The impact of influential figures on the past and future of the cryptocurrency industry
Author: Huo Huo | Plain Language Blockchain / Source
The entire cryptocurrency industry in 2023 experienced ups and downs. The Silicon Valley bank turmoil at the beginning of the year continued to shake the market, which was heavily invested in by FTX, and then various regulatory storms began, causing industry giants to be on edge.
However, "danger" and "opportunity" always go hand in hand. With the approach of Bitcoin halving, the expected approval of Bitcoin spot ETF, and the rise of BRC20 narrative triggering a craze for inscriptions on various public chains, the combination of various narratives led to a surge in market enthusiasm at the end of the year. Bitcoin once surpassed $45,000, with an annual increase of over 150%, and the market entered the early stage of a bull market.
So, amidst these unpredictable changes, who are the influential figures? Will they determine the market trend in 2024?
01
Retirement of a Titan—CZ
On November 23, 2023, CZ announced his resignation as CEO of BN, stating that he would not hold an executive position, but would retain the majority of BN's shares and transition to an investor behind the scenes. The news shocked the entire industry.
Why did CZ suddenly resign? The reason was that on November 22, 2023, BN and its CEO, Zhao Changpeng (CZ), pleaded guilty to federal charges in the United States. BN was charged with three counts, including money laundering, operating an unlicensed money transfer business, and violating U.S. sanctions. In order to continue operating, BN reached a settlement with the SEC, paying a hefty fine of $4.368 billion, and CZ resigned.
In fact, this lawsuit had been dragging on for 5 years. As early as 2018, the U.S. Department of Justice began investigating BN for alleged unlicensed money transfers, money laundering, and violations of U.S. sanctions, but it finally came to a conclusion this year.
Looking back, from BN's humble beginnings in 2017 to becoming the industry leader today, CZ's contribution over the past 6 years has been invaluable. He has built a diversified business system for the industry from scratch, including spot, futures, options, mining pools, cloud services, and public chains. He has also transformed a single CEX into a comprehensive Web3 group, spreading its products, services, and brand influence globally.
Over the past 6 years, under CZ's leadership, BN has achieved a leading position in trading platforms, public chains, wallets, and investments. However, as BN became an industry giant, CZ may have realized that as a industry leader, the biggest challenge at this point may no longer be competition, but rather taking on the responsibility of leading the cryptocurrency industry towards compliance and development.
Therefore, after stepping down, some have called it a "sacrifice of personal interests for the greater good, illuminating the path of compliance and innovation for future generations," and even paving the way for the "upcoming ETF."
02
A Heavy Blow—SEC Chairman
Since assuming the role of SEC Chairman, especially in 2023, Gary Gensler has launched a strict crackdown on cryptocurrency regulation, attracting significant attention in the crypto space. Most notably, he led the SEC's lawsuit against Ripple and imposed multimillion-dollar fines on cryptocurrency exchanges such as Kraken. This has sparked a wave of fear, uncertainty, and doubt (FUD) in the entire cryptocurrency industry, as well as concerns among other top platforms.
Regarding his crackdown on cryptocurrencies, what made him famous was the SEC's lawsuit against the digital payment protocol Ripple in December 2020. This case, under the guise of consumer protection, severely targeted the staking services of cryptocurrency platforms and attempted to classify all tokens as securities.
The recent successful prosecution of CZ and BN is another regulatory milestone under Gensler's leadership at the SEC. In addition to these two cryptocurrency litigation cases, the SEC's designed cryptocurrency cases include:
1) Bittrex and its former CEO were accused of operating unregistered trading platforms, broker-dealers, and clearing agencies. 2) Fines exceeding $23 million were imposed on two individuals involved in the alleged fraud of Ormeus Coin. 3) Tron founder Justin Sun and his company were accused of illegally selling unregistered securities, fraud, and market manipulation. 4) Terraform Labs and Do Kwon were accused of orchestrating a multi-billion dollar cryptocurrency securities fraud. 5) Trade Coin Club was accused of conducting a $295 million cryptocurrency Ponzi scheme. 6) The SEC filed a lawsuit against Dragonchain, accusing it of issuing unregistered cryptocurrency securities. 7) Eleven individuals involved in creating and promoting Forsage were accused of a $300 million fraud Ponzi scheme. 8) The U.S. Second Circuit Court ordered Terraform Labs and Do Kwon to comply with the SEC's subpoena. 9) The SEC urgently halted the distribution of tokens for the Telegram cryptocurrency project TON, alleging the sale of unregistered securities. 10) The SEC charged Block.one and reached a settlement by paying a $24 million civil penalty, involving the issuance of unregistered digital token EOS.
