TBW #50: The Bitcoin 'moment'? 👀

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The Bitcoin "moment"? 👀

When bitcoin was created, Satoshi Nakamoto wrote the title of an article from The Times newspaper on 3 January 2009 in the first transaction block. It referred to the British government's bailout of the banks.

That was almost fifteen years ago. It's 31 October 2008, and someone (a group?), whose identity we still don't know, publishes a nine-page document online.

This document, you all know, is the Bitcoin white paper.

Beyond the title and the technical specifications of the first of the cryptocurrencies, it's the message behind its launch that has our attention today.

For the creators of Bitcoin, the bank bailouts of 2008 and the massive injections of liquidity from the Fed 🇺🇸 that followed were the first step in a long rush forward. According to Satoshi Nakamoto, this would inevitably lead states into a dead end with uncontrollable inflation (hence the limited quantity of bitcoins) and no way of combating these soaring prices without provoking a new financial crisis.

What has happened in recent days, with the collapse of several US banks and the European contagion - Crédit Suisse lost more than 20% yesterday 😱, speaks for itself in this respect.

To combat the galloping inflation of the last twelve months, the Fed, and also the ECB, have raised rates sharply, which has helped to bring prices back down, but has also resulted in Silvergate, Silicon Valley Bank and Signature Bank going under... Gregory explained the phenomenon very well in a thread here.

The upshot is that, in order to prevent other institutions from being knocked down by rising rates, the Fed could ease off sharply and thus let inflation go back to the peaks.

A boon for bitcoin?

Replay the video interview with Denis Alexandre, former head of risk at Société Générale.



👉 Yield products: the AMF's timidity

Companies offering crypto yields are going to have to take their sweet time getting registered in France. If they don't simply abandon their procedure en route.

According to our information, the Autorité des marchés financiers (AMF) would no longer take a very favourable view of this type of product after the cascading losses of numerous clients of platforms in 2022 that worked stablecoins, particularly UST, into decentralised finance applications. The value of the UST fell to zero in a few days.

"The regulator is currently considering whether this type of service should not instead be subject to the framework for traditional investment service providers rather than that on digital assets," says the boss of a European start-up that has just withdrawn its application. 🧐

This regime is more restrictive, as "we are obliged to work with accredited investors and this limits the market enormously", he continues.

Currently, several companies that have registration as digital service providers specialise in crypto returns. These include Meria, CryptoSimple, Mon Livret C and Swissborg...


In Berlin, the crypto ecosystem is looking for a second wind


Considered one of the European cradles of crypto, the German capital has lost ground somewhat in recent years. It is banking on its cluster of developers and its 'fintech' culture to return to centre stage.

"Settle in, the drinks are here, it's going to start in a few minutes!"

No time to hang around this Friday afternoon on the third floor landing of Berlin's 'Build Station'. The building is teeming with people. After weeks of work, the participants in the hackathon organised on site by the Solana protocol teams are going to present their new products and innovations.

The atmosphere is festive. Between techno music and the sound of bottle-openers 🍻 , the latest start-ups are fine-tuning their presentations, until "Chris", the master of clocks, steps in.

"Come on, that's it, let's go, let's move on to the moment you've all been waiting for, the pitches!"

Wearing a flashy yellow jumpsuit, Chris is the head of Super Team Deutschland, the German branch of Solana's communications team. "We have the best ecosystem," he chuckles with a big smile.

A dozen projects are due to take place this snowy afternoon. There's everything from decentralised finance applications, collections of NFTs, (non-custodial) wallets and so on.

Each of them has about ten minutes on stage, with a question-and-answer sequence.

The projects follow on.

Aside from Daniel Kelleher's (pictured below) Sunrise Stake, which proposes a system in the ReFi, for "regenerative finance", linked to the climate, the projects are not stunning.

You could feel it in the room.

Daniel Kelleher (Sunrise Stake)

"Any more questions? Are you sure?", Chris tries on stage to try and keep the attention of the few hundred or so people on hand. "Okkkk, I ask for a round of applause for Daniel." It'll be a few (big) applause's.

As the introductions roll on, attention wanes inexorably, until the aperitif when, there, everyone wakes up. 😅

"This kind of event is important, people are together, they see each other, they work, but nothing extraordinary ever comes of it", admits Dan, a beer in hand. "That's actually kind of the problem," he adds.

This observation is made by other participants on site. "There's a lot of energy, it's great, but how many of these projects are really going to emerge?" asks Tilo, who is working on a collection of NFTs based on Solana. "Honestly? I don't think there will be many."

