforms are specifically targeting younger investors." ... Maximizing is what's being encouraged here – the idea that this is an amazing asset, and as much as you want to put in, come on and jump on in, the bitcoin's lovely. … We would never feel comfortable for an alcohol client, or a high-salt or high-sugar or high-fat client, to encourage that level of unequivocal behavior."   That said maybe "mass adoption" always meant endorsements and commercials. Either way, if crypto just caught your eye and you're looking to stay safe, here's a short guide.    –D.K. The cryptocurrency movement has never been so sprawling, reaching every corner of the planet.   Crypto State by CoinDesk aims to connect with local communities to explore this movement of financial disruption and how it trickles down to every corner of the globe, from DeFi investment opportunities to alternative ways to transact and store wealth.    We're making virtual stops with audiences in Nigeria, the Middle East and Southeast Asia this year. Register for the Crypto State virtual tour. The Chaser... ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is. The Node   A newsletter from CoinDesk   See Previous Editions Copyright © 2021 CoinDesk, All rights reserved.    250 Park Avenue South New York, NY 10003, USA You can manage your preferences here or unsubscribe from all CoinDesk email.