In summary, it can be said that Gensler's SEC regulatory hammer has been omnipresent alongside the growth and development of the cryptocurrency world.
03
Bear Market Pillar—Vitalik Buterin
Since its creation in 2014, Ethereum has entered its tenth year, and under Vitalik's leadership, Ethereum has made groundbreaking contributions to the development of cryptocurrencies. From being a platform that only supports digital assets at the beginning, it has evolved into one that supports various decentralized applications, earning the title of "world computer." If Satoshi Nakamoto is the creator of blockchain, then Vitalik Buterin is another key leader in the blockchain and cryptocurrency space.
Vitalik established the earliest Ethereum roadmap: from PoW to PoS (Phase 0) → data sharding (Phase 1) → execution sharding (Phase 2). Subsequently, in the development process, he continuously revised and debugged it, expanding it to the Ethereum roadmap centered around Rollup: The Merge, The Surge, The Scourge, The Verge, The Purge, and The Splurge.
Even though Ethereum's overall development in 2023 was relatively flat, the most important events were the Shanghai upgrade completed in April and the rise of the staking track following the upgrade.
In a market with a lackluster performance in 2022, Ethereum's layer2 experienced an explosive growth phase at the end of the year, becoming a major highlight that continued into the first half of 2023, especially with the leading development of Arbitrum. According to L2beat's data, the total value locked (TVL) in Layer2 has currently reached $20.1 billion (as shown in the figure below), providing room for development for builders during this bear market phase.
Vitalik is more optimistic about Rollup, so he is combining it with privacy protection and zero-knowledge proofs (ZK) technology. Although OP-Rollup is currently the mainstream in the Layer2 ecosystem, with the advancement of zero-knowledge proof technology, ZK Rollup is likely to become the ultimate Layer2 solution.
Furthermore, it is worth mentioning Ethereum's next upgrade—the Cancun upgrade. There are reports that if there are no unexpected circumstances, it will officially begin testing on January 17, 2024. If successful, this will significantly increase the transaction volume per second on the Ethereum network, and it will also open up a new stage of development for Ethereum's data storage and retrieval capabilities, further paving the way for the development of Ethereum Layer2.
04
Founder of the Inscription Craze—Founder of Ordinals
The recent frenzy in the inscription market has exceeded many people's expectations, and the founder of this grand event can be traced back to Casey Rodarmor, the founder of Ordinals.
Rodarmor has been working in technology since 2010, having worked at Google, Chaincode Labs, and also contributed to the main code implementation of the Bitcoin core protocol. He also served as co-host of the San Francisco Bitcoin BitDevs last year. BitDevs, which began in New York City, is a monthly gathering to discuss more technical aspects of the Bitcoin community and is an important part of Bitcoin grassroots culture.
Earlier this year, Rodarmor's development of the Ordinal protocol enabled Ordinal NFT and inscriptions to be implemented on Bitcoin, marking another attempt at NFT on Bitcoin since the appearance of colored coins in 2012 and the derivatives platform Counterparty in 2014.
The Ordinal protocol outlines a method for sequentially numbering satoshis (the smallest unit of Bitcoin, representing one hundred millionth of a Bitcoin). Once a satoshi is assigned a sequence number, users can engrave data onto these satoshis to create digital artifacts, which was Rodarmor's initial description of Ordinals. As of December 27, 2023, the cumulative fees for Ordinals inscription casting have reached 5028 BTC.
Source: dune.com
Rodarmor said that the inspiration for Ordinals came from the pseudonymous creator of Bitcoin, Satoshi Nakamoto. Nakamoto mentioned something called "atoms" in the original Bitcoin codebase.
Currently, Rodarmor is working full-time on Ordinals. In September of this year, Rodarmor proposed a new Bitcoin FT protocol design concept called "Rune," also known as the "Rune" protocol, but it has not been launched yet.
Regardless of the future development of Rune, Rodarmor's proposal for Ordinals has inspired the development of BRC20 Tokens, not only igniting the inscription craze but also triggering further development in the Bitcoin ecosystem.
05
The Financial Giant Awaiting Approval—CEO of BlackRock
On June 15, 2023, BlackRock applied for a spot Bitcoin ETF, causing a sensation in the cryptocurrency industry. The SEC has rejected dozens of similar fund applications over the past decade, so why did BlackRock's application cause such a stir in the industry?
On one hand, the SEC has previously rejected applications for spot Bitcoin ETFs, citing concerns about fraud and market manipulation, aiming to protect investors, including further tightening regulations on cryptocurrency companies following events such as the collapse of FTX.