It's hard to prove him wrong, so gimmicky can some of the projects seem...

An ecosystem that's searching

This mixed mood, between euphoria and realism, is a bit like the Berlin ecosystem that The Big Whale discovered over several days (it's only a first trip).

As in most major European cities, there are plenty of initiatives, projects being launched (there are more than 100 Web3 start-ups in Berlin alone), but there's a slight sense of disillusionment, and not because of the Bear Market that has plunged the markets.

To understand this feeling, which we don't feel in Neuchâtel, Paris or London (read our report 👋 ), we need to go back a bit in time to what Berlin represented just a few years ago in crypto.

For if some have forgotten, the German capital is the birthplace of several must-have projects, such as Ethereum, which is now the second largest blockchain on the planet. A real source of pride for the local ecosystem.

"Berlin is a city that's a bit out of the ordinary in the crypto world. There's a different culture and history," explains Barnabé Monnot, who works for the Ethereum Foundation and has lived in Berlin for almost two years.

"The vast majority of people who work here are more developers than business specialists. We have less of that marketing culture," he adds. Un euphémisme.

With Barnabé Monnot (Ethereum Foundation)

In Berlin, one should indeed not expect to see well-known crypto companies, with clearly identified figures. "Here, it's not like Paris where you have Ledger and Sorare who are stars," confirms Jonathan Nute, one of the co-founders of the W3Fund investment fund, which has invested in a dozen crypto projects (Pile, Senken, Spirals, etc.).

The ecosystem is less structured and more fragmented. "The dynamic comes from the protocols, not the companies, so there are sort of chapels. You're from one community or another," explains Jonathan Nute.

Part of the team at the Ethereum Foundation, which is completely decentralised, is based in Berlin. At the time of writing, we still haven't been able to visit their office 😅. "It's a bit of a mess, and we like to work quietly, out of sight", a member of the team tells us.

According to legend, the Berlin offices still have the mattress on which Vitalik Buterin, the co-founder of Ethereum, allegedly slept for months in 2016... Quite a relic!

Ethereum isn't the only protocol to have been developed in Berlin. This is also partly the case for Polkadot, Cosmos and Solana, which has large teams on site and organises numerous events, such as the aforementioned hackathon, to try and get projects off the ground.

But which projects stand out in Berlin today?

"There aren't that many," explains Paul Bramas, ecosystem manager at Kyve, a decentralised solution for storing blockchain data. The Berlin-based company raised $9m in 2022 and is one of the projects to watch.

Most German Web3 companies, like Bison, are more focused on Munich, Cologne or Stuttgart where there is that business approach. "Frankfurt is the city where you find quite a few projects linked to decentralised finance," explains Jonathan Nute.

Betting on Tech

In fact, Berlin's great strength lies in Tech.

It's no coincidence, moreover, that funds with a local presence, such as Greenfield One, are betting heavily on it. "It's important to have applications in Web3, but you also need to create solid foundations, and that involves protocols," explains a member of the fund, which has raised a $160m vehicle in 2021 and has invested in the Near and 1Inch protocols.

Jonathan Nute (W3Fund)

Some people in Berlin think that the centre of gravity of the European ecosystem could gradually shift back to the German capital. At least in part.

"With the Bear market, there is less money and we are returning to the fundamentals of the sector, i.e. protocols and technology, which is a strong point of Berlin," explains Paul Bramas.

"Projects without too much interest are not funded", adds Jonathan Nute, who is also counting on the arrival of several heavyweight players from the traditional economy to "bridge the gap" when the markets take off again.Berlin can thus count on the arrival of some heavyweight players in the Web3 ecosystem.

This is particularly the case for N26 and Trade Republic. "Cryptocurrencies have become an unavoidable topic for our customers," explains Thanasis Noulas, head of data and engineering at German investment app Trade Republic (find his interview below).

Sufficient to give it a second wind? C'est ce qu'espèrent certains.



Thanasis Noulas (Trade Republic): "Europe must not lose the lead it has in crypto"


Passed through Uber, Airbnb and Netflix, the head of technology at German investment app, Trade Republic, knows the US well. We met him in Berlin. For him, financial innovation and the crypto industry are an asset for Europe.

The article is available on The Big Whale website 🐳

This edition was prepared with ❤️ by Raphaël Bloch and Grégory Raymond. The Big Whale is a free and independent media. By supporting us, you are contributing to its development.
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