As the world's largest asset management company, BlackRock manages assets worth approximately 10 times the total market value of the entire cryptocurrency industry. If the ETF application is successfully approved, its substantial financial volume will have a significant impact on the cryptocurrency industry and drive up the prices of crypto assets, potentially igniting the next bull market.
On the other hand, BlackRock's move has encouraged eight financial companies including Fidelity, Invesco, VanEck, Cathie Wood’s Ark Investment Management, and WisdomTree to follow suit, greatly promoting the development of Bitcoin ETFs.
The relationship between BlackRock's CEO Larry Fink and Bitcoin is also noteworthy. As early as 2017, Fink stated that he was a "believer" in cryptocurrencies but expressed concerns about market speculation at the time. On July 16, 2018, he mentioned that BlackRock's clients were not interested in cryptocurrencies and slowed down BlackRock's investment inclination in this area. In 2019, as the market improved, BlackRock hired Robbie Mitchnick, former marketing director of Ripple, and resumed exploring the feasibility of cryptocurrencies. In 2020, there was a shift in attitude towards cryptocurrencies, believing that they would be necessary and could potentially replace gold. In 2021, Fink stated that he was once again studying Bitcoin but had not reached a definitive conclusion. In 2023, BlackRock submitted an application for a Bitcoin ETF, and Fink stated that cryptocurrencies are likely to surpass global currencies.
06
Lifelong Imprisonment—SBF
In November 2023, on the first anniversary of FTX's collapse, its founder SBF was convicted of seven charges, including fraud and money laundering. The prosecution called it "one of the largest financial fraud cases in American history."
What led to this?
SBF, originally named Sam Bankman-Fried, is the co-founder and former CEO of the bankrupt CEX FTX and the crypto company Alameda Research. FTX rose to prominence during the bull market of 2020, becoming the world's third-largest CEX, attracting over a million users and numerous well-known investment institutions, with a peak valuation of $32 billion.
In November 2022, CoinDesk revealed financial documents exposing potential debt issues between FTX and Alameda Research, causing user panic and leading to a run on funds. Within a few days, the FTX Group declared bankruptcy, and SBF resigned. In 2021, 28-year-old SBF was already listed in Forbes' 30 Under 30 list of young elites, but within two years, his current net worth is $0.
After FTX's bankruptcy, over $370 million in assets were stolen, prompting an investigation by U.S. prosecutors. To address the chaos, FTX sought the help of former regulatory officials, but the company's closure raised questions about regulation. In court documents, FTX revealed that over $2 billion was transferred to SBF. FTX accused SBF and other former executives of embezzling $1 billion in company funds. The trial involved 20 witnesses, including the former CEO, SBF's ex-girlfriend, and other executives.
The trial of this case began in early October 2023 and lasted for a month, with the verdict scheduled for March 28, 2024. If SBF is convicted of all charges, he could face a maximum sentence of 115 years in prison.
However, as of December 30, 2023, the U.S. government dropped six charges against SBF, including violating campaign finance regulations and conspiring to bribe, meaning SBF will not face a second trial.
07
Meme Master—Elon Musk
Elon Musk's most famous connection to crypto is his story with Dogecoin, but his relationship with crypto goes back to 2021 when his companies Tesla and SpaceX both purchased large amounts of Bitcoin.
In October 2022, Musk acquired Twitter, and on April 5 of this year, he changed Twitter's logo to a dog's head, causing the price of Dogecoin to surge by over 20%. This move is discussed in the article "Musk Changes Twitter Logo to Dogecoin Emoji, What's the Intention?"
Then, on July 30, Twitter changed its classic little blue bird logo to an "X," which was hailed as having a significant impact on cryptocurrency. This is because in 1999, Musk co-founded an online financial service and email payment company called X.com, which is now PayPal, one of the world's earliest and most successful online payment processing companies.
Now Musk is reshaping Twitter into a more extensive new service called X, which is likely an intentional move to turn this iconic social media app into a payment platform. Some speculate that he will integrate other cryptocurrencies such as Bitcoin, Ethereum, and stablecoins like USDC, especially Dogecoin, which is favored by billionaires.
Therefore, Musk is likely to continue bringing major changes to the crypto industry.
08
Pressing Forward—Coinbase CEO
With CZ leaving Binance and SBF in prison, Brian Armstrong has become the most prominent figure still facing challenges. Brian Armstrong is the co-founder and CEO of Coinbase, and he has a significant influence on the crypto industry.
Firstly, Coinbase launched its own Layer2 blockchain Base and derivative trading platform Blade this year, and it is expected to launch a Bitcoin ETF in 2024, undoubtedly actively preparing for the next wave of the crypto market.
Like Binance, Coinbase also faces regulatory challenges and has been accused of illegal trading. Previously, the SEC considered all tokens as securities, impacting the entire cryptocurrency industry. Armstrong has been pushing forward, likening Coinbase to a local sheriff and calling for action to address the regulatory issues led by U.S. institutions. Armstrong once posted on the social media platform X, "We can't always grow as quickly as other companies. The nature of the industry makes compliance more difficult and costly. The news about Binance further proves that choosing to do the difficult things is the right decision."
In early January, Coinbase acquired the derivatives trading platform FairX, regulated by the U.S. Commodity Futures Trading Commission (CFTC). This acquisition is a crucial step for Coinbase to provide crypto derivatives to U.S. retail and institutional clients. He also established the "Stand With Crypto" organization, hoping to protect the industry from government criticism.
From a macro perspective, with Binance facing regulatory pressure and another competitor, Kraken, facing similar charges, it is a positive factor for Coinbase's individual development, leading to a 200% increase in Coinbase's price and a market value exceeding $25 billion this year. However, Coinbase's development is not without challenges, as it will face the overall poor development of the crypto market next. Although some settlement agreements have resolved significant issues in the crypto market this year, a larger catalyst is still needed to boost the overall market.
Currently, the next important catalyst is the possibility of regulatory approval for a Bitcoin ETF, and the announcement by BlackRock, mentioned earlier, to apply for a Bitcoin ETF, which will be custodied by Coinbase, has raised hopes for the approval of the ETF, driving the rise of Bitcoin and Coinbase. The specific developments to follow are worth paying attention to.
09
AI Powerhouse—OpenAI CEO
Since its release on November 30, 2022, ChatGPT has quickly become one of the fastest-growing consumer applications in history, reaching 100 million monthly active users within just two months. This has brought significant attention to Sam Altman, the CEO of OpenAI, the company behind ChatGPT. However, apart from the initial success of ChatGPT, last month, a letter from several researchers to the board claimed that OpenAI had made a significant AI discovery that could threaten humanity, leading to a controversy and calls for Altman's removal from the board.
On November 18, 2023, OpenAI announced on its official website that the current CEO, Sam Altman, also known as the "father of ChatGPT," would step down as CEO and leave the board. This unexpected news led to a significant number of employees announcing their resignation in support of Altman. However, shortly after, Altman announced a shocking development, stating that he would be joining Microsoft along with his assistant. Then, just five days after being fired, Sam Altman was reinstated as the CEO of OpenAI.
Altman expressed on X that his recent decisions, including joining Microsoft, were made to preserve the integrity of the OpenAI team and its mission. With a new board and the support of Microsoft CEO Satya Nadella, Altman looks forward to returning to OpenAI and maintaining an excellent partnership with Microsoft.
Additionally, in July of this year, Altman created and launched the Worldcoin project and token, aimed at addressing global online identity verification and income inequality issues. Worldcoin hopes to build the world's largest and fair digital identity and currency system to help everyone access the global financial system. However, the project has faced some regulatory resistance.
As one of the noteworthy directions in the crypto field in 2024, Sam Altman is someone to keep an eye on.
10
Bitcoin Finally Profitable—President of El Salvador
As of December 4, 2023, President Nayib Bukele of El Salvador stated that, based on the current market price of Bitcoin, selling it would not only recoup 100% of the investment but also generate over $3.6 million in profit. This achievement is attributed to Bukele's efforts.
El Salvador, a small Central American country, does not have its own legal tender and uses the U.S. dollar. This has had some economic implications, with people working abroad needing to pay expensive remittance fees, which is not conducive to increasing GDP. Additionally, about 70% of the population in El Salvador does not have bank accounts or credit cards. To some extent, repairing the economy requires attracting new investors.
Apart from external factors, Bukele is a genuine enthusiast of Bitcoin. Under his leadership, on June 9, 2021, El Salvador passed a law with an "absolute majority" vote to make Bitcoin legal tender in the country, making it the first country to do so. This decision garnered widespread attention globally. Since implementing this policy, El Salvador has actively promoted digital payments and financial inclusion, aiming to provide broader financial services and convenience to residents through the adoption of Bitcoin. It has been reported that the country purchases one Bitcoin every day since the policy was announced.
Furthermore, this move is seen as an innovative experiment in the financial system that may influence the choice of legal tender policies in other countries in the future. Over time, the relationship between El Salvador and Bitcoin will become an important case study in global digital currency experiments.
Additional 1
Devoted Believer—Michael Saylor
Michael Saylor, the CEO of MicroStrategy, is a significant figure in the cryptocurrency field as a Bitcoin whale. It is said that he reached a net worth of $3 billion in 2023 and holds over 120,000 Bitcoins, making a significant contribution to achieving his target net worth.
Saylor began investing in Bitcoin in 2020. He purchased a large amount of Bitcoin in his personal capacity at MicroStrategy and invested the company's funds in Bitcoin. In the months that followed, Saylor doubled or even tripled his bet on Bitcoin, borrowing over $2 billion in debt to purchase more volatile cryptocurrencies. Since then, Saylor has been a loyal supporter of Bitcoin.
Despite being in the "low point" of the Bitcoin cycle, which saw companies like FTX, Three Arrows Capital, and Celsius go bankrupt, last year was undoubtedly a year of perseverance for cryptocurrency investors. However, Saylor continued to support Bitcoin. On November 13, 2023, at the Australian Cryptocurrency Conference, Saylor looked ahead to the future of Bitcoin. He emphasized the upcoming Bitcoin halving event and predicted that this would be the stage where Bitcoin enters its "adolescence," becoming a mainstream asset. He expects that from 2024 to 2028, large tech companies and banks will widely adopt Bitcoin and integrate it into their products and services.
Additional 2
Just Buy Bitcoin—Author of "Rich Dad Poor Dad," Robert Kiyosaki
According to the latest news on December 11, the author of "Rich Dad Poor Dad," Robert Kiyosaki, posted on X, stating that the U.S. government is stealing wealth through people's money, and it's not too late to realize this. The banking system has already collapsed, and now is the time to act by buying gold, silver, and Bitcoin while you still can. Kiyosaki also mentioned that his previous warnings have all come true, and the next warning will be about the S&P, which will severely impact millions of 401k and individual retirement accounts.
Translation:
I want to thank Smart Silver Stacker because since 2010, he has been mocking my advice to buy and store silver. Like Paul Revere or Chicken Little, warning people that the U.S. government is stealing our wealth through our currency is not easy. But you can laugh as long as you want. It's still not too late. Our banking system has already collapsed. While you still have the chance, hurry up and buy gold, silver, and Bitcoin. Your friends and family will mock you and me just like Smart Silver Stacker. By the way, I predicted the collapse of Lehman Brothers in 2008 on Wolf's show. You can find me on CNN's Wolf Blitzer show. Wolf laughed at that time. In 2023, I appeared on Neil Cavuto's show on Fox Business, predicting the collapse of the banking giant Credit Suisse and mentioning that UBS might be next. Laugh if you want, the global banking crisis is imminent. Please remember my warning in "Rich Dad, Poor Dad" published in 1997: "Savers are losers" and "Your house is not an asset," which became a reality in 2008. People are still laughing at those predictions from 1997. Stay tuned for my next warning. The S&P index will be next, and it will have a severe impact on millions of 401k and IRA accounts. Take care.
I believe that anyone with a slight interest in finance has read the book "Rich Dad, Poor Dad," published in 1997, with sales of no less than millions of copies and translated into more than 50 languages, making the author, Robert Toru Kiyosaki, a prominent figure in finance. His connection to crypto dates back to 2017 when he began expressing interest in Bitcoin and started advising people to pay attention to and understand cryptocurrencies.
Moreover, this month's shout-out is not the first time Robert has promoted Bitcoin. In 2022, Robert Kiyosaki also tweeted that Bitcoin is almost like a commodity, more like gold, silver, or oil. Secondly, the U.S. Securities and Exchange Commission has classified Bitcoin as a commodity, while other cryptocurrencies are considered securities.
Q: Are you investing in Bitcoin? A: Yes, I am investing. I am very excited about Bitcoin. Why? Because Bitcoin is classified as a commodity, just like gold, silver, and oil. Most crypto tokens are classified as securities, and the regulations of the U.S. Securities and Exchange Commission will destroy most of them. I am buying more Bitcoin.
By publicly expressing support for Bitcoin and other crypto assets, he not only indicates that he is a Bitcoin investor but also does not disclose the specific amount of investment.
13
Conclusion
Although 2023 is considered a low point in the crypto cycle, both speculators and true builders are pushing the crypto industry forward in their own ways.
The influence of these influential figures not only affects market trends but also plays a leading or driving role in the future development of cryptocurrencies. Regardless of how the industry develops, over time, they are undoubtedly an important part of this historical picture.
Source: https://mp.weixin.qq.com/s/Vv5N5eSdr18O0KDhnT2UfQ